Lafarge Cement Zimbabwe : HY22 Results & Audit Review

LAFARGE CEMENTREVIEWEDZIMBABWEABRIDGEDLIMITED REVIEWEDFINANCIALABRIDGEDRESULTSFINANCIAL RESULTS

for the half year ended 30 June 2022

LG109

CHAIRMAN'S STATEMENT

INTRODUCTION

I hereby present the business performance update for Lafarge Cement Zimbabwe Limited (the Company) for the six months period covering January to June 2022.

TRADING ENVIRONMENT

The operating environment for the 6-months period was characterised by an acceleration of annual ination from 60.6% in January 2022 to 191.6 % in June 2022 (Source: Zimbabwe National Statistics). The environment, therefore, remained hyper inationary with signicant increases in the price of fuel and other basic commodities.

The ongoing Government-driven infrastructure projects have presented business growth opportunities. Global supply chain disruptions and attendant costs were worsened by the Russia/Ukraine war during the period, resulting in escalation of costs of raw materials, fertilisers and some agricultural commodities such as wheat.

Further relaxation of Covid-19 induced restrictions were instituted by the government, making way for full resumption of normal business activity across the country. The Company, however, continues to observe the Covid-19 protocols with a focus on creating an enabling workplace adjusted to the changes necessitated by prolonged periods of remote working.

STRATEGIC AGENDA

We continue to pursue our business targets in line with the Holcim 2025 Vision - Accelerating Green Growth. Focus has been streamlined on ve key strategic pillars of health and safety, industrial performance, commercial growth, nancial growth and people development.

HEALTH, SAFETY AND ENVIRONMENT

The Company continues to uphold the highest standards of health and safety through a robust cocktail of policies and programs tailored to achieve zero harm in its operations. In the context of the Covid-19 pandemic, the Company implemented a business resilience program, prioritising employee wellness and business continuity.

In addition to Health and Safety, the Company is committed to sustainable environmental practices and subscribes to the Net Zero Pledge to reduce carbon emissions by 2030 as part of the Holcim Group global commitment. There is no letting up on continuous improvement to reduce dust emissions and other environmental impacts.

No fatalities or serious injuries were recorded at any of the Company's operations or projects during the period under review.

The Company has a zero-tolerance attitude towards injuries in the workplace. Health, Safety, Environment and quality systems are continually being upgraded and improved, in line with the Holcim Group standards, to enhance performance in accordance with the Company's Zero Harm policy.

INFLATION ADJUSTED FINANCIAL PERFORMANCE

The volume of cement sold declined by 56% versus the same period last year. This was necessary, as per the rst half budget, to decommission one of the existing cement ball mills to make way for the installation of the new Vertical Cement Mill (VCM), eectively doubling Lafarge Cement Zimbabwe (LCZ) capacity. The new VCM is anticipated to be fully operational by Q4 2022.

As cement productivity is the main contributor for Dry Mortar Operations (DMO), the volumes from the dry mortar units reduced by 26% versus prior year. Despite start up challenges associated with the newly commissioned VCM, the Company has already noted an improvement in cement availability since the end of June 2022 and is condent that volumes will continue to grow in the second half of the year in line with our strategic objectives.

The decommissioning of cement mill 1 to make way for the VCM, the mill house roof collapse in Q4 2021 and the commissioning phase of the VCM adversely aected cement volumes. This resulted in the Company's ination adjusted revenue reducing by 23% to ZWL 6.6 billion (2021, ZWL 8.5 billion). The gross prot margin fell by 21% to 37.1% (2021:58.1%) as the Company resorted to selling clinker, an intermediary product for sustenance. For the period under review, the combination of the reduction in sales revenue, squeezed gross margins, increased operating costs and an increase in foreign exchange losses resulted in the Company posting an operating loss of ZWL 7.8 billion compared to a prot of ZWL 1.4 billion for the same period in 2021. However, the EBITDA performance for H1 2022 of ZWL 0.47 billion remains above the half year budget for 2022. In light of the local currency depreciation over the six months period, there has been signicant increase in Other Gains and Losses to ZWL 6.8 bn (2021, ZWL 226 mn) driven by exchange losses due to the company's net foreign currency exposure. This is mainly linked to the Holcim Group loan to LCZ representing 72% of the exchange losses. The operating loss was oset by a net monetary gain of ZWL 4.7 bn (2021, ZWL 323 mn) which diluted the loss before tax to ZWL 3.6 bn (2021, ZWL1.3 bn prot).

CAPITAL EXPENDITURE

The business continues with the implementation of the previously announced US$25 million capital expansion programme. Following the successful installation of alternative power infrastructure in 2020 and the successful completion of the automated Dry Mortars (DMO) Plant in 2021, the new Vertical Cement Mill (VCM) commissioning started in Q2 2022. Additionally, there is the refurbishment of silos which will help to increase the storage capacity of cement and to solve the dispatch bottle necks. These investments are expected to double the Company's cement production capacity and improve raw material availability to the new DMO plant.

SIGNIFICANT TRANSACTION UPDATE

As of the 27th of June 2022, shareholders and members of the investing public were advised that Associated International Cement Limited, a member of the Holcim Group, had entered into a binding agreement for the sale of its 76.45% stake in Lafarge Cement Zimbabwe Limited to Fossil Mines (Private) Limited. As advised on the 7th of October 2022, the parties are still working towards consummation of the Sale and Purchase Agreement. Accordingly, shareholders and members of the investing public are advised to exercise caution when dealing in the Company securities until further notice.

DIVIDEND

Due to the uncertainties that prevail in the economic environment and the desire to ensure that adequate working capital is maintained in the business, the Directors have not declared an interim dividend.

