28th Feb 2020 14:34
(Alliance News) - Cambria Africa PLC on Friday said its performance deteriorated sharply in 2019 amid currency changes in Zimbabwe.
The company, which owns investments in Zimbabwe, reported revenue for 2019 of USD5.0 million, down 47% from USD9.4 million it generated a year earlier, pushing pretax profit down by 40% to USD1.8 million from USD3.0 million.
Cambria Africa said its performance was hurt by the introduction of a local currency in Zimbabwe for the first time since 2009 to replace the US dollar. The new currency opened at ZWL2.5 per US dollar, with the current interbank rate at ZWL17.5 per US dollar.
In response, the company said it has adopted a defensive approach in the second half by reducing expenses, hedging its assets and cashflow and minimising its cost of capital.
As a result, Cambria Africa reported a 28% increase in net asset value per share to 1.36 US cents in 2019 from 1.06 US cents a year prior.
AIM-listed Cambria Africa shares were trading 27% higher in London on Friday at 0.40 pence each.
"As long as Zimbabwe is unable to allow market forces to determine optimal economic allocation, foreign direct investment will elude most sectors of the economy which are not export oriented. To the extent that we have cash resources outside of Zimbabwe, and assets which have a market value, we have our defences," said Chief Executive Samir Shasha.
By Evelina Grecenko; [email protected]
Copyright 2020 Alliance News Limited. All Rights Reserved.
Related Shares:
Cambria Africa