Shake-up adds $500m to Turnall topline

ZIMBABWE Stock Exchange (ZSE)-listed piping products maker, Turnall Holdings Limited says revenue improved by $500 million during the year ended December 31, 2021 after a 2% rise in volumes.

In a commentary, Turnall chairperson Bothwell Nyajeka said revenues moved to $2,1 billion during the review period, compared to $1,6 billion during the prior
year.

While inflationary pressures contributed to the rise, in a trend that cuts across the entire market, Zimbabwe’s biggest pipes and roofing materials producer has been undergoing a bold restructuring process since Nyajeka arrived about two years ago to help seal back fault lines that had emerged.

Inflation adjusted total comprehensive income rose to $422,3 million during the period, after revenues increased ahead of overheads.

The firm reported $269,5 million total income in the prior comparable period.

Turnall reduced financing costs to $1, 6 million, a 72% decline compared to $5,7 million in 2020.

Gross profit margins went up by 24% in the year under review to 41% compared to 33% in the same period prior year.

“The gross profit margin for the year increased to 41% against 33% for the same period last year as a result of cost containment strategies and the business restructuring exercise implemented during the year,” Nyajeka
said.

The statements showed gross profit rising to $868 million during the review period, from $530, 8 million, as selling and distribution expenses moved at a much slower
pace.

Nyajeka said the company achieved a turnover of$2,1 billion which was a 31% increase compared to the preceding year in inflation adjusted terms.

“Sales volumes grew by 2% compared to the same period last year. The business performed well in spite of the impact of the COVID-19 lockdown measures implemented by the government, liquidity constraints, subdued aggregate demand and pricing challenges due to exchange rate disparities which were in place throughout the year,” he said.

The company, Nyajeka said, priced its products in both United States dollars and Zimbabwe dollars and was able to generate its own foreign currency to fund working capital requirements.

These funds were used to import raw materials and spares for use in production.

He said pricing issues had been a major challenge particularly on the export market owing to the depreciation of the currencies within the region against the greenback. The business switched to pricing exports in US dollars in order to eliminate this exchange risk.

Nyajeka said the government introduced Statutory Instrument 127 of 2021 which compelled companies and individuals to trade in both foreign currency and local currency using the official exchange rate.

This, he said, resulted in most organisations reviewing their trading terms, with credit policies being substantially revamped resulting in a significant skew towards a cash economy.-newsday