LAFARGE Cement Plc says increasing local and regional construction activity is likely to improve the company’s performance after lower cement volumes slowed its profits by 23 per cent last year.
Company secretary Harriet Kapekele said there was moderate growth in domestic demand, with a decline in the first six months reversed in the second half of the year under review.
Kapekele said regional demand continued to be strong and the Democratic Republic of Congo remained the dominant market but that there was also a significant increase in Burundi.
“Clinker was exported to Malawi, as was cement,” Kapekele said. “Operating profits declined 23 per cent to K222 billion due to lower cement volumes, a change in the sales mix and higher input costs. A limited set of facilities from Chilanga I continued to be used to manufacture special cement.”
She said the fluctuation of the kwacha against other major currencies and its weakening mid-year resulted in net foreign exchange losses.
However, Kapekele said the relative stability of the kwacha’s performance during the last quarter enabled some of the costs to be reversed.
“Working capital and cash management remained key priorities,” she said. “The cash flow and balance sheet were sound. The Citibank loan, for the new plant was repaid before the year end, 17 months before contractual maturity, as was the Danish Development Assistance loan to the government.”
Kapekele said the expected increase in local and regional demand for cement should boost the performance of Lafarge Cement Zambia Plc.
“Domestic demand has remained fairly steady and the commencement of various infrastructure projects will sustain demand at current levels,” Kapekele said.
“New projects which will increase demand for cement are anticipated to commence mid-year. Regional demand is expected to remain strong.”
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