Chairman’s Statement
OPERATING ENVIRONMENT
The economy maintained a positive growth path in 2012, although the growth rate was revised to 4.4% against an initial projection of 9.2%. This was mainly a result of challenges arising from the tight liquidity which affected both the public and private sectors.
A significant external debt overhang continued to militate against efforts to mobilise capital inflows whilst fiscal revenues were overstretched against multiple demands.
Ageing infrastructure, poor export performance, and unreliable utility provisions particularly in respect of power and water, adversely affected performance in the productive sector.
Economic growth was mostly spurred by activity in the mining and agricultural sectors. The informal sector became a major driver of economic activity and, to an extent provided a safety valve which absorbed excess labour from the formal market.
Capacity utilisation in the manufacturing sector declined from 57% to 44%, while imported goods comprised about 70% of products in retail outlets. As a result, the cumulative trade deficit widened by 17% from US$3 billion in 2011 to US$3.6 billion in 2012.
Zimbabwe’s year-on-year inflation was stable and averaged 3.75% in 2012, while the month-on-month inflation ranged between -0.2% and 0.5%.
Capital markets continued to underperform with the mining index down by a massive 36.3%, while the industrial index added a paltry 5.3%. On the other hand, activity on the money market remained relatively subdued, owing to the lack of tradable financial instruments, the absence of an active inter-bank market and lender of last resort. Overall, money supply grew by 28% from US$3.1 billion at the beginning of January 2012 to US$3.97 billion at the end of December 2012.
THE GROUP’S PERFORMANCE
The Group posted a profit after taxation for the year of US$7.8 million, being an 11% increase from the profit posted in 2011.
The Group has maintained a steady growth trend with total assets having increased by 20% during the year under review.
The financial performance is discussed in more detail in the Group Chief Executive’s report.
SHARE BUY-BACK
A total of 16 231 843 of the Company’s issued share capital, representing 9.27% of the shares in issue have been purchased since the inception of the share buy-back scheme in 2010 at a cumulative average price of US$0.10 per share. The shares have been retained as treasury shares.
DIVIDENDS
The Directors have proposed payment of a final dividend of 0.16 cents per share which will bring the total dividend for the year under review to 0.34 cents per share.
CAPITALISATION AND FUTURE PROSPECTS
The Group hopes to complete the merger of ZB Bank Limited and ZB Building Society before the end of the current financial year in order to achieve greater efficiencies in capital deployment.
Efforts towards the overall recapitalisation of the Group’s operations have gathered momentum and should see the injection of further liquidity into the Group’s operations. It is hoped that positive results will have been achieved by June 2014.
LITIGATION AND MATERIAL DISCLOSURES
The appeal in which Transnational Holdings Limited is challenging the acquisition of Intermarket Holdings Limited by the ZB Group is still pending at the Supreme Court of Zimbabwe.
The Group continues to be listed as a Specially Designated National (SDN) by the Office of Foreign Assets and Control (OFAC) of the United States of America’s Treasury Department.
ACKNOWLEDGEMENT
On behalf of the Board, I wish to thank management and staff for their effort during the past year.
I also wish to thank the various stakeholders and all authorities for their continued support.
Finally, I would like to thank all directors in the ZBFH Group for their wise counsel and commitment to the business of the Group.
B P Nyajeka
Chairman
28 March 2013
Harare
