Harare – The rush by companies to publish their results comes after a cabinet taskforce on pricing, which forced a cut in newspaper prices and advertising rates by 50% at the end of June, overlooked the independent newspapers in a review that allowed state newspapers to hike cover prices by 20% and advertising rates by 50% at the end of August.
Over 80 companies listed on the Zimbabwe Stock Exchange (ZSE) are compelled to publish their results in the local press, in addition to 30 banking institutions and 15 asset management companies registered by the Reserve Bank of Zimbabwe (RBZ).
Publication of the results, which should have started in July for companies with June half years, had been delayed because the government had banned the release of inflation rates since April, making it impossible for companies to prepare inflation-adjusted financial results.
The inflation figures for June, required to prepare inflation-adjusted statements, were made available to the banking sector by the RBZ, and were subsequently shared by the entire market, prompting the Central Statistical Office to eventually make disclosures for July inflation, which came at a record 7 634.8%, a 383.7 percentage gain on the June inflation rate.
Both the RBZ and the ZSE have directed that all listed companies, registered banking institutions and asset managers should prepare their financial statements in line with International Accounting Standard 29, which states that in a hyperinflationary economy financial statements should be based on inflation-adjusted figures rather than historical cost figures, which in a hyperinflationary situation are held to be misleading.
The affected companies have until the end of September to publish their results in line with regulatory requirements, hence the rush that has given the newspapers the current boost in fortunes.
Local newspapers, grappling with high printing and newsprint costs, are struggling to survive after the cut in prices and a ban on any increases without permission from the cabinet taskforce on prices.
