Lafarge Revenue Crashes By $4 Billion
Lafarge Cement Zimbabwe has said the damaged roof collapse in October 2021 coupled with COVID-19-induced lockdowns, resulted in the cement producer’s revenue crashing by $4 billion compared to the same period last year.
The cement producer indicated this in its financial statements on Friday.
Lafarge chairman Kumbirai Katsande said the roof collapse incident became a nerve centre of write-downs during the year ended December 31, 2021.
Revenue crashed to $7.1 billion in 2021, from $11.1 billion during the comparable period in 2020.
Katsande, however, struck an optimistic tone as he shared the results with investors, even after announcing a 21% drop in volumes, along with a $694.7 million post-tax loss. Lafarge had recorded a $5 billion profit during the same period in 2020. He said:
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The company suffered a significant business interruption when the roof over both cement mills collapsed, which resulted in stoppage of cement production from the 10th of October 2021 up until mid-February 2022.
Following the aforementioned incident, the company resorted to selling clinker, an intermediary product, for sustenance.
This business sustenance plan meant that the overall gross margins were squeezed, resulting in a decline in gross profit margins to 49.6% compared to 60.5% in the prior year.
The dry mortars business realised some growth despite the significant impact of the cement roof collapse, which negatively affected availability of the majority of the company’s products which are cement based.
He added that the combination of the COVID-19 induced slowdown and the roof collapse resulted in volumes declining for the year by 21% from the prior year.
Katsande also said the second half, however, saw a gradual improvement in business activity owing to the phased re-opening of the economy, albeit under strict public health protocols, as COVID-19 lockdown conditions were relaxed.
The Lafarge chairman also cautioned that the war between Russia and Ukraine could affect the doing of business worldwide as supply chains have been already crippled further while global cutbacks in key commodities have sparked off a price surge.
More: The Standard