OUTLOOK

The commissioning process of the new VCM started in Q2 2022. The Company will essentially double its cement production capacity and improve raw material availability to the new DMO plant. The launch of the new VCM will reposition the Company on a growth path into the future. This will have a positive eect on the Company's revenue generation and protability.

Binastore and Aggregates as with Dry Motors are anticipated to post good growth in H2. The overall market demand continues to grow driven by the individual home builders' segment as well as the ongoing major Government infrastructure development projects.

The Company is hopeful that continued collaborative dialogue between government and industry will continue in order to safeguard business condence, preserve value and macro-economic stability.

APPRECIATION

I would like to take this opportunity to thank our valued stakeholders for their continued support as the business has been concerned with gradual recovery from the impact of the loss of business following the roof collapse in October 2021. The business looks forward to a protable future and all stakeholders - employees, customers, suppliers, communities and the government are pivotal in building this business into the future.

By Order of the Board

________________

K. C. Katsande

Chairman of the Board of Directors

27 October 2022

ABRIDGED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

for the half year ended 30 June 2022

		Ination Adjusted		*Historical Cost
	Notes		**Restated			**Restated
		Reviewed	reviewed		Unreviewed	unreviewed
		six months	six months		six months	six months
		ended	ended		ended	ended
		30.06.2022	30.06.2021	30.06.2022	30.06.2021
		ZWL`000	ZWL`000		ZWL`000	ZWL`000
Revenue	5	6,561,636	8,534,541	4,424,897	2,751,588
Cost of sales		(4,127,002)	(3,572,170)		(2,248,739)	(1,124,363)
Gross prot		2,434,634	4,962,371	2,176,158	1,627,225
Other gains and losses	12	(6,793,976)	(225,691)	(6,736,207)	(62,694)
Quarry rehabilitation movement		18,227	-	12,123	-
Distribution expenses		(245,788)	(427,315)	(155,006)	(137,295)
Administration expenses		(3,265,846)	(2,944,554)	(2,138,214)	(947,910)
Restructuring costs		(5,217)	(24,272)	(4,550)	(7,778)
Other income		10,534	9,646		6,715	3,095
(Loss)/prot before interest and tax		(7,847,432)	1,350,185	(6,838,981)	474,643
Finance costs		(467,375)	(374,178)	(335,729)	(120,261)
Net monetary gain on ination adjustment		4,723,995	323,438	-	-
(Loss)/prot before tax		(3,590,812)	1,299,445	(7,174,710)	354,382
Income tax (expense) /credit	8	(272,600)	(187,404)	1,698,619	(122,848)
(Loss)/prot for the year		(3,863,412)	1,112,041		(5,476,091)	231,534
Other comprehensive income, net of tax		-	-	-	-
Total comprehensive (loss)/income for the half year		(3,863,412)	1,112,041	(5,476,091)	231,534
Earnings per share
Number of shares in issue		80,000,000	80,000,000	80,000,000	80,000,000
Basic and diluted (loss)/earnings per share	6	(48.29)	13.90	(68.45)	2.89
Headline (loss)/earnings per share	6	(48.23)	14.20	(68.39)	2.99

• Income tax credits as at 30 June 2021 restated to correct a prior period error on deferred tax computation. Refer to Note 13 for details.

ABRIDGED STATEMENT OF FINANCIAL POSITION

as at 30 June 2022

		Ination Adjusted	*Historical Cost
			** Restated		** Restated
		Reviewed	audited	Unreviewed	unaudited
		as at	as at	as at	as at
	Notes	30.06.2022	31.12.2021		30.06.2022	31.12.2021
		ZWL`000	ZWL`000	ZWL`000	ZWL`000
ASSETS
Non-current assets
Property, plant and equipment	10	13,404,031	14,147,705		5,617,732	5,748,717
Statutory receivable		8,372,618	5,663,670		8,372,618	2,587,126
Deferred taxation		-	-		1,709,005	-
Total non-current assets		21,776,649	19,811,375		15,699,355	8,335,843
Current assets
Inventories		5,036,168	4,095,479		2,531,725	1,577,348
Prepayments and deposits		830,340	967,706		489,754	349,223
Trade and other receivables		878,528	635,544		878,528	290,312
Related party receivables		167,266	94,646		167,266	43,234
Cash and cash equivalents		10,773	222,108		10,773	101,457
Total current assets		6,923,075	6,015,483		4,078,046	2,361,574
Total assets		28,699,724	25,826,858		19,777,401	10,697,417
Capital and reserves
Issued capital		78,412	78,412		800	800
Revaluation reserve		7,610,487	7,610,487		3,820,411	3,820,410
(Accumulated losses)/retained earnings		(1,372,317)	2,491,095		(5,389,167)	86,924
Total equity/(decit)		6,316,582	10,179,994		(1,567,956)	3,908,134
Non-current liabilities
Long term borrowings	11	12,576,345	7,938,083		12,576,345	3,626,062
Deferred taxation		793,718	626,655		-	42,864
Provision for quarry rehabilitation		412,432	289,377		412,432	132,185
Total non-current liabilities		13,782,495	8,854,115		12,988,777	3,801,111
Current liabilities
Trade and other payables		3,290,341	3,003,917		3,046,274	1,257,459
Related party payables	7	4,863,608	3,363,784		4,863,608	1,536,554
Provisions		188,703	198,149		188,703	90,513
Borrowings		125,000	-		125,000	-
Current tax payable		132,995	226,899		132,995	103,646
Total current liabilities		8,600,647	6,792,749		8,356,580	2,988,172
Total equity and liabilities		28,699,724	25,826,858		19,777,401	10,697,417

K. C. Katsande	G Ndugwa
Chairman	Chief Executive Ocer
27 October 2022	27 October 2022

*Historical gures were not reviewed. We have included historical information as supplementary information

• Retained earnings and deferred taxation as at 31 December 2021 restated to correct a prior year computation error. Refer to Note 13 for details.

