Axia Corporation – Abridged Group Statements for HYE 31 December 2022

By Published On: March 16th, 2023Categories: Corporate announcement, Earnings
Axia Corporation Limited 2023 Interim Results For The Half Year

Axia Corporation Limited (AXIA.vx) HY2023 Interim Report

Chairman’s Statement and Review of Operations


The Directors of Axia Corporation Limited are responsible for the preparation and fair presentation of the Group’s consolidated financial results and this press release is an extract thereof. The reviewed interim financial results have been prepared in accordance with International Accounting Standard 34 “Interim Financial Reporting” and in the manner required by the Companies and Other Business Entities Act (Chapter 24:31) and the Victoria Falls Stock Exchange listing requirements except for the non-adherence to International Accounting Standard (IAS) 21 “The Effects of Changes In Foreign Exchange Rates”. The principal accounting policies of the Group are consistent with those applied in the previous annual financial statements.


The interim financial results for the six months ended 31 December 2022 which have been reviewed by BDO Zimbabwe Chartered Accountants and an adverse review conclusion has been issued thereon. The reviewed report carries an adverse conclusion with respect to non-compliance with International Accounting Standard 21 “The Effects of Changes In Foreign Exchange Rates”. The review conclusion has been made available to management and those charged with governance of Axia Corporation Limited. The Engagement Partner responsible for the review is Mr. Davison Madhigi.


The Group adopted the Zimbabwe Consumer Price Index (CPI) as the general price index to restate transactions and balances as appropriate. Non-monetary assets and liabilities carried at historic cost have been restated to reflect the change in the general price index. Monetary assets and liabilities and non-monetary assets and liabilities carried at revalued amounts have not been restated as they are presented at the measuring unit current at the end of the reporting period. Items recognized in the statement of profit or loss have been restated by applying the change in the general price index from the dates when the transactions were initially earned or incurred. A net monetary adjustment was recognized in the statement of profit or loss. All items in the statement of cash flows are expressed in terms of the general price index at the end of the reporting period. Comparative amounts in the Group financial results have been adjusted to reflect the change in the general price index. Financial statements prepared under the historical cost convention have also been presented as supplementary information. The auditor has not expressed any opinion on these historical results.

The CPI increased from 8,707.35 in June 2022 to 13,672.91 in December 2022, representing a 57.03% increase in the period under review, this is compared to the Reserve Bank of Zimbabwe Auction rate which increased by 83.32% during the same period. Due to the disparities currently prevailing in the economy, significant distortions can occur in the preparation of inflation-adjusted financial statements in accordance with the requirements of IAS 29. Of significance in the inflation-adjusted financial statements is a net monetary gain of ZWL$ 4,3 billion in the current period. Despite this net monetary gain, the Headline Earnings Per share increased by 61%.

The indexed cost base and high local currency interest rates had a significant impact on the Group’s financial results. Management will continue to adapt business units’ operating models to manage business growth and sustainability.


The Group was recently listed on the Victoria Falls Stock exchange (VFEX) and is in the process of aligning with the listing requirements in terms of systems and financial reporting.

The Group has therefore also prepared financial results in United States Dollars which are presented as supplementary information. The auditor has not expressed any opinion on the supplementary financial results.

The Group will publish audited financial statements for the year ending 30 June 2023 in United States of America Dollar.


The local trading environment in the first half of the financial year was characterized by the depreciation of the local currency, unstable and multiple exchange rates, high inflation and the pass-through impacts of rising global inflation together with supply disruptions arising from COVID-19 and the Russia/Ukraine conflict. The country, however, benefited from the increased diaspora remittances, government infrastructure spending and increased mining activities.

The warranted stance taken by both fiscal and monetary authorities helped stabilise the exchange rate during the period. The Group was affected by the high local currency interest rates during the first quarter and Management embarked on an aggressive repayment program to reduce the resultant finance costs. The second quarter witnessed subsided inflation and exchange rate volatility and this resulted in increased foreign currency transactions. Whilst the prevailing stability has had a positive bearing on the trade and general business confidence, complexity remains in the form of constrained liquidity and pricing distortions, which negatively impacted consumer demand across the formal sales channel during the period.

