LAFARGE Cement Zimbabwe Limited posted a loss of $609 589 for the year ended December 31, 2017, on the back of an increase of costs and expenses.
BY TATIRA ZWINOIRA
In a statement accompanying the financial results released last week, Lafarge Cement Zimbabwe chairman, Kumbirai Katsande said a full-year sales decline of 4% was recorded on the back of reduced volumes, which contributed to the loss.
“Additional costs incurred to optimise logistics networks, distribution costs increased by 6%. Administration expenses increased by 26% mainly driven by the SAP [systems, applications and products] project implementation costs and current information system productivity upgrades. Retrenchment costs recorded in the year reflected the partial implementation of plans targeted at managing costs. As a result, the company recorded a profit before interest and tax of $860 000, down from $4,47 million in 2016,” he said.
“The company incurred increased finance costs due to the utilisation of standby financing facilities. Ultimately, the company registered a total loss after taxes of $610 000 from a profit of $3,13 million in the prior year, a decline of 119%. The total current assets increased by 3,9%, largely due to increases in prepayments, following a decision to hedge price increases on strategic raw materials.”
Katsande said total equity reduced marginally by 6,5% to $37,95 million due to a reduction in retained earnings and declaration of a dividend.
“Total current liabilities increased by 9,2% to $38,18 million mainly because of related party payables,” he said.
Utilisation of financing facilities was based on the fact that the company was unable to get enough foreign currency to import critical equipment and other production inputs, causing a deferment on industrial and manufacturing upgrades.
This led to the increase in costs and expenses for the company.
Revenue during the period under review was down 4,14% to $58 476 212 from $61 004 062 recorded at the end of 2016.
Katsande said heavy rainfall adversely affected cement stocking patterns and partially contributed to low sales in the early part of 2017.