The Sunday Mail
Dozens of mainstream companies may have folded in 2015, with thousands of job losses; but several others beat the odds of a tough Zimbabwean economy through mergers, acquisitions and innovation in what could well be a strong foundation for future growth.
At a time when Russian telecommunication behemoth – Vimpelcom – decided to exit the domestic market, international brands like Samsung and Pepsi demonstrated their confidence in the present and future of the Zimbabwean economy by setting up multi-million dollar factories here.
While isolated foreign investors are still fretting over Zimbabwe’s perceived security risk, others have shown confidence in the country as a safe investment destination.
The year also witnessed several corporate activities on the Zimbabwe Stock Exchange (ZSE) listed companies as they intensified survival strategies in the face of biting liquidity challenges. Below are some of the notable ones.
Delta Beverages
ln July 2015, the country’s largest company by market capitalisation commissioned the Chibuku plant in Fairbridge Bulawayo.
The plant is expected to grow the sorghum beer business following declines in lager volumes.
In the six months to September 2015, Delta reported a 19 percent decline in after tax profit to US$35,7 million while sales fell 10 percent on prior year pushing revenue down by eight percent to US$269.
Lager volumes slid two percent while sorghum beer volumes fell 12 percent.
With the Fairbridge plant coming on line, the beverages giant projected national capacity for Chibuku Super to increase to 3,5 million hectolitres per year, closing the gap that existed.
In September, Delta’s parent company SABMiller agreed to sell itself to its rival Anheuser- Busch InBev for US$104 billion in one of the largest corporate deals in history.
Delta is 38 percent owned by SABMiller. The deal will make Delta part of a brewing empire that will make an estimated one-third of the world’s beer.
Econet Wireless Zimbabwe Limited
In February, ZSE’s second largest company by market capitalisation – Econet – launched Dial-A-Doctor, a health service facility that would enable its subscribers access health advice using their mobile phones.
The service was expected to bridge the widening gap of access to cheaper health service while the telecoms giant diversified its services to boost revenue.
The mobile operator, in partnership with National Foods, launched a mobile phone grocery facility, Ecoshopper, to allow subscribers to purchase groceries through their Ecocash wallet and collect from National Foods’ depots countrywide.
As part of efforts to expand its mobile money service, Econet and global money transfer giant, MoneyGram, introduced a new platform in October to enable customers from more than 200 countries to transfer money via EcoCash.
However, the company also felt the effects of the challenging economic environment, retrenching 100 employees as revenues continued to dip.
In the six months to August, profit was down 47 percent to US$23,5 million from US$49,8 million in the prior year.
Total revenue fell 17,7 percent to US$323 million from US$392 in the prior year on the back of a 35 percent tariff cut introduced by regulator Postal and Telecommunications Regulatory Authority of Zimbabwe (Potraz).
On January 1, 2015 Potraz implemented a 35 percent reduction in regulated tariffs in addition to a five percent excise duty on airtime sales.
Innscor Africa Holdings
Last year, the industrial conglomerate spun off its Quick Service Restaurant business to unlock shareholder value.
Simbisa Brand Limited listed separately on the ZSE in November.
The new company owns the popular fast food outlets Chicken Inn, Pizza Inn, Creamy Inn, Nandos and Steers.
In unbundling the Quick Service Restaurant, Innscor Africa Ltd aims to “create financial independence and enhanced transparency for the company so it can report independently to shareholders.”
This will also enable the QSR to undertake mergers and acquisitions of entities in complementary spheres of operation, without competing internally with other Innscor division.
Fidelity Life Assurance
In October, shareholders approved the acquisition of an 81 percent of agro-industrial group CFI Holdings’ Langford Estate.
Under the deal, Fidelity assumed CFI’s US$18 million debt on restructured terms. Fidelity planned to use the 834 hectares of Langford land to expand its residential housing scheme in Southview Park.
RioZim Limited
The resources group reopened its gold mining unit in October. Cam and Motor in Kadoma had ceased operations 50 years ago. The mine closed in 1968 after producing 150 tonnes of gold in its entire life. The mining unit, with capacity to produce 4000 ounces per month was seen as key to reviving RioZim’s ailing fortunes.
The group’s major shareholder, GEM RioZim Investments increased its shareholding in the company after taking up more than 20 million ordinary shares following a US10 million rights issue that was subscribed by 67 percent.
ZB Financial Holdings
Limited
The financial services group returned to profitability reporting a net profit of US$4,1 million in the six months to June 2015 from a loss of $2,5 million over the corresponding prior period.
In addition to that, the financial service provider secured US$20 million to boost capital base for its flagship unit – ZB Bank limited.
ln November, ZB Holdings also commissioned residential houses in Twentydales, Harare.
African Sun group
Equity investment firm, Brainworks Capital increased its stake in African Sun to 55 percent after a mandatory offer to the hospitality group’s minority shareholders.
Brainworks bought into the hotel group in 2013 through investment vehicle Lengrah and had a 44 percent stake, thereby becoming its major shareholder.
The hotelier group embarked on a rationalisation exercise which saw nine managers leaving the group.
In October, South African hotel group, Legacy Hotels said it had set aside US$60 million for the refurbishment of five African Sun hotels.
A management contract was also signed in September.
Under the deal, the South African hotel group took over the management of five hotels – Elephant Hills and Victoria Falls Hotel in Victoria Falls, Hwange Safari Lodge, Troutbeck Inn in Nyanga and Crowne Plaza in Harare.
