In its full-year financials to September last year, Willdale said activity in the construction industry was relatively low in the year under review.
“The year under review presented serious operational challenges stemming from under-capitilisation. Capacity utilisation remained too low to achieve optimum levels of production,” the company said in a statement.
Lending from financial institutions which was primarily anchored on depositor’s funds was short term, expensive and insufficient, with the construction industry experiencing little growth as a result, it said.
A local financial institution, Tetrad noted in its weekly report that Willdale has been struggling to secure long term funding for refurbishment work and working capital.
“During the year, they managed to secure a bank facility which assisted in carrying out some refurbishment work and resulted in increase in green and burnt production by 63% and 32% respectively.
“However, the capacity utilisation for the company is still low at 23%. Additional funding is required as more refurbishment work still needs to be done and also for working capital purposes,” said Tetrad.
Low volumes and margins led to an operating loss of US$1,54 million after charging US$374, 751 to depreciation of property, plant and equipment, Willdale said.
Turnover increased by 40% to US$1,5million.
However, Willdale is optimistic of recovery in the current financial year.
“Although recovery in the construction industry has been slow, we are hopeful that significant growth will be witnessed in the coming year (2011) driven by renewed confidence in the economy. However, the company will only benefit from the anticipated growth if it is adequately resourced to consistently produce at low cost,” Willdale said.
Meanwhile, banks will avail US$80 million loan to the construction industry to facilitate repairs and maintenance of plant and equipment and development of infrastructure. — Staff Writer.