LAFARGE CEMENT ZIMBABWE LIMITED

Directors: K. C. Katsande (Chairman); M. A. Masunda; S. M. Mutangadura; G. E. Zvaravanhu; S. Shoniwa;	Manresa Works, Arcturus Road, P.O. Box GD 160, Greendale, Harare.
J. W. Stull (Alternate: V. Darbo); G. Ndugwa* (Chief Executive Ocer) A.E.A Mowafy* (Chief Financial Ocer) *EXECUTIVE	Tel: [phone], [e-mail]. www.lafargeholcim.com

REVIEWED ABRIDGED FINANCIAL RESULTS

for the half year ended 30 June 2022

LG109

ABRIDGED STATEMENT OF CHANGES IN EQUITY

for the half year ended 30 June 2022

Ination Adjusted			**Restated
	Share	Revaluation	Retained	Total
	capital	reserve	earnings	equity
	ZW$`000	ZW$`000	ZW$`000	ZW$`000
Balance at 1 January 2021	78,412	4,895,987	3,687,629	8,662,028
Total comprehensive income for the period	-	-	1,112,041	1,112,041
Balance at 30 June 2021	78,412	4,895,987	4,799,670	9,774,069
Balance at 1 January 2022	78,412	7,610,487	2,491,095	10,179,994
Total comprehensive loss for the period	-	-	(3,863,412)	(3,863,412)
Balance at 30 June 2022	78,412	7,610,487	(1,372,317)	6,316,582
*Historical			**Restated
	Share	Revaluation	Retained	Total
	capital	reserve	earnings	equity
	ZW$`000	ZW$`000	ZW$`000	ZW$`000
Balance at 1 January 2021	800	1,589,902	485,662	2,076,364
Total comprehensive income for the period	-	-	231,534	231,534
Balance at 30 June 2021	800	1,589,902	717,196	2,307,898
Balance at 1 January 2022	800	3,820,410	86,924	3,908,134
Total comprehensive loss for the period	-	-	(5,476,091)	(5,476,091)
Balance at 30 June 2022	800	3,820,410	(5,389,167)	(1,567,957)

**Restated retained earnings as at 1 January 2022 & 2021 to correct a prior period error arising from deferred tax computations. Refer to Note 13 for details.

ABRIDGED STATEMENT OF CASH FLOWS

for the half year ended 30 June 2022

	Ination Adjusted		*Historical Cost
		** Restated			**Restated
	Reviewed	Reviewed		Unreviewed	Unreviewed
	six months	six months		six months	six months
	ended	ended		ended	ended
	30.06.2022	30.06.2021	30.06.2022	30.06.2021
	ZWL`000	ZWL`000		ZWL`000	ZWL`000
Net (loss)/prot for the period	(3,863,412)	1,112,041	(5,476,091)	231,534
Adjustments:
Income tax expense/(credit)	272,600	187,404	(1,698,619)	122,848
Finance costs recognised in prot/loss	467,375	374,178	335,729	120,261
Depreciation, amortisation and impairment charges	1,530,639	803,579	660,528	253,986
Quarry rehabilitation movement	(18,227)	-	(12,123)	-
Unrealised foreign exchange gains and losses	6,574,205	225,691	6,574,205	62,694
Inationary movements	(4,717,104)	654,911		-	-
Net cash from operations before working capital changes	246,076	3,357,804	383,629	791,323
Movements in working capital
Increase in inventories	(940,690)	(1,356,731)	(954,377)	(564,416)
Increase in trade, related party and other receivables	(315,605)	(70,453)	(712,248)	(104,996)
Decrease/(increase) in prepayments and deposits	137,367	209,403	(140,530)	(23,672)
Increase in trade, related party and other payables	1,786,247	439,119	1,650,826	406,889
Increase in provisions	113,607	357,389		378,435	132,706
Cash generated from operations	1,027,002	2,936,531		605,735	637,834
Finance costs paid	(171,420)	(164,918)	(122,632)	(48,489)
Income taxes paid	(37,789)	(666,477)		(23,900)	(168,850)
Net cash generated by operating activities	817,793	2,105,136	459,203	420,495
Cash ow from investing activities
Purchase of property, plant and equipment	(786,965)	(787,525)		(529,543)	(208,155)
Total net cash used in investing activities	(786,965)	(787,525)	(529,543)	(208,155)
Cash ow from nancing activities
Proceeds from long-term liabilities	-	90,708	-	25,777
Proceeds/(repayments) of short-term liabilities	125,000	(135,824)		125,000	(36,743)
Total net cash used in nancing activities	125,000	(45,116)		125,000	(10,966)
Ination eects on cash	(186,776)	(762,258)		-	-
Total net increase(+) / decrease(-) in liquid funds	(30,948)	510,237		54,660	201,374
Cash and cash equivalents at the beginning of the period	222,107	448,578		101,457	127,480
Eect of movement in exchange rates	(180,386)	-		(145,344)	-
Cash and cash equivalents at the end of the period	10,773	958,815		10,773	328,854

