Willdale Limited is actively exploring avenues to augment its plant capacity in the short term by leveraging existing assets to secure necessary funding. The company is in ongoing negotiations for the sale of specific idle assets, earmarking the proceeds for capital expenditures.
In a recent statement, Mr Cleopas Makoni, the Group chairman, highlighted the company’s commitment to upgrading production facilities through funds generated from existing assets. The financial report for the year ending September 30, 2023, indicated a 75 percent average capacity utilization, driven by robust demand in housing development and other construction activities.
Mr Makoni acknowledged the impact of intermittent power outages on throughput and efficiencies during the financial year. However, he emphasized that clay crushing capacity was bolstered by investing in a new plant, resulting in improved product quality. To address supply challenges during the rainy season, the company is implementing a program to ensure consistent brick supplies.
Despite facing a 5 percent decline in sales volumes compared to the previous year, largely attributed to electricity shortages, the demand for bricks remained high. This demand was driven by housing development, educational facility construction, and shopping centers.
Mr Makoni noted the company’s resilience in maintaining market dominance and increasing margins, driven by a strategic focus on higher-margin brick types. Despite rising competition, Willdale Limited sustained its brand strength.
On the financial front, inflation-adjusted revenue for the year reached $37 billion, marking a significant 106 percent increase from the prior year’s $18 billion. Challenges such as electricity shortages contributed to lower stock availability, impacting sales volumes. However, sustained margins were achieved through a favorable product mix, keeping average prices at acceptable levels.
The company acknowledged the impact of exchange rate distortions, with exchange losses accounting for 21 percent of revenue. Despite these challenges, Willdale Limited remains optimistic, citing stable economic fundamentals and expressing confidence in leveraging the current construction boom for enhanced revenues and profitability in the upcoming year – HARARE