Zimbabwe’s largest company says operating environment remains challenging

One of Zimbabwe’s largest listed companies, Delta Corporation, today said the operating environment in the country remained challenging and its operations could be adversely affected by the current shortage of maize.

The country’s largest beverage maker said the trading environment is characterised by high inflation and an unstable exchange rate with limited availability of foreign currency in the formal banking channels.

Consumer spending was also constrained by low disposable incomes as salary and wage adjustments continued to lag behind increases in prices of goods and services.

Inflation is estimated at 520% while the Zimbabwe dollar is now trading at 17.34: 1 at the official interbank rate, and at 24:1 on the black market.

Zimbabwe discontinued publishing annual inflation figures claiming that they were distorted after the country reintroduced the Zimbabwe dollar and floated it on the market.

It said it will resume publishing the figures from next month, a full year after it allowed the local currency to trade on the market kicking off at 2.5:1.

In its trading report for the quarter ending 31 December, Delta said lager beer volumes were down 43% for the quarter while sorghum beer sales declined by 41%.

There was, however, a 34% increase in the volume of sparkling beverages during the quarter which coincided with the festive period.

Revenue was up 646% in historical terms and 27% in real or inflation adjusted terms.

The government has taken the lead in cushioning workers by increasing their salaries by 140 percent.

The lowest paid workers is expected to earn $2 500.

The poverty datum line for an average family, of five persons, stood at $4 188.42 in December.

Currently half the nation, 7.7 million people, are said to be in need of food relief.

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