The continued volatility of the Zimbabwe dollar (since stabilised following the moral suasion between the central bank and the financial institutions) in spite of the anticipated disbursement of balance of payments support funds by the International Monetary Fund is of great concern and is an indication of the lack of confidence in the government’s ability to correct shortcomings in the economy, so says tobacco giant, TSL, in its latest annual report.
“The coming year,” it says, “promises to be difficult and begs the question whether Zimbabwe’s resilience will finally be stretched too far.”
But the company says with its healthy cash resources it is well placed to have an outstanding year given an enabling environment. The company had “impressive” results for the year ending October 1998 especially when viewed against a “chaotic economic backdrop”.
It saw its turnover increase by 39 percent from $1.9 billion in 1997 to $2.6 billion and profit after tax also increase by the same margin. Earnings attributable to shareholders rose from $167.7 million to $224.4 million.
Tobacco Sales Floor more than doubled its profits although tobacco prices fell from US$2.33 in 1997 to US$1.73. This was largely due to the devaluation of the dollar.
Chemco’s operating profit was 57 percent up while Bak Storage doubled operating profits and Hunyani’s operating profit was up 77 percent.