• Star Africa Corporation has missed its publication deadline
  • OK Zimbabwe delayed publication too
  • What are the possible reasons

Harare- The Zimbabwe Stock Exchange (ZSE)- listed sugar maker, Star Africa Corporation has delayed the publication of full-year results for the 12 months to March 2023 according to a circular released by the company. The abridged audited financial statements will be out on or before 31 July 2023.

“The Company applied for, and was granted, a month’s extension by the Zimbabwe Stock Exchange (ZSE) with regards to the publication of the audited financial statements in the press,” said the company in a circular. 

Seed company, SeedCo Zimbabwe also shared a notice on the 30th of June 2023 talking about the same issue.

“Notice is hereby given that there has been a delay in the publication of the Seed Co Limited financial results for the year ended 31 March 2023 which results were due to be published by 30 June 2023."

The company expects results to be published on or before 31 July 2023.

OK Zimbabwe, the biggest retailer is also another company to have missed its full-year publication date. But the biggest question is why companies keep on missing publishing targets.

The biggest demerit of failing to publish in time is that investors may view it as a negative sign, as it can indicate poor financial management and lack of transparency. 

This can lead to a decline in the company's stock price, as investors may become more cautious about investing in the company.

When companies listed on ZSE fail to publish their results on time, they are in breach of the ZSE listing requirements. The ZSE requires listed companies to publish their annual financial results within 90 days of the end of their financial year, and their interim financial results within 60 days of the end of the first half of their financial year.

When companies fail to commit to these deadlines, they may face penalties for non-compliance, including fines or suspension from trading.

Why are companies failing to stick to deadlines

There could be various reasons why Zimbabwean companies listed on ZSE fail to publish their financial results on time. Some potential reasons include economic challenges, technical challenges, lack of resources and technical challenges. 

Zimbabwe has faced significant economic challenges in the period under review including a hyperinflationary environment, price madness, exchange rate volatility and foreign currency shortages. These challenges make it difficult for companies to prepare their financial statements on time, as companies struggle to access the resources needed to complete the necessary audits and financial reporting.

Technical challenges are other possible reasons other companies may face in preparing their financial statements, such as implementing new accounting standards or adopting new financial reporting software. This was the case for OK Zimbabwe as it is implementing the ERP system. however, the biggest challenge was the adoption of blended inflation

The adoption of blended inflation in Zimbabwe may have had an impact on the presentation of financials on time. Blended inflation refers to the use of a combination of the US dollar and the Zimbabwe dollar to track price movements, introduced by the government this year. 

The use of blended inflation has increased the complexity of financial reporting for Zimbabwean companies, as they may need to adjust their financial statements to reflect the new inflation rate. This could involve revaluing assets and liabilities, adjusting for changes in the value of the Zimbabwean dollar, and applying new accounting policies.

As a result, companies may have faced additional challenges in preparing their financial statements on time, particularly if they lacked the necessary resources or expertise to make these adjustments. This could have led to delays in the publication of financial results.

Some companies may lack the financial and human resources needed to prepare their financial statements on time. This could be due to a shortage of skilled accounting professionals or limited financial resources to invest in the necessary infrastructure to complete the financial reporting.

Companies may face challenges complying with the regulatory requirements of the Zimbabwe Stock Exchange or other regulatory bodies, which may delay the publication of their financial results.

Equity Axis News