By Natasha Chamba
LaFarge Cement Zimbabwe has projected high demand for cement in the country this year on the back of growing housing developments despite rising inflationary pressures.
In a statement accompanying the company’s financial report, Larfarge chairman, Mr Kumbirayi Katsande, said they were responding positively to the anticipated growth in cement demand by increasing focus towards improved profitability.
“Although the full impact of the October 2018 and February 2019 Monetary Policy Statements is just beginning to unfold, management believes that the demand for cement will continue to be firm in 2019 as housing remains the only stable investment to lock value against inflation,” he said. “As such the business will focus on improving profitability with the anticipation of closing the year strong and in the lead.”
According to the company’s financial report, Lafarge recorded 24 percent revenue growth to $72, 3 million as at end of December 2018 from $58, 5 million recorded in 2017. Profit before tax settled at $4, 4 million from $0, 6 million.
Mr Katsande attributed the growth to the company’s “better” average selling price adjustments in the last quarter of 2018 and a “favourable” product mix skewed in favour of higher strength cements.
He said the growth was also on the back of the business expanding its distribution footprint into regional markets. The company’s total assets in the comparable period grew by $9 million from $82, 2 million to $91, 2 million.
Lafarge also said their business secured external and local facilities amounting to $38, 4 million and utilised $24, 8 million of the amount for working capital and clearing some of their outstanding foreign obligations.
Mr Katsande said the company’s overall growth, which also reflected in the construction sector, was because of the “historic changes” in the socio-political environment, which ushered in a fresh wave of interest in the Zimbabwean economy from the international community.
“The 2018 financial year began on an optimistic note for the country following the historic changes in the socio-political environment, which ushered in a fresh wave of interest in the Zimbabwean economy from the international community.
“The renewed confidence and heightened expectations for macro-economic and political reforms boosted medium to long-term investment potential and the construction sector grew on this background. Demand for cement was generally firm throughout the year,” he said. The Chronicle