Willdale mulls changing transactional currency

Audrey Galawu

Willdale Limited said the company is contemplating a change in functional currency to the United States dollar in view of the increased ratio of transaction conducted in US dollars.

Despite recording increase in revenue, Willdale revealed that the company’s revenue continued to be impacted by exchange rate distortions.

In its report for the year ended December 31, 2023, the company revealed that revenue for the quarter increased by 130% in hyperinflation terms and 835% in historical terms compared to the prior year.

Willdale faced a difficult year, with sales volumes declining by 9% while production dropped by 16% compared to the previous year.

“The decline, like many other companies in the country has been attributed to electricity load shedding.

“The major economic factors remained volatile with the inflation rate increasing steadily from a month-on-month rate of 1% in September to 4.7% in December.

“The December dollar shed 12% against the US dollar in the same period putting pressure on costs and margins. Significant activity was witnessed in the construction industry. Increased load shedding was experienced, affecting throughput and efficiencies,” reads the report.

The company has shown confidence for better performance due to building projects that have continued to increase, with cluster homes, educational infrastructure and shopping centres dominating the list of projects.

Willdale said the projects should provide the critical mass to meet targets for the year.

“The upsurge in construction projects presents opportunities for real growth despite increasing competition especially in the common brick market.

Strategies are being pursued to improve the product mix and maximise margins from high value bricks.

“During the period under review, the company was certified to ISO standards ISO9001:2015 (Quality Management System), ISO14001:2015 (Environmental Management System) and ISO45001:2015 (Occupational Health & Safety Management System). These management systems will ensure a sustainable supply of high quality bricks at affordable prices and cement the brand’s dominance in the market,” further reads the report.

The company further said the tax measures introduced for 2024, which include the reclassification of bricks as liable to Value Added Tax, will impact on business on short term, especially from price sensitive customers who are not VAT registered and cannot recover input tax.