NOTES TO THE ABRIDGED FINANCIAL STATEMENTS

1. GENERAL INFORMATION
   Lafarge Cement Zimbabwe Limited ("the Company") is incorporated in Zimbabwe and is engaged in the manufacture and distribution of cement and allied products. Its ultimate holding Company is Holcim Limited, a Swiss Company which is listed on the Euronext and Swiss stock exchanges. The address of its registered oce and principal business is Manresa Works, Arcturus Road, Greendale, Harare, Zimbabwe.
   The Company's nancial statements are presented in Zimbabwe dollar (ZWL). Amounts have been rounded to the nearest thousand dollars (ZWL '000'). The historical cost amounts have been presented as supplementary information and the auditors have not expressed any opinion on those numbers.
2. APPROVAL OF ABRIDGED FINANCIAL STATEMENTS
   The underlying nancial statements to the abridged nancial results were approved by the Board on 27 October 2022. Subsequent to the reporting period date there were no material adjusting or non-adjusting events warranting disclosure in the underlying nancial statements, nor these abridged nancial results.
3. BASIS OF PREPARATION
   The abridged nancial statements for the half-year reporting period ended 30 June 2022 have been prepared in accordance with International Accounting Standard (IAS) 34 Interim Financial Reporting. The nancial statements have been prepared from the statutory records that are maintained under the historical cost basis except for certain property, plant and equipment items that are measured at revalued amounts, and certain nancial instruments measured at amortised cost. Historical cost is generally based on the fair value of the consideration given in exchange for goods and services.
   The interim report does not include all the notes of the type normally included in an annual nancial report. However, selected explanatory notes are included to explain events and transactions that are signicant to an understanding of the changes in the Company's nancial position and performance since the last annual nancial statements. Accordingly, this report is to be read in conjunction with the annual report for the year ended 31 December 2021 and any public announcements made by Lafarge Cement Zimbabwe Limited during the interim reporting period.
   IAS 29 Financial reporting in Hyperinationary Economies requires that nancial statements be prepared in the currency of a hyperinationary economy and be stated in terms of the measuring unit current at the balance sheet date and that corresponding gures for previous period be restated in the same terms. The restatement was calculated by means of conversion factors derived from the Zimbabwe Consumer Price Index (CPI) issued by the Zimbabwe National Statistics Agency (ZIMSTAT). The indices and conversion factors used to restate the accompanying nancial statements at 30 June 2022, are as follows:

Dates	Indices	Conversion Factor
CPI as at 30 June 2022	8,707.4	1.0000
CPI as at 31 December 2021	3,977.5	2.19
CPI as at 30 June 2021	2,986.4	2.92
CPI as at 31 December 2020	2,474.5	3.52

NOTES TO THE ABRIDGED FINANCIAL STATEMENTS (continued)

NEW STANDARDS, INTERPRETATIONS AND AMENDMENTS ADOPTED BY THE COMPANY

The accounting policies adopted in the preparation of the interim abridged nancial statements are consistent with those followed in the preparation of the Company's annual nancial statements for the year ended 31 December 2021. The Company has not early adopted any standard, interpretation or amendment that has been issued but is not yet eective.

4. GOING CONCERN

As at the reporting date, the Company's current liabilities exceeded current assets by ZWL 1,677,572,000 (December 2021: ZWL 777,266,000) and the Company reported a net comprehensive loss for the period of ZWL 3,863,412,000 (June 2021: net comprehensive income of ZWL 1,112,041,000) and accumulated loss of ZWL 1,372,317,000 (December 2021: ZWL 2,491,095,000 retained earnings). The Company's performance was mainly aected by the roof collapse in 2021 which halted production and resulted in low revenues and also foreign currency exchange losses incurred on the related party borrowing of USD $32 million and related party payables. As a result, the Company has not been able to generate sucient cash ows to settle short-term borrowings due to external parties.

The major shareholder of the Company Associated International Cement Limited, a member of the Holcim Group, has entered into a binding agreement for the sale of its 76.45% stake in Lafarge Cement Zimbabwe Limited to a third party; this transaction has not been concluded as at the reporting date, pending regulatory approvals; which when concluded may impact the timing of the settlement of the related party borrowings. In the event that the transaction is not successfully concluded the company will enter into negotiations with the Holcim Group to restructure the repayment terms. Management is aware of the following conditions as at the reporting date:

1. That the Company has not been able to generate sucient cashows to settle the interest portion of the long-term related party borrowing and it remains uncertain whether it will be able to settle this borrowing if required to be settled immediately or by the current due date should the sale not take place;
2. That there is no clarity on how and whether the debt may be restructured by the new shareholder, and whether the Company will be able to meet those payment obligations;
3. Furthermore, in the continuing economic environment characterised by a disparity between the ocial exchange rate and parallel exchange rate, costs continue to increase exerting pressure on the Company's cash ows, and resultantly aecting settlement of borrowings mostly associated with related parties and other creditors.

The above factors indicate the existence of a material uncertainty on the Company's ability to continue as a going concern and that it may be unable to realise its assets and discharge its liabilities in the normal course of business. Management have taken mitigation plans as described in detail below, to restore the positive results in terms of earnings before interest and tax (EBIT) and cash generation.

1. The net loss and negative working capital position were mainly driven by the collapse of the cement mill roof that occurred in October 2021, however, one of the cement mills was restored in February 2022. Lafarge Cement Zimbabwe is gradually restoring its ability to sell cement in the market and furthermore a Design Safety of Construction Quality Program was developed to ensure the sustainability of all the buildings within the Company's premises.
2. The partial restoration of one of the cement mills indicated above impacted the sales volume of cement positively from February 2022 after the full stoppage of cement sales from October 2021 to January 2022. This trend will continue to improve and it is anticipated that signicantly higher volumes will be achieved in Q4 2022. Full restoration of one of the cement mills and the operation of the new VCM is expected to improve the overall Company performance.
3. The newly installed VCM which will be fully implemented by Q4 2022 will enable Lafarge Cement Zimbabwe to double its cement production capacity and this will improve the supply of cement to the new Dry Mortar plant for optimal operation. This will be directly reected through the Company's ability to generate cash to meet its commitments and to enhance its protability.
4. The two major capex projects which are the VCM installation, and the silos refurbishment are expected to be completed and capitalised during Q4 2022 and this development will increase the Company's asset base by approximately USD 16 mn. The refurbishment of the silos will help to increase the storage capacity of cement, which will solve the dispatch bottle necks further enhancing protability.
5. The related party borrowings have been part of the discussions between the Holcim Group and the prospective buyer. Management believe that if the deal is successfully concluded between both parties, then restructuring or a settlement of the loan may be part of the new shareholders plan. As a result, management anticipates that this will resolve the net liability position.

