Chairman’s Statement
Operating Environment
The economy remained in a fragile state during 2015. This was made worse by weakened terms of trade following the depreciation of the South African Rand, a major trading currency. Adverse weather conditions and depressed levels of capacity utilization in the productive sector, reported at about 34% during the year, compounded the situation.
The Zimbabwean economy is estimated to have grown by 1.5% in 2015, slowing down from the 3.2% recorded in 2014. Deflationary pressures continued to persist with year-on-year inflation as at 31 December, 2015 being reported at -2.47%.
In aggregate, the Zimbabwe Stock Exchange market capitalization dropped from $4.3 billion in December 2014 to close at $3 billion at 31 December, 2015, thus underlining reduced market competitiveness.
Financial Performance
The Group recorded a full year profit of $8.9 million, an improvement from a loss of $8.6 million posted in 2014.The financial performance is discussed in more detail in the Group Chief Executive’s report.
Dividends
The Board has declared a dividend amounting to 0.54 cents per share for the period under review. Whilst capital preservation and growth remain as priority areas, the Board has considered the need to provide an investment return to shareholders in a harsh economy as key in making this declaration.
Outlook
At the macro-level, economic for tunes are hinged on an aggressive arrears clearance strategy in respect of the country’s external debt which is expected to unlock new funding. Despite its continued listing on the United States sanctions list, the ZB Group will position itself to take advantage of any opportunities that will arise as the implementation of the Zimbabwe Agenda for Sustainable Socio-Economic Transformation (ZIMASSET) gathers momentum. The recent recapitalization of the Banking Operations by the injection of $20 million through treasury bills during the year has strengthened overall underwriting capacity which the Group will leverage on, going forward.
Directorate
Mr.T Mafunda resigned from the Board with effect from the 19th of August, 2015. On behalf of the Board, I would like to thank him for the contribution he made to the affairs of the Group during his term. I wish him success in his future endeavours.
Conclusion
I would like to thank all our stakeholders, particularly our clients, for their contribution to the results achieved during 2015.
T. P. B. Mpofu
Chairman
23 March 2016
