Published: 16 May 2025

Construction firm Turnall Holdings Limited (Turnall) recorded an 11% decline in revenue to US$2.3 million during the first quarter of 2025, citing low economic activity and persistent liquidity challenges as key factors behind the drop.

The market has faced significant cash shortages since last year, driven by regulatory policies aimed at limiting money supply to support the central bank's artificial exchange rate. This liquidity squeeze has curtailed consumer spending by restricting access to physical cash and credit, negatively impacting Turnall's sales.

In its trading update for the quarter ended March 31, 2025, Turnall disclosed that sales volumes fell sharply to 5,464 tonnes—a 31% drop from the 7,926 tonnes sold in the same period last year. The decline was compounded by changes in the sales mix, with a higher proportion of lower-tonnage fibre-cement products sold.

"The sales revenue for the quarter was US$2.3 million, an 11% decline compared to the same period last year (US$2.6 million)," the company said. "The drop in sales was largely due to the low economic activity in the market and liquidity challenges prevailing in the economy."

Despite the sales decline, Turnall reported an improved gross margin of 22%, up from 19% in the previous year. This margin boost was attributed to the higher margins enjoyed on fibre-cement products, which made up a larger portion of sales.

However, the company noted it was unable to generate positive cash flow from operating activities due to the ongoing loss incurred during the period.

For the financial year ended December 31, 2024, Turnall nearly doubled its loss-making position to US$2.92 million, largely driven by inflation-related increases in operating expenses.

To address these challenges, Turnall said it is currently re-sizing operations to contain costs, improve profitability, and enhance cash generation.

The firm also invested US$2.2 million during the quarter, primarily on components and civil works for a new sheeting plant in Harare, which is nearing completion.

"Production during the quarter was 7,357 tonnes of fibre cement and concrete products, down 18% from the same period last year, reflecting sales demand," Turnall noted.

Looking ahead, the company expressed optimism about the new sheeting plant, which is expected to boost production output, increase efficiency, and deliver significant cost savings, particularly in transportation.

"Cost containment remains a key focus area, alongside enhancing our product offering," Turnall said. "We remain committed to turning the group's fortunes around and restoring it to profitability."
- newsday

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