A digital copy of the BH24 (03 December 2015 edition). Zimbabwe's premier business news free sheet published by the Zimpapers Newspapers Group (1980) Limited and available every week day from 1530hrs to give a summary of the day's business news.

1. By Tawanda Musarurwa
HARARE -Pharmaceutical prod-
ucts distributor Medtech will now
go ahead with plans to dispose its
subsidiary - Medtech Medicals and
Scientific (Pvt)Ltd - to "another
pharmaceutical distributor."
This follows the completion of a
buyback of a 40 percent minority
interest in Medtech Medicals and
Scientific (MMS).
In terms of the buyback, the
holding company has fixed 240
130 000 ordinary shares as the
purchase consideration which
increases the shares in issue to 3
039 764 872 shares.
The group told shareholders today
that the successful buyback had
paved the way for a disposal trans-
action.
"(T)he transaction to acquire the
40 percent minority sharehold-
ers interest in MedTech Medical
and Scientific (Pvt) Ltd, as previ-
ously advised, has now been con-
cluded....
"The agreement to place approxi-
mately 70 percent of the author-
ised and unissued shares in MMS
with another pharmaceutical dis-
tributor to raise sufficient funds for
this business to achieve profitabil-
ity are nearing conclusion," said
the group.
Medtech has been trying to sell
off its loss-making assets notably
MMS and its manufacturing divi-
sion Zimpharm, which stopped
operating about three years ago.
The struggling pharmaceutical
products distributor has been
weighed down by high operating
costs and underperforming units,
and it posted a $1 million loss
for the full-year to December 31,
2014.
But for the half-year to June 30,
2015, the company narrowed its
losses to $90 000 from $233 000
in the prior comparable unit, on the
back of an improved performance
of its other subsidiary, Chicago
Cosmetics, which registered a 75
percent growth in revenue to $1,2
million.●
News Update as @ 1530 hours, Thursday 03 December 2015
Feedback: bh24admin@zimpapers.co.zwEmail: bh24feedback@zimpapers.co.zw
Disposal of MedTech Medical & Scientific (Pvt) Ltd nears

2. BH242

3. BH24 Reporter
HARARE -The signs are looking up
for diversified group, Art Corpora-
tion, after the group narrowed its
loss for the six months to Septem-
ber 30, 2015 to $0,6 million from
$1,1 million in the prior year com-
parative.
Group chairman Mr Moses Chundu
attributed the improved perfor-
mance to enhanced operational
efficiencies.
"The improvement in performance
was a result of the recapitalisa-
tion of the factories, production
efficiencies and focus on cost con-
tainment," he said in a statement
accompanying the results.
Investments in new equipment
at Chloride, Eversharp and Kad-
oma Paper Mills helped the Group
improve capacity utilisation as well
as reduce costs with overall oper-
ating expenses coming down by 8
percent.
And management's focus on pro-
duction efficiencies resulted in the
firm's operating expenses declin-
ing 8 percent from the same period
last year. Operating profit rose to
$1,9 million from $0,2 million dur-
ing the parallel period in 2014.
Gross margins also increased from
33 percent in the prior comparable
period to 35 percent.
Revenue for the period also went
up to $29,8 million up from $28,7
million prior year comparative,
driving the loss position down-
wards.
The group's loss per share was
0,13 cents against loss per share
of 0,24 cents prior year compar-
ative.
Going forward, the company plans
to capitalise on advantages pro-
vided by the recapitalised facto-
ries.
"The manufacturing units are now
strongly positioned to compete
with imports and the increased
capacity in all the units has
ensured that the group is ready to
exploit growth opportunities in its
markets," said Mr Chundu.
The board did not declare a divi-
dend for the period.●
3 news
ART Corporation narrows loss

4. BH244

5. BH24 Reporter
HARARE - Listed packaging group
Nampak Zimbabwe has reported a 5
percent decline in revenue to $95,9
million for the year to September
30, 2015 on the back of low aggre-
gate demand.
Nampak Zimbabwe is the local unit
of South Africa's packaging giant
Nampak, which holds a controlling
51,43 percent interest in the entity.
Operating profit for the period
amounted to $4,1 million with man-
agement saying the out turn was
depressed as a result of lower mar-
gins.
Profit for the period amounted to
$2.4 million resulting in earnings per
share of 0,32 cents.
Performance was however mixed at
business unit level.
In respect of other divisions, Car-
naudMetalbox recorded a 13 percent
increase in revenue on improved
can and (High-density polyethylene)
HDPE bottle sales and returned to
profit from a loss position the previ-
ous last year.
Hunyani recorded decline in revenue
and operating profit by 2 percent
and 59 percent, respectively, com-
pared to the prior period. Manage-
ment believes that reduction in costs
and new machinery will place the
business on a solid footing for 2016.
MegaPak recorded a 13 percent
decline in revenue compared to the
prior year on depressed volumes for
PET and pre-form products, driving
operating profit down 43 percent .
The group is confident of positive
yields in the long-term on the basis
of its "current investment into addi-
tional capacity and expanded prod-
uct range", but believes that there
is "little short-term relief in sight for
the manufacturing industry."
The board did not declare a dividend
for the year.
●
5 news
Nampak Zim FY revenue takes a 5pc hit

