Zimbabwe: Lafarge Cement records 2015 loss

Lafarge Cement Zimbabwe has said that expects to see a return to profitability in 2016 after recording a loss of US$1.9m in 2015.

Announcing its results for the year, Lafarge blamed the economic conditions in the country, including the liquidity crunch and the poor agricultural season.

This Day quotes a company spokesperson as saying "We expect the general trading environment to exert sustained pressure on prices due to the ongoing economic stress. However, we anticipate improved profitability in 2016 mainly driven by operational cost reduction measures and targeted strategic marketing initiatives.

"The company performed comparatively well despite the economic hardships. Cement sales volumes grew by five per cent above the prior year, driven largely by the successful implementation of market growth strategies of leveraging targeting distribution which was supported by the overall domestic market stabilisation."

Sales volumes for 2015 increased by two per cent YoY to US$61.55m.

Earnings Before Interest and Tax decreased by 230 per cent to a loss of US$1.68m during the period under review from a profit of US$1.29m in 2014 driven to a large extent by these provisions.

Total assets decreased by 13 per cent to US$65m in 2015 from US$69.9m in 2014 due to the reduction in inventory from the obsolescence provisions.

"Total equity reduced marginally by five per cent due to the reduction in retained earnings driven by the loss for the year. Total current liabilities decreased marginally by four per cent to US$23,36m mainly due to repayment of borrowings. The net impact of these movements decreased in net working capital of US$2.86m from the prior year," the group said.