1 January 2013

Zimbabwe: Willdale Posts U.S.$1 Million Loss

Brick manufacturing company Willdale Limited has continued to experience capital constraints resulting from liquidity shortages in the market for the year ended September 30 2012. The company made a US$1 034 672 million loss after tax this year compared to US$1 081 456 last year.

In a statement, Willdale said insufficient working capital delayed the start of the peak production season therefore volumes were not enough to generate the critical mass to operate profitably.

The company registered a turnover growth of 47 percent to US$5,4 million from US$3,7 million last year on the back of a 26 percent increase in sales volumes.

Willdale said volumes were not high enough to generate sufficient margin to cover all costs resulting in an operating loss of US$900 000 being incurred after charging US$436 821 for depreciation of property, plant and equipment.

The company said unit costs remained excessively high due to power interruptions, insufficient equipment and brick loss in production.

Although green and burnt brick production levels were up by 38 and 29 percent respectively this year, efficiency levels in production continued to the hampered by plant breakdowns and inadequate equipment.

The company said high production losses were incurred from rain damage as a result of old equipment.

Capacity utilisation averaged 40 percent up from 30 percent during the same time last year.

Sales volumes increased by 26 percent over the last year in line with the increase in burnt throughput Willdale said it is forecasting further positive growth in revenues and a positive profit margin from increased throughput in the next financial year. This, however, would depend on the provision of funding to refurbish the plant and acquire sufficient mobile equipment.

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