Zim firms see tougher second half of the year as economy implodes

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By Alois Vinga

ZIMBABWE Stock Exchange (ZSE) listed companies that have so far reported their financial performance for the first half ending June 2019 period have predicted that the remaining months up to year end will be very tough and challenging.

British American Tobacco chairman, Lovemore Manetsa recently said the trading conditions for the remaining half will remain challenging.

“Trading conditions are expected to remain challenging for the remainder of 2019. We are however confident that our strategy remains appropriate for the operating environment and that the quality of our people, the strength of our brands and the loyalty of our consumers will continue to deliver growth and value for our shareholders,” he said.

Echoing similar sentiments, AgriBank’s chief executive, Sam Malaba said that a host of factors hinged on an unstable economy making the last half’s prospects gloomy.

“The economy continues to face multiple challenges with respect to the macro and business environment. The outlook for the economy remains dampened by inflation, currency volatility, industry capacity decline, fuel and electricity challenges,” he said.

FBC Holdings Limited, group chairman, Herbert Nkala said his company was not immune to economic challenges and geo-political strife, even if the relationship between financial markets and growth in the economy is weak.

“The present political and economic climate creates a wide range of challenges across many industries, which results in difficulties but also challenges to the group.

“Currency reforms, robust monetary policy interventions, and the continued international re-engagement efforts by the government are critical to the future of the company and economy at large,” Nkala said.

Dairibord Zimbabwe Limited chairman, Josphat Sachikonye said that going forward, the environment is expected to remain fragile and uncertain, making it difficult for businesses to implement their growth plans.

He said that the supply of electricity, water and foreign currency is expected to remain constrained.

“Given the aforesaid challenges in the operating environment, sales volumes for the second half are expected to be lower than what was achieved in the first half of the year,” he said.

Paper and packaging group, Nampak Zimbabwe chief executive, Keith Nicholson criticised government’s decision to outlaw the use of multi-currencies and expressed doubts of better prospects.

“The economy is facing strong headwinds. It is unlikely that any meaningful relief will be forthcoming to the manufacturing sector until the critical constraints of foreign exchange and power supply are eased,” he said.