Willdale Limited (WILD.zw) HY2023 Interim Report
CHAIRMAN’S STATEMENT FOR THE SIX MONTHS ENDED 31 MARCH 2023
The operating environment which was characterized by high borrowing rates and depreciation of the Zimbabwe dollar against major currencies, continued to impact on performance in the period under review. Low stock availability caused by electricity shortages hampered growth in sales volumes.
Hyperinflated revenue for the period under review increased by 29% compared to the same period in the prior year. Distortions in exchange rates affected the computation of revenue. An operating loss of ZWL 606 million was incurred for the period (2022: ZWL 26 milllion) due to the low revenue base and high seasonal costs. Consultations with ZIMRA and its parent ministry over clarity on the charging of VAT on bricks have been positive so far.
Sales volumes declined by 16% compared to the prior period largely due to low stock availability resulting from electricity shortages that impacted on production. However, demand for bricks remained firm as several projects resumed after the rainy season. Housing development for both cluster homes and individual units accounted for most of the sales, with significant contributions also noted from improvements in educational facilities.
Capacity of the clay crushing plant was enhanced during the period under review resulting in improved quality of the end product and throughput. The improved plant will drive competitiveness going forward. Production remained hampered by electricity load shedding which mostly affected extruders that are heavy consumers of the energy source. Extruder output declined by 34% as a result of the severe electricity shortages. Electricity supply has significantly improved in the past two months.
We are excited and encouraged by the number of building projects that are in the market driven by both corporates and individuals. The backlog for individual housing remains huge while government is driving construction of housing in all provinces. These and other infrastructure projects will provide the critical mass for sustainable revenue and profitability in the short to medium term. We remain hopeful that the economy will stabilize soon and provide a better operating environment. Consistent good supply of electricity will help improve efficiencies and margins. Our drive for ISO certification should enhance our focus on ESG and developing a culture of safety, health and environmental awareness in our operations and the resultant benefits.
No dividend has been declared with respect to the half year ended 31 March 2023 in view of the need to preserve cash for working capital.
On behalf of the Board, I am grateful to my colleagues on the Board, the management team and staff for their efforts in steering the company through a challenging environment. I also wish to thank our various stakeholders including our shareholders, suppliers and customers for their continued support.
29 June 2023
The contents of the post above were obtained from third parties, which We, AfricanFinancials, believe to be reliable. However, We do not guarantee their accuracy and the above information may be in condensed form. The reader is encouraged to refer to the original source of the information, which, in most cases, is in PDF format and on the originating company's letterhead. While We endeavour to replicate the original content accurately, We cannot guarantee the absence of errors in the above article and We disclaim any liability regarding reliance on information provided in this article.