The Directors therefore believe that the preparation of the nancial statements on a going concern basis is still appropriate. This basis assumes that the realisation of assets and settlement of liabilities will occur in the ordinary course of business.

5. REVENUE FROM CONTRACTS WITH CUSTOMERS

	Ination Adjusted	*Historical cost
	Reviewed	Reviewed	Unreviewed	Unreviewed
	six months	six months	six months	six months
	ended	ended	ended	ended
	30.06.2022	30.06.2021		30.06.2022	30.06.2021
	ZW$ 000	ZW$ 000	ZW$ 000	ZW$ 000
Cement	4,376,810	7,732,447		2,951,540	2,492,988
Clincker	1,496,250	-		1,009,010	-
Aggregates	57,815	67,929		38,988	21,901
Dry mortars	567,402	552,090		382,633	177,997
Other solutions and products- Binastore	49,799	168,641		33,582	54,371
Transportation services	13,560	13,434		9,144	4,331
Total	6,561,636	8,534,541		4,424,897	2,751,588

Revenue performance was impacted on by volume performance that went down 56% comparing the rst 6 months of 2021 and those of 2022. There were no clincker sales in the comparative period as the Company only started selling clincker after the cement mill roof breakdown in October 2021.

6. EARNINGS PER SHARE
		Ination Adjusted	*Historical cost
			** Restated		** Restated
		Reviewed	reviewed	Unreviewed	unreviewed
		six months	six months	six months	six months
		ended	ended	ended	ended
		30.06.2022	30.06.2021	30.06.2022	30.06.2021
		ZW$ 000	ZW$ 000	ZW$ 000	ZW$ 000
	Basic and diluted (loss)/earnings per share	(48.29)	13.90	(68.45)	2.89
	Headline (loss)/earnings per share	(48.23)	14.20	(68.39)	2.99
	The calculation of basic and diluted earnings per share is based on the following data:
	(Loss)/earnings used in the calculation
	of basic and diluted loss/earnings per share	(3,863,412)	1,112,041	(5,476,091)	231,534
	(Loss)/earnings used in the calculation
	of headline loss/earnings per share	(3,858,195)	1,136,313	(5,471,541)	239,312
	Number of shares (thousands):	(000)	(000)	(000)	(000)
	Weighted average number of shares
	for the purpose of basic earnings per share	80,000	80,000	80,000	80,000
	Weighted average number of shares
	for the purpose of diluted earnings per share	80,000	80,000	80,000	80,000

*Historical gures were not reviewed. We have included historical information as supplementary information

• Restated to reect changes in earnings after correcting a prior period error on the deferred tax computation. Refer to Note 13 for details.

LAFARGE CEMENT ZIMBABWE LIMITED

Directors: K. C. Katsande (Chairman); M. A. Masunda; S. M. Mutangadura; G. E. Zvaravanhu; S. Shoniwa;	Manresa Works, Arcturus Road, P.O. Box GD 160, Greendale, Harare.
J. W. Stull (Alternate: V. Darbo); G. Ndugwa* (Chief Executive Ocer) A.E.A Mowafy* (Chief Financial Ocer) *EXECUTIVE	Tel: [phone], [e-mail]. www.lafargeholcim.com

REVIEWED ABRIDGED FINANCIAL RESULTS

for the half year ended 30 June 2022

LG109

NOTES TO THE ABRIDGED FINANCIAL STATEMENTS (continued)

7.	RELATED PARTY TRANSACTIONS AND BALANCES
			Ination Adjusted		*Historical cost
			Reviewed	Audited		Unreviewed	Unaudited
			as at	as at		as at	as at
			30.06.2022	31.12.2021	30.06.2022	31.12.2021
			ZW$ 000	ZW$ 000		ZW$ 000	ZW$ 000
	Balances at the end of the period
	Balances owed to related parties	4,863,608	3,363,784	4,863,608	1,536,554
	Balances receivable from related parties
	for goods and services	167,266	94,646	167,266	43,234
			Ination Adjusted		*Historical cost
			Reviewed	Reviewed		Unreviewed	Unaudited
			six months	six months		six months	six months
			ended	ended		ended	ended
			30.06.2022	30.06.2021	30.06.2022	30.06.2021
			ZW$ 000	ZW$ 000		ZW$ 000	ZW$ 000
	Transactions during the period
	Purchases of goods & services from related parties	315,503	1,998,488	210,950	743,642
	**This note excludes a group loan reported under Note 12**
8.	INCOME TAX EXPENSE
			Ination Adjusted		*Historical cost
				**Restated			**Restated
			Reviewed	unreviewed		Unreviewed	unreviewed
			six months	six months		six months	six months
			ended	ended		ended	ended
			30.06.2022	30.06.21	30.06.22	30.06.21
			ZW$ 000	ZW$ 000		ZW$ 000	ZW$ 000
	Current tax expense	105,536	608,138	53,250	206,370
	Deferred tax expense/(income)		167,064	(420,734)		(1,751,869)	(83,522)
	Total income tax expense /(credit)
	recognised during the period		272,600	187,404		(1,698,619)	122,848

• Restated to reect changes after correcting an error on deferred tax computation. Refer to Note 13 for details.

