BLUE-CHIP counter Meikles Africa Ltd (Meikles) has made an impressive $68 billion attributable profit, up from $5,9 billion chalked up last year. However, the group has a net inflation-adjust
ed $92,1 billion loss for the period ending September 30 caused by its US$27 million deposited at the Reserve Bank of Zimbabwe (RBZ).
The RBZ requires all foreign currency-earning companies to deposit money in the central bank, which it then keeps, and issues out at the official exchange rate to them.
Meikles chief executive officer, prominent businessman Chris Parvin, blamed the fixed exchange rate for the $92,1 billion loss, which analysts had queried at a briefing on Tuesday.
“We have US$27 million deposited at the RBZ and we access it whenever we embark on projects within the region,” Parvin told businessdigest in an interview.
“The figure varies because the RBZ gives the foreign currency back to us at the official rate which currently stands at $824.”
The RBZ has continued to fix the Zimbabwe dollar at $824 against the United States greenback in an arrangement that is now causing havoc for the business community.
“The inflation-adjusted income statement records a net monetary loss of $92,1 billion,” company secretary Andrew Lane-Mitchell said.
“This arises primarily from the group’s foreign currency assets, the value of which in Zimbabwe dollar terms has diminished because the official exchange rate remains unchanged and therefore has not matched inflation.
The majority of the foreign funds are deposited with the Reserve Bank of Zimbabwe and are converted at the official rate of exchange.”
Parvin said turnover at $126,5 billion had increased and was commendable judging from the current difficult economic conditions.
Headline profits per share stood at $417,16, up from $38,02.
Meikles experienced a decrease in the number of occupancies at its prestigious Meikles and Victoria Falls Hotels.
“We need to sort out our image as a country,” Parvin said.
Meikles and Victoria Falls Hotels experienced reduced occupancies against the same period in the previous year.
Lane-Mitchell said the Cape Grace Hotel also experienced occupancies lower than those experienced in the exceptional winter season of 2002.
“The Cape Grace Hotel has had an average Cape ‘low season’ largely because of the strength of the rand against the US dollar, and exacerbated by the fall in travel as a result of the Iraq war,” he said.