LAFARGE Cement Zimbabwe Limited’s inflation adjusted revenue declined to $7,2 billion for the year to December 31, 2021, a 35,5 percent drop from $11,1 billion prior year.
The decline was a result of poor industrial performance mainly attributable to a roof collapse at its Manresa plant in Harare in 2021. Following the incident, the company resorted to selling clinker, an intermediary product, for sustenance.
This business sustenance plan meant that the overall gross margins were squeezed, resulting in a decline in gross profit margins to 49,6 percent compared to 60,5 percent in the prior year.
“In spite of the decline in revenue and volumes during the year, the company managed to maintain tight control of expenditure as total expenses fell by 4,9 percent. Distribution expenses declined by 33,2 percent compared to the prior year, reflecting the decline in cement volumes alluded to earlier,” said the company’s chairman, Kumbirai Katsande.
The company instituted various measures to contain structural administrative costsunder a difficult period, resulting in a marginal 4,4 percent increase compared to the prior year. However, despite the cost containment efforts, the poor industrial performance and the ensuing decline in volumes weighed down overall performance to a loss before tax of $364 million compared to a profit before tax of $3,2 billion in 2020.