Lafarge’s revenue for Q1 down 15% as heavy rains weigh
HARARE- Cement producer, Lafarge’s revenue was down 15% as at March 2017 compared to the same period last year. The decline was mainly due to the incessant rains season that weighed down demand for their product.
Lafarge, chief executive officer, Amil Tantawi however said the cement producer’s revenues have been on the rebound since April with demand expected to increase in the second quarter.
“When I look at the figures of March, we were down 15% compared to the figures of last year. The good news is we started picking up when the rains stopped. When we look at April and May results things are looking good,” Tantawi said during an interview after the company’s annual general meeting earlier today.
Incessant rains experienced during the first quarter of this year according to Tantawi stalled various projects resulting in low turnover.
“To be honest the market has been down. When we look at the first quarter, we estimate that the overall market was down by 23% that is the overall market. We had a more than expected rainy season and of cause the cash crisis. So we anticipate that the market was down 23 percent.”
Lafarge, according to Tantawi was operating within budget, with the cement producer is expected to pursue a robust growth strategy.
“If I look at the first quarter were even better that last year. So I think we will finish the year with the budget that we have but we have a budget that is in line with the anticipated growth,” Tantawi added.
Lafarge like most net importers of raw material and spare parts has not been spared by foreign payments backlog as its current liabilities grew by 50% to $34,95m as at December 31,2016.
With foreign payments softening after intervention from the African Development Bank (AFDB), the cement producer would be looking at capitalising on last year’s success.
However the 2017 operating environment for the French headquartered cement producer could be characterised by stiff competition in the wake of Pretoria Portland Cement (PPC) commissioning a cement plant early this year, posing a challenge to other competition in the Northen Region.