We have extracted a Chairman’s Statement from the 2019 half year interim report for Dairibord Holdings Limited (DZL.zw), listed on the Zimbabwe Stock Exchange:
I am pleased to report the Group’s results for the half year ended 30 June 2019. The Group’s performance, particularly growth in volume sold and raw milk intake, reflect the positive impact of business strategies deployed under an increasingly difficult trading environment.
The period under review was characterised by several government policy changes that redefined the fundamentals in the business environment. Specific policy changes included the floating of the exchange rate from the previous 1:1 fixed rate; the introduction of a local currency, the ending of the multicurrency system and the increase in the Reserve Bank overnight accommodation rate from 15% to 50%.
These policy changes, though welcomed by most industry players, are yet to positively impact business fundamentals. Foreign currency supply remains a major challenge impacting both inflation and availability of inputs. In addition to the aforementioned developments, fuel, electricity and water supply worsened as the year progressed, thus further negatively impacting the already fragile economy. The all items year on year inflation ended the month of June at 176%, with the foods and non-alcoholic beverages inflation at 252%. Capacity utilisation in the manufacturing sector, as reported by the Ministry of Industry and Commerce, significantly decreased to an estimated 34% from 48% achieved in 2018.