OK Zimbabwe sees 46pc dip in profit

RETAIL chain, OK Zimbabwe, has recorded a 46 percent dip in profit after tax to $1,1 billion in the financial year ended March 31, 2021 due to the challenges imposed by the Covid-19 pandemic.

Covid-19 is a global health crisis that was first reported in China in December 2019 before spreading across the world with countries globally imposing national lockdowns as part of initiatives to contain the spread of the viral disease.

Through the national lockdowns induced by the pandemic, national economies have been adversely affected.

Zimbabwe recorded its first Covid-19 case in March last year.

In its annual report for the 2021 financial year, the Zimbabwe Stock Exchange-listed group said revenue for the period also declined by 2 percent to $34,3 billion from $35 billion in the prior year.

“Profit before tax of $2 billion was 42 percent below prior year’s $3,4 billion, while profit after tax declined by 46 percent to $1,1 billion from $2 billion in prior year,” it said.

During the period under review, overheads grew by 6 percent over prior year.

“The measures implemented by the group to curtail the spread of Covid-19 increased the cost base.

“Electricity charges, staff costs, cleaning costs and security expenses also contributed to overheads growth,” it said.

Capital expenditure for the year was $1,2 billion down from $1,5 billion in prior year.

Most of the capital expenditure was on store refurbishments and equipping the new outlets. The group’s capital expenditure programme continued during the year with refurbishments completed at OK Avonlea, OK Machipisa, Bon Marché Belgravia, Bon Marché Eastlea, OK Kadoma, OK Rusape and OK Hwange.

Two new stores were opened, an OK store in Harare’s Sanganayi Inn area and an OK Mart store in Victoria Falls.

“The refurbished stores and new branches were well received in their respective markets and made a significant contribution to the group’s sales,” it said.

The Covid-19 pandemic had a strong impact on our customers, the business and supply chain.

“As such, we took precautionary measures to protect our customers and stakeholders while ensuring business operations are safe from Covid-19 exposure,” said OK Zimbabwe.

In addition, the group adopted sustainability reporting to reinforce responsible business values.

The retail chain believes that sustainability will now drive future business strategy and practices.

The group said the impact of Covid-19 on future operations remains uncertain.

“However, the group’s financial status remains solid and mitigatory measures are in place to ensure continuity and viability of operations.

“The health and safety of employees, customers and all stakeholders remain of paramount importance and the group will continue to follow Covid-19 protocols for their safety.”

Going forward, it said the economy is expected to benefit from the anticipated good harvest from the 2020/2021 agricultural season, availability of foreign currency on the auction system and declining inflation.

The group has been investing in capacity enhancement and is therefore, well poised to maximise on the anticipated economic rebound.

OK Zimbabwe has declared a final dividend of $0,54 per share that has since been paid to the shareholders.

The final dividend brings the total dividend declared for the year under review to $0,80 cents per share. — @okazunga. its