Tawanda Musarurwa Business Reporter
TURNALL Holdings has reported an 8 percent decline in half-year profits to June 30 2012 to US$2,5 million compared with the same period last year. Management has attributed the decline to depressed demand for the company’s products.
Turnall’s turnover from continuing operations stood at US$18,5 million, also down 16,5 percent from the US$22,1 million recorded during last year’s corresponding period.
Finance charges topped US$1,2 million over the same period due to increased short-term borrowings.
Turnall chairman Mr Herbert Nkala said the operating environment in the period under review was characterised by a number of challenges.
“The results for the first half of the year were achieved in a very challenging environment, characterised by severe liquidity challenges, working capital constraints, depressed demand and high interest rates, ranging between 15 to 25 percent.
“Capacity utilisation for the industry dropped to levels of between 30 to 50 percent,” he said in a statement accompanying the results.
The company said pipes had not performed well during the period due to take-off failure of some planned infrastructural projects.
Turnall’s volumes during the period, at 31 500 tonnes, were 13 percent lower compared with the similar period last year.
It also reported export volumes of 2 140 tonnes, which were up 373 percent during the period under review, as the company resumed exports of the asbestos-free products into South Africa, following the commissioning of the Newtech machine.
According to Turnall, exports contributed 7 percent to sales volumes and total turnover after the re-entry into the South African market.
“Exports are expected to contribute significantly towards overall performance in view of the potential projects in the South African market,” said                                      Mr Nkala.
He said they were expecting a much better performance in the second half of the year.
“The company is expecting a better performance in the second half of the year since the business traditionally does 60 percent of its volumes and turnover in the second half of the year,” he said.
“On the export front, potential significant orders are in the pipeline and only awaiting finalisation of agreements and other relevant documents,” he said.