Lafarge FY14 profit tumbles 97 percent on low sales, to reduce costly contractors

Lafarge FY14 profit tumbles 97 percent on low sales, to reduce costly contractors

HARARE, March 11 (The Source) – Cement maker Lafarge has reported a 98 percent decline in profit to $81,000 for the full-year to December 31 compared to the previous year on low sales revenue and high operating costs.

Turnover declined by 11 percent to $60,4 million following a seven percent reduction in sales volume and a three percent drop in cement selling prices.

Maintenance costs amounted to $10 million as the company undertook improvements on its plant.

Presenting the company’s results on Wednesday Lafarge Managing director Amal Tantawi said the company would reduce use of subcontractors to cut costs.

“We have been working a lot with sub-contractors but then we have seen that this adds extra 25 percent cost on our limestone. So going forward we intend to reduce our dependency on sub-contractors,” she said.

During the period under review, the company’s capital expenditure was at $7,2 million of which $4,9 million was in limestone quarry development.

Clinker export volumes declined by 15,000 tonnes compared to the same period last year.

Tantawi said the company was looking to its high strength product to spur revenue streams in the new year.

“There has been a shift of demand to high strength cement so we will be focusing on the Concrete Product Manufactures (CPM) with our new product Supaset.”

Basic earnings per share declined to 0,1 cents from 4,4 cents in 2013.