BH24 Reporter

HARARE – Beverages giant Delta has reported a 7 per-cent decline in revenue to $538 million for the year ended March 31 from $576 million in the prior year, which had a knock-on effect of the firm’s profitability.

For the period under review, Delta’s profit slid 12 percent to $80 million. Management attributed the depressed performance to low demand for its products resulting from a challenging economic environment.

“The El Nino induced drought, poor cash and liquidity availability, delayed remuneration and continued

retrenchments all worked to constrain consumer demand. There is some infiltration of products from adjacent

markets due to the stronger US dollar.

“Consumers continue to shift towards affordable brands

as they seek to stretch their dollar,” said Delta in a statement accompanying the results.

News Update as @ 1530 hours, Thursday 12 May 2016

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Delta FY2016 profit slips 12pc

Operating income for the period was down 14 per-cent to $96, 1 million, while earnings before interest, tax, depreciation and amortisa-tion (EBITDA) was down 10 percent to $129 million.

The group’s finance costs for the year just ended rose to $5, 7 million from $5, 3 mil-lion in the prior comparable period.

Delta reported further decline in sales for FY16.

The lager beer was most affected as volumes in this segment were 8 percent below prior year. In respect of this segment Delta said the value brands grew, the premium portfolio sof-tened, while the mainstream brands experienced the most decline.

The group’s sparkling bever-ages volume declined 6 per-cent during the period under review, while sorghum beer volume was down 3 percent.

Meanwhile says Chibuku Super plants in Kwekwe and Masvingo are scheduled for commissioning by September this year at a cost of $30 million

Earnings per share of 6, 49 cents were down 13 percent

from 7, 44 cents in the pre-vious year.

The beverages maker’s board has declared a special div-idend of US0, 95 cents per share and final dividend of $2, 35 cents per share.●

2 NEws

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BH244

By Funny Hudzerema

HARARE-The use of technol-ogy such as plastic money in all financial transactions has got the potential to reduce the level of corruption in the country, an official from the industry has said.

Zimbabwe National Chamber of Commerce (ZNCC) Harare Branch chairman, Mr Mike Juru said this will improve the ease of doing business and encour-age investment inflow in the country.

“There is need to embrace technology in all the transac-tions that we will be doing at institutional level to reduce over the counter transactions.

“We must promote the use of plastic money instead of hard cash in transactions which creates avenues of corruption,” he said.

He said this during a presenta-tion on the Business Transac-tional Corruption Survey Zim-

babwe which was conducted by the private sector under the theme “Doing business reforms business transactional corrup-tion as a liability”.

The survey indicated that corruption at the border posts appears to be rampant, with importers and exporters often stating that no clearance of goods is possible without paying officials, with multiple officials existing at every stage of the process.

The survey was done to gather people’s perceptions on dif-ferent institutions as far as corruption is concerned.

People interview indicated that the highest rate of corrup-tion was in the police force, followed by the State Procure-ment Board, the Ministry of Transport and Infrastructural Development, Department of Immigration and Zimra.

The survey also concluded that there is little faith in the

business community that the Government follows rules when it comes to tenders or that bids are kept confidential. In conclusion the report called on Government to develop a busi-ness transactional corruption trekker or barometer could be a strategic tool to account for corruption sectorial and region-ally. In his remarks Deputy Chief Secretary Office of the President and Cabinet Dr Ray Ndhlukula said Government is planning to introduce a com-mercial court to deal corruption cases only.

“Government is set to intro-duce a commercial court for corruption because the courts are taking long to investigate corruption issues.

“Currently the courts are taking 3 years to investi-gate corruption cases before arresting the criminal and the commercial courts will take 6 months to investigate corrup-tion issues,” he said.●

5 NEws

Industry calls for use of plastic money to fight crime

BH246

BH247

By Tawanda Musarurwa

HARARE -Gwanda-based gold producer Blanket Mine’s output for the quarter ended March 31, 2016 rose 8,7 per-cent 10 822 ounces from the prior period comparative.

Blanket Mine is 49 percent owned by Canadian firm Caledonia Mining Corpora-tion. Gross profit rose 3,7 percent to $3,8 million, which management attributed to increased production and sales and a lower average cost per ounce, offset by the lower realised gold price.

Gold prices for the quarter averaged $1 166 per ounce compared to 1 198 per ounce previously. Costs were lower at $950 per ounce compared to $985 in the comparable period.

CEO Mr Steve Curtis attrib-uted the improved perfor-mance to the better output, good cost control and gold

price, and added that the company was making signifi-cant progress on the develop-ment of the mine.

"The financial and oper-ating results for the first quarter of 2016 were better than expected. Production, as previously reported, was marginally better than tar-get; on-mine operating costs and AISC were lower than in the comparable quarter and reflect continued strict cost control and lower sustaining capital expenditure.

