OK Zimbabwe Limited is anticipating an improvement in the product supply environment on the back of a combination of increased foreign currency collections in-store, as well as renewed commitment by the authorities to improve efficiencies on the central bank’s forex auction system.
RONALD MUCHENJE
In its trading update for the third quarter and nine months ended 31 December 2021, the company said payment of civil servants’ emoluments in foreign currency, heightened agricultural activity, and resumption of normal school calendar were expected to result in an upturn in consumer spending.
The company’s revenue grew 29% for the quarter and 37% for the year to date in inflation-adjusted terms and by 103% and 132% for the quarter and year to date respectively in historical terms.
During the period, sales volumes grew by 8% for the quarter and by 27% for the nine months while profit margins for the third quarter were higher than reported for the half-year ended 30 September 2021 owing to improved operational effectiveness.
“The group anticipates an improvemenit in the product supply environment on the back of a combination of increased foreign currency collections in-store as well as renewed commitment by authorities to improve efficiencies on the RBZ (Reserve Bank of Zimbabwe) auction system. Payment of civil servants’ emoluments in foreign currency, heightened agricultural activity, and resumption of normal school calendar are expected to result in an upturn in consumer spending,” the company said.
While Covid-19 remains a threat, the group said it will continue to implement best practice protocols to ensure the safety of its employees, customers, supplier partners and all other stakeholders.
“The macro-economic environment posed various challenges in the quarter under review. In spite of the myriad of challenges, the group’s stores were well-stocked to deliver good quality service to our customers during the peak festive season.
The company worked with the Reserve Bank of Zimbabwe to co-create solutions around in-store foreign currency trading.
The flexibility offered through various promotional discounts helped improve foreign currency sales revenues and managed to stem illegal forex trades by vendors in the various shopping centres where the company operates from,” the group said.
The persistent shortages of foreign currency in the broader macro-economic environment continued to create inflationary headwinds that resulted in a 6% average month-on-month inflation rate while debilitating power outages worsened during the trading period as supplies from the national utility Zesa became unpredictable and unbearably long.
The group said alternative power sources remained expensive, inadequate and increased operating costs for businesses. On the other hand, the company embarked on a vaccination drive that resulted in 99% of the staff getting vaccinated against Covid-19.
