Lockdown easing boosts business

THE gradual easing of Covid-19 induced lockdown restrictions has brought relief to local businesses that see this as an opportunity to maximise production as well as boost sales volumes as they recover from the negative effects of the pandemic.

Companies listed on the Zimbabwe Stock Exchange (ZSE) have expressed optimism about prospects of improved performance as the economy gradually eases lockdown restrictions.

Acting President Constantino Chiwenga on Tuesday announced that the relaxed level two lockdown, introduced in September from level four lockdown, would be extended by a further two weeks. Under the level two lockdown, businesses are allowed to trade between 8am hours and 5pm while the national curfew kick in at 10pm.

This, the companies say, is expected to enhance economic activity and boost disposable incomes. Already, there has been notable improvements in sales volumes across sectors as trading hours were increased in line with the easing of the national lockdown restrictions.

Retailers such as Edgars Stores Limited are not classified as essential services and therefore lost about seven weeks of trading hours to shop closures and reduced trading hours.

But the easing of restrictions and increased trading hours have been a welcome development with management upbeat of cashing in on the improved trading conditions especially during the festive period.

“The business resumed normal trading hours up to 7pm in September. Sales are slowly recovering off the low base experienced over July and August.

Despite losses in the January, February and June trading months the business is profitable overall with inflation adjusted and historic profits of $65 million and $148 million, respectively.

Management looks forward to better trading conditions in October to December, which is traditionally our busiest and most profitable period,” said the clothing retailer in an update for the half year to July 11, 2021.

At fast food giant Simbisa Brands, Covid-19 related mandatory restrictions resulted in the group trading at 70 percent of full capacity on counter trading hours during the financial year 2021.

Its local operations had to navigate three waves of Covid-19 and resultant operating time restrictions, which included curfews, limitations on sitting capacity and restrictions on trading hours, which culminated in Simbisa Brands counter trading hours in 2021 compared to full capacity.

Most severely affected were the casual dining, sit-in restaurants and transit sites due to inter-city travel restrictions. But the relaxation of the restrictions are expected to pay dividends for the group especially during the festive period which is characterised by increased spending by holiday makers.

Although currently not active on the bourse, Border Timbers has indicated that despite the pandemic causing supply chain disruptions during the year to June 30, 2021, the relaxation of restrictions boosted its export business.

“The economic conditions during the financial year under review were slowed down by partially relaxed Covid-19 induced restrictions to gatherings, travel, and business trading hours.

“The regional countries relaxed the lockdowns in response to the subsiding second wave Covid-19 infections rates, which had a positive impact on the export business.

The reassuring recovery in the Zimbabwe economy, mainly attributable to rescinding inflation and a relatively stable exchange rate, created a better trading environment which is expected to continue as the Government continues to implement economic reforms,” judicial manager Mr Peter Lewis Bailey.

For industrial giant Innscor Limited, the relaxation of Covid-19 lockdown restrictions have already started to bear fruit in its first quarter to September 30, 2021, as the group recorded volume growth across segments, thanks to increased economic activity.

“Notwithstanding current market dynamics, the group continued to deliver positive volume growth across most categories, supported by recent investment and business optimisation initiatives.

“Towards the latter part of the quarter under review, the trading environment was enhanced by the gradual removal of Covid-19 lockdown restrictions; this was a positive development for the group’s operations,” said company secretary Andrew Lorimer.-The Herald