Lafarge Zimbabwe bullish as earnings firm

Lafarge Zimbabwe bullish as earnings firm
Published: 05 October 2010

Lafarge Cement Zimbabwe, the country’s second largest producer, said on Monday earnings for the half-year to June 30 2010 had firmed by 50 per cent to US$0.02 per share from US$0,01 per share as domestic demand increased on the back of a significant rebound in the construction industry.

Demand for cement declined from 1.1Mt in 1999 to 242,000t in 2008 but output bounced back to 400,000 tonnes last year after the power-sharing administration that came into office in February introduced wide-ranging economic stabilisation reforms that reignited economic activities.

Financial results from Lafarge, the only listed of three cement manufacturing firms in Zimbabwe, revealed this week the industry had started enjoying the benefits of the growth in demand.

Gross turnover during the review period surged by 69 per cent to US$17.2m from US$10.1m, again driven by higher domestic demand.

Pre-tax profits trebled to US$2m during the review period, from US$691 000 while post-tax profits also increased by 84 percent to US$1.5m from US$807 000 during the comparative period last year.

Chairman, Muchadeyi Masunda said in a commentary accompanying the results earnings were projected to increase during the second half of 2010 in light of the resurgent demand.

“Domestic demand for cement is expected to remain firm,” Masunda said.

“In line with seasonal demand revenue in the second half of the year should exceed that of the first half,” added the Lafarge chief.