"As expected, Caledonia's net consolidated cash was lower

than at the end of December 2015 due to the continued suspension of dividends from Blanket as a result of invest-ments at Blanket Mine and the continuation of Caledonia's dividend. Net cash at March 31, 2016 was better than expected due to the combined effects of slightly better than expected production, good cost control and the higher gold price,” he said.

"Progress on implementing the Revised Investment Plan at Blanket remains on track. Towards the end of the quar-ter, production commenced as planned from the No. 6

Winze and from an additional development which provides access to ore below the 750 meter level. These devel-opments have substantially improved operational flexibil-ity and are expected to be the main reason for the projected increase in production from 42 800 ounces in 2015, to approximately 50 000 ounces in 2016….

"A huge amount has been achieved at the Central Shaft since work commenced in late 2014; in the first quar-ter of 2016 the main sinking headgear was assembled; the winders have been commis-sioned and sinking is expected to re-commence within a few days. Completion of the Cen-tral Shaft remains on track for mid-2018.”

Caledonia however reported that net profit however dropped to $543 000 from $1,2 million due to a deferred tax charge of $909 000 at the mine.●

Blanket’s gold output up 9pc in Q1

8 NEws

BH249

BH2410

BH24 Reporter

HARARE-Cable manufacturer CAFCA’s six-month revenue for the period ended March 31, 2016 slid 34 percent to $9, 3 million as the firm scaled down on production.

CAFCA’s production during the half-year was reduced from 300 tons a month to 200 tons a month due to a “downturn in both the local and export markets”, said the firm.

The group’s key export markets were affected by currency volatil ity during the period under review.

“In terms of exports, Malawi is suffering from devalua-tion and foreign currency shortages. Zambia due to the drop in copper prices, is also having foreign currency challenges. Mozambique has currently stopped all import payments. The devaluation of the rand over the period

made us uncompetitive to export to South Africa,” reported management in a statement accompanying the results.

Operating profit was down to $307 298 from $1, 1 million in the prior year compar-

ative, while profit before income tax also declined to $232 513 from $1, 1 million.

Profit for the period amounted to $128 420.

As at the close of the period, CAFCA had stock and debtors of $14, 5 million, which was

“adequately” covering liabil-ities and borrowings of $2, 9 million.

The board has waived the declaration of a dividend for the period just ended on the need to “retain resources for funding working capital.”●

11 NEws

Depressed demand hits CAFCA H1 revenue

BH2412

HARARE -Today’s trades saw the local bourse adding to yesterday’s f i rst loss after a prolonged posit ive streak as the mainstream industr ia l index weakened by 0.31 to c lose at 106.81.

Thin trading was the order of the day as three counters weighed down the index.

Wines and spir i ts maker AFDIS s l ipped $0,0500 to trade at $0,4000, whi le te lecoms giant Econet fe l l $0,0050 to $0,2450 and retai l g iant OK Zimbabwe was down $0,0001 to sett le

at $0,0430.

On the upside conglomer-ate Innscor gained $0,0030 to c lose at $0,2350 and

Padenga rose $0,0010 to trade at $0,0750.

The mining index was steady at 21.55 as a l l the mining

counters maintained previ-ous pr ice levels

. - BH24 Reporter ●

ZsE13

Equities lose again

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MovERs CHANGE ToDAY PrICE USC sHAKERs CHANGE ToDAY PrICE USC

PADENGA 1.35 7.50 AFDIS -11.11 40.00

INNSCOR 1.29 23.50 ECONET -2.00 24.50

OK ZIM -0.23 4.30

INdEx PREvIoUs TodAy MovE CHANGE

INDUSTRIAl 107.12 106.81 -0.31 points -0.29%

MINING 21.55 21.55 +0.00 POINTS +0.00%

14 ZsE TABlEs

ZsE

INDICES

Stock Exchange

Previous

today

15 dIARy oF EvENTs

The black arrow indicate level of load shedding across the country.

PoWEr GENErATIoN STATS

Gen Station

12 May 2016

Energy

(Megawatts)

Hwange 323MW

Kariba 285 MW

Harare 30 MW

Munyati 33 MW

Bulawayo 0 MW

Imports 0 - 300 MW

Total 1245 Mw

• 18 May - ZB Building Society AGM; Place: 21 Natal road, Avondale, Harare; Time: 12:00hrs

• 18 May - The 76th AGM of Astra Industries Limited; Place: Auditorium at Astra Park, Corner ridgeway North/Northend roads, Highlands, Harare; Time: 12:00hrs

• 19 May - The Fifth Annual General Meeting of Padenga Holdings Limited; Place: royal Harare Golf Club, 5th Street extension, Harare; Time: 08.15am

• 19 May - NMBZ AGM; Place: Unity Court, Corner 1st Street Kwame Nkrumah Avenue; Time: 10:00am

• 19 May - Turnall Holdings AGM; Place: Jacaranda room, rainbow Towers; Time: 12:00

THE BH24 dIARy

lUANDA - Angolan President Jose Eduardo dos Santos replaced two deputy central bank governors on Wednes-day, his office said in a statement, the latest round of shake-ups at the bank comes as the oil-rich Afri-can country seeks assistance from the IMF.

