Willdale says its profits in the five months to February are ahead of target despite the current economic crisis.
Nyasha Matonda, the company’s chief executive, told shareholders at an annual general meeting that sales volumes in the five-month period were 22 percent and 18 percent below prior year and budget largely as a result of mismatch between disposable incomes and prevailing prices.
“However, despite the dip in volumes, our profit is way ahead of target due to cost containment and pricing. Our cost of sales went up by just under 10 percent while general price increases have been more than 50 percent,” he said.
Matonda said the listed brick manufacturer’s production started earlier due to low rainfall, therefore expect to surpass targets for the year.
“Fired production for the five months is 18 percent ahead of prior year while extrusion is 68 percent ahead. Rains have been low so far to our advantage,” he said.
The Willdale boss noted that during the last five months, the company has managed to stockpile critical raw materials such as coal and machine wear parts and these helped in production efficiencies.
“We anticipate plant availability and utilisation of at least 85 percent following planned maintenance during the off-season. We are well placed in the market to compete effectively supported by our quality bricks and superior brands,” he said.
Matonda said the company has firm order book after receiving several inquiries from envisaged projects.
Meanwhile, in terms of the land the company disposed last year, Matonda said the company realised $11,3 million against an indicative value of $4,5 million.
“As a result, all targeted debt has since been repaid, strengthening the balance sheet and improving profitability. Excess funds amounting to $4 million were invested in a housing development project,” he said.
Matonda said the company is now well placed to operate profitably and pursue growth initiatives that grow the company.
“We are currently exploring ways to modernise our production processes and we remain confident of the future of the company,” he said. DailyNews