Cor­po­rate re­sults re­flect grow­ing econ­omy

The Sunday Mail (Zimbabwe) - - BUSINESS - Busi­ness Re­porter

FI­NAN­CIAL re­sults re­leased by three of the coun­try’s big­gest cor­po­rates, Delta Cor­po­ra­tion, Econet Wire­less Zim­babwe and OK Zim­babwe, is a clear tes­ti­mony that de­spite the head­winds fac­ing the coun­try, strong brands and busi­ness mod­els can still flour­ish and cre­ate value for in­vestors in Zim­babwe.

Zim­babwe has been go­ing through crip­pling cash short­ages that have seen some busi­nesses dither­ing on the brink of col­lapse.

But strong brands have not only man­aged to sur­vive, have even reg­is­tered tremen­dous growth.

Zim­babwe Stock Ex­change listed en­tity OK Zim­babwe is one such a com­pany.

This week, the com­pany pre­sented its half year fi­nan­cial re­sults to Septem­ber 30, 2018.

Re­spond­ing to an­a­lysts who were seek­ing to un­der­stand whether the com­pany was ex­pe­ri­enc­ing real growth given the pre­vail­ing eco­nomic head­winds, the re­tail gi­ant’s chief ex­ec­u­tive of­fi­cer Mr Alex Siya­vora said his com­pany had ex­pe­ri­enced real growth of ap­prox­i­mately 10 per­cent.

OK Zim­babwe’s rev­enue for the six months un­der re­view grew by 23,2 per­cent to US$330,1 mil­lion while profit after tax in­creased by 66,3 per­cent to US$8,4 mil­lion.

“While there was in­fla­tion, con­sump­tion lev­els in­creased, and some busi­nesses ex­pe­ri­enced real growth, and I think we will show in our num­bers an el­e­ment of real growth,” said Mr Siya­vora.

“The growth rate is very real, our mea­sure of in­fla­tion at the point of pro­cure­ment, which goes through in sales, is 12,1 av­er­age for the pe­riod. So it (in­fla­tion) could be say 23,2 per­cent (rev­enue growth) mi­nus 12,1 per­cent (in­ter­nal in­fla­tion) and the dif­fer­ence amounts to real growth,” Mr Siya­vora said.

He said the re­tailer had also seen phys­i­cal move­ment of vol­umes in its shops more than what was moved for the com­par­a­tive prior year. The story was the same for bev­er­ages gi­ant Delta Cor­po­ra­tion after sales of its lager beers eclipsed lev­els last seen back in 2013.

Group chief ex­ec­u­tive of­fi­cer, Mr Pear­son Gowero said lager beer vol­umes out turn of 1,040 mil­lion litres was the high­est since 2013 when vol­umes reached 1,027 mil­lion litres. To­tal rev­enue in­creased by 37 per­cent to US$341 mil­lion in spite of the com­pany not in­creas­ing its prices.

Fur­ther, the com­pany achieved good re­sults de­spite the for­eign cur­rency short­ages in im­port­ing pack­ag­ing ma­te­rial and other key raw ma­te­ri­als.

“Con­sumer de­mand has been firm due to im­proved eco­nomic ac­tiv­ity in min­ing, agri­cul­ture and elec­tion re­lated spend­ing.

How­ever, ou­tages of im­por­tant raw ma­te­ri­als aris­ing from lim­ited hard cur­rency led to a con­strained ca­pac­ity in lager and Chibuku Su­per beer,” he said.

Fi­nan­cial di­rec­tor Mr Matts Valela weighed in say­ing it is key that the com­pany had con­tin­ued to de­liver at con­stant prices in the last five years, and that vol­umes growth re­flects a pos­i­tive change in the sales mix.

Mr Gowero stressed that his com­pany had not scaled down op­er­a­tions in any way and was do­ing all it can to ad­dress prod­uct sup­ply chal­lenges in the con­text of the emerg­ing trad­ing en­vi­ron­ment.

The Group is con­sid­er­ing ex­plor­ing crit­i­cal in­vest­ment and re­gional growth op­por­tu­ni­ties. Also to re­port an im­pres­sive set of re­sults was tele­coms gi­ant Econet Wire­less Zim­babwe after rev­enue went up by 70 per­cent to US$600 mil­lion dol­lars in half-year rev­enue to 31 Au­gust 2018, up from US$353 mil­lion in the same pe­riod last year.

While growth for the Fin­tech busi­nesses such as EcoCash and Stew­ard Bank was largely ex­pected as most trans­ac­tions are now go­ing through elec­tronic means, the com­pany still man­aged to record sig­nif­i­cant busi­ness in its telco re­lated busi­nesses.

Rev­enue from data, voice and SMS grew by 40 per­cent to US$353 mil­lion, up from US$252 mil­lion in re­sults that man­age­ment cred­ited to its TMT (tele­com, me­dia and tech­nol­ogy) model.

“Tra­di­tional telco prod­ucts bucked the in­dus­try trend and all showed dou­ble digit growth, with data rev­enue con­tri­bu­tion grow­ing by 57 per­cent to US$98,3 mil­lion, and the voice and SMS rev­enue go­ing up by 34 per­cent to US$218 mil­lion.

An­a­lysts said the strong set of re­sults seen this week demon­strates the ev­i­dent po­ten­tial and growth prospects in the lo­cal econ­omy.

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