9. PROFIT AND LOSS INFORMATION

	Ination Adjusted		*Historical cost
Prot for the year has been arrived	Reviewed	Reviewed		Unreviewed	Unreviewed
after charging the following	six months	six months		six months	six months
	ended	ended		ended	ended
	30.06.2022		30.06.21	30.06.22	30.06.21
	ZW$ 000	ZW$ 000		ZW$ 000	ZW$ 000
Auditor's remuneration	39,730		2,905	30,600	2,711
Depreciation, amortisation and impairment charges	1,530,639		803,579	660,528	253,986
-Cost of sales	1,469,262		771,003		634,024	243,690
-Administration	61,190		32,124		26,418	10,154
-Amortisation of quarry	187		452		86	142
Directors' fees	5,454		5,465	4,341	1,875
Expected credit losses - statutory receivables	84,339		56,677	84,339	25,890
Expected credit losses - other receivables	21,087		44,462	21,087	20,310
Technical fees expense	44,720		888,685	23,024	304,801
Employee benets expense:	1,802,945		365,898	1,219,019	421,205
Post employment benets	72,571		59,581		48,212	20,435
Short term employment benets	1,725,157		283,638		1,166,257	392,992
Termination benets	5,217		22,679		4,550	7,778
10. PROPERTY PLANT AND EQUIPMENT
				Ination Adjusted	*Historical cost
Cost						Reviewed	Unreviewed
						ZW$'000	ZW$'000
Balance at 1 January 2021					10,784,004	2,490,875
Capital expenditures					2,124,381	721,400
Revaluation increase					3,623,153	2,967,860
Disposals					(3,236)	(1,186)
Assets derecognised					(21,776)	(8,159)
Accumulated depreciation on revaluation					(1,450,605)	(412,507)
Balance at 31 December 2021					15,055,921	5,758,283
Capital expenditures					786,965	529,543
Balance at 30 June 2022					15,842,886	6,287,826
Accumulated Depreciation
Balance at 1 January 2021					907,397	9,280
Depreciation and amortisation expense					907,430	414,420
Eliminated at revaluation					(903,050)	(412,507)
Eliminated on disposals					(2,596)	(1,186)
Elimination on impairment					(965)	(441)
Balance at 31 December 2021					908,216	9,566
Depreciation and amortisation expense					1,530,639	660,528
Balance at 30 June 2022					2,438,855	670,094
Carrying Amounts
Balance at 1 January 2021					9,876,607	2,481,595
As at 31 December 2021					14,147,705	5,748,717
As at 30 June 2022					13,404,031	5,617,732
11. LONG TERM BORROWINGS
	Ination Adjusted		*Historical cost
						Unreviewed
	Reviewed	Audited		Unreviewed	Unaudited
	as at		as at		as at	as at
	30.06.2022	31.12.2021	30.06.2022	31.12.2021
	ZW$ 000	ZW$ 000		ZW$ 000	ZW$ 000
Inter-Group Loan	12,576,345	7,938,083	12,576,345	3,626,062

The Company did not obtain any new borrowings during the period under review. The movement in the loan balance is a restatement to reect the closing rate. The Company has a an outstanding related party loan of US$32 Million with an interest rate of 6 months LIBOR plus 5%. The Company obtained this long term unsecured loan facility from the Holcim Group through a subsidiary Cemasco B.V. The loan is repayable at the option of the borrower but must be settled in full by at least 1 August 2023.

NOTES TO THE ABRIDGED FINANCIAL STATEMENTS (continued)

12. OTHER LOSSES AND (GAINS)

Foreign exchange losses are coming from translations of outstanding foreign obligations due to related parties including the intergroup loan of US$ 32 Million. The foreign exchange gain is coming from restatement of the statutory receivable at closing rate being part of the legacy debt held the Reserve Bank of Zimbabwe under the blocked funds and legacy debt arrangements.

	Ination Adjusted		*Historical cost
	Reviewed	Reviewed		Unreviewed	Unreviewed
	six months	six months		six months	six months
	ended	ended		ended	ended
	30.06.2022	30.06.21	30.06.22	30.06.21
	ZWL`000	ZWL`000		ZWL`000	ZWL`000
Net foreign exchange losses	6,793,976	225,691	6,736,207	62,694
Unrealised foreign exchange losses	12,360,654	513,290		12,360,654	161,335
Unrealised foreign exchange gains - blocked funds	(5,786,449)	(286,825)		(5,786,449)	(98,375)
Realised foreign exchange losses	400,157	-		307,347	-
Realised foreign exchanges losses on
restatement of bank balances	(180,386)	(774)		(145,345)	(266)
Total unrealised	6,574,205	225,691		6,574,205	62,694
Total realised	219,771	-		162,003	-

13. RESTATEMENT OF PREVIOUSLY REPORTED NUMBERS AS A RESULT OF PRIOR PERIOD ERRORS

13.1 Restatement of the Statement of Comprehensive Income for the period ended 30 June 2021 and the Statement of Financial Position as at 31 December 2021

A correction was made to the calculation of deferred tax for periods that ended 31 December 2020, 30 June 2021 and 31 December 2021 which led to restatement of the previously reported numbers. The correction was to align tax bases for foreign denominated obligations with the original values booked when these obligations were initially recognised for all open obligations that remained unpaid as at the reporting date. In the previous computations only current period exchange losses were being included in the deferred tax computation resulting in understatement of deferred tax with respect to unrealised foreign exchange losses.

