Harare Quarry Incurs $367 000 Loss in Q1

By Yeukai Karengezeka

Harare City Council’s subsidiary, Harare Quarry, incurred a loss of $367 000 during the first quarter of the year due to low production caused by maintenance shutdown.

The low production led to low sales of $137 909 against a projected $911 250.

In addition, the amount realised was almost equal to salaries and employees’ welfare costs amounting to $137 367 during the period under review.

According to recent Business Committee minutes, Town Clerk Engineer Hosiah Chisango reported that Harare Quarry was not performing well.

“Town Clerk reported that Harare Quarry (Pvt) Ltd encountered a loss of RTGS$ 367, 397.81 for the first quarter,” reads the minutes. “The loss was attributable to reduced production due to the annual maintenance shutdown, resulting in the first quarter production focusing on clearing 2018 backlog.”

Eng Chisango said a loan of $4,5 million they got failed to meet the costs, as it was eroded by inflation.

“He also reported on the procurement of capital equipment from the $4,5 million loan that had been facilitated by the shareholder,” reads the minutes.

“Regrettably, the loan had lost value due to delays in expending the loan, hence the amount could not cover the cost of procurement of asphalt and crusher plants.”

This resulted in Harare Quarry entering into strategic partnerships with Voyager (Pvt) Ltd and Instant Tar (Pvt) Ltd for the crusher and bitumen or asphalt plants.

Eng Chisango raised concern over the company’s performance, which regarded the council as its biggest customer.

“He reported that the main customer for the company was the City of Harare and this position was not in sync with the objective of commercialisation,” reads the minutes.

“The commercialisation objective was not to only efficiently supply council with its needs, but to also enter into the economic mainstream with a view to increase revenue generation.

“The reliance on the City of Harare had crippled the entity’s operations due to late . . . payments, hence the company had resorted to using capital expenditure funds for recurrent expenses.”

Eng Chisango’s office was working on a quick resolution to the late payments dilemma.

He reported on the need for the company to improve its turnover to meet all expenditure obligations.

Source : The Herald

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