By Daniel Itai.
HARARE – (News of The South) _ OK Zimbabwe reported a 23% decline in sales volumes for the six months ended September 30, 2019 when compared to prior period last year, a trading period that was characterised by foreign currency shortages, declining purchasing power and government policy changes.
Price increases have been frequent due to the instability in the market.
“The scarcity of foreign currency slowed down the importation of goods and this, combined with high prices of goods that were available, slow down consumption particularly in the second half of the reporting period,” said group chairman Herbert Nkala.
On a monthly basis the company requires US$1.4 million to cover both goods imported for trade and equipment.
Revenue for the retail giant, in the inflation adjusted results grew 19.57% to Z$1.81 billion from Z$1.51 billion in the same period last year. After tax profit for the group increased to Z$164.05 million from Z$71.71 million previously.
As expected due to the inflationary pressures in the market, net operating costs was up 34% to Z$137.94 million from Z$102.920 in comparable period last year. Overheads increases were also attributable to fuel for generators and vehicle fleet, repairs and maintenance costs, staff costs, bank charges, contingent rentals and interest on lease liability arising from the adoption of IFRS 16 leases.
“The cost lines that increased most significantly were those corresponding directly with sales generated as well as those that have import components.”
As the group continued with its refurbishment program, capital expenditure rose to Z$76.93 million from Z$34.5 million in the same period last year.
The group’s balance sheet grew by 30.41% to Z$1.25 billion from Z$961.99 million in the same period last year.
OK Zimbabwe declared an interim dividend of 4.00ZWL cents per share.
The group remains “reasonably stocked” for the festive season and beyond.
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