• Sales volumes declined by 9%
  • April rains affected production
  • Cumulative revenue declined by 1%

Harare - ZSE-listed brick maker, Willdale Limited recorded a 9% decline in sales volumes for the nine months ended 30 June 2022 owing to a lack of stock which was caused by the effects of the late April rains.

In a trading update, the Company said the late rains that fell in April impacted production.

Willdale however, highlighted that production is currently ahead of target and prior year and this should provide stocks to cover the sales gap in the fourth quarter.

“Demand remains high, driven by cluster home developments and individual home builders,” the Company said.

The Company’s cumulative revenue for the period under review declined by 1% in hyperinflationary terms compared to the prior year.

Willdale further noted that although average prices have been affected by exchange rate disparities, the product mix remains favourable and this is expected to buttress margins for the full year.

Meanwhile, the Company continues to implement its business strategy despite the various local and external factors in the operating environment.

“Business continuity and risk management plans are in place and regularly reviewed to minimise negative impacts on the business,” the Company said adding, “We continue to operate under strict guidelines issued by the health authorities to minimise the effects of the COVID-19 pandemic, although there has not been any impact from the virus in the quarter under review.”

The Company highlighted that the recent tightening of the lending terms and conditions by the central bank presents challenges in raising working capital however, the business model in place is generating sufficient working capital to support the business in the short term.

Looking forward, the Company said increasing demand for bricks to meet the high demand for housing will drive revenue in the fourth quarter.

“Plant capacity utilisation which is currently averaging above 80% should provide sufficient stocks to meet targeted sales volumes for the ensuing quarter, provided electricity supply remains reasonable,” Willdale said.

The Company hopes that the monetary and fiscal policy interventions by the government will bring stability to the exchange rate and inflation and a better operating environment.

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