CONSTRUCTION firm, Turnall Holdings Limited (Turnall) recorded an 11% decline in revenue to US$2,3 million during the first quarter, owing to low economic activity and liquidity challenges.
Since last year, the market has been strapped for cash owing to regulatory policies to limit the money supply and support the artificial exchange rate of the central bank.
Consequently, this limited liquidity negatively affected consumer spending as this reduced access to physical cash and credit, affecting Turnall purchases.
The performance comes as Turnall nearly doubled 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.
“The sales revenue for the quarter was US$2,3 million, which was an 11% decline compared to the same period last year (US$2,6 million).
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“The drop in sales was largely due to the low economic activity in the market and liquidity challenges which were prevailing in the economy,” Turnall said in its trading update for the first quarter ended March 31, 2025.
“Consequently, the sales volumes for the quarter were 5 464 tonnes, which was a 31% decline compared to the same period last year (7 926 tonnes).
“Changes in the sales mix exacerbated the volume decrease as a higher proportion of low tonnage fibre-cement products were sold during the quarter.”
The firm reported a gross margin for the quarter under review of 22% against the previous year’s figure of 19%.
Turnall said the improved margins were mainly due to the change in the sales mix as the group enjoyed higher margins on fibre-cement products.
“The business was not able to generate positive cash flow from operating activities, and this was mainly due to the loss incurred during the period,” Turnall said.
“The business is in the process of re-sizing its operations to contain costs and thereby improve profitability and cash generation.
“In addition, US$2,2 million was spent on investing activities with the bulk of that being components and civil works for a new sheeting plant which is going to be based in Harare.”
The company produced 7 357 tonnes of fibre cement and concrete products during the first quarter under review, an 18% decline compared to the same period last year.
Production levels were linked to sales demand.
However, the firm remains optimistic.
“The civil works and installation of a new sheeting plant in Harare are now at an advanced stage and this plant is expected to boost production output, increase production efficiency and result in significant cost savings particularly in respect of transportation costs,” Turnall said.
“Cost containment remains a key focus area, as well as enhancing our product offering. We remain committed to turning the group’s fortunes around and restoring it to profitability.”
