BRICK manufacturing company Willdale Limited, says it expects the prevailing stability in the economy underpinned by a stable currency and declining inflation to stimulate property and infrastructure development in the short to medium term.
The firm is confident it will continue operating as a going concern for the foreseeable future.
In a statement accompanying abridged results for the year ended September 30, 2020, Willdale chairperson Washington Chidziwo said activities in the construction industry during the year under review had been negatively affected by Covid- 19 lockdowns resulting in subdued trade volumes.
“The operating environment was characterised by inflation and was worsened by the Covid-19 pandemic which culminated in government induced lockdowns introduced in April 2020. Sales volumes increased by 12% compared to the prior year, despite effects of the Covid-19 induced lockdown on projects. The relaxation of lockdown conditions from Q4 witnessed a steady increase in orders especially from individual home developers,” he said.
“The continued opening up of economic activity coupled with the RBZ introduced foreign currency auction system resulted in a stable currency and inflation rate. This will present opportunities from dormant and new projects including government infrastructure and housing development programmes.”
During the period, revenue for the year increased 19% to ZWL$596 million (US$ 7,2 million) compared to the prior year at ZWL$499 million (US$6 million) driven by a 12% increase in volumes.
Operating profit decreased by 50% to ZWL$166 million (US$2 million) from ZWL$331 million in 2019 after charging ZWL$8,7 million (US$106 000) to depreciation of property, plant and equipment (2019: ZWL$22 million (US$268 000).
Exchange gains amounting to ZWL$26 million (US$318 000) from ZWL$34 million (US$416 000) in 2019 were earned from translation of foreign currency denominated balances.
Net cash flows generated from operations amounted to ZWL$125 million (US$1,5 million) from ZWL$72 million (US$880 000) in 2019 while capital expenditure for the year, which was all financed from internal resources, totalled ZWL35 million (US$428 000) from ZWL$30 million (US$367 000) in 2019.
Chidziwo said land and buildings were revalued to reflect fair values.
“Fired production for the year declined by 20% compared to the prior year. About two months’ production was lost due to the Covid-19 induced lockdown.
Annual maintenance of the plant will be carried out during the seasonal shutdown to ensure efficient production that delivers sufficient bricks for projects during the ensuing year in line with approved budgets for the new financial year,” he said