BUSINESS REPORTER
Zimbabwe’s largest seed producer, Seed Co Limited, is expecting a more stable socio-economic environment following the elections held yesterday, which will be better for business and economic activity, Business Times can report.
Yesterday, registered voters went to the polls to elect the nation’s President and parliamentary representatives.
Additionally, votes were cast for members of the local government.
If necessary, a Presidential re-run will be held on September 2.
Zimbabwe’s economy has been unstable in the first half of the year, with hyperinflation eroding purchasing power.
The Zimbabwe dollar has also been rapidly losing value against the United States of America dollar and other major currencies.
“…We expect a more stable socio-economic environment soon after the elections, that is more conducive for business and general economic activities to thrive.
Despite these circumstances, the group is well-equipped for the upcoming sales season, both domestically in Zimbabwe and within the broader region,” company secretary Tineyi Chatiza said.
Additionally, he claimed that the group’s plans for production and processing had been carefully thought out in order to amass the ideal variety mix of seed stocks to prepare for the El Nino forecast scenarios of below- or above-average rainfall.
According to the Meteorological Services Department, Zimbabwe could encounter a disastrous El Nino during the summer cropping season of 2023–2024.
In a trading update for the three months to June 30, 2023, Chatiza stated that Seed Co was working hard and was confident in its ability to ensure that it had enough funding and inventory to meet the demand for food crop seeds during the upcoming summer planting season.
Inflation-adjusted revenue for the quarter increased by 305% when compared to the same period the previous year, and this growth is consistent with the sharp depreciation of the exchange rate and its subsequent inflationary effects.
“In contrast to prior year, the operating profit showed a positive swing of 10 times when compared to the previous period’s inflation-adjusted loss. The improved profitability outturn is attributed to the recovery of profit margins and the alignment of the exchange rate with open market forces,” Chatiza said.
He added: “It is therefore important to note that the comparability of financial performance has been significantly distorted by the substantial fluctuations in exchange rates and the shift in the base of inflation statistics from solely the local currency to a computation involving blended currencies.”
Chatiza also said: “Tight liquidity management is however negatively affecting the availability of productive working capital for businesses as well as aggregate demand.
