Willdale plans US$1m capex

ZIMBABWE Stock Exchange-listed brick moulder, Willdale says it is planning to invest US$1 million to improve production capacities of its plants and machinery this year.

Willdale reported improved sales and production volumes during the year ended September 30, 2021, according to financial statements for the review period.

However, company chairman Washington Chidziwo said production was disrupted by COVID-19-induced lockdowns and power outages during the review period.

“Although production activities were disrupted by effects of the COVID–19-induced lockdowns, production increased by 19% compared to prior year,” Chidziwo said.

“Significant downtime was recorded during the year emanating from electricity outages. About US$1m in capital expenditure (Capex) has been budgeted for in the coming year to refurbish and renew parts of fixed and mobile plant to enhance efficiency and quality,” the Willdale chairman said.

“Volumes grew by 32% compared to prior year. Housing development contributed most to sales with cluster and individual housing topping the list of projects.

“The delivery channel was successfully serviced through third party partners despite effects of the COVID-19 pandemic and diesel availability challenges. Housing development will continue to drive volumes and revenue in the short to medium term given the appetite for provision of decent accommodation from both the government and private sector,” he said.

Chidziwo added that despite the impact of the COVID-19 pandemic on the business, profit margins remained relatively strong.

Willdale revenues increased to $1,2 billion during the review period, 37% ahead of $904 million during the comparable period in 2020.

Profit before tax increased to $275 million during the review period, compared to $72,5 million previously.

Willdale is positive that productivity will increase due to the expected demand for bricks and related materials in the year ahead caused by the growing appetite for modern housing and government’s drive to reduce the housing backlog under the National Development Strategy 1.

“We expect to improve productivity, volume levels and profitability subject to availability of foreign currency to import spares and capital equipment and adequate electricity supply,” Chidziwo said.

Power supply challenges have affected the country’s industry for a long time.

However, the problem escalated last year when Zesa Holdings rolled out blanket load-shedding programmes.

Government says blackouts are expected to end early next year after completion of the US$1,5 billion refurbishment and expansion project at Hwange power plant.

Work on the facility started just over two years ago.