Lafarge records volume decline

Published: 06 June 2014

Lafarge's volumes for the first four months of the year went down about 13% compared with the same period last year although 2% higher than the last quarter of 2013, MD Amal Tantawi told the AGM today.

Giving the trading update group FD Farai Matanhire highlighted that the prevailing economic challenges are impacting on the volumes.

"Our volumes are slightly low compared with last year and this is also being reflected by overall demand in the market so we believe the current prevailing economic challenges that we're facing are also having a negative effect on the overall performance of the company," Matanhire said.

Matanhire also noted that they are facing some challenges in terms of collecting funds from customers as they are also battling to pay their accounts on time.

'So it's a difficult year but if we look at the FY projection we still believe we will be able to record some improvement but not significant. Maybe flat or slightly better than last year despite the prevailing economic challenges," he said.

He further told the meeting that they have got plans to improve their operation efficiency and this is reflected in the Capex budget which has been put in place to ensure that they spruce up demand.

Of the $7 million that they "talked about earlier on", Matanhire noted that about $3.6 million of that has been spent and the remainder is going to be spent in the remaining part of the year.

"We still continue to have some implemental revenue from the other products so far 13% ahead of the same period last year. Cash generation; obviously because of the depressed operations we've got some squeeze on cash but we believe in the remainder of the year we will be able to improve on cash generation," he said.

Adding on to the trading update, group MD Amal Tantawi highlighted that the market is slightly squeezed this year in terms of the demand and one of the things that they are trying to do is to introduce new products like the Supa Set cement launched last week.

"We are still making efforts to work on the cash; we're reviewing our pricing strategy and our volume strategy as well. We are targeting at least to be the same as last year if not slightly better," she said.

In terms of the new investment projects, she noted that they are still in the phase of the feasibility study and they still have some anticipation of good returns on that, but they have to go through the internal approval process of the group of Lafarge.

All the directors were reappointed at a directors' fee of $35 058 and the auditors Deloitte and Touche were also reappointed at a fees of $83 000.
- zfn