Lafarge H1 losses widen to $2,2 mln on weak sales

Lafarge H1 losses widen to $2,2 mln on weak sales

HARARE, September 29 (The Source) – Lafarge Cement’s loss position nearly doubled from $1, 3 million to $2, 2 million in the six months to June on soft demand as competition in the cement sector increased, the company said on Thursday.

Competition from cheaper imports remains a challenge at a time local cement manufacturers have also increased production.

Zimbabwe’s cement industry mainly comprises of three players: PPC, Lafarge Zimbabwe and Sino-Zim, all with a combined installed capacity of 1,46 million tonnes per annum.

PPC has 760,000 tonne capacity, Lafarge 450,000 tonnes and Sino-Zim Cement 250,000 tonnes.

PCC expects to add 700,000 tonne capacity from its new Harare plant, which it expects to commission later this year.

The country’s demand for cement for the year is estimated at 1,17 million tonnes.

“The volumes of cement sales remained subdued due to increased competitive activity in the total market following the influx of cement imports into the country as well as the entry of a major competitor into the Harare market,” said board chair Kumbirayi Katsande in a statement accompanying unaudited financial results on Thursday.

Sales revenue for the half-year under review increased marginally from $25, 4 million to $26, 5 million.

The company incurred a loss before interest, tax, depreciation and amortisation of $1, 5 million from $1, 3 million last year.

Finance costs were down from $442,000 last year to $127,000 as the company did not have any borrowings during the six months.

Going forward, Katsande said the company anticipates soft volume sales for the balance of the year.

“The market continues to experience intense competitive pressure as key players in the industry seek to protect share in the core Harare market which remains the single largest market by geography and volume in the country,” said Katsande.