Consequently, this eliminated a significant portion of inbound logistics costs related to input costs during ... Current
LAFARGE CEMENT ZIMBABWE LIMITED
UNAUDITED FINANCIA L RESULTS FOR THE HALF YEAR ENDED 30 JUNE 2017
CHAIRMAN’S STATEMENT
Abridged statement of profit or loss and other comprehensive income for the half year ended 30 June 2017
THE BUSINESS ENVIRONMENT The economy continued to experience further strain from the liquidity situation that spilled over from 2016. As a result, the majority of companies experienced extended delays in foreign currency payments as they grappled with an unprecedented procurement backlog. Some industrial and manufacturing operations were adversely affected after companies failed to land relevant spare parts and components in time. Plant maintenance schedules had to be deferred to later periods in the year. The cost of distribution also increased as operating costs went up. On a good note, the agricultural sector received a much needed boost from the above normal rainfall season. A number of dams and reservoirs spilled over after more than 16 years. However, the heavy and sustained rainfall in the 1st quarter was a drawback on the cement industry. Some construction related projects were delayed, resulting in restrained sales. In addition, there was increased destocking by cement key stockists as they minimised risk associated with moisture level degradation and cement shelf life concerns on very slow moving stock.
Unaudited June 2017
Unaudited June 2016
$
$
Revenue
23,139,167
26,504,058
Operating loss before other income, finance costs and tax
(1,620,555)
(1,549,985)
Loss before finance costs and tax
(1,620,555)
(1,549,985)
(162,013)
(127,237)
(1,782,568)
(1,677,222)
6,623
(571,300)
Loss for the period
(1,775,945)
(2,248,522)
Total comprehensive loss for the period
(1,775,945)
(2,248,522)
80,000,000
80,000,000
(0.022 )
(0.028)
Finance costs
Loss before tax
Income tax credit/(expense)
RESULTS Following from a combination of the above referenced factors, 1st quarter sales lagged behind prior year by 23%. There were no major infrastructure projects that were started in the 1st half of the year but the preparatory work on the Beitbridge – Chirundu road continued in the build up to formal project rollout later in the year. It is therefore anticipated that the Company will be one of the major suppliers of cement and other related products to this key project once all the necessary formalities are finalised.
Earnings per share
The individual housing construction market remained resilient. This segment continued to drive sales in the 2nd quarter and helped reduce the sales revenue deficit to single digit levels. It is estimated that the industry recorded a decline in uptake of products in comparison to prior year, resulting in the Company recording a decline in sales volume of 12%. The Company recorded a sales decline of 13% to reach US$23.14 million from US$26.5 million in prior year. This represents the impact of sales volume decline countered positively by product mix. The Company achieved a reduction in cost of sales following normalisation of plant operations after the upgrade of the environmental control unit. Consequently, this eliminated a significant portion of inbound logistics costs related to input costs during the plant downtime period. The Company recorded a normalised gross profit of US$11.91 million from US$6.48 million in prior year. Distribution costs increased due to economic factors impacting the business environment. There were no retrenchment costs recorded in the current period while all other costs were in line with prior year. Other income increased marginally from sales of idle assets and scrap. As a result, the Company recorded a loss before interest and tax of US$1.62 million from a loss of US$1.55 million in 2016. The Company incurred increased finance costs pertaining to standby credit facilities. Ultimately, the Company registered a total comprehensive loss after taxes of US$1.76 million from a loss of US$2.25 million in the prior year, an improvement of 21%. The total current assets increased by 5% mainly due to inventory accumulation in anticipation of the approaching peak period. Total equity reduced marginally by 4% to US$38.82 million due to a reduction in retained earnings. Total current liabilities increased by 5% to US$36.6 million mainly due to trade payables. BORROWINGS The Company had no borrowings as at 30 June 2017. However, one of the bank accounts carried an overdraft of US$0.72 million in 2017 from US$0.65 million in prior year. CAPITAL EXPENDITURE The Company continues to invest in developmental projects. As at 30 June 2017 the Company had invested US$0.71 million towards plant and machinery upgrade. OUTLOOK The 2nd half of the year represents the peak of the cement and construction industry in line with seasonal trends. It is therefore anticipated that sales will increase from August onwards and taper off in December when the industry goes into recess. The rise in sales volumes for the balance of the year is expected to result in improved profitability.
