Lafarge Cement Zimbabwe’s profit for the first half of 2013 fell 3.8 per cent, but the company expects a better performance in the remainder of the year due to cost reduction measures and an improved operating environment.
The company said profit after tax in the first six months of 2013 fell to US$2.6m due to lower sales and the payment of retrenchment costs. Revenue for the six months to the end of June 2013 totalled US$32.2m, six per cent less than the US$34.3m posted in the same period of the year before.
Ziimbabwe's second-largest cement producer blamed the decline in revenue to the prevailing liquidity crunch n the market and the drop in sales to subdued domestic demand. The group said US$600,000 went towards settling obligations to employees affected by the retrenchment exercise that was effected during the half year.
However, Lafarge Cement chairman Muchadeyi Masunda, said he was optimistic that the company’s second-half performance would improve on the back of a number of cost cutting measures. "Following the successful implementation of various cost reduction exercises, profitability is expected to improve in the second half of the year," he said.
In terms of the outlook for demand, he said that prospects were ‘modest t high’ following the conclusion of peaceful elections which is expected to improve the operating environment and increase construction activity going forward.
As testament to its confidence in the local market, over the last three years Lafarge Cement Zimbabwe has invested US$15m in refurbishment and expansion programmes and is planning to raise capacity at its works in Harare from 0.45Mta to 1Mta.