Lafarge records losses 6 months after Fossil Contracting takeover

Embattled cement manufacturer, Lafarge Cement Zimbabwe (LACZ), which recently rebranded to Khaya Cement has recorded financial losses six months after being taken over by Fossil Contracting.

The losses are contained in Lafarge’s latest unaudited FY22 preliminary results as at 31 December 2022.

Revenue was 0.09% down at ZWL24.44 billion. Gross profit for the year was 47% down at ZWL7.69 billion. Loss before income tax increased by 2092% to ZWL13.20 billion and loss for the year was ZWL17.27 billion.

Total comprehensive income for the year was (ZWL2.71 billion). Basic loss per share was $215.89. No dividend declared.

In January, the company requested for a three months’ suspension from the Zimbabwe Stock Exchange (ZSE).

The development came during the peak of Lafarge’s tiff with the US Office of Foreign Asset Control (OFAC) which stalled the then concluded deal by Fossil Mines to buy a 76% stake in the cement manufacturer.

In December last year, the US added Fossil Agro, Fossil Contracting and the group’s chief executive officer, Obey Chimuka, to its Specially Designated Nationals (SDN) list, accusing it of being linked to corrupt government contracts.

The sanctioned individuals and entities are said to have “materially assisted, sponsored, or provided financial, material, logistical, or technical support for, or goods or services in support of, the Government of Zimbabwe” leading to the alleged promotion of corruption and undermining of democracy in Zimbabwe.

The Lafarge and Fossil deal was allegedly sealed under controversial circumstances that involved disregard of the Competitive and Tariffs Commission regulations.

It is believed that Fossil acquired the largest cement company in order to directly supply the product to its cocktail of construction projects financed by the government.