Turnall Holdings turnover down 41pc
LISTED concern Turnall Holdings has recorded a 41 percent decline in turnover to $16,99 million for the year ended December 31, 2016 compared to $29 million in the prior year.
In a financial statement for the period under review, the firm’s chairperson Mrs Rita Likukuma said their sales during the period under review were negatively affected by liquidity constraints, subdued aggregate demand and uncompetitive pricing in the regional markets.
“Export sales contributed 0,52 percent against the previous year contribution of 1,82 percent.
“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,” she said
Mrs Likukuma said the company’s revenues were predominantly on cash basis in line with the revised business model thereby achieving lower sales but of a higher quality.
“Sales volumes were at 36 791 tonnes against that of the same period in 2015 of 60 451 representing a 39 percent reduction.
“As a result of the 41 percent and 54 percent drop in turnover and production out respectively, gross profit margin for the year.
“The group incurred impairment losses of $6.21 million arising from plant put on care and maintenance ($2.4 million), inventories ($1.3 million) and trade receivables,” she said.
During the year under review, the group incurred retrenchment costs of $480 000 while finance cost were reduced to $1.15 million from $1.45 million last year.
“Management believes the finance costs are still high and are impacting negatively on profitability prompting negotiations with banks to reduce interest charges and increase the loan tenures.
“Trade and other receivables reduced by $3.86 million from beginning of the year as a result of collections and impairments of uncollectable amounts,” said Mrs Likukuma.
On the outlook, she said trading conditions were expected to remain challenging this year while the prospects of a good agricultural season were anticipated to improve the economic situation.