Economic challenges plague Zimbabwean companies, affecting productivity and deadlines: ZSE

Leafias Mazviro

In a recent report released by the Zimbabwe Stock Exchange (ZSE), it has been revealed that economic challenges and instability have significantly impacted companies’ ability to meet deadlines, leading to a decline in overall productivity and performance.

This comes after two giants Star Africa and SeedCo Zimbabwe have delayed the publication of full-year results for the 12 months to March 2023.
Zimbabwe has been facing weighty economic challenges in the past month including a hyperinflationary environment, price madness, exchange rate volatility, and foreign currency shortages.

Analysts pointed out that some of these challenges are making it difficult for companies to prepare their financial statements on time due to companies struggling to acquire the resources required to complete audits and financial reports on time.

According to the Zimbabwe Stock Exchange’s listing requirements, all listed firms are required to publish their annual financial results within 90 days and interim financial results within 60 days of the first half of their financial year.

Star Africa has issued a circular that indicated that the abridged audited financial statements of the year ended in March will be circulated before or on 31 July 2023.

“The Company applied for, and was granted, a month’s extension by the Zimbabwe Stock Exchange (ZSE) with regards to the publication of the audited financial statements in the press,” said the company in a circular.

In another circular, the Seed Company, SeedCo Zimbabwe also shared a notice on the 30th of June 2023 talking about the same issue and the firm expects results to be circulated on or before 31 July 2023.

“Notice is hereby given that there has been a delay in the publication of the Seed Co Limited financial results for the year ended 31 March 2023 which results were due to be published by 30 June 2023.

“The results will now be published on or before 31 July 2023.

“The delay has been occasioned by the complexity of reporting and concluding audit procedures in a hyperinflationary environment,” said the company in a circular.

However, analysts say if firms fail to pledge to these deadlines, they may face penalties for non-compliance, including fines or suspension from trading and it can lead to a decline in the company’s stock price, as investors may become more cautious about investing in the company.

According to some reports by local media, technical challenges are other possible reasons other companies may face in preparing their financial statements, such as implementing new accounting standards or adopting new financial reporting software. This was the case for OK Zimbabwe as it is implementing the ERP system.

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