Turnall optimistic on improved product supply
TURNALL Holdings Limited says it is optimistic about improved product supply and enhanced production efficiencies in the last quarter of 2023 as the group pursues recapitalisation and expansion drive.
This move is part of Turnall’s restructuring and recovery plan which kick-started in the first quarter of the current financial year.
The construction products manufacturer spent $269 million on capital expenditure initiatives in the half-year period to June 2023, most of which was directed at improving the entity’s manufacturing efficiencies.
The Capex figure was, however, less than half of the $590, 5 million spent during the same period last year.
Growth initiatives being instituted by Turnall are expected to yield improved product quality, increased production capacity, and if successful lead to the resumption of export sales.
According to Turnall, the restructuring process will be focused on its core roof sheeting business at the Bulawayo plant while some of the investment will be channeled towards enhancing manufacturing capacity at the Harare factory.
Turnall’s roofing tile business represents circa 15 percent of the group turnover.
Turnall has been in the doldrums having faced supply disruptions in asbestos fibre supply which stemmed from the Eastern Europe conflict.
However, as it stands the company has managed to secure alternative sources of fibre, and normal supplies are expected to be reinstated in the current fourth quarter.
The firm’s business performance was also affected by stockouts owing to shortages of key raw materials which are normally obtained from Russia.
As a result, the company was not able to meet available demand and this is expected to end as the Bulawayo factory came on stream last month while the Harare one is expected to start functioning next year.
In the half-year results to June 2023, Turnall Board Chairman, Grenville Hampshire, highlighted that his group was embarking on a massive expansion drive to grow its revenue base and profitability in the future.
“Despite the challenges experienced in the first half of 2023, the board and management are confident that the recovery is on track and with the improved fibre supply in the second half of the year, recapitalisation initiatives, continued cost containment initiatives, enhancement of production efficiencies and the improved product offering, the group is geared for material improvements in its performance.
“This investment which is targeted on improving quality, output and manufacturing efficiency will start to yield results in the fourth quarter of 2023,” said Hampshire.
Adding that his firm’s focus is on recapitalising the plants with the main projects being to purchase a new fibre cement sheeting plant for Harare, upgrading key elements of the Bulawayo sheeting machine and establishing a presence in the glass reinforced plastic (GRP) market in Zimbabwe.
In the period under review, Turnall recorded a profit before tax of $11, 5 billion in inflation-adjusted terms, representing a 247 percent growth compared to last year’s same period.
The growth in profit is mainly attributed to the net monetary gains of $27, 7 billion compared to a loss of $222 million incurred last year.
Turnover closed the half-year period at $18 billion in inflation-adjusted terms, a 41 percent growth compared to $12, 7 billion realised in the previous year’s same period, despite a six percent reduction in sales volumes.
The growth in terms of turnover was also attributable to a 122 percent increase in the cost of goods sold.
However, the group incurred an exchange loss of $14, 7 billion due to the sharp increase in exchange rates during the first half of the year which negatively impacted the group’s performance.
A total exchange loss of $8,8 billion arose from outstanding terminal benefits for former employees.-ebusinessweekly
