Forex shortages impede on AXIA’s volume performance

  • DGA Zim Q3 and nine months volumes were down by 25% and 35% respectively
  • Accessing forex has remained Transerv’s biggest challenge
  • Group registered positive profit performance in April despite lockdown

Harare – Local shortage of foreign exchange negatively affected AXIA’s sales volumes which saw only TV Sales and Home recording a positive volumes performance in the third quarter and nine months ended 31 March 2020.

Distribution Group Africa Zimbabwe (DGA) registered 25% and 35% decline in volumes for the quarter and nine months respectively in comparison to the prior comparable period.

The declines have been attributed to the shortage of foreign currency which resulted in the business reducing its imported stock levels due to the concomitant pricing pressures with more reliance in distribution of local products.

Transerv, the Group’s automotive division saw a 22% decrease in volumes for the quarter while the nine months’ volumes were down by 40%.

According to the Group, accessing foreign currency has remained the unit’s biggest challenge as the business imports most of its inventory.

In the period under review the business completed renovations of some of its outlets.

TV Sales and Home however registered growth in the quarter as sales volumes were up by 15% compared to the prior comparable period, a performance attributed to aggressive promotion activity which was designed to capitalize on the successful “Black Friday” and Christmas promotions.

The majority of the sales growth was achieved in sales of locally made furniture and appliances.

The business’ year-to-date volumes were however down by 17% due to the poor first quarter performance.

AXIA’s regional operations, DGA  Region recorded growth in Zambia where volumes were 27% above same period last year due to new distributorship agencies while volumes for the nine months were down by 3%.

The Malawi business registered an 11% decrease in volumes for the quarter and a 10% increase for the nine months.

The quarter’s decline has been attributed to some political instability which saw shops closing for some days during the quarter.

AXIA’s fourth quarter started off on shaky ground due the COVID-19 pandemic which saw TV Sales and Home and Transerv being significantly affected by the national lockdown as they were closed for almost the whole of April 2020.

In the last few days of April TV Sales and Home was only allowed to trade through its online platform and Transerv traded from a limited number of outlets countrywide.

“DGA Zimbabwe was operating at reduced levels with minimal staff as it is part of essential services providing FMCG products to mainstream retailers and wholesalers”, AXIA said.

The Group said despite the adverse effects of lockdown, the Group still recorded an attributable profit for the month of April.

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