Dos Santos in March appointed little-known Valter Filipe da Silva as Angola's new central bank governor after José Pedro de Morais resigned.

His office said Gualberto Manuel Amaro lima Cam-

pos and Cristina Florencia Dias Van-Dúnem had been dismissed and replaced by António Manuel Tiago Dias and Suzana Maria de Fátima Monteiro Camacho.

The economy of Angola, Africa's second-largest oil exporter after Nigeria, has been hammered by the oil price fall, and the govern-ment is in talks with the World Bank and International Monetary Fund about possi-ble financial assistance.

Three directors of the bank's board were also dismissed and replaced. - Reuters●

rEGIoNAL NEWS 16

Angola continues central bank shakeup

JoHANNESBUrG -South Africa's rand retreated against the dollar early today, giving up a minor rebound back from six-week lows as global and domes-tic growth concerns rattled sentiment towards the con-tinent's most industrialised economy.

By 0650 GMT the rand had slipped 0,44 percent to 15,1035 per dollar compared to its overnight close at 15,0370 in New York.

Government bonds were firmer, with the benchmark paper due in 2026 shedding 3.5 basis points to 9,15 per-cent.

Earlier in the week the rand tumbled to its weakest level since March 29 after data showed unemployment rose to its highest in more than a decade.

Traders expect growth wor-ries and low liquidity in a session short of any major data releases to leave the door open for further rand losses.

"It's about the biggest order at the most illiquid time," chief trader at Standard Bank Warrick Butler said in a note.

South Africa's statistics agency publishes March min-ing and manufacturing pro-duction figures later in the session, with both sets of data due to show contrac-tions in the country's two largest sectors.

The stock market is set open lower when trade resumes at 0700 GMT, with the bench-mark Top-40 futures index down 0,5 percent

- Reuters●

rand on the ropes as economic

concerns weigh

European shares declined for a second day as the latest batch of earnings releases failed to ease investor con-cerns over the region’s cor-porate and economic health.

lafargeHolcim ltd. led a gauge of construction-related stocks to the worst perfor-mance of the 19 industry groups on the Stoxx Europe 600 Index, falling 2,4 per-cent after the reporting first-quarter earnings that missed estimates. Credit Agricole SA was among the biggest losers as a meas-ure of banking shares slid, dropping 3,4 percent after posting a 71 percent drop in first-quarter profit.

The Stoxx 600 retreated 1 percent to 331.51 at 8:31 a.m. in london. Shares fell yesterday as optimism that a recent selloff was overdone dissipated. The equity gauge has lost momentum after rallying to a three-month high on April 20, with inves-tors intensifying their focus on financial results amid disappointing economic data. Analysts have cut profit pro-jections for Stoxx 600 firms

this year, reversing earlier calls for growth to forecast a contraction.

The FTSE 100 Index slid 0,8 percent as investors await the Bank of England’s latest interest rate decision and economic update before the referendum on whether to stay within the European

Union.

Among other shares moving on corporate news today, Assicurazioni Generali SpA fell 2,6 percent after Ita-ly’s biggest insurer said first-quarter profit fell 14 percent.

Zurich Insurance Group AG added 4,2 percent after

Switzerland’s biggest insurer posted a first-quarter profit that beat analysts expec-tations. RWE AG rose 2,9 percent after the German power producer said that first-quarter profit was little changed as “unusually high earnings” from trading coun-tered slumping power prices. - Bloomberg●

INTERNATIoNAl NEws 17

European shares decline second day as earnings fail to inspire

By George rautenbach

With the spate of negative publicity China has endured over time, it seems appro-priate to try to reframe our understanding and thinking about East Asian culture. Having had the opportunity to work directly under C-level East Asian leadership in the past eight years in Africa, I have come to learn a lot more about their rich and ancient culture.

This was very enlightening, especially given the negative image of China that is cur-rently portrayed, perhaps in some cases with reason. Away from the politics, this is a highly intellectual culture, one with a depth and history equal to none.

There is a lot that we can learn from history. Confucius wrote in 500BC: "Study the past if you would define the future."

He also said, "when the wise man points at the moon the

fool stares at the finger".

When we go back in history and compare western Chris-tianity with eastern Tao-ism, there are fundamental differences in the outlook on life that still resonate today through the world-view of these two regions. In Taoism, there is a need for balance and harmony, and the human is viewed as a whole that must live in harmony with nature.

