BY TAURAI MANGUDHLA
Delta Corporation, a drinks maker listed on the ZIMBABWE Stock Exchange (ZSE), yesterday added its voice to growing concerns over policy inconsistency and currency volatility in the country, saying they have affected operations during for the year ended March 31, 2021.
The beverage producer said the currency’s depreciation during the period was made worse by multiple exchange rates, hyperinflation and declining business during lockdowns induced by COVID-19.
Zimbabwe has undergone several changes in its currency over the past three years, which has created problems in processing transactions for tax purposes in the absence of clear guidelines.
“The board is concerned about the volatile operating environment indicated by hyperinflation, frequent changes in the political environment, weak local currency and the existence of multiple and disparate exchange rates,” said Delta chairman Edwin Dube in a commentary on period finances. .
“Access to foreign currencies has improved, however, following the introduction of a foreign exchange auction system and partial re-dollarization.
“The legacy external liabilities are covered by the Reserve Bank of Zimbabwe agreements, although the policy framework is not in place,” he said.
“Disposable incomes of consumers have been further eroded by high inflation and low wage increases.
“Some macroeconomic stability has been recorded following the relaxation of the use of foreign currencies for domestic transactions and the implementation of the foreign exchange auction system. There have been improvements in business performance during times when foreclosure restrictions have been relaxed, particularly in the last quarter of calendar year 2020. “
The company weathered the storm caused by the economic crisis, seeing its inflation-adjusted after-tax profit jump to $ 7.1 billion, from $ 3.9 billion in the comparable period in 2020.
Revenue reached $ 40.4 billion during the review period, up from $ 29.1 billion in 2020, mostly after inflation-adjusted prices across the company’s product categories.
Delta said the economy will rebound as the impact of the COVID-19 pandemic diminishes in response to measures adopted to combat it.
“The easing of foreclosure restrictions in the region is expected to boost economic activity and consumer spending.
“Improving the grain harvest will restore food security, reduce pressure on foreign exchange needed for imports and unlock discretionary spending,” Delta noted.
“Businesses in Zimbabwe are expected to record a recovery in volumes thanks to better access to foreign currencies thanks to domestic nostro sales, a stable exchange rate and slower inflation.
“Business in Zambia is expected to benefit from election-related activities during the year,” Delta added.
The company declared a final dividend of 105 cents per share.
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