By Oliver Kazunga
Zimbabwe Stock Exchange-listed building materials manufacturer, Turnall Holdings, says its export turnover improved to $10,5 million in 2019, contributing five percent to the group’s total turnover of $231,6 million.
In a statement accompanying financial results for the full year ended December 31, 2019, Turnall said:
“Export turnover increased to $10,5 million contributing five percent of turnover from 0,3 percent in the previous year.
“This was attributed to the group’s strategy that resulted in enhanced presence in the regional markets.”
During the financial year ended December 2018, the group was exporting to Zambia only, but increased its market coverage last year to include Mozambique and South Africa.
The group’s total turnover, which amounted to $231,6 million during the period under review was 11 percent below the previous year. The group experienced depressed product demand during the year due to low disposable incomes as inflation increased.
“Despite slightly improved demand in the second half, the group was constrained by unavailability of forex for the importation of raw materials, high power outages and shortages,” it said.
During the period under review, Turnall said the gross profit margin was 33 percent while in 2018, it stood at 35 percent. The group was unable to pass on the full cost of production to the customer due to price resistance.
“The group’s operating costs of $62,5 million were 12 percent above the previous year compared to revenue decline of 11 percent.
“The group’s costs were affected by the significant increases in fuel costs and electricity tariffs during the year.
Finance costs of $1,88 million were however 65 percent below the previous year.
The company’s profit before tax was $99,4 million compared to $76,5 million the previous year.
“The group utilised all tax losses from the previous years and will pay current tax of $1,9 million for the year.
“Property, plant and equipment was revalued by an independent professional valuer as at December 31, 2019. This resulted in a revaluation reserve of $177,3 million,” it said.
On the outlook, Turnall said the country was going through a difficult economic landscape and there were indications that this may continue during 2020.
“The group will focus on cost containment and exports growth in order to increase sales volumes and obtain foreign currency required for importation of raw materials and spares,” said the firm.
Last year, Turnall announced the intent to increase its product range to include production and supply of non-asbestos roofing materials as part of the group’s wider strategy to explore export markets.
Asbestos products were blacklisted on the international market after concern had been raised by the Asbestos Resource Centre, an international group, which suggested that exposure to asbestos usually resulted in diseases such as asbestosis, lung cancer and mesothelioma.
Zimbabwe and some other countries like Russia and India countered the call for the banning of asbestos, citing the lack of conclusive scientific evidence on the toxicity of asbestos as a roofing material.
Turnall has announced that it has decided to expand its product range to cater for foreign markets that have shifted from asbestos products to cushion the company against prevailing foreign currency shortages. The Chronicle