LAFARGE Zambia PLC says new identified export markets will translate into an increasing percentage of cement and clinker sales, and combined with cost adjustment measures, they will help keep the company afloat despite a challenging market environment.
Company chief executive officer Emmanuel Rigaux said that the financial structure had remained solid with no external debt, citing a record high of clinker (residue) sales and a profit margin of K49 million in the first quarter of 2016 before interest and tax.
Mr Rigaux said that the Zambian market conditions had remained exceptionally challenging both in volumes and prices but that the cost adjustment measures were bearing fruit and that the end of the August 11 general elections would bring back some growth in the construction markets.
“The company continued to adjust its cost base in order to remain competitive and fully leveraged the group synergy initiatives in H 1. New export markets represent an increasing percentage of our sales with strong growth of rail transported volumes.
‘‘Large contracts such as the Kenneth Kaunda International Airport, Kafue Gorge Lower and continued focus on export as well as the rollout of our new franchise network (“Kumanga”) should help us mitigate the difficult market conditions in Zambia itself in the coming months,” he said. This is contained in the company unaudited results for the half year ended 30th June, 2016, which is in compliance with the requirements of the Securities Act, Cap 354 of the Laws of Zambia and the listing rules of the Lusaka Stock Exchange (Luse).
Mr Rigaux said that Lafarge Zambia had continued to operate in a difficult environment characterised by tight liquidity, market contraction and competitive pressures in the domestic market.
He said the financial position and cash flows of the company remained solid with no external debt despite additional power costs.