Staff Writer 
Elton Manguwo
Staff Writer
WILLDALE Limited has issued a cautious guidance for the year 2025 anticipating a continuation of tight liquidity conditions which led to working capital constraints and production inefficiencies during the financial year ended September 30, 2024.
The brickmaking concern was further hampered by poor cash generation with cash from operations dipping 18 percent to US$535 214 resulting in a significantly poor cash flow ratio of 0.10.
Zimbabwe’s monetary authorities have kept a hawkish eye on money supply since the currency reforms instituted last year in a bid to tame inflation.
“The operating environment is expected to remain tough in the coming year as we anticipate liquidity to remain constrained,” group chairman Cleophas Makoni said in a statement accompanying the financials.
“Production volume growth was hampered by working capital shortages, which emanated from the changing business model and tight liquidity conditions that prevailed.”
Revenue for the year at US$11 million was 64 percent above prior year’s US$6,7 million despite sales volumes declining by seven percent due to reduced production.
However, average prices were six percent higher compared to prior year despite stiff competition which offset the impact of lower production.
Exchange rate distortions affected revenue and costs in the first half of the year resulting in significant exchange losses. Profitability was also weighed down by real increases in other cost lines such as a 23 percent increase in wages and electricity which recorded a 41 percent average tariff increase.
Subsequently, the company posted US$796 883 loss after tax against a profit position of US$1,5 million prior year.
“Production costs remained relatively higher than competitors who were using better technology. Fund raising for the acquisition of a modern and more efficient rotary kiln plant is ongoing. This plant will improve competitiveness particularly in the common brick segment,” Makoni said.
The company anticipates that the new facility will enable it to respond more effectively to market demands and position production to better compete with industry peers, ultimately driving growth and profitability in the long term.
“Efforts to secure funding for the acquisition of a modern, high-efficiency rotary kiln plant are currently underway and this strategic investment is expected to enhance our competitiveness, particularly in the common brick market,” said Makoni.By upgrading to a more advanced kiln technology, the company aims to optimize production processes, reduce operational costs, and improve the overall quality of its products.
“We anticipate securing the necessary funding for the upgrade of our production plant from the various initiatives that are already in motion and have effective strategies designed to maintain profitability amid increasing competition and evolving business models have been implemented,” said Makoni.
“Lack of adequate stocks affected volume growth, with volumes declining by seven percent compared to the prior year,” said Makoni underlining the need to enhance production to effectively deal with emerging competition which is threatening both volumes and margins.
newsdesk@fingaz.co.zw
