A manufacturing company that supplies housing and pipe products, Turnall Holdings has reported a $111, 875 after-tax loss for the first half of 2013, according to News Day. The company, which is listed on the Zimbabwe Stock Exchange, recorded a $874,118 surge in profits during the same time period.
According to News Day, lower pricing in the first quarter of 2013 forced the company’s gross profit margin of 30 percent in 2012 to fall seven points to 23 percent this year.
“The financial results for the period under review reflect two business approaches to dealing with an economic environment that to a large extent remained fluid,” Herbert Nkala, Turnall chairman said in the report.
“Pricing and margins during the first quarter of 2013 were aligned to the market in an effort to retain market share. With a high fixed cost structure and a lower than normal capacity utilisation, profit margins reduced significantly against a generally high cost of production,” he continued.
Nonetheless, News Day also reported that the company’s overall $18.9 million in revenue was two percent higher than that of last year’s. Zimbabwe’s local construction industry faced difficulty last year and according to the report is expected to further decline “due to underfunding, stiff competition and high operating costs.”
Because the company’s exports have experienced growth, and because of plans to expand into neighboring markets, Turnall’s chairman believes there is a light at the end of the construction industry tunnel.
“As a business, we believe that a growth trajectory for the economy will see us benefit in the areas of housing construction, water and sewer reticulation and an introduction of export incentives,” Nkala said. “The post-election era should usher in positive economic growth and that in turn should see a growth in investment in infrastructure and housing.”