A company that owns Payserv, Cambria Africa Plc, is expecting its earnings in the second half of 2019 to be impacted as a result of the rapid devaluation in the exchange rate.
Zimbabwe’s Central bank devaluated its RTGS currency to the US Dollar at a rate of US$1: 2.50. The RTGS local Zimbabwean currency to USD has since devaluated further to 1:5.41 respectively on the interbank market.
Cambria says that it has actively ameliorated the rapid devaluation impact by reducing expenses, hedging its assets and cash flow, minimizing and hedging its cost of capital. Hedging is a process done reduce the risk of adverse price changes in assets.
The devaluation of the Zimbabwean local currency coincides with price hikes that have been witnessed in the country since October last year.
Cambria Chief Executive Officer Samir Shasha assured investors, who fear having challenges in the repatriation of funds from Zimbabwe that, the company has US $1.4 million cash outside the country.
Investors have been facing challenges in getting their invested money as foreign currency shortage made repatriation of funds from Zimbabwe almost impossible.
“The first question any investor would ask of these results is whether these earnings are real and if they are real, where is the money? The answer is that these earnings are indeed real US dollar earnings and barring a systemic failure by the RBZ to honour its commitments, will be preserved in real dollars,” Shasha said.
“Cambria will continue to do everything in its power to preserve the value of its investments and returns in real US dollars.”
Cambria’s CEO however disagrees that the Monetary Policy Statement of February 2019 or October 2018 resulted in a devaluation.
“I believe it is a change of the functional currency of Zimbabwe from US dollars (or multicurrency) to a new currency just as the Euro replaced multiple European currencies. ” Shasha said.
“Therefore, we anticipate changes to the accounting treatment of audited results to be put into place which may or may not impact the results reported here.”