The Christian viewpoint is filled with extremes: good and evil, body and soul, the freedom of one from the other. This points to an inherent difference in the one searching for harmony in unity, while the other is swaying between extremes.

Throughout its history, the West was driven by an "out-ward" approach that mani-fested in the need to set out and conquer new worlds. The East was mainly driven by an "inward" approach to main-taining harmony and focusing on the Asian continent rather

than setting out to conquer new worlds. This culminated in the development of a cir-cumscribed world-view set to maintain harmony, which could be more appropriate in a glo-balised world.

Examples of how these two world-views applied to their external environments can be found at various times in their histories. When Admiral Zheng He (1371-1433) set out from China with an impressive 300 ships and 28,000 crew includ-ing doctors, public servants and scholars, his sole aim was to demonstrate the power and prestige of the emperor.

His instructions were clear: to spread the goodwill of the emperor far and wide and to treat all people with kindness. This East Asian approach had as its primary aim to give more than it received and so obtain the allegiance of the countries the admiral visited. This was known as the start of the tribute system.

Almost 100 years later, when

Vasco da Gama (1460-1524) set out, the fleet was far less impressive, consisting of only four ships and 170 crew. The aim of the voyage was com-pletely different: Da Gama’s trips were driven by individual initiative, with a determination to find a direct sea route to the Spice Islands, greed for goods and slaves, and a plan to colonise and enslave. There was no goodwill or kindness.

When it came to warfare, the two worlds also manifested in two different approaches. On the one side, there was Sun Tzu (400BC-320BC), for whom making war was the last resort and should be viewed as an option only when all others were exhausted.

His closest western equivalent, Carl Von Clausewitz (1780-1831), looked at this problem from a completely different viewpoint. The aim for him was "total victory", at all cost. Pre-emption of conflict versus total victory in conflict. This was recently reflected when President Barack Obama

18 analysis18 ANAlysIs

China’s embrace of harmony makes it a good African fit

19 analysis19 ANAlysIs

admitted that the biggest mistake of his presidency was that there was no strategy for what to do with libya once the dust had settled. The list is long of how the two worlds developed differently, with different outlooks on politics and business.

Through an outward approach driven by conflict and victory, the West achieved liberty. Through subtle management, a soft hand and a longer-term vision, the East aimed at securing harmony.

The West tends to highlight the lack of freedom in the East, whereas the East read-ily points out that the West neglects the value of harmony. Summed up, the West wants to be in the driver’s seat, while the East allows things to develop.

Western and Eastern cultures were shaped in very different ways. As early as 2 000 years ago, the East learned during the warring states period what devastating effect such conflict can have. For that reason, we

still do not see China flexing its muscles in the same way as the US, openly taking posi-tions in the international arena in terms of whether it should go to war or not.

In the United Nations Security Council, China is usually the voice of reason and modera-tion, preferring not to act too hastily. We hardly ever see China take a strong position or even condemn other nations.

A good example of this shrewd approach to international politics, which aims to avoid offending where possible, is China’s island-building spree in the South China Sea.

There are various compet-ing claims to existing islands by the Philippines, Malaysia, Vietnam, Taiwan and China. Instead of simply occupying the islands, as it could, the Chinese have simply built their own. All the US could do was send a guided missile destroyer to the area, with no effect. The fool staring at the finger?

Our perception of China in Africa is skewed, based on fear that China will become the new imperialist power on the continent. But the Chinese foreign affairs ministry has gone out of its way to promise that China will not take that route.

China is also readjusting its development assistance to Africa to move away from natural resources and infra-structure, diversifying to help African countries become more self-sufficient.

It announced recently that it would invest $60bn over a three-year period to build infrastructure, develop local talent and bolster inadequate business funding, accelerate industrialisation and agri-cultural modernisation and promote independent and sus-tainable development in Africa. This compares with the $12bn that the US has put forward for its Power Africa initiative.

Certainly, there are many complaints that can be made about China’s approach, but

on the other side of the coin, Africa shares similarities with East Asian culture. Here, too, the group is considered more important than the individual. This world-view has developed in a similar circumscribed manner as in the East.

In general, China suits Africa better as a partner, and the capacity of China to adapt its strategy and pay a sort of "tribute" to Africa on the investment side will buy more friends than enemies.

Doing business with the Chi-nese tends to be less pre-scriptive and patronising than with the West. The Chinese deliberately refrain from lecturing. And it can be more efficient, with decision-making unconstrained by cumber-some western administrative systems. China is here to stay and it is a formidable oppo-nent to traditional interests in Africa. – BDLive ●• Rautenbach, a former chief of staff at the United Nations, is the CEO of Africa Business Experts