- Cement sold declined by 23%
- Dry Mortars volumes fell by 55%
- Inflation-adjusted revenue reduced by 43%
Harare- Cement producer Lafarge Cement Zimbabwe Limited recorded unsatisfactory results according to the just-released third-quarter trading update for the period July 2022 to September 2022.
The inflation-adjusted revenue for the quarter under review was 43% below the same period last year due to suppressed volume of both cement and dry mortar products.
Consequently, the volume of cement sold declined by 23% versus the same period last year. Dry mortar volumes fell by 55% compared to the same period last year. Regardless of the fall in volumes, the Group expects the new VCM that was commissioned to reach its full potential in the fourth quarter of 2022 and hereby doubling the company’s capacity.
The other factor that led to the low volume of sales and revenue also has to do with the roof collapse the company experienced which suppressed the availability of cement
The middle-of-the-range performance recorded by the company was also attested to the inflationary macroclimate as well as high borrowing rates resulting in liquidity pressures around the world’s supply chains and hence affecting the Company’s performance.
The company experienced significant liquidity challenges that hindered it from meeting its financial obligations. This was driven by reduced cement production during the ramping-up period of the VCM and actions taken by the government to reduce excess local liquidity in the economy.
Looking ahead, the company expects the company to see its annual cement production capacity increase from 0.4mt to 1.0mt when the new plant is in full effect. The company believes that the full operationalization of the new VCM will reposition the Company on a fine growth path into the future and possibly have a good effect on the Company’s revenue generation and profitability.
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