CBZ Holdings Limited (CBZ.zw) HY2022 Interim Report
I am pleased to present an update on the financial and strategic performance of CBZ Holdings Limited and its subsidiaries for the half year ended 30 June 2022.
The half-year period saw the relaxation of the bulk of COVID-19 induced restrictions, allowing the corporate world to slowly transition to a post-crisis mode whilst the subsequent reopening of borders and airspaces, resulted in a noticeable recovery in the tourism, hospitality, and aviation sectors.
In Zimbabwe, provisional figures indicate that tourist arrivals more than doubled during the first five months of 2022, compared to the same period of 2021. Destinations such as Victoria Falls further benefitted through hosting business conferences and major sporting events, which also boosted activity across the value chains. Furthermore, activity in the mining sector remained fairly active, buoyed by ongoing investments in new operations in the lithium, iron & steel and gas subsectors, as well as resuscitation and expansion of existing mines. Additionally, government driven infrastructure projects, among them roads, dams and airports construction projects, continued in earnest, supported by the Government’s public sector investments programs. although these continued to crowd-in the private sector thereby widening business opportunities for the financial services and relate sectors, the period was characterized with an increase in downside risks.
However, the period was also characterised with an increase in downside risks. These included external factors such as rising global inflation and interest rates and firming prices of key raw materials such as fuel, fertilisers and agricultural commodities, which translated into higher domestic production costs, and thus, rising inflationary pressures. Internal factors such as adverse expectations, currency depreciation and general uncertainties also inhibited economic activity during the period under review.
In spite of these adverse macroeconomic conditions, the Group continued to deliver on its value proposition and commitment to its various stakeholders.
Environmental, Social & Governance
Sustainability has become an integral part of our operations as a Group. This is largely borne out of need to responsibly generate a good return for shareholders and all our stakeholders. CBZ Holdings is dedicated to promoting economic growth and human development that is both sustainable and inclusive, as well as ensuring that our business operations have beneficial effects on society, the environment, and the bottom line. For us, embracing Sustainability and ESG concepts as value drivers has shown us that we are socially responsible partners who consider not just our own interests but those of the society in which we operate. To achieve a net beneficial effect, we make intentional and deliberate trade-offs.
In order to have the greatest possible positive effect, we will keep working to improve our knowledge of our environmental and social implications. Currently, the Group is analyzing and reorganizing its governance structures and procedures in order to ensure that they are in line with worldwide best practices for ESG risk management. In order to better identify and manage our portfolio exposure to climate-risk, we are implementing systems throughout the Group and working towards standardizing our reporting.
Share Price Performance
Activity on the capital markets remained fairly strong, with the introduction of Exchange Traded Funds “ETFs” widening the investment options and opportunities on the Zimbabwe Stock Exchange. The CBZH share price rose by 110.4% from ZW$8,032 at the beginning of the year to close the first half of the year at ZW$16,900. Meanwhile, the ZSE benchmark index registered a 79.98% growth. CBZH ended the half year with a market capitalisation of ZW$88.3 billion. The graph below shows the movements in the CBZH share price and the benchmark industrial index from December 2021 to June 2022.
Overview of the Group’s performance
The table below summarises the Group’s financial performance for the half year ended 30 June 2022
Going forward, sectors such as mining and construction are expected to remain fairly strong and resilient, whilst recovery in the tourism and aviation sectors may be further catapulted by pent-up demand as tourists travel far and stay longer. The Group will continue to closely monitor these developments in order to better meet the expectations of its customers, employees, shareholders and all stakeholders.
The anticipated introduction of an investment instrument to assist holders to store value in gold coins, announced by the RBZ on June 24, 2022, is an opportunity we will actively participate in as a financial institution. The Central Bank also put in place additional measures to curb inflation and stabilize the economy. We remain optimistic that these steps will help keep the deteriorating economic situation in check and provide the much needed relief.
Our valued clients remain the core of our success and we highly appreciate their continued partnerships with us. I would like to thank fellow Directors of the Board, the Boards of Subsidiary Companies, Management and Staff for their strong commitment to the CBZ brand and their desire to participate in the growth of the country’s economy.
31 August 2022
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