18th Nov 2019 11:17
(Alliance News) - Investment company Cambria Africa on Monday said it is trading profitably in the much depreciated Zimbabwean RTGS dollar, though in US dollars, second half operating profits failed to even meet the worst internal estimates.
The company also said an investee's court claim in Zimbabwe was dismissed, rendering it liable to pay an unspecified amount in legal costs.
Cambria shares were 12% higher at 0.40 pence each in London on Monday morning.
Cambria said: "Operating profits in US dollars for the second half of the 2019 fiscal year did not meet management's worst expectations. The rapidly depreciating exchange rate has rendered operating profits negligible, however the company continues to trade profitably in Zimbabwe dollars."
In June, Zimbabwe, introduced single-currency measures, banning the use of foreign currencies, including the British pound, US dollar and South African rand. Since then, the RTGS dollar, introduced in February has depreciated sharply.
Cambria said the currency "depreciated from an opening exchange rate to the US dollar of ZWL2.50 in February 2019 to an interbank selling rate of over ZWL17.00".
The company expects to release its full-year results in mid-February.
Payment service provider Payserv Africa Ltd, a Cambria subsidiary, saw its USD100 million case against the Bankers Association of Zimbabwe dismissed. The company was pursuing the damages from BAZ, which represents banking institutions in Zimbabwe, due to "anti-competitive practices".
Cambria explained: "The company has been advised that the exception filed by BAZ has been upheld by Justice Mushore and Payserv's lawsuit has been dismissed with Payserv liable for BAZ's legal costs. Through its Payserv subsidiaries, the company intends to reissue summons against the BAZ and/or individual banks as guided by its senior counsels."
Christian Beddies, the chief executive of Payserv's Zimbabwe unit, resigned from the role but will remain a non-executive director. Samir Shasha takes over on an acting basis, he is also Cambria's chief executive.
Cambria is also eyeing boosting its stake in brick manufacturer & seller Radar Holdings, though it is still awaiting the result of an arbitration, which was initially due last Monday.
Cambria is looking to purchase a further 20% stake in Hinshaw Investments (Pvt) Ltd , which has an 80% interest in Radar.
The company added: "The company funded its acceptance of what it believes to be an irrevocable offer by Caulicle Investments (Pvt) Ltd, a 20% shareholder of Hinshaw, to sell its entire shareholding of Hinshaw shares.
"If the award is in favour of the company, Paynet Zimbabwe will control 24.9% of Radar indirectly through Hinshaw. The company continues to believe that Radar is well positioned as a defensive investment in Zimbabwe."
By Eric Cunha; [email protected]
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