• Profit after tax narrowed to ZWL 48.6 million
  • The Group recorded an operating loss of ZWL 8.7 million
  • Sales volumes declined by 6%

Harare- Zimbabwe Stock Exchange (ZSE) -listed brick maker, Willdale Limited has bemoaned the lack of sound economic fundamentals which ultimately narrowed its volumes and profitability during the half-year ended 31 March 2022. 

The group recorded an operating loss of ZWL 8.7 million from a profit of ZWL 235 million recorded during the same period in 2021 due to the rapid depreciation of local currency against the US dollar which widened its operating expenses. 

With the tax paid by the Group widening by 118% to ZWL 122 million, profit after tax narrowed to ZWL 48.6 million from ZWL 104.7 million recorded in the comparative 2021 period. 

During the six months to 31 March 2022, the Treasury and the Reserve Bank of Zimbabwe (RBZ) failed to mop up excess liquidity of the electronic Zimbabwe dollars as they battled to support government projects and hike civil servants' salaries to curtail the inflationary pressures. This resulted in the rapid depreciation of the local currency. 

RBZ also failed to bring exchange rate stability due to shortages of foreign currency and high liquidity of electronic ZWL in the market, a situation manipulated to facilitate speculative borrowing.

In fact, during the period, the RBZ and Treasury failed to mop up excess ZWL electronic liquidity, stabilise inflation and exchange rates, the macro-economic fundamentals that sustain companies’ ease of doing business. 

"Monthly inflation which was partly driven by the depreciation of the Zimbabwe dollar against the United States dollar continued on an upward trend while the unstable economic fundamentals and the late rains negatively impacted volumes and profitability," the Group’s chairperson Cleophas Makoni said in a statement accompanying the half-year financials. 

Meanwhile, the production of bricks also succumbed to the extended rainy season which disrupted the production plan leading to production shortages. 

This resulted in a 6% decline in sales volumes compared to 2021. 

However, sales of the face and load bricks rose significantly from larger projects with the housing development remaining the dominant driver of volumes and revenue. 

Revenue for the Group at ZWL 839.7 million was 4% ahead of the prior year during the same period. 

Going forward, Makoni expects that the availability of electricity will bolster the group's productivity. 

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