Covid-19 weighs on listed entities

The persistence of Covid-19 is weighing heavily on businesses across sectors with listed firms saying the pandemic has presented an unprecedented set of challenges to operations.

Covid-19 has spared no sector from agriculture, manufacturing, contractors to retailers and hospitality.

The pandemic was first detected in Zimbabwe in March 2020, resulting in various levels of lockdowns being implemented to curtail spread of the deadly viral disease.

Lockdowns enforced globally have meant business disruptions for both local sales and exports while procurement of essential raw materials was hampered by supply chain disruptions.

While retailers like OK Zimbabwe are classified as essential services and therefore allowed to operate during lockdowns, albeit at reduced trading hours, consumer discretionary businesses such as Edgars, Truworths and Axia’s TV Sales and Home, endured weeks without operating during the first quarter of 2021.

Ariston Holdings said tea volumes declined by 27 percent which was however, alleviated by a 34 percent increase in local sales volume for the full year to September 30, 2021.

Export tea average selling prices declined by 8 percent due to subdued global economic activity as a result of the Covid-19 pandemic.

The selling period for its stone fruit also coincided with the lockdown promulgated in January 2021.

Chairman Alexander Jongwe said this had a negative effect on fruit uptake in the market.
“Unfortunately, most of the export markets were also depressed due to Covid-19 lockdowns implemented in various countries. As a result, stone fruit sales volume suffered a 13 percent decline compared to the prior comparative period,” he said.

Although National Tyre Services (NTS) recorded improved performance for the half year to September 30, 2021, the company still bemoaned the adverse impact of the pandemic as trading hours were lost due to the lockdown restrictions.

The pandemic continues to negatively impact operations.
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“The negative impact of Covid-19 pandemic continued during the first six months of our trading year, with your company experiencing reduced operating hours,” said NTS, adding the pervasive challenges brought about by exchange rate disparities, rising inflation and power cuts added to their woes.

Management is however, upbeat the continued road works, growth in agriculture and mining sectors will boost the tyre business and offset the Covid-19 shocks.

While most of CFI Holdings businesses operated under normal trading conditions during the greater part of the year to September 30, 2021, the group however, said it felt the negative impact of the continued existence of the pandemic on the economic environment.

This was further compounded by delays in disbursements of foreign currency from the auction market among other setbacks.

“The economic environment continued to be restrained by the impact of the Covid-19 pandemic as the country traded under varying degrees of lockdowns throughout the year.

“The increasing backlog in the disbursement of foreign currency allocated on the auction market resulted in market confidence declining, and the widening of the gap between the auction market exchange rate and the alternative market rates,” said CFI chairperson Ms Itai Pasi.

But for the VFEX listed Padenga Holdings Limited, management is hopeful the easing of lockdowns globally will continue to boost their confidence that skin sales and gold output targets for the year will be achieved.

This comes as the group was among the worst affected by the pandemic as global markets for crocodile skins took a dip due to the pandemic.
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Padenga also revealed there were no crocodile meat exports during the third quarter to September 30, 2021 due to the pandemic.

But businesses are pinning their hopes on the rolling out of vaccination programmes across the globe in anticipation this will lead to increased economic activities as lockdown restrictions are relaxed.

For hospitality firms — African Sun, Meikles and Rainbow Tourism Group — the easing of lockdowns globally will also open global travel and boost their businesses.

In 2020, these were forced to shut down their facilities on low demand as the travel restrictions were imposed not only in Zimbabwe but across borders.

But improved economic activity across the globe and more international visitors coming into Zimbabwe is an added advantage for the tourism and hospitality sector.

“We are cautiously optimistic that the accelerated vaccination programmes around the world and the likely easing of restrictions for vaccinated travellers will contribute to the gradual normalisation of travel,” said African Sun.-The Herald