The Zambian economy remains relatively stable although the exchange rate has been volatile since December 2022.

In Malawi, the economy was affected by huge foreign currency shortages, with official currency exchange rate depreciating by 25% during the period.


In terms of IFRS and other regulatory requirements, the Group is required to provide financial commentary on the Group’s inflation-adjusted financial statements; users are advised to exercise caution in the interpretation and use of these Group inflation-adjusted financial statements.

The Group reported revenue of ZWL$75.555 billion during the period to achieve a 44% growth compared to the comparative period. The revenue growth filtered into gross margin which increased by 36% on prior period. Operating expenditure increased by 54% on comparative period due to indexing of cost base to the US$. The Group posted an operating profit of ZWL$10.396 billion, representing a 16% increase on the comparative period. Profit before tax of ZWL$15.030 billion was reported which was 78% ahead of prior year. Basic Earnings Per Share and Headline Earnings Per Share both improved by 61%.

The Group’s statement of financial position remained solid. Net borrowings decreased by ZWL$2.78 billion mainly due to high interest rate increases during the period.

The Group generated cash of ZWL$8,362 billion from operations which however was 3% down from the comparative period. Positive free cash generation enabled the Group to incur capital expenditure for the period totaling ZWL$2.7 billion. The Group’s free cash generation will enable it to execute exciting expansion opportunities.


The Group continues to apply the Global Reporting Initiatives (GRI’s) Sustainability Reporting Guidelines as part of its commitment to ensuring the sustainability of its businesses. The Group will continue to uphold these practices and values across its operations to ensure that long-term business success is achieved in a sustainable manner.


The main operating business units in the Axia Corporation Limited Group are TV Sales & Home (TVSH), Distribution Group Africa (DGA) and Transerv. TVSH is Zimbabwe’s leading furniture and electronic appliance retailer with sites located countrywide. DGA’s core areas of expertise lie in inbound clearing and bonded warehousing, ambient and chilled warehousing, logistics, marketing, sales, and merchandising services. Transerv retails automotive spares and accessories through retail stores and fitment centers to service the needs of its customers.

TV Sales & Home

Second quarter volume performance for TV Sales & Home was up 22% compared to the same period in prior year attributable to successful market activation promotions namely Black Friday and Ho-Ho-Home which were well received by consumers. However, year-to-date volume performance increased by 3% compared to prior year. This was on the back of a disappointing first quarter performance which was affected by restrictive pricing pressures experienced in the first two months of the quarter. The reintroduction of US dollar credit has seen significant growth in the US dollar debtors’ book which increased by 382% between September 2022 and December 2022 with the potential to improve revenue streams in the last half of FY2023. Collections on the debtors’ book have remained solid.

As customer demand continues to increase, the business is leveraging on recently proposed policy changes such as the review in lending rates to boost the local currency credit sales which had been negatively impacted by high finance costs in the past year. Despite the economic challenges, TV Sales and Home continues to invest in volume growth initiatives with the introduction of new product range from the group’s local manufacturing units as well as imported products.

Two new stores were opened in Harare during the first quarter. Plans are underway to expand the retail store network which include opening new stores in the second half of the financial year coupled with upgrades to outlooks of existing stores to improve customer experience. At least three new stores will be opened in the second half of the financial year with a new store concept, Bedtime Store, opening its first store. Volumes are expected to improve in the second half of the financial year following the addition of a new home appliances and homeware distribution business.

Volumes at Restapedic, a bed manufacturing business, decreased by 20% to the comparative period. The decline in volumes was attributable to an unsatisfactory first quarter performance. The disappointing first quarter performance by the retail business cited above, had a negative impact on the demand of product from Restapedic in the same period. In addition, Restapedic experienced intermittent raw material supply gaps attributed to delays in the auction payments, this had a negative impact on the imports supply chain, resulting in the downturn in volumes during the second quarter. The business could not meet the demand in the second quarter. Due to delays experienced in the construction of the new bedding factory in Sunway City, Harare, the factory is now set to open in March 2023. New markets have been identified in the region and new orders are expected in the last quarter of the financial year.

