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Enacy Mapakame Business Reporter
Retail giant OK Zimbabwe is downbeat of its volume performance during the first quarter of the current financial year due to disruptions caused by the Covid-19 pandemic.
The quarter began at the same time the country started implementing a national lockdown as recommended by the World Health Organisation.
Since it was detected late last year, the pandemic has caused economic downturn across the globe due to disturbances to production time as governments implemented lockdowns and social distancing to limit its spread.
Borders have been closed while airlines have been grounded serve for cargo and selected passenger flights to transport returnees.
Zimbabwe implemented a national lockdown effective March 30, although essential services remained in business but for limited business hours.
As an essential service provider, OK Zimbabwe has been operating during lockdown period, but at reduced trading hours, which will have a knock on effect on the group’s figures.
Group chairman Mr Herbert Nkala, indicated the pandemic also caused disruptions to supply chains.
“Volume performance for the first quarter of the current financial year will therefore show a significant decline from prior year,” he said in a statement accompanying the group’s financials for the year to March 31, 2020.
“The short to medium term prospects of the group depend on the duration and severity of the COVID-19 pandemic, which will impact the timing of the return to full normalcy of operations.
“The Covid-19 pandemic has disrupted supply chains and the group will work closely with suppliers to ensure adequate product supply,” he said.
The pandemic has come at a time the economy is already constrained by foreign currency shortages as well as hyperinflation, which has significantly eroded consumer spending.
At OK Zimbabwe, management has implemented measures to ensure viability of operations and will involve these measures as the uncertain environment demands.
One of the key focus areas remains cost control.
Towards the end of the past financial year, the group opened a new store in Karoi and this was also during the eve of the pandemic lockdown.
Resultantly, it’s contribution to financial results were not significant and its full potential will be realised when normal operations resume and economic conditions improve.
The group also continued with the refurbishment programme started during the year, with makeovers being completed at OK branches in Gweru, Mutare, Triangle and at Bon Marche’ Westgate to enhance the stores’ ambience.
For the year to March 31, 2020, profit surged 11-fold to $566 million from $49 million recorded in the prior year. In historical terms, before tax profit also rose by over 1 000 percent to $788.6 million from prior year’s $67.5 million.
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