Brick making concern, Willdale Limited recorded a loss after tax for the half-year ended March 31, 2017 of $380 564 from $146 574 recorded in the same period last year due to stock write-offs. The group’s revenue base however grew 14 percent to $4,05 million buoyed by 20 percent increase in volumes. Company chairman Alex Jongwe said incessant rains the country experienced impacted the group’s performance despite demand for bricks remaining firm.
“Saleable stock availability was affected by incessant rains which destroyed some kilns resulting in stock write-offs which impacted negatively on profitability.
“Sales volumes were higher than prior year but profitability declined below expectations,” he said.
Due to a sales mix inclined towards a “low margin product”, average selling prices declined by 5 percent.
Net financing costs for the group, which include costs of preference shares, increased to $437 670 from $339 340.
Mr Jongwe said strategies had been put in place to minimise damage from rain in the future.
“The prolonged rains delayed the resumption of extrusion. However, operations have resumed with expectations of high efficiencies and quality, provided electricity supply remains normal,” he said.
However, the company’s operating profit of $3 771 was realised after charging $426 339 to depreciation of property, plant and equipment.
Loss per share stood at $0,02 cents from $0,01 cents. Total assets for the group now sits at $26,76 million.
In view of the financial performance the group resolved not to pay a dividend citing the need to, “preserve cash for operations”.
Mr Jongwe said in the outlook, the commencement of various institutional projects that are planned for this year will provide the required critical mass to realise profitability.
“We are encouraged by the efforts of financial institutions to increase mortgage financing and the various housing schemes in the public and private sectors which should increase demand for bricks.
“We are ready to utilise idle plant capacity to meet growth in demand and the planned disposal of the identified asset will improve the company’s profitability going forward,” he added. — New Ziana.