Lafarge records solid performance

30 Jul, 2021 - 00:07 0 Views
Lafarge records solid performance

eBusiness Weekly

Business Writer

Zimbabwe Stock Exchange listed entity, Lafarge Cement Zimbabwe, recorded a solid performance for the first five months of the year in spite of Covid-19 related national lockdown instituted in the first quarter of the year.

Naturally, the wave of the Covid-19 pandemic and associated lockdowns inevitably slow down business activity.

But for Lafarge, sales were little affected with cement volumes for the period increasing by 23,7 percent compared to prior year.

In the same period, Dry Mortar products volumes grew by 105 percent compared to the same period last year.

The Binastore retail franchise recorded a remarkable 555 percent growth in volumes compared to the same period in prior year.

“This growth in the retail franchise business was further strengthened by the growth in purchases made on the Binastore e-commerce site facilitating business continuity during lockdown periods,” Company Secretary Faithful Sithole said in a Trading Update for the 5 months to May 2021.

Sithole said the sales growth was driven by growing market demand in the Individual Home Builder segment as well as the ongoing major infrastructure development projects led by the government.

“As a result of strategic changes in product portfolio mix the average selling price was favourable against budget.

“This, coupled with the significant growth in volumes, secured the company a 346 percent (inflation adjusted:31 percent) increase in revenue compared to the same period prior year,” Sithole said.

The strong sales volumes, coupled with effective cost reduction initiatives implemented in 2021 and revenue growth helped the company record improved profit margins.

The company’s EBITDA margins strengthened by 2 percent versus the same period in 2020.

“Focus remains fixed on ensuring profitability, therefore the cost optimisation drive remains integral given the less than stable operating environment.

“The business remains focused on expenditure discipline across the board with a key focus on production, distribution and contracted labour costs,” Sithole said.

Innovation and new product development is also another focus area and during the period under review, the company launched the country’s first waterproof cement under the label WaterShield as part of its progressive product innovation and expansion objective.

Beyond the period under review, the company has since launched yet another innovative offering; a high end dry mortars range of products under the name Tector which consists of plastering mortar (TectorPlast) and Tile Adhesives (TectorCeram) designed to give superior finish to construction works.

Innovation remains a key focus, leveraging on the increased manufacturing capacity recently installed in the Dry Mortars business, reads part of the Trading Update.

On delivery channels, Lafarge has maintained momentum on the digitisation of customer services and continues to invest in improving the capabilities of the various platforms for added convenience and efficiency.

According to Sithole, this has led to the achievement of 98 percent adoption of the Lead Retail customer service application by customers bringing convenience and ease of transaction processing to our customers.

“The rising momentum in the use of online transaction sites continues to secure revenue for the business in restricted operating environment.”

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