Listed digital solutions Group, Cassava Smartech suffered foreign exchange losses of $ 506 million as the local currency tumbled against the American dollar, restricting the Group’s profits for the six months ending 31 August to $ 3.2 million, 263Chat Business can report.
The translation loss was exacerbated by the Group’s decision in the financial year that ended 28 February 2019 to account for all debentures as though they were all US Dollar denominated instruments prior to monetary changes that took place in the economy.
“The continued depreciation of the Zimbabwe Dollar against the United States dollar had a significant impact on our financial performance as we had to recognize foreign exchange losses amounting to $506 million,” Group chair, Sherree Shereni said in a statement.
“The Group has net foreign liabilities amounting to US$45 million, of which US$30 million comprise the Group’s 50 percent portion of the debentures issued when the Group was still part of Econet Wireless Zimbabwe Limited,” said Shereni.
However, the Group realized a profit of $3.2 million in the financial statements for period on a hyperinflation adjusted basis buoyed by revenue streams from cutting-edge services it launched during the period under review.
Revenue reached ZWL$ 946 million.
The Group launched Clean City Zimbabwe – an innovative and sustainable on-demand waste management solution riding on the VAYA Africa App.
It also introduced the Ecocash Bureau De Change, the country’s first mobile bureau de change that provides a platform for one to sell foreign currency, the Maisha Medik, a platform which connects patients to medical service providers across the health spectrum and the VAYA Tractor Services , an on-demand tractor services platform linking farmers to agricultural mechanization equipment for smart farming solutions.
“The Group has experienced a rapid increase in the volume and value of transactions being processed on mobile and digital banking platforms as more customers continued to favour these channels due to their convenience and availability,” the Group said.
However, foreign currency shortages continued to suffocate the Group’s performance as it worsened its ability to settle critical foreign obligations.
Cassava Smartech was also affected by incessant power cuts and fuel shortages.