BEVERAGE manufacturer Delta Corporation Ltd recorded exchange losses of $1,64 billon for the first quarter ended March 31, 2020, due to a legacy foreign debt amounting to US$63,8 million.
BY TAFADZWA MHLANGA
In a statement, company chairman Canaan Dube said the inconsistency of market exchange rates and the fixed interbank exchange rate created a further risk that the “blocked funds” liabilities could be paid at exchange rates higher than the central bank’s settlement rates.
Blocked funds are cashflows generated in Zimbabwe by foreign entities that could not be repatriated to foreign suppliers due to foreign exchange shortages commonly referred to as foreign exchange legacy liabilities.
“The board notes that there remains a risk that the policies regarding these liabilities may be varied. Such a change would have a significant impact on both the statement of financial position and the statement of comprehensive income. The divergence of market exchange rates and the fixed interbank exchange rate creates a further risk that the “blocked funds” liabilities could be paid at exchange rates that are above the Reserve Bank of Zimbabwe settlement rates,” Dube said.
He added that actions to be taken by the country to manage the effects of the lockdown on businesses will determine the direction the economy will take this year.
“The fortunes of the country and the group in the coming year will largely be dependent on how Zimbabwe manages and contains the COVID-19 pandemic and the ramp up plan directed at re-opening the country and economy. The first quarter of the trading year will be significantly subdued owing to the effects of lockdown on business and the lag that will follow as the economy is gradually re-opened and new or modified consumption patterns are established.”
The company’s revenue increased by 10% from $7,68 billion to $8,43 billion. The operating income for the period under review increased by 19% to $2,15 billion. Earnings before interest, taxes, depreciation and amortisation increased by 26% to $2,63 billion.
Profit for the quarter was 1,7% lower than the previous year after it decreased from $1,11 billion to $1,09 billion.