September inflation was at 12,2 percent: OK Zimbabwe

OK Zimbabwe is relying on internally generated inflation data, which executives said was at 12,2 percent for September compared to the official rate of 5,39 percent for the same month.
Presenting the company’s financial results for the six months to September 30, 2018, Alex Siyavora, OK Zimbabwe chief executive, said internally generated inflation gave the company a clearer picture of price movements, which retailers and customers have been witnessing lately.
“Our average internal inflation was 12,2 percent at a time government’s official inflation was announced 5,3 percent…It is important to note that most products that are monitored and receive Reserve Bank of Zimbabwe support have increased their prices as well,” he said.
He said while official figures were lower, the “real truth” came out once an organisation imports goods.
In a series of presentations of financial results for the half year to June 30, 2018, several listed companies said they were increasingly relying on internal inflation rates as official statistics cast the image of stability, which was misleading. They argued that official numbers were not representing the state of affairs in the country.
Last week, regional lender African Development Bank (AfDB) said Zimbabwe reported the fastest regional inflation growth rate in the third quarter of the year, placing it within the league of countries with the highest figures.
The southern African country’s annual inflation increased to 5,39 percent in September 2018 after gaining 0,56 percentage points from 4,83 percent recorded in August 2018.
Leading equities firm, Old Mutual Securities (OMSEC), recently said the country’s official inflation was misleading and did not reflect the price increases of goods and services.
“Official inflation however does not fully reflect some of the direct price increases on individual basic product imports,” OMSEC said in its portfolio manager’s report for the third quarter.
“The notable rise in the price of imported goods is due to the fact that foreign currency used to import them is sourced from the parallel market where exchange rates are at significant premiums to the official one,” OMSEC said.
Meanwhile, OK Zimbabwe recorded a profit of $8,4 million during the period under review, a 66,3 percent increase from $5 million achieved during the prior year’s comparable period.
Revenue generated for the period increased by 23,2 percent to $330,1 million, from $268 million recorded in the comparable period the previous year.
Overheads increased by 18,4 percent to $45,7 million from $38,6 million in the comparable period. Bank charges and rentals increased in line with the growth in sales.
Promotions and staff costs also increased to support higher sales levels.
“The group managed to restrict the overheads growth to below sales growth in order to improve profitability,” Siyavora said.
Capital expenditure for the period was $7,5 million, up from $4,9 million for the comparable period. This was spent on acquiring properties, refurbishment of stores and replacement of equipment.
OK Zimbabwe directors recommended an interim dividend of 0,35 cents per share to be paid to shareholders on or about November 29, 2018.
Siyavora said the separation of real time gross settlements foreign currency accounts and nostro foreign currency accounts, which was announced in October by the Reserve Bank of Zimbabwe, would disadvantage non-exporters.
“On the ease of doing business, the two percent intermediated tax was also penalising compliant tax payers,” Siyavor