Willdale posts ZWL$198,44bn half year loss

LISTED brick making firm, Willdale Limited, posted a loss of ZWL$198, 44 billion in its half year ended March 31, 2024, owing to exchange rate volatility, despite a growth in revenue.

The loss in the period under review is from a profit after tax of ZWL$4,13 billion over the comparative time frame last year.

“Revenue in inflation adjusted terms grew by 91% compared to the same period in the prior year . . . An operating loss of ZWL$113 billion was incurred for the period (2023:ZWL$19 billion),” Willdale chairperson Cleophas Makoni said in a statement accompanying the financial results for the half year ended March 31, 2024.

“Profitability was affected by exchange rates and indices used to compute revenue and expenses and unrealised exchange losses emanating from the revaluation of foreign currency denominated liabilities.”

Revenue was recorded at ZWL$186,33 billion during the period under review, up from ZWL$97,42 billion in the same period last year.

“Sales volumes were 3% up compared to the prior year despite challenges in the market. The introduction of 15% VAT [value-added tax] on clay brick sales from January 2024 brought with it some shocks into the market as customers resisted the increased prices,” Makoni said.

“Customers preferred to buy from cheaper suppliers who were allegedly not complying with the VAT requirements, presenting unfair competition in the market. It is hoped that mechanisms will be put in place to ensure that all manufacturers comply with the VAT requirements going forward.”

He said production would be ramped up, subject to the availability of electricity and working capital to meet growing demand.

“Efforts are underway to secure funding to acquire the planned all-weather plant,” Makoni added.

Despite the loss for the period under review, the firm ended the period in a liquid position, with ZWL$1,11 to every dollar of short-term debt.

This was due to reductions in short term borrowings as well as trade and other payables of 81,11% and 26,34%, respectively, from September 2023.

Total assets were down nearly 27% to about ZWL$1 trillion at the end of the period under review, from the September 2023 figures.

The reduction was owing to revaluation of property, plant and equipment as well as lower investments in fair value through other comprehensive income and properties.

“Opportunities to increase sales in the remainder of the year exist as stakeholders in the construction sector continue to promote various projects in housing development and other infrastructure. Efficient and low-cost production will be critical going forward to compete effectively,” Makoni said.

“We will continue to review our operating strategy to ensure growth in both revenue and profitability, riding on our strong brand and systems that deliver quality bricks. Our partners in the land development transactions have commenced making applications for relevant permits to start the projects.”-newsday