The lounge suite manufacturing business also experienced raw material supply gaps attributed to delays in the auction payments and these negatively impacted the imports supply chain resulting in a 15% decline in volumes to the comparative period. Some work has been carried out on redesigning products whilst improving the range on offer. This is being done in order to enhance the availability of affordable products that can be sold on credit in response to market demands. The business also made progress on the export front and the first orders should be delivered in the last quarter of the financial year.

Distribution Group Africa (DGA) – Zimbabwe

Year to date volumes were 27% below the prior comparative period and this resulted in a decline in revenue. This has been a result of the weaker demand in the formal sector, and the management’s decision to stop supplying some customers to manage the risk on the extent of debtor balances. Cost containment strategies allowed the business to end the first half with profit ahead of last year despite decrease in revenue. High interest rates incurred during the first quarter led management to embark on an aggressive repayment of debt program to reduce the finance costs thus improving profitability and free cash generation.

The business remains poised to exploit opportunities from economic activities in the informal business sector that will not require extended credit terms. The business continues to safeguard and grow shareholder value by embarking on projects that generate positive cash flows and achieve the required returns.

Distribution Group Africa – Region

In Zambia, volumes increased by 5% on the comparative period. The noted growth was a result of concerted efforts from the sales team. The sales mix was skewed towards high margin products which led to improved margins. The business increased its operating profit by 8% in US$ terms. The business continues to monitor and correct its pricing positions in response to market conditions.

Malawi continues to face foreign currency shortages. The foreign currency shortages resulted in the business reducing its ordering of imported stock which led to a decline in sales volumes by 25%. Operating expenditure was well managed, and this resulted in the business posting a decent profit. Plans have been implemented to generate foreign currency to settle foreign suppliers.


During the six months, the Company’s revenue and volumes were on an upward trend, as the Company started recovering from the restrictive pricing challenges experienced during the first two months of the financial period. Revenue was 3% below the comparative period.

The Company increased its store network by opening two retail stores in Harare. Plans are underway to open at least six shops in the 2023 financial year as the business continues with the drive to lead the market and ensure that customers continue to access quality products whilst enjoying shopping convenience.


The clearing of the auction backlog has brought renewed confidence in the auction system. The Group is hopeful that this will therefore be a reliable source of foreign currency to enable the Group to pay foreign suppliers. The right pricing of goods will stimulate demand thus improving sales volumes. The downward revision of the local currency interest rates as announced in the latest Monetary Policy Statement will assist in managing the Group’s working capital position which will allow for greater supply of goods at more affordable prices as well as stimulate volumes growth.

The Group remains hopeful that disciplined and progressive policies will be adopted to foster stability in the market and building confidence. The Group’s management teams will focus on managing gearing levels, executing expansion opportunities, broadening product ranges, balancing pricing and volume objectives, achieving appropriate levels of margin return, managing operating costs in light of the environment and ensuring maximum free cash generation.


The Board has declared an interim dividend of US$0.0018 (0.18 US cents) per share in respect of all ordinary shares of the Company. The dividend is payable in respect of the interim period ended 31 December 2022 and will be paid in full to all ordinary shareholders of the Company registered at close of business on the 21st of April 2023. The payment of this dividend will take place on or around the 28th of April 2023. The shares of the Company will be traded cum-dividend on the Victoria Falls Stock Exchange up to the 17th of April 2023 and ex-dividend as from the 19th of April 2023.

The Board has also declared an interim dividend totaling US$50,000 to the Axia Employee Trust (Private) Limited which will be paid on or around the same date.


I express my sincere gratitude to the Board of Directors, executives, management and staff for their ongoing efforts during the period under review. Their commitment, despite the challenging operating environment, is greatly appreciated. I also take this opportunity to thank the Group’s valued customers, suppliers and other stakeholders for their continued support and trust.


16 March 2023

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