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OK Zimbabwe records decline in revenue

ONE of the country’s leading retailers, OK Zimbabwe Limited recorded a $24 million decline in revenue for the year ended 31 march 2016 as a result of persistence economic headwinds which hampered business operations.

Addressing executive members at the company’s Annual General Meeting in the capital yesterday, Finance Director Alex Sayirova revealed the company financial status is in the red following what he described as “operational challenges” chief among them relying on borrowing.

“Our revenue declined from $462,7million in 2014 to $437,5 million in 2015. This is largely due to the decline in sales of basic commodities.” Sayirova said.

The company’s profit decreased to $0.7 million from $7.5 million recorded in 2015.

Siyarova attributed this sharp decline to the liquidity crunch that the country is facing saying the general populace was finding it difficult to buy from large retail shops, a challenge facing all other retail outlets.

“We are all aware of the financial status of the country and the liquidity crunch we are faced with. This to a large extent had contributed to this downfall in our profits.

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“OK Zimbabwe remains a very good competitor and we believe we are still the leading retail outlet but the cash crisis over the couple of months is crippling our operations,” said Siyarova.

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As a result, the company realized a 5, 5% net sales loss margin with sales dropping from $461, 8 million to $436, 5 million during the same financial period.

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Sayirova said they have had to cut down costs by closing down their branch in Nkulumane (Bulawayo) because it was not generating meaningful revenue . The move resulted in more than 500 people losing their jobs.

OK Zimbabwe Limited Board members decided that it would not declare a dividend and that it would channel resources towards reinvestment in the company.

Speaking at the same occasion, the company Chief Executive Officer, Vimbai Zireva said the company will continue to close down as long as liquidity crunch persists.

OK ZIM CEO , vimbai zireva

OK Zimbabwe Limited CEO , Vimbai Zireva

He pointed out that the country needs to start attracting  foreign direct investment if change in the economy is to revived.

“We need to focus more on attracting foreign direct investment so that companies do not end up closing down or retrenching like what we are doing. This is a result of lack of investment and liquidity crunch.

“It is not OK Zimbabwe alone that is affected but all companies are facing the same predicament we are in” he said.

He added that during the coming year, OK Zimbabwe will put in place survival strategies that will enhance the company’s operations so that it does not end up shutting down more branches.

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Multi-award winning journalist/photojournalist with keen interests in politics, youth, child rights, women and development issues. Follow Lovejoy On Twitter @L_JayMut

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