Delta Corporation, a beverages manufacturer has announced that it has recorded an exchange loss amounting to $1,64 billion in the first quarter which ended March 31, 2020, due to a legacy foreign debt amounting to US$63,8 million.
This was announced by company chairman Canaan Dube who bemoaned the adverse effects of the inconsistency of market exchange rates and the fixed interbank exchange rate on the company. In a statement, Dube said:
The board notes that there remains a risk that the policies regarding these liabilities may be varied. Such a change would have a significant impact on both the statement of financial position and the statement of comprehensive income. The divergence of market exchange rates and the fixed interbank exchange rate creates a further risk that the “blocked funds” liabilities could be paid at exchange rates that are above the Reserve Bank of Zimbabwe settlement rates.
The Finacial dictionary defines blocked funds as money generated by a company’s foreign operations that cannot be moved from one country to another because of one or more regulations in the country in which the money was generated.
The company’s revenue increased by 10% from $7,68 billion to $8,43 billion although profit for the quarter was 1,7% lower than the previous year after it decreased from $1,11 billion to $1,09 billion.-Pindula