Statement of Comprehensive Income	Ination Adjusted		*Historical Cost
for the period ended 30 June 2021	Reviewed		Unreviewed
	As Previously			As Previously
	Reported	Restated		Reported	Restated
	ZWL'000	ZWL'000		ZWL'000	ZWL'000
Prot before tax	1,299,445	1,299,445	354,382	354,382
Income tax expense	(478,332)	(187,404)		(187,396)	(122,848)
Prot for the year	821,113	1,112,041		166,986	231,534
Impact on basic earnings per share	10.26	13.90	2.09	2.89
Impact on diluted earnings per share	9.96	14.20	1.99	2.99
Statement of Financial Position	Ination Adjusted		*Historical Cost
as at 31 December 2021	Reviewed		Unreviewed
	As Previously			As Previously
	Reported	Restated		Reported	Restated
	ZWL'000	ZWL'000		ZWL'000	ZWL'000
Retained earnings/(accumulated losses)	813,436	2,491,095	(510,765)	86,924
Total equity	8,502,333	10,179,994		3,310,445	3,908,134
Deferred tax liabilities	2,304,313	626,655	640,551	42,864
Total non current liabilities	10,531,772	8,854,114	4,398,798	3,801,111
Impact of changes on opening balances
as at 1 January 2021
Retained earnings/accumulated losses)	2,334,333	3,687,629		(40,335)	485,662
Total equity	7,308,731	8,662,028		1,550,367	2,076,364

13.2 Restatement of the Statement of Cash Flow for the six months ended 30 June 2021

For the period ended 30 June 2021, no inationary adjustment was made to the proceeds from long term borrowings and the eects of ination on cash balances was not disclosed. The restatement done was to align current period numbers with numbers reported in the prior period for comparability and in compliance with IAS 29 by taking into account ination eect on both proceeds from long term borrowings and cash. This correction had a positive impact on the net cash from operations before working capital changes but no impact on total liquid funds.

Statement of Cash Flow	Ination Adjusted
or the six months ended 30 June 2021	Reviewed
	As Previously	Restated
	Reported	ZWL'000
	ZWL'000
Inationary movements	85,662	654,911
Net cash from operations
before working capital changes	2,788,554	3,357,804
Cash ow from nancing activities
(Repayments) / proceeds from long term borrowings	(102,301)	90,708
Repayments of short-term borrowings	(135,824)	(135,824)
Total net cash used in nancing activities	(238,125)	(45,116)
Ination eects on cash	-	(762,258)
Net increase in cash and cash equivalents	510,237	510,237

*Historical gures were not reviewed. We have included historical information as supplementary information

LAFARGE CEMENT ZIMBABWE LIMITED

Directors: K. C. Katsande (Chairman); M. A. Masunda; S. M. Mutangadura; G. E. Zvaravanhu; S. Shoniwa;	Manresa Works, Arcturus Road, P.O. Box GD 160, Greendale, Harare.
J. W. Stull (Alternate: V. Darbo); G. Ndugwa* (Chief Executive Ocer) A.E.A Mowafy* (Chief Financial Ocer) *EXECUTIVE	Tel: [phone], [e-mail]. www.lafargeholcim.com

LG109

REVIEWED ABRIDGED FINANCIAL RESULTS

for the half year ended 30 June 2022

NOTES TO THE ABRIDGED FINANCIAL STATEMENTS (continued)

14. Financial Instruments

Set out below is an overview of nancial assets held by the company.
	Ination Adjusted		*Historical Cost
Financial assets	Reviewed	Audited		Unreviewed	Unaudited
	as at	as at		as at	as at
	30.06.2022	31.12.2021	30.06.2022	31.12.2021
AMORTISED COST	ZWL`000	ZWL`000		ZWL`000	ZWL`000
Cash and cash equivalents	10,773	222,108	10,773	101,457
Trade receivables	832,366	231,360	832,366	105,684
Sta loans and advances	8,306	6,259	8,306	2,859
Other receivables	37,856	397,924	37,856	181,769
Related party receivables	167,266	94,646	167,266	43,234
Statutory receivable - blocked funds	8,372,618	5,663,670	8,372,618	2,587,126
Total	9,429,185	6,615,967	9,429,185	3,022,129
Financial liabilities
AMORTISED COST
Borrowings - long term	12,576,345	7,938,083	12,576,345	3,626,062
Borrowings - short term	125,000	-	125,000	-
Trade payables	2,554,596	1,128,962	2,554,596	515,702
Accrued expenses	188,703	463,954	188,703	211,931
Related party payables	4,863,608	3,363,784	4,863,608	1,536,554
Total	20,308,252	12,894,783		20,308,252	5,890,249

Registration & Recognition of Blocked Funds

In April of 2020, the Company successfully registered, with the Reserve Bank of Zimbabwe ("RBZ"), blocked funds amounting to US$31 million. These blocked funds are in respect of outstanding amounts towards Holcim Group loan, capex and other foreign supplier payments. The registration is consistent with the blocked funds guidelines provided in the Exchange Control Directive RU28 dated 21 February 2020 and Exchange Control Circular No. 8 of 24 July 2020. Following this registration, the Company obtained assurance that the RBZ will provide the required foreign currency at 1:1. The RBZ availed this funding in two structures as follows:

The rst was for the capital projects for US$15 million where Lafarge Cement Zimbabwe received the conrmation for the registration of the capex line, which came through a letter dated 10 October 2019 from RBZ stating that settlement shall be done at 1:1 and the Company would be reimbursed for any realised exchange losses in ZWL.

The second was for foreign suppliers'payments and mainly to repay Holcim Group loan both together coming to a total of US$16 million. This conrmation came through on the 11th of March 2022 for the purpose of the 2021 year end audit conrmation for the contractual agreement between the Company and RBZ, the approval letter was detailed as follows:

INV/SBICZWHX/2020/Registration of Blocked Funds #0000027 for USD 14,064,000.00,

INV/SBICZWHX/2019/Registration of Blocked Funds #000398 for USD 1,005,882.00

IMP/SBICZWHX/2019/009410 for USD 1,114,981.94.

