Turnall profit up 30%

LIVINGSTONE MARUFU

Listed industrial concern, Turnall Holdings has posted a 30% increase in profit to ZWL$96.7m for the year ended December 31, 2019, from ZWL$73.7m in 2018 due to increased usage of the local fibre while reducing imports and implementation of the cost containment measures.

The increase in profit comes at a time when the company’s export turnover improved to ZWL$10.5m contributing 5% of turnover from 0.3% in the previous year due to the group’s export strategy that resulted in enhanced presence in the regional markets.

Turnall chairperson Rita Likukuma said the increase in profit was a result of exporting to other countries like Mozambique and South Africa other than Zambia which was the company’s traditional market.

“The profit for the period was 30% up to ZWL$96.7m in 2019 from ZWL$73.7m the previous year. “The group recorded a profit for the second successive year after years of reporting losses marking the turnaround strategy of the business,” Likukuma said, in a statement accompanying the financial results for 2019.

She said the group will continue increasing the use of local fibre and reduce imported fibre to cut on the amount of foreign currency needed to import fibre.

Turnover for the year was 11% down to ZWL$231.6m in 2019 from ZWL$259.9m. Despite slightly improved demand in the second half, the group was constrained by unavailability of foreign currency for the importation of raw materials, high power outages and fuel shortages.

Export turnover improved to ZWL$10.5m contributing 5% of turnover from 1.2% in the previous year. Operating costs of ZWL$62.5m were 12% above the previous year’s revenue due to the hyperinflationary environment. Finance costs of ZWL$1.88m were 65% below the previous year which stood at ZWL$3.1m.

Turnall also upgraded the cement fibre line to increase capacity and efficiency and plans to upgrade the NuTech fibre cement plant in order for the group to access foreign markets.

Turnall will continue to prepay for the raw materials and spares to avoid significant exposure to foreign borrowings and exchange-related losses. The company said the interbank market system was not able to provide forex for the company while power outages also negatively affected the company’s operations.

The group will focus on cost containment and exports growth in order to increase sales volumes and obtain foreign currency required for raw material, Likukuma said.

However, the coronavirus outbreak will negatively affect the exportation of the company’s products due to some restrictions that the countries will continue to implement to contain the disease.