Zimbabwe slowdown hits London listed Masawara

Jersey registered and London listed Masawara posted an after-tax losses of $9.3m for the the year to the end of December after a financial performance which, it said, was below expectations.

Masawara said it experienced a continued challenging environment during 2012 and had been affected by a significant slowdown in the rate of economic growth in Zimbabwe. Current estimates of real GDP growth for 2012 are 4.4% as compared to 2011 real GDP growth of 9.4%.

The after-tax loss compared to a profit of $7.0m in 2011. Masawara said decline in profitability from the prior year was mainly attributable to:

- The $9.2m gain on the bargain purchase of Zuva Petroleum (Private) Limited that was recognised in 2011, which was one-off in nature

- A decrease in the gain on bargain purchase of additional shares in TA Holdings Limited from $1.5m in 2011, to $398,000 in 2012. The gain on bargain purchase in the current year was lower than that which was recorded in the previous year because the group purchased fewer TA Holdings Limited shares during 2012, 2.4 million shares, in comparison to the 12.7 million shares purchased in the previous year

- An increase in the group's share of losses incurred by associate Telerix Communications (Private) Limited from a loss of $1.6m in 2011 to a loss of $3.4m in 2012

- Impairment loss on financial assets amounting to $541,000 recognised in the current year on the investments in preference shares, debentures in Telerix and the short term loan granted to Telerix

- A fair value gain on investment property was not recognized in the current year.

- An increase in other operating expenses as a result of the share options expense recognized in the current year of $387,000.