eBusiness Weekly
Tapiwanashe Mangwiro
Axia Corp says the Zimbabwean operating environment remains complex and with many distortions but it will continue to adapt its business strategy so as to thrive in the ever-changing environment.
Major risks facing the economy are re-dollarisation pressures, exchange rate risks, inflationary pressures, weak aggregate demand and climate change. On the other hand, the Russia-Ukraine conflict has made it even worse especially in the case of Zimbabwe.
“We remain hopeful that progressive policies regarding money supply, exchange rate and interest rates will be reinforced to foster stability in the market and gradual building of confidence,” the company said in a trading update.
It said the economic shocks will not deter its expansion drive.
“The group remains focused on executing the expansion opportunities as previously advised.”
The company has not been spared from the effects of the US dollar cash shortage. The mining sector contributes immensely to the economy, it being the main source of foreign currency for the country’s coffers.
“Continued shortages of foreign currency on the official auction system coupled by increased arbitrage and market distortions negatively affect the Group’s operations through pricing challenges and value preservation as retail and distribution rank low on the auction allocation continuum,” the company said.
It acknowledged policymakers’ desire to maintain high interest rates and a tight lid on the money supply during the quarter. However, it remains cautious to further upward review of interest rates and their likely impact post Q3 F22.
“The group is hopeful that the increased gold output witnessed towards the end of the quarter as well as the tobacco selling season will improve foreign currency receipts to address foreign currency liquidity issues,” it said.
The regional trading environment has been positive in Zambia and Malawi, however, significant pressure on access to foreign currency remains crucial to attainment of our core business objectives, according to the company.
Volumes at TV Sales & Home for the third quarter ended 31 March 2022 were up 24 percent compared to the same period in prior year. This was attributed to the increase in trading days in the current year compared to prior year where major restrictions to social and economic activity were in effect, following the advent of the Covid-19.
Year-to-date volumes up 15 percent from the same period in prior year. Growth remains a key focus area and the business plans to expand its retail store footprint with three new stores scheduled to open in the 4th quarter, one in Bulawayo and two in Harare.
Transerv is continuing on its growth trajectory despite major challenges in obtaining foreign currency to “ensure optimum stocking levels at all times”.
Year to date volumes were 13 percent up compared to the same period last year whilst the quarter registered growth of 15 percent compared to the same period last year.
Before the financial year-end, it is poised to open more retail shops in Bindura, Karoi and Zvishavane.
Year to date volumes for DGA Zimbabwe were 22 percent below the prior comparative period and 21 percent below the same quarter in the prior year.
In Zambia, Q3 F22 volumes were 9 percent down compared to the comparative period, owing to the impact of termination of Johnson & Johnson agency. Year to date volumes were 16 percent below the prior comparative period.
As for Malawi, volumes were up 53 percent in Q3 F22 on the introduction of new agencies namely Clover and Unilever and good support from Colgate. Year to date volumes were 55 percent above the prior comparative period.