Number of shares in issue
Basic loss per share based on 80,000,000 shares in issue ($ per share)
Abridged statement of financial position as at 30 June 2017
Unaudited June 2017
Audited December 2016
$
$
41,950,839
43,716,812
ASSETS
Non-current assets
Property, plant and equipment and other non-current assets Intangible assets
20
5,940
-
368,010
41,950,859
44,090,762
35,586,913
33,594,787
3,550,905
3,607,831
585,000
616,000
Total current assets
39,722,818
37,818,618
Total assets
81,673,677
81,909,380
800,000
800,000
Revaluation reserve
12,508,225
12,508,225
Retained earnings
25,514,810
27,270,755
Total equity
38,823,035
40,578,980
Deferred tax
5,135,826
5,389,961
Provision for rehabilitation
1,079,504
990,291
Total non-current liabilities
6,215,380
6,380,252
Trade and other payables, accruals and provisions
13,409,529
11,234,848
Related party payables
20,555,918
21,014,458
Other non-current assets Total non-current assets
Current assets
Current assets other than cash and cash equivalents Cash and cash equivalents Assets held for sale
EQUITY AND LIABILITIES
Capital and reserves
Issued capital
Non-current liabilities
K. C. Katsande CHAIRMAN 15 September 2017 DIVIDEND The Directors have recommended that no dividend be declared due to the loss recorded by the Company during the period under review. By Order of the Board
Current liabilities
Bank Overdraft
719,749
650,451
1,950,116
2,050,391
Total current liabilities
36,635,312
34,950,148
Total equity and liabilities
81,673,677
81,909,380
Provisions
H. Mapondera Company Secretary 15 September 2017 DIRECTORS:
Registered Office Manresa Works Arcturus Road, Harare
D.L. Cruttenden; J. Cantillana Ibarrola; D. Drouet; K.C. Katsande (Chairman); H. Mapondera*; M.A. Masunda; S.M. Mutangadura; A. Tantawi* (Chief Executive Officer). *Executive LAFARGE CEMENT ZIMBABWE LIMITED Manresa Works, Arcturus Rd - P.O.Box GD160, Greendale, Harare, Zimbabwe Tel: 086 77 215 000 / 086 88 005 000 Sales Office Tel: 086 77 215 215, 086 88 005 215 www.lafargeholcim.co.zw
UNAUDITED FINANCIA L RESULTS
LAFARGE CEMENT ZIMBABWE LIMITED
FOR THE HALF YEAR ENDED 30 JUNE 2017 Abridged statement of changes in equity for half year ended 30 June 2017
Issued capital
Revaluation reserve
Sharebased payment reserve
Retained earnings
Total
$
$
$
$
$
800,000
10,664,627
23,893
21,871,159
33,359,679
Total comprehensive income for the period
-
1,843,598
-
5,375,703
7,219,301
Transfer from share-based payments to retained earnings
-
-
(23,893)
23,893
-
800,000
12,508,225
-
27,270,755
40,578,980
-
-
-
(1,775,945)
(1,775,945)
800,000
12,508,225
-
25,514,810
38,823,035
Balance at 30 June 2016
Balance at 31 December 2016
Total comprehensive loss for the period
Balance at 30 June 2017
Strength
Abridged statement of cash flows for the half year ended 30 June 2017 Unaudited June 2017
Unaudited June 2016
$
$
(1,775,945)
(2,248,522)
Net cash from operations before working capital changes
1,594,674
546,500
Cash generated from operations
4,116,128
2,253,530
Net cash generated from operating activities
3,075,487
1,103,880
(3,201,711)
(1,739,963)
69,298
446,210
(56,926)
(189,874)
Cash and cash equivalents at the beginning of the period
3,607,831
198,827
Cash and cash equivalents at the end of the period
3,550,905
8,953
Loss before tax
Net cash used in investing activities
Net cash generated from financing activities
Net decrease in cash and cash equivalents
Tried & Trusted
Supplementary information for the half year ended 30 June 2017
1
General Information Lafarge Cement Zimbabwe Limited is incorporated in Zimbabwe, its parent Company is LafargeHolcim, a Swiss Company which is listed on the Euronext and Swiss stock exchanges.
2
Statement of Compliance The financial statements of the Company are prepared in accordance with International Financial Reporting Standards (IFRS), Zimbabwe Stock Exchange Listing Requirements and the Companies Act (Chapter 24:03).
3
Directors Responsibility Statement The Directors of the Company are responsible for the maintenance of adequate accounting records and the preparation of the financial statements and are also responsible for the systems of internal control. The results were approved by the Board of Directors on 15 September 2017.
4
Accounting Policy and Reporting Currency. There were no changes in accounting policies. The results are presented in United States Dollars.
5
Borrowings The Company had no borrowings except for an overdraft of $719,749.
6
Supplementary Information Unaudited June 2017
Unaudited June 2016
$
$
710,999
1,758,013
Depreciation expense
1,743,886
1,527,479
Commitments for the acquisition of property, plant and equipment
2,683,075
3,155,457
Contingent Liability
7,439,279
-
Capital expenditure
DIRECTORS:
D.L. Cruttenden; J. Cantillana Ibarrola; D. Drouet; K.C. Katsande (Chairman); H. Mapondera*; M.A. Masunda; S.M. Mutangadura; A. Tantawi* (Chief Executive Officer). *Executive LAFARGE CEMENT ZIMBABWE LIMITED Manresa Works, Arcturus Rd - P.O.Box GD160, Greendale, Harare, Zimbabwe Tel: 086 77 215 000 / 086 88 005 000 Sales Office Tel: 086 77 215 215, 086 88 005 215 www.lafargeholcim.co.zw
