Turnall holdings’ turnover of US$16.99 million is a 41% decrease from last year’s US$29 million and has attributed the drop to liquidity constrains, subdued aggregate demand and uncompetitive pricing in the regional markets.
The Group chairperson, Rita Likukuma said high cost of production had an effect on the company’s export sales as their prices were relatively high compared to other competitors in the region.
“Export sales were affected by pricing issues owing to high cost of production in Zimbabwe, a direct consequence of the weakening regional currencies against the United States Dollar.
“Current year revenues were predominantly on cash basis in line with the revised business model thereby achieving lower sales but of higher quality sales volumes were at 36,791 tonnes against that of the same period in 2015 of 60,451 representing a 39% reduction,” said Likukuma.
She also said despite improved buying processes and cost containment initiatives taken by the company during the year, the profit went down due to low production output.
“As a result of the 41% and 54% drop in turnover and production output respectively, the group reported a loss from operating activities of $0.5 million compared to a profit of $1.5 million recorded in the previous year.
“The profit deteriorated because of low production output despite improved buying processes and cost containment initiatives taken during the year. The Group reported a loss from operating activities of $0.5 million compared to a profit of $1.5 million recorded in the previous year.
“The Group incurred impairment losses of $2.9 million arising from plant on care and maintenance, held to maturity investment and intangible asset,” she added.
According to Likukuma, the Group incurred retrenchment costs of $0.6 million during the year while they gained $7.2 million from debt rescheduling and write offs.
“The Board has therefore instituted a balance sheet restructuring scheme to ensure that the business is capacitated to trade profitably,” Likukuma.