ZSE dips as BAT Zim reports sharp revenue decline amid currency challenges

The Zimbabwe Stock Exchange (ZSE) All Share Index slipped on Monday, losing 1.64 points, or 0.58 percent, to close at 283.58 points.

The decline was driven largely by losses across several key counters, including CBZ Holdings Limited, Dairibord Holdings Limited and TSL Limited, reflecting a cautious trading environment as investors reacted to market signals and economic factors.

CBZ Holdings saw its stock ease by ZiG 90.000c to close at ZiG 1600.0000c, while Dairibord Holdings shed ZiG 34.5000c to end the session at ZiG 195.5000c.

TSL Limited was also among the top decliners, losing ZiG 26.2222c to close at ZiG 253.7778c.

Meikles Limited dropped ZiG 25.9170c, ending at ZiG 430.0830c, while RioZim Limited lost ZiG 9.0000c, closing at ZiG 130.0000c.

On the upside, a few stocks managed to post gains, led by Tanganda Tea Company Limited, which surged by ZiG 52.9997c to close at ZiG 460.0000c. Zimre Holdings Limited also saw an uptick, adding ZiG 6.0000c to end at ZiG 48.0000c, while OK Zimbabwe Limited gained ZiG 5.9360c to close at ZiG 87.9360c.

Nampak Zimbabwe Limited added ZiG 5.0000c, ending the session at ZiG 165.0000c, and Econet Wireless Limited edged up by ZiG 0.9231, closing at ZiG 481.0087.

In corporate news, British American Tobacco (BAT) Zimbabwe reported challenging half-year results for the period ending June 30, 2024.

The company saw a 9 percent decline in sales volumes, attributed by board chairman Lovemore Manatsa, to currency shifts and supply constraints related to the new currency’s introduction. Revenue fell sharply by 38 percent year-on-year to ZiG 400 million, with gross profit down 41 percent compared to the previous year.

Despite reduced revenue, BAT Zimbabwe implemented cost-cutting measures, resulting in a 20 percent reduction in administrative expenses to ZiG 33 million, down from ZiG 42 million last year.

Production costs also decreased from ZiG 60 million to ZiG 47 million, a result of efficiency improvements. However, these measures could not offset the revenue shortfall, and the company posted a pre-tax loss of ZiG 145 million, a significant increase from the pre-tax loss of ZiG 28 million recorded in the same period the previous year.

The report underscores the impact of Zimbabwe’s economic challenges on corporate performance and the ZSE, with companies facing headwinds from currency volatility and tightening consumer demand.-ebsinessweekl