Turnall volumes fall 34pc in Q3

Zimbabwe Stock Exchange-listed manufacturer, Turnal Holdings Limited, suffered a volume reduction of 34 percent for the third quarter that ended 30 September 2022.

In a trading update released on Thursday morning, board chairman Bothwell Nyajeka, said the decline in volumes was mainly due to a change in the sales mix which was skewed towards the high – value and low-tonnage building products.

Nyajeka said the changes in sales mix were coupled with a decline in the aggregate demand due to liquidity challenges in the market.

The period under review was characterised by tight monetary policies which saw a gradual decline in the month-on-month inflation levels.

“High borrowing costs in excess of 200 percent and liquidity challenges contributed to a general decline in aggregate demand,” Nyajeka said.

While turnover in historical terms increased by 282 percent in historical terms and by 13 percent in inflation-adjusted terms, profit margins for the firm “remained under pressure due to the increased cost of doing business.”

As a remedy, the Group continued to engage suppliers for better terms and prices, pursued its cost containment initiatives and restructured the business in line with its strategy.

However, in addition to cost pressures, there were official and parallel market exchange rate distortions whose adverse impacts could not be fully absorbed through selling price adjustments,” Nyajeka said.

Also in line with managing costs, the refurbishment of the Harare fibre cement plant is currently underway, and production is expected to commence in the second quarter of 2023.

Nyajeka said this will result in significant cost savings and improved product availability in the Northern region where there is higher demand for Turnall products.

The Group is also going to resume the production of Inverted Box Rib (IBR) roofing sheets which will commence in the 4th quarter of 2022.

This, according to Nyajeka will improve the Group’s product offering and see the company taking advantage of an additional segment of the market.-ebusinessweekl