Improved regional performance amidst headwinds in Zimbabwe Despite sustained economic challenges in Simbisa’s anchor market, Zimbabwe, the group managed a firm set of results for 1H20, reflecting strong growth, a resilient business model and diversification away from earnings concentration risk to the Group via the region. Zimbabwe’s operating environment, characterized by currency devaluation, hyperinflationary pressures, frequent regulatory changes, and weakened consumer demand remained ch...
Although monetary and fiscal policy reforms are expected to yield results in the near to medium-term, the new policies have led to a depreciation of the local ‘RTGS’ dollar. Thus, we expect a significant drop in sales volumes and a squeeze in margins as the cost of raw material fluctuates from an unstable Zimbabwe dollar. Furthermore, corporate earnings might experience lower real run rates to FY 20, as already seen this year.
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