· Borders re-opened to allow for the importation of basic goods
· The allowance contradicts the mantra of local industry capacity utilization
· Farmers to now get 30% of total earnings from the GMB in USD
Harare - Amidst an economic meltdown, the government of Zimbabwe over the weekend announced new measures for the re-opening of borders to allow for the importation of basic goods.
In a statement, the Minister of Finance and Economic Development Mthuli Ncube, said those with free funds are with immediate effect, permitted to make use of these funds and other resources to import basic commodities.
The Group faced the shortages of raw materials accompanied by price increases of the main ingredients used in the manufacture of its key products.
“This position is further worsened by shipping costs which have ballooned by 480%,” the Group said in a statement accompanying the trading update.
Also, shortages of electricity and foreign currency on the auction floor to import raw materials hindered the business performance, forcing the Group to turn to generators for power supply.
However, the Group shrugged all these headwinds to register volumes growth in all business units, with export volumes growing by 178%, contributing 13% of the total volumes.
Revenue for the quarter surged by 72% compared to the same period last year, although the business experienced a drop in margins due to the ever-increasing cost of raw materials.
Plant availability for the period under review was 92% with capacity utilization standing at 60%.
Current ratio improved to 1.6 from 1.4 recorded as at 31 December 2020 while gearing was at 10% at the close of the quarter.
Going forward, the Group expects resilient performance in the last quarter provided that costs, foreign currency and electricity shortages are addressed.
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