BY FIDELITY MHLANGA
HORTICULTURAL exporter Ariston Holdings on Monday said government’s decision to maintain a fixed exchange rate during the first quarter undermined revenue growth for the year to September 30, 2020 as export earnings were liquidated at the lower interbank market rate.
Ariston generates a significant amount of its revenue from exports.
Inflation-adjusted revenue at the Zimbabwe Stock Exchange-listed operation slumped by 20% to $619,5 million during the review period, after hitting $773,44 million previously.
This was after the Reserve Bank of Zimbabwe (RBZ) maintained a US$1:$25 exchange rate from March, before agreeing to free it up in June.
While the RBZ maintained the rate, parallel market rates were rampaging, reaching US$1:$80 during the period.
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Year-on-year inflation also ran riot, hitting 785,5% in May before slightly declining to 737,29 % in June.
“The group’s inflation-adjusted revenue for the year reflects a 20% decrease to $619,54 million from $773,44 million realised during the comparative period,” Ariston chairman Alexander Jongwe said in a statement accompanying the firm’s financial statements.
“Revenue trailed inflation growth as the majority of the group’s revenue is from United States denominated exports which are converted to Zimbabwe dollars using the interbank rate which did not increase in line with inflation,” he said.
Ariston’s profit-after-tax declined to $143 million during the period, from $418 million in 2019.
“The group continued to invest heavily in capital expenditure which was primarily funded from own internally generated funds. The current year investment of $80 million was 40% greater than the $57 million invested in the prior comparative period,” Jongwe said.
Tea volumes declined by 14% to 2 582 tonnes, from 2 985 tonnes in 2019.
Macadamia volumes slipped by 18% to 1 063 tonnes, from 1 301 tonnes during the same period in 2019.
“Avocado yields declined as they are biennial bearing plants and 2020 was their low yield year. Current year revenue for the fruit category improved by 35% when compared to prior year and this was largely attributable to inflation,” Jongwe said.