The Company has recognised this support as a foreign currency receivable as the Directors believe the amounts will be received since some have already been disbursed. The carrying amount at the reporting date is determined after an allowance of 1% for expected credit losses (ECL) as a sovereign debt which is regarded as low risk in the Zimbabwean market that is supported by statutory instruments. The table below summarises the position of these balances.

	Ination Adjusted	*Historical Cost
	Reviewed	Audited	Unreviewed	Unaudited
	as at	as at	as at	as at
	30.06.2022	31.12.2021		30.06.2022	31.12.2021
	ZWL`000	ZWL`000	ZWL`000	ZWL`000
Amounts registered	31,226	68,359		31,226	31,226
Amounts drawn down	(7,306)	(15,717)		(7,306)	(7,180)
Excess unutilised capex	(831)	-		(831)	-
Balance at the end of the period	23,089	52,642		23,089	24,046
Unrealised exchange dierence	8,433,868	5,667,705		8,433,868	2,588,970
Impairment of RBZ statutory receivable	(84,339)	(56,677)		(84,339)	(25,890)
Carrying amount in ZWL	8,372,618	5,663,670		8,372,618	2,587,126

*Historical gures were not reviewed. We have included historical information as supplementary information

1. SUBSEQUENT EVENTS
   There are no reportable events after the reporting date.
2. REVIEW CONCLUSION
   The ination adjusted nancial results from which this abridged version has been extracted have been reviewed by Ernst and Young Chartered Accountants (Zimbabwe). A qualied review conclusion has been issued thereon as a result of non-compliance with the requirements of International Accounting Standard (IAS) 21, "The Eects of Changes in Foreign Exchange Rates" and International Accounting Standard (IAS) 8 -" Accounting Polices, Changes in Accounting Estimates and Errors" , International Accounting Standard (IAS )16 "Property, Plant and Equipment and the consequential impact of applying International Accounting Standard (IAS) 29 - "Financial Reporting in Hyperinationary Economies" on incorrect base numbers. The review conclusion also includes an emphasis of matter with regards a Material Uncertainty Related to Going Concern.
   The auditor's review conclusion is available for inspection at the Company's registered oce. The partner of this engagement was Fungai Kuipa (PAAB Practising certicate number 335).

LAFARGE CEMENT ZIMBABWE LIMITED

Directors: K. C. Katsande (Chairman); M. A. Masunda; S. M. Mutangadura; G. E. Zvaravanhu; S. Shoniwa;	Manresa Works, Arcturus Road, P.O. Box GD 160, Greendale, Harare.
J. W. Stull (Alternate: V. Darbo); G. Ndugwa* (Chief Executive Ocer) A.E.A Mowafy* (Chief Financial Ocer) *EXECUTIVE	Tel: [phone], [e-mail]. www.lafargeholcim.com

Ernst & Young	Tel: [phone] or 2750979-83
Chartered Accountants (Zimbabwe)	Fax: [phone] or 2773842
Registered Public Auditors	Email: [e-mail]
Angwa City	www.ey.com
Cnr Julius Nyerere Way /
Kwame Nkrumah Avenue
P O Box 62 or 702
Harare
Zimbabwe

To t he Shareholders of Lafarge Cement Zimbabwe Limit ed

Report on t he Review of t he Financial St at ement s

Int roduct ions

We have reviewed t he accompanying inflat ion adjust ed interim Abridged financial st at ement s of Lafarge Cement Zimbabwe Limited, which comprise t he inflat ion adjust ed int erim Abridged st at ement of financial posit ion as at 30 June 2022 and t he related inflat ion adjust ed int erim Abridged st at ement of profit or loss and ot her comprehensive income, t he inflat ion adjust ed int erim Abridged st at ement of changes in equit y and t he int erim st at ement of cash flows for t he six-mont h period then ended and explanatory not es.

Management is responsible for t he preparation and presentat ion of this inflat ion adjust ed int erim Abridged financial st at ement s in accordance wit h the Int ernat ional Financial Report ing St andards. Our responsibilit y is t o express a review conclusion on the inflat ion adjust ed int erim Abridged financial st at ement s based on our review.

Scope of review

We conducted our review in accordance wit h Internat ional St andard on Review Engagement s 2410,

• Review of Interim Financial Informat ion Performed by the Independent Audit or of t he Entit y" . A review of inflat ion adjust ed int erim Abridged financial st at ements consist s of making inquiries, primarily of persons responsible for financial and accounting matt ers, and applying analyt ical and ot her review procedures. A review is subst ant ially less in scope t han an audit conduct ed in accordance wit h Internat ional St andards on Auditing and consequent ly does not enable us t o obt ain assurance t hat we would become aware of all significant mat t ers t hat might be ident ified in an audit . Accordingly, we do not express an audit opinion.

Basis for qualified review conclusion

Mat t er 1 : Impact of prior year modificat ion on current period

As explained in not e 3 to t he inflat ion adjusted abridged financial st at ements, Lafarge Cement Zimbabwe Limit ed's funct ional and presentat ion currency is t he Zimbabwean Dollar (ZWL).

For the year ended 31 December 2021, the predecessor audit or issued a disclaimer of opinion due t o various mat t ers impact ing t he inflat ion adjust ed financial st at ement s as follows:

The company applied inappropriate exchange rat es to t ranslat e USD denominat ed t ransact ions to ZWL funct ional currency cont rary t o t he requirement s of International Account ing St andard (IAS) 21 -The Effect s of Changes in Foreign Exchange Rat es.

Furt her, the following mat t ers which arose in 2020, alt hough resolved in 2021, had a cont inuing possible impact on performance and cash flows for t he year ended 31 December 2021:

A member firm of Ernst & Young Global Limited