Listed brick manufacturer, Willdale Limited endured a tough quarter ending 31 December 2019 with volume sales dropping 15 percent as demand for construction material weakened due to the hyperinflation.
In its trading performance report for the highlighted period, the company said it was relying on funded government projects and cluster housing development to sustain operations as construction activities were hardly hit by the harsh economic environment.
“Sales volumes were 15 percent lower than the same period last year as a result of declining effective demand. Selling is being ramped up targeting funded government projects and cluster housing development while riding on short lead times enabled by high stock levels,” company secretary, Mavuto Munginga said.
The company however posted an inflation adjusted revenue increase of 8 percent from that of comparable year but margins remain under threat as cost pressures continue swelling.
“Inflation adjusted revenue for the quarter was 8 percent above same period in the prior year. Margins remain under threat from cost push factors such as demands for higher wages and increases in electricity charges, maintenance spares and raw material input prices,” he said.
Month on month inflation shot up to 38.8 percent in October therefore eroding disposable incomes and affecting the mortgage market.
The company intends to explore opportunities in the various reconstruction projects in natural disaster hit areas like Chimanimani where a lot of infrastructure was destroyed by Cyclone Idai last year.