Victoria Falls Stock Exchange (VFEX) listed diversified goods retailer Axia saw its gross margin grow by 36% as a result of growth in revenues in the half year to December 31, 2022.
The group reported revenue of $75,555 billion during the period to achieve a 44% growth compared to the comparative period in 2021.
Axia board chairman, Luke Ngwerume in a statement accompanying results said, “The revenue growth filtered into gross margin which increased by 36% in the prior period. Operating expenditure increased by 54% in the comparative period due to indexing of cost base to the US$.”
The group posted an operating profit of $10,396 billion, representing a 16% increase on the comparative period.
“Profit before tax of $15,030 billion was reported which was 78% ahead of prior year. Basic Earnings Per Share and Headline Earnings Per Share both improved by 61%,” Ngwerume said.
According to the chairman, Axia’s statement of financial position remained solid as net borrowings decreased by $2,78 billion mainly due to high interest rate increases during the period.
The group generated cash of $8,362 billion from operations which however was 3% down from the comparative period.
Positive free cash generation enabled Axia to incur capital expenditure for the period totaling $2,7 billion.
According to Ngwerume, the warranted stance taken by both fiscal and monetary authorities helped stabilise the exchange rate during the period.
“The Group was affected by the high local currency interest rates during the first quarter and management embarked on an aggressive repayment program to reduce the resultant finance costs. The second quarter witnessed subsided inflation and exchange rate volatility and this resulted in increased foreign currency transactions,” he said.
Whilst the prevailing stability has had a positive bearing on the trade and general business confidence, Axia says that complexity remains in the form of constrained liquidity and pricing distortions, which negatively impacted consumer demand across the formal sales channel during the period.
Regionally, the Zambian economy remains relatively stable although the exchange rate has been volatile since December 2022, whilst in Malawi, the economy was affected by huge foreign currency shortages, with official currency exchange rate depreciating by 25 percent during the period – Harare