By Taurai Mangudhla
ZIMBABWE Stock Exchange-listed retail chain OK Zimbabwe’s revenue went up 49% in the first quarter of its current financial year to June despite COVID-19-induced disruptions.
Since the pandemic hit Zimbabwe in March last year, borders and airports have been closed to non-commercial cargo most of the time, limiting imports and smuggled goods which boost the retail outlet’s operations.
Although commercial cargo has been allowed to come in and out of the country, there have been huge delays at ports due to COVID-19 protocols. Economies across the globe have also not been operating to capacity.
In a statement for the first three months of its financial year, OK Zimbabwe said although the business environment for the quarter under review continued to be characterised by COVID-19-induced restrictions, revenue for the quarter grew by 263% in historical terms and by 49% in inflation adjusted terms.
“Volume performance was aided by a surge in aggregate demand across key product categories. Sales volumes grew by 48% over the corresponding period in 2020, attributed to a recovery from more stringent prior year COVID-19 restrictive regulations and the success of the OK Grand Challenge Promotion,” the company said in a statement.
The group resumed its flagship OK Grand Challenge Promotion which was suspended in 2020 due to lockdown restrictions. OK Zimbabwe said its retail outlets were adequately stocked during the quarter as supply partners moved timeously to fulfil growing demand.
This comes after the company reported a 2% decline in annual revenue for the period ended March 2021 as consumer spending came under pressure as a result of a debilitating economic crisis and disruption to supply chains as the COVID-19 pandemic restrictions bite.
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Profit before tax declined by 42% to $2 billion during the review period, from $3,4 billion during the comparable period in 2020.
In the quarter under review, OKZim said COVID-19 restrictions were less severe compared to the same period in the prior year with product supply remaining stable on the back of improved availability of foreign exchange accessed through the auction system by its supply partners for both local and imported merchandise.
“Inflationary pressures were stoked midway through the quarter as market players reacted adversely to the promulgation of SI 127 of 2021 which seeks to criminalise dual pricing that is based on discounted US$ prices relative to the official exchange rate. Consequently, national and internally monitored inflation rates remained high in the quarter although experiencing significant reduction to the prior year inflation rates,” the company said.
Going forward, the group said, the COVID-19 pandemic was expected to persist in the foreseeable future and affect businesses across the sectors. However, hopesA the virus will be contained in the medium-term are pinned on the success of the vaccination programme which has since been accelerated.
“Towards the end of the quarter, the country experienced a surge in COVID-19 infections and to combat the pandemic, the authorities responded by further tightening the lockdown restrictions. Business trading hours have been reduced from an average of 11 hours to 7,5 hours per trading day. The general curtailment of mobility and economic activity impact disposable incomes and consumer spending,” the group said.
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