Zimbabwe's companies lament impact of COVID-19 on operations

Source: Xinhua| 2020-05-15 19:58:11|Editor: huaxia

by Gretinah Machingura

HARARE, May 15 (Xinhua) -- Zimbabwean companies have bemoaned the impact of COVID-19 on their operations, against the backdrop of an already fragile economy.

In their periodic performance reports published Friday, the companies said business volumes had declined considerably due to low demand amid the COVID-19 pandemic.

One of the country's leading retail and hospitality groups, Meikles Limited, said the Victoria Falls Hotel, which it runs jointly with African Sun, closed operations at the outbreak of the virus and that its date of reopening remained uncertain.

Its other hotel in South Africa, the Cape Grace Hotel in Cape Town, also closed and is on care and maintenance.

The company added that the current lockdown, which started on March 30, had caused certain commercial difficulties.

Nampak Zimbabwe Limited said the quarter from January to March 2020 had been tainted by the outbreak of the coronavirus pandemic which impacted on the group's operations.

"Like most countries throughout the world, Zimbabwe will not escape the negative impact of restricted traveling both internally and externally, closed businesses and the knock-on effect of depressed demand following the virtual devastation of the tourist industry.

"Consumer demand generally is reducing as incomes cannot keep pace with rising inflation. These factors, added to the already serious macro-economic difficulties facing the country and need for reforms, make any forecast of short to medium term relief extremely difficult," the company said.

Nampak Zimbabwe is a packaging company engaged in the manufacturing of paper, plastic and metal packaging products, as well as leasing biological assets and the timber processing plant.

Real estate services provider, Dawn Properties, said in addition to experiencing a challenging operating environment in 2019, it remained wary of the impact of COVID-19 on operations.

"The recent COVID-19 pandemic has posed some uncertainty on the Group's future performance as the world is still battling to contain its economic impact," the company said in its audited financial statement for the year ended December 31, 2019.

Top cement manufacturer Lafarge Cement Zimbabwe Limited said the lockdown will have an inevitable impact on volumes for the second quarter in 2020.

"It is projected that Q2 2020 volumes will decline by 30 percent with the possibility of spill over risks impacting the second half of the year," the company said in its first quarter trading update for 2020.

"The ripple effects of the lockdown and border closures are still to be fully quantified, but the business expects to continue to feel the effects of the COVID-19 outbreak into the second half of the year."

It said it will have to rely more on foreign funded projects to sustain operations in the wake of the slowdown in aggregate demand in the core individual home builder market.

Diversified mining group, RioZim Limited said there had been no significant disruptions as the group was exempted from lockdown regulations, but there was however, the threat to the group's raw materials supply chain which is predominantly imports.

The group has interests in gold, nickel and diamond mining.

Banking group FBC Holdings Limited said preliminary assessments show that the group's financial performance for 2020 may be impacted adversely by the COVID-19 pandemic.

"Product and services demand is projected to decrease, whilst impairment costs will likely increase as revenue streams of our customers are impacted," the bank said.

Horticultural firm Ariston Holdings said the COVID-19 pandemic was affecting the company's production and sales business.

It said harvesting of tea had slowed down due to labor disruptions owing to some lockdown rules.

"This will result in a 20 percent reduction in overall tea production for the group as slowing down the harvesting process results in compromised green leaf quality which cannot be converted into export quality made tea," it said.

Tea export sales had become subdued due to suspension of services by airlines while banking channel delays were also being experienced. Enditem