HARARE, August 25 (The Source) – Turnall Holdings recorded a net loss of $1,8 million in the six months to June 30, from a comparative profit of $400,000 last year but management expects to return a profit by end of the year.
Briefing analysts, managing director Caleb Musodza said the company had resized and realigned its level of operations to match its operating income, which resulted in its Harare sheeting plant being placed under care and maintenance.
“This process entailed employment costs rationalisation and plant operations consolidation,” said Musonza, adding that a total 80 employees have been retrenched.
Musodza said benefits of the staff rationalisation programme are expected in the second half of the year together with improved margins and an operating profit.
“However, due to the very significant once off retrenchment and plant impairment costs, the group is expected to report a loss for the year ending 31 December 2016,” he said.
Musodza said the model is capable of meeting current and short-term market requirements while producing an acceptable gross margin and optimizing the use of working capital.
The group expects to become profitable in 2017 going forward.
During the half-year, revenue declined 38 percent to $8,73 million from $14 million previously as a result of a decline in volumes.
Musodza said the company continued with its cash model given the extreme liquidity challenges in the market.