Zimbabwe: Covid-19 Takes Toll On Meikles' Performance

18 February 2021

Diversified Zimbabwe Stock Exchange listed entity, Meikles Limited, suffered volumes decline at its supermarkets segment as the impact of the Covid-19 pandemic took toll on the Group's operations.

Performance at the agriculture segment was mixed with production volumes growing while export volumes fell.

Meikles released its trading update for the nine months to December 2020 showing a 22 percent drop in volumes at its supermarket segments including Pick n Pay outlets.

While the decline for the three months to December 2020 was just 4 percent, at half year volumes had dropped by a massive 31 percent.

For the agriculture segment, bulk tea production benefited from early rains and grew by 41 percent and 6 percent for the quarter and year to date, respectively.

In volume terms, bulk tea export sales were, however, behind last year by 8 percent and 10 percent for the quarter and year to date, respectively.

Packed tea and coffee sales volume grew by 24 percent and 18 percent for the quarter and year to date respectively.

The volume performance resulted in revenue in inflation adjusted terms falling by 7 percent and 8 percent for the quarter and nine months to date, respectively.

However, group revenue, in historical cost terms grew by 487 percent and 575 percent for the quarter and year to date, respectively.

Meanwhile, Meikles is not expecting much improvement in the last three months of its financial year to March 2021.

The start of the fourth quarter coincided with the second wave of Covid-19 and the subsequent scale up of restrictions on movement of people to curtail the spread of the virus.

Whilst the group's main segments are classified as essential service and continue to operate, revenue is likely to be affected by reducing volumes to the end of the financial year and beyond, according to company secretary Thabani Mpofu.

Mr Mpofu, however, said the good rains received this season bodes well for the Group's agriculture segment and growth in export crops is expected in the forthcoming financial year.

"Our dams are full and power, which is essential for irrigation and estate factories will be available not only from traditional sources, but also from the solar projects," Mr Mpofu said.

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