BOTSWANA-BASED retailer Choppies Enterprise Limited incurred a significant loss on the sale of its Zimbabwean unit in December last year, with financial reports revealing a P14 million (approximately US$1,02 million) loss on the disposal.
According to Choppies’ unaudited interim financial results for the six months ended December 31, 2024, the supermarket chain’s Zimbabwe unit was a cash drain.
Choppies exited the Zimbabwean market, citing economic challenges such as high inflation, volatile local currency, and a shortage of foreign currency.
“The Choppies Zimbabwe segment foreign currency translation reserve and Choppies Zimbabwe segment hyperinflationary reserve were reclassified to retained earnings on disposal of the Choppies Zimbabwe segment,” Choppies said in a statement attached to its half-year report ended December 31, 2024.
Choppies’ expenses increased by 22,9% during the half-year period under review due to new stores, inflation, the loss on the sale of the Zimbabwe segment, and impairment losses.
“Expenses excluding the following items increased 21,8%: foreign exchange losses on lease liabilities, the loss on sale of business, and impairment losses and expected credit losses,” the group said.
Expenses during the period under review totalled P815 million (US$59,44 million).
During the period under review, revenue from its Zimbabwean segment was down at P260 million (US$18,95 million) from a prior year comparative of P278 million (US$20,26 million).
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The firm also made a P8 million (US$583 273) loss on lease modifications and terminations upon the sale of the local unit.
“In December 2024, the segment’s net assets were sold, and the group no longer trades in Zimbabwe. The buyer is a leading supermarket retailer in the southern region of Zimbabwe,” Choppies said.
Sai Mart, a retailer owned and operated by Industry and Commerce deputy minister Raj Modi, bought Choppies Zimbabwe.
At the time of its sale in December, Choppies Zimbabwe had a debt of P89 million (US$6,48 million), nearly 13% higher than what was recorded at the end of the prior year.
Meanwhile, in terms of what it was owed, Choppies recorded trade receivables of P4 million (US$291 670) in the half-year under review, no change from the comparative period.
Its property, plant, and equipment was valued at P29 million (US$2,11 million), down from the P37 million (US$2,69 million) recorded in the prior period.
Choppies Zimbabwe was also sold with inventories worth P37 million for the half-year under review, from a 2023 comparative of P45 million (US$3,28 million).
“We will also benefit from the remaining segments in the group, which are all performing or in a strong turnaround stage,” Choppies said.
“We have disposed of all loss-making businesses, such as Choppies Zimbabwe and the medical distribution business.”
Choppies had a 100% stake in local company Nanavac Investments (Pvt) Limited, trading as Choppies Zimbabwe, which had 31 stores nationally employing 1 051 employees.
