Turnall Holdings Limited revenue for the full year to December 31, 2023 more than doubled to $84,2 billion compared to $40,3 billion achieved in the prior year, which was however not enough to carry the group into profitability territory.
Group chairman Mr Grenville Hampshire said the 109 percent revenue growth was mainly due to an increase in concrete product sales and furnish modifications, which enabled the group to maximise the available raw materials for the fibre-cement products.
“However, the group was unable to meet sales demand on the fibre-cement products due to the fibre supply disruptions,” he said.
Despite the solid revenue growth, Turnall recorded a loss before tax narrowed to $1,2 billion compared to a loss of $17,7 billion realized in the prior year.
The exchange losses were incurred on foreign-denominated liabilities held during the year owing to the sharp increases in the official exchange rates from US$1:$684 in December 2022 to close the 2023 financial year at US$1:$6,715 representing an 882 percent increase.
Other income increased 17 percent to $593 million, compared to the prior year’s figure in inflation-adjusted terms. The other Income arose largely from scrap sales and rental income.
A fair value adjustment gain of $5,7 billion was realised on the investment property and this was due to the exchange rate movements.
Turnall had a monetary gain of $16,4 billion during the year compared to a loss of $14,7 billion incurred last year.
The inflation-adjusted gross margin for the year under review was 45 percent compared to 31 percent achieved last year on the back of the timeous review of selling prices in line with inflation and the tight cost containment initiatives being implemented by management.
Management said it would continue to manage costs and ensure that the business remains competitive and profitable.
Operating expenses to sales ratio was 41 percent compared to 52 percent in the prior year and the reduction is attributed to cost containment initiatives being implemented by management.
“In addition, in the prior year the business had some unusual expenses such as the provision of terminal benefits for the former executives and impairment of some of the old equipment,” said Mr Hampshire.
However, the expenses have remained high due to the general price increases experienced in the economy as evidenced by the hyperinflationary environment.
The group incurred an exchange loss amounting to $26,4 billion due to the sharp increases in the exchange rates during the year and this impacted negatively on the group’s performance.
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During the year under review, the group had a negative cash flow from operations of $60,3 billion representing a 2,273 percent drop compared to the prior year.
According to the group, a total of $35,7 billion was paid towards the recapitalisation of the plants, which will be installed in 2024 and 2025 and are thus included in prepayments.
“The capital projects were funded through a shareholders’ rights issue. The group is embarking on a massive expansion drive in order to grow revenue base and profitability,” said Mr Hampshire.
Turnall Holdings Limited remains committed to the implementation of its ambitious recovery plan, which involves the introduction of a new modern production line in Harare for roofing sheets and flat products.
“The group is also committed to returning to the regional export market and a significant investment in new equipment to convert the Bulawayo sheeting plant to “NuTech” production for the export market will come on stream in Quarter 2 2025, following the commissioning of the new sheeting plant in Harare in Quarter 1 2025.”
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