CONSTRUCTION firm, Turnall Holdings Limited, widened its loss-making position to US$2,92 million for its financial year ended December 31, 2024, owing to an increase in inflation-driven operating expenses.
In the comparative period, Turnall posted a loss of US$1,5 million.
Amid the volatile local currency, companies are struggling to remain open, with some either opting for corporate rescue or shutting down.
According to the Confederation of Zimbabwe Industries, companies older than five years are performing well, out of the 4 552 manufacturing firms surveyed.
Turnall has been in operation for 82 years.
“The group’s turnover for the year ended 31 December 2024 was US$12,04 million compared to US$12,56 million in the previous year,” Turnall chairperson Grenville Hampshire said in a statement accompanying the firm’s financial results for the year ended December 31, 2024.
“This represents a 4% decline, which was mainly due to liquidity constraints and the adverse effects of the El Nino-induced drought, which suppressed the demand for our products.”
He said the rising cost of raw materials and exchange rate disparities negatively impacted the cost of doing business.
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“The operating expenses to sales ratio was 48% compared to 35% in the same period last year. The increase is attributed to inflationary pressures exerted particularly in the first and last quarters of the year,” Hampshire said.
Expenses were recorded at US$5,74 million during the period under review, from US$4,45 million in the prior year.
“A provision for obsolete and slow-moving inventory amounting to US$1,2 million was made during the year and was mainly in respect of some raw materials (synthetic fibres) which have expired and some pipes that have not moved for over a year, mainly due to changing customer preferences,” Hampshire said.
“The stock provision is included in administration expenses. Included in operating expenses is a provision for credit losses amounting to US$267 771 and intermediary money transfer tax amounting to US$111 710.”
The poor performance led the firm to have US$1,13 to every dollar of short-term debt, down 48,14% from the prior year, threatening Turnall’s capital position.
Total assets were recorded at US$37,91 million during the period, up from US$34,99 million in the prior year.
“All these factors culminated in the group incurring a loss for the year of US$2,9 million to US$1,5 million recorded last year,” Hampashire said.
The firm is currently retooling its factories to address production efficiencies and improve product offerings.
“These efforts, coupled with the current cost containment initiatives, will bring improvements to the performance of the group,” Hampshire said.
