Published: 20 May 2025

Turnall Holdings Limited (Turnall) has announced a strategic downsizing of its operations in a move aimed at cutting costs, improving profitability, and enhancing cash flow generation amid a tough operating environment.

The company revealed the decision in its interim financial results for the first quarter of 2025, a period marked by declining sales and production volumes. Turnall produced 7,357 tonnes of fibre cement and concrete products during the quarter, representing an 18 percent decrease compared to the same period in 2024.

Despite the fall in output, the company said its production levels were closely aligned with subdued market demand. It also managed to maintain sufficient stock across its major product lines for the greater part of the quarter.

Sales revenue for the period dropped to US$2.3 million, down 11 percent from US$2.6 million recorded in the first quarter of 2024. Turnall attributed the revenue decline to sluggish economic activity and prevailing liquidity constraints that continue to weigh down customer spending.

Sales volumes also fell significantly, down 31 percent to 5,464 tonnes from 7,926 tonnes in the corresponding period last year. The company said the decline was further exacerbated by a shift in the sales mix, with a greater share of low-tonnage fibre cement products being sold.

However, the company reported an improvement in its gross profit margin, which rose to 22 percent from 19 percent recorded in the same period in 2024. Turnall credited this improvement to the favourable margins associated with fibre cement products, which formed a larger portion of its sales mix during the quarter.

Despite the improved margins, Turnall failed to generate positive cash flows from operations due to losses incurred during the period. The company has since embarked on a restructuring programme aimed at resizing its operations to reduce overheads and restore profitability.

"The business is in the process of resizing its operations to contain costs and thereby improve profitability and cash generation," Turnall said in a statement accompanying the financial results.

In the midst of these challenges, Turnall invested US$2.2 million in capital expenditure during the quarter. The bulk of the investment went towards components and civil works for a new sheeting plant currently under construction in Harare, signaling the company's long-term commitment to enhancing production efficiency.

As economic headwinds persist, Turnall's management is banking on a leaner operational model and strategic capital investments to navigate the current market volatility and position the business for sustainable recovery.
- zimpapers

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