ZIMBABWE Stock Exchange-listed Powerspeed Electrical says its prospects for growth this year are minimal as the country’s economic turnaround remains uncertain.
The group said it was highly unlikely that the economic environment would i
mprove in the near future.
“Unfortunately, the present economic circumstances prevailing in Zimbabwe do not appear likely to improve significantly in the short-term,” Powerspeed said in its results for the half year ended March.
It said this would inevitably limit prospects for growth during the rest of the year.
Powerspeed reported that trading in the period under review was difficult with demand for all products — produced and traded — extremely weak due to the general state of the economy.
“Although growth in earnings for the period is reasonable, much of this is as a result of the high levels of inflation rather than an increase in volumes,” it said.
Powerspeed added that the shortage of foreign currency would continue to pose a major threat to the operations of the group.
“The current method of foreign currency management is not effective and all sectors of the economy are suffering,” Powerspeed said.
The central bank recently introduced a volume-based exchange rate system under which the greenback is trading at $101 195, way below the parallel market rate of above $200 000.
Powerspeed’s turnover grew to $412,9 billion during the period, an increase of 715% from comparable period the previous year.
Attributable income of $67 billion in the period was 112% up on the previous year.
The group’s capital expenditure was limited to $2,5 billion.
Powerspeed did not declare a dividend, saying there was a need to conserve cash resources.