Listed building materials manufacturer, Turnall Holdings, suspended exports in the second quarter ended June 30,2020 resulting in the firm’s export volumes in the first six months of the year declining by three percent.
The suspension of exports was on account of the international restrictions caused by the Covid-19 pandemic.
In a statement accompanying financial results for the six months period under review, export volumes were down three percent.
“The company did not export in the second quarter as the supply chain of imported raw materials was disrupted by border closures and limited international logistics movement,” said the firm.
It said the short to medium term prospects of the business are dependent on the duration and severity of the Covid-19 pandemic and the measures implemented to contain the disease.
“Sales volumes for July and August recovered from April and May’s Covid-19 constrained levels and management has implemented measures to ensure business continuity in the uncertain environment and will continuously review these measures.
“The sales volumes for the period were three percent below comparable period. The company volumes for the first quarter were 45 percent above the same period last year, but the second quarter volumes were 37 percent below the same period last year owing to the Covid-19 lockdown restrictions.
“Export volumes were three percent of total export volumes, as in the previous year,” said Turnall.
The group’s net profit after taxation for the half year ended June 30, 2020 was ZWL$28 million, which is 82 percent below comparable period last year.
Turnover was ZWL$203 million, which is 30 percent below the same period last year.
“The gross profit percentage was 41 percent compared to 42 percent in the same period in 2019, and operating expenses of ZWL$66 million were 28 percent below the same period last year,” it said.
Operating activities generated ZWL$59 million cash, of which ZWL$46 million was invested into capital expenditure, and ZWL$1 million on loan repayment.
Cash and cash equivalents increased by ZWL$5 million.
Despite slightly improved demand in the second half, the group was constrained by unavailability of foreign currency for the importation of raw materials, high power outages and fuel shortages.
“In order to consolidate and sustain the gains achieved the directors will continue with the following measures to ensure that the group continues to operate in the foreseeable future;
thereby limiting the company’s exposure to foreign currency shortages; the group continues to implement cost control measures to improve the viability of the business; upgrade the non-asbestos plant in order to improve access to foreign markets; exposure to foreign borrowings and related exchange losses.”
During the period under review, export turnover improved to ZWL$10,5 million contributing five percent of turnover from 1,2 percent in the previous year.
“This was attributed to the group’s export strategy that resulted in enhanced presence in the regional markets,” said Turnall.
In the prior year, the group was exporting to Zambia only, but increased its market coverage in 2019 to include Mozambique and South Africa.
The group’s operating costs of ZWL$62,5 million were 12 percent above the previous year. The Chronicle