• Sales volumes down 29%

  • Production volumes declined by 21%

  • Profit increased to ZW$536.58 million

Listed building materials manufacturer, Turnall Holdings Limited posted a 29% decline in sales volumes for the half year ended 30 June 2022, owing to a change in the sales mix which favoured the high value and low tonnage products.

In a statement accompanying the Company’s financial results, Chairman Bothwell Nyajeka said sales were negatively affected by liquidity constraints and subdued aggregated demand.

“All sales earned in US$ were recorded at the auction rate from January 2022 to April 2022 and the interbank rate after that,” Nyajeka said.

The Company’s production volumes for the half year dropped by 21% compared to the previous year and this was a deliberate move by management in order to align production to the sales demand.

Meanwhile, Turnall’s inflation-adjusted turnover for the period under review grew by 38% to ZW$2.6 billion compared to last year.

Profit for the period increased to ZW$526.58 million from ZW$76.99 million recorded in the same period last year driven by the notable improvements in the turnover value, gross margins and cost containment initiatives employed by management throughout the period.

The gross profit margin for the year in inflation-adjusted terms was 51% against the same period last year of 24% driven by improved production efficiencies, cost containment strategies and a change in the sales mix.

Operating costs were 235 of turnover compared to 20% in the same period in the prior year attributed to the general price increases experienced in the economy while financing costs stood at ZW$1.25 million compared to ZW$1.35 million in the same period last year.

Cash generated from operating activities stood at ZW$861.7 million representing a 159% growth compared to the same period last year.

The Company’s capital expenditure for the period was ZW$119.3 million compared to ZW$8 million spent last year.

“The Company continued to invest in working capital in order to preserve value in this hyperinflationary environment,” Nyajeka said.

Looking forward, the Company is optimistic that the business will continue to be profitable and maximize shareholder’s wealth.

Nyajeka highlighted that Turnall’s key focus areas are to re-capitalise the plants, improve production efficiencies, improve its product offering and reduce production costs.

“Cost containment and business rightsizing will remain top priorities to enhance profitability. Management is resuscitating the fibre-cement plant in Harare in order to increase production capacity,” he said.

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