Simbisa delivers strong performance
CLOUDINE MATOLA
Zimbabwe’s largest fast-food restaurant operator, Simbisa Brands Limited, has successfully navigated macroeconomic challenges, as reflected in its strong financial performance for the half-year to December 2024, Business Times can report.
In its financial results, Simbisa Chairman Addington Chinake attributed the company’s success to its customer-centric approach, which has bolstered resilience in the face of economic volatility.
“The Group delivered a strong performance in the six months under review, building on the resilience demonstrated in the last quarter of FY2024. Despite socio-political and economic headwinds, particularly in Kenya and Zimbabwe, the Group achieved a 7% increase in turnover, a 2% growth in operating profit, and strong free cash generation. This reflects the effectiveness of our customer-focused strategy. By leveraging real-time customer feedback, we have enhanced service delivery and improved the overall customer experience,” Chinake said.
Despite these gains, macroeconomic instability in Zimbabwe has put consumers and businesses under pressure. The continued devaluation of the local currency, soaring electricity tariffs, and frequent power outages have increased operating costs.
Chinake noted that the volatility of Zimbabwe’s newly introduced currency affected disposable incomes, necessitating adaptive strategic interventions to sustain operations.
“Macroeconomic instability continued to exert pressure on both consumers and companies. Notably, local currency devaluation in the first quarter, electricity tariff increases exceeding 50%, and intensified load-shedding impacted cost structures and profitability.
In response, the Group focused on cost containment, supplier engagement, and enhanced customer-driven promotional activities. These initiatives aim to protect consumer affordability while preserving operating margins and sustaining profitability. Management remains confident that this approach fosters a sustainable and profitable business model,” he said.
Simbisa CEO Basil Dionisio emphasized that rising inflation, worsening power shortages, and exchange rate disparities had placed significant pressure on the company’s operating margins.
“Simbisa Zimbabwe’s operating margins came under pressure during the financial period under review due to sustained high inflation, rising utility costs, worsening power outages, and exchange rate disparities.
To mitigate these challenges, we implemented stringent cost-containment measures, including right-sizing staff headcounts, managing electricity usage, minimizing waste, preventive maintenance on critical assets to avoid downtime, and improving supply chain efficiencies,” Dionisio explained.
Despite economic challenges, Simbisa Brands posted a solid financial performance, with revenue growing 7% year-on-year.
In addition to macroeconomic challenges, Simbisa is working on strategies to mitigate the impact of a new 1% tax on specific fast-food items, which came into effect on January 1, 2025.
“In the 2025 National Budget, Zimbabwe introduced a 1% tax on specific fast-food items. The Group is actively exploring solutions to minimize its impact on menu prices while preserving margins. These include enhancing supply chain efficiencies and engaging suppliers on raw material prices,” Dionisio said.
Looking ahead, Simbisa remains focused on strategic cost management, operational efficiencies, and customer engagement to sustain profitability. The company’s ability to adapt to economic turbulence while maintaining strong cash flow and revenue growth underscores its resilience and market leadership in the fast-food sector.
Despite ongoing challenges, Simbisa’s commitment to innovation, cost control, and customer satisfaction positions it well to weather economic storms and drive long-term value for stakeholders.
