Zimbabwe Stock Exchange (ZSE) –listed roofing and building materials manufacturer, Turnall Holdings Limited turnover for the year ended December 2020 dropped four percent from the previous reporting period to ZWL$ 999.570 million due to losses incurred in the currency conversion using Reserve Bank of Zimbabwe’s fixed exchange rate at the time.
Formal businesses who sold their products in foreign currency were compelled to convert their earnings using the ruling bank rate.
The interbank market rate for the better half of 2020 remained stuck at ZWL$25 against the American dollar when the much quoted parallel rate was trading nearly double the value.
Despite improved demand for the company’s products leading to 9 percent sales volumes increase from previous year; this could not offset the impact of exchange losses.
“The company generated most of its revenues in USD and was converted at the fixed exchange rate ruling at that time resulting in the decrease in revenue compared to the previous year, said the company in its latest trading update.
Resultantly, profit for the year fell to ZWL$ 165 million from ZWL$ 434 million registered in 2019.
The RBZ however introduced the weekly foreign exchange auctions to better establish the value of the Zimbabwe dollar in July but most companies had already bled profusely.
Due to the COVID-19 pandemic, the company’s export receipts tumbled 43 percent of previous year due to border closures, international cargo logistics constraints and lack of competitiveness in the regional markets.
“The strict lockdown for the first one and half months of this year reduced the company’s sales volumes as most of the customers’ businesses were deemed not essential and were closed for business,” said the company.
Going forward, the Group anticipates better prospects in the construction industry due to demand in individual housing projects and the new regulations that prohibits the sale of un-serviced stands which is likely to improve demand for water and sewer reticulation pipes.