MULTINATIONAL investment firm Cambria Africa says its subsidiaries in Zimbabwe continue to operate above breakeven in both earnings before interest, taxes, depreciation and amortisation (EBITDA) as well as accounting profit.
This is despite a shrinkage in its revenue by 8% to US$1,22 million in 2021.
Based on the current trajectory, the company said, in its audited results for the year ended August 31, 2021, that the subsidiaries were expected to continue reporting at breakeven levels in financial year 2022.
The Payserv Group is the country’s leading provider of payments and business process outsourcing services targeted at financial and related sectors.
The group comprises four business units, Paynet Zimbabwe, AutoPay, Loanserv and Softserv. Millchem is among Zimbabwe’s leading distributors of industrial solvents and metal treatment products.
Cambria said consolidated profits in the period under review stemmed mainly from Payserv revenues of US$1,13 million. Net asset value (NAV) fell by 1,63% to US$6,32 million.
Revenues declined by 8% to US$1,22 million while operating costs declined by 0,8% to US$838 000.
“As a result of careful cost management, such as line item cost control and orderly reductions in staffing, the company has managed to avoid significant losses from the shrinkage of its revenue as a consequence of the impact of the COVID-19 pandemic and its inability to regain traction for its bulk payment and clearing software for banks,” the company said.
Cambria’s attributable profit after tax was positive at US$82 000 as operations edged above breakeven. Central costs associated with listing and interest expense dropped by 33% to US$151 000 from US$224 000.
The balance of central costs was associated with hyperinflationary adjustments, foreign currency translation and the loss of value in the shares of Old Mutual Limited.
Consolidated EBITDA before fair value adjustments to investments and marketable securities increased by 131% to US$369 000.
In the same period in 2020, EBITDA was negatively impacted by the fair value adjustment of the company’s indirect holding of Radar Holdings Limited shares from US$0,40 to US$0,35.
The reduction in NAV was attributable in part to a US$200 000 downward adjustment in the valuation of its commercial property conducted by Hollands Harare Estate Agents (Hollands). The company’s property was valued by Hollands at US$2,3 million as at January 2022.
NAV was further impacted by the change in the closing value of the company’s Old Mutual Limited shares on the Johannesburg Stock Exchange (JSE) compared to the last closing price on the Zimbabwe Stock Exchange (ZSE).
The company holds 204 047 Old Mutual Limited common shares that were suspended on the ZSE on July 31, 2020 and valued on its financial year 2021 statement of financial position at US$184 000 based on the closing price of Old Mutual Limited on the JSE at year end.
The value of Old Mutual shares closed at US$196 000 on the JSE on March 29, 2022.
“We continue to appeal to the government of Zimbabwe to allow repatriation of Old Mutual shares by foreign investors to the foreign exchange where the shares were originally purchased before transfer to the Zimbabwe register,” Cambria chief executive Samir Shasha said.
“Old Mutual shares have an intrinsic international value and we will continue to work towards achieving this value despite not being able to hedge the market value of the shares,” he said.