6. BH246

7. HARARE -The equities market con-
tinued on a downward path, largely
reflecting the macro-economy as
theindustrialindexlost0.31toclose
at 114.08.
Spirits-maker AFDIS declined
$0,0200 to trade at $0,5600, while
Fidelity Life shed $0,0070 to trade
at $0,1030 and giant insurer Old
Mutualwentdown$0,0062tosettle
at $2,1100.
Also trading in the negative was
Dairibord, which waned $0,0032 to
closeat$0,0802andNicozDiamond
retreated $0,0030 to $0,0150.
On the upside, ART Corporation
gained $0,0020 to close at $0,0090
after posting an improved set of
half-year interims. The group nar-
rowed its loss for the six months to
September 30, 2015 to $0,6 million
from $1,1 million in the prior year
comparative.
Also gaining was First Mutual, which
added $0,0010 to close at $0,0230
while beverages giant Delta rose
$0,0001 to trade at $0,7001.
Theminingindexshed0.43(or1,93
percent)tosettleat21.90ascoalm-
inerHwangelost$0,0040tocloseat
$0,0300.The balance of the mining
counters maintained previous price
levels
- BH24Reporter●
ZSE7
Industrials maintain bearish form

8. BH24
TAA:DI251386-Y22Laz DI324241-D15
8

9. Movers CHANGE Today Price USc SHAKERS Change TODAY Price USc
ART Corporation 28.57 0.90 Nampak Zim -19.58 1.93
First Mutual 4.54 2.30 NicozDiamond -16.66 1.50
Delta 0.01 70.01 Hwange -11.76 3.00
Fidelity Life -6.36 10.30
Dairibord -3.83 8.02
AFDIS -3.44 56.00
Old Mutual -0.29 211.00
Index Previous Today Move Change
Industrial 114.39 114.08 -0.31 points -0.27%
Mining 22.33 21.90 -0.43 points -1.93%
9 zse tables
ZSE
Indices
Stock Exchange

10. BH2410

11. 11 DIARY OF EVENTS
The black arrow indicate level of load shedding across the country.
POWER GENERATION STATS
Gen Station
03 December 15
Energy
(Megawatts)
Hwange 203 MW
Kariba 468 MW
Harare 30 MW
Munyati 18 MW
Bulawayo 24 MW
Imports 0 MW
Total 714 MW
•09 December 2015 - Cottco AGM; Venue: Cotton Pavilion, Exhibition Park; Time; 12:00hrs
•09 December 2015 - Border Timbers AGM; Venue: Boardroom, Northern Tobacco (Private)
Limited Complex, 4-12 Paisley Road, Southerton; Time: 9:00hrs
•11 December 2015 - Buy Zimbabwe Awards; Venue: Rainbow Towers, Harare
THE BH24 DIARY

12. BH2412

13. Johannesburg -South Africa's rand
fell in early trade on Thursday as the
dollar gained after Federal Reserve
chair Janet Yellen said she was "looking
forward" to the first U.S. interest rate
increase in nearly a decade.
Stocks opened lower, with telecoms
company MTN Group in the spotlight.
Nigerian authorities reduced by more
than a third, to $3.4 billion, a fine
imposed on MTN for failing to cut off
unregistered users.
MTNwasupnearly1percentat147.90
rand, outpacing a 0.4 decline to 45,777
in the JSE Top-40 index.
By 0714 GMT, the rand was trading
at 14.3700, down 0.13 percent from
Wednesday's close. The rand fell to an
all-time low of 14.4950 to the dollar on
Tuesday.
A U.S. rate increased is widely
expected hike when the Fed meets
later this month. When she spoke at
the Economic Club of Washington on
Wednesday, Yellen did not say whether
an increase would be warranted at
that meeting, but she did say keeping
ratesatzerofortoolongcouldthreaten
financial stability.
Yellen is scheduled to speak again
today and traders expect the rand to
remain under pressure.
"Given that she will most likely main-
tain her more hawkish rhetoric, we
expecttherandtoremainvulnerableto
intensified Fed rate hike expectations,"
Barclays Africa currency strategist Mike
Keenan said.
Her comments sent the dollar index,
which measures the greenback against
a basket of six major currencies, to its
highest level since April 2003. The rand
remained resilient, on the strength of
loan agreements between China and
South Africa, but then gave up some
gains in early trade.
The 26 loan agreements signed on
Wednesday are worth 94 billion rand
($6.5 billion), including $500 million
for South Africa's cash-strapped power
utility.
South Africa suffers from a chronic
electricity shortage that is increasing
costs for industry and discouraging
investment. Part of its response is to
buildnewnuclearplants,whichexperts
say may cost as much as $100 billion.
On the fixed-income market, govern-
ment bonds were mostly firmer, with
the yield for debt due in 2026 shedding
1.5 basis points at 8.600 percent.
- Reuters●
PRETORIA - China will loan
South Africa's struggling
power utility $500 million
as part of deals agreed on
Wednesday between the two
countries worth 94 billion rand
($6.5 billion), the South Afri-
can government said.
China will also help to build
a car manufacturing plant on
South Africa's coast which
should begin exporting vehi-
cles to other African countries
by the end of 2017- Reuters●
regioNAL News13
Rand drops on Yellen's hawkish comments, stocks open lower China to loan South
Africa's power firm
Eskom $500m

14. Anheuser-Busch InBev NV said it
will explore the sale of SABMiller
Plc’s European premium beer brands
including Peroni and Grolsch to
smooth the way for the 73.5 bil-
lion-pound ($110 billion) takeover of
its main rival.
Meantime Brewing Co., the inde-
pendent beermaker acquired this
year by SABMiller, is also among the
brands being considered for sale, AB
InBev said in a statement Thursday.
Selling the assets would help to
meet potential antitrust complica-
tions arising from AB InBev’s plan
to acquire the maker of Castle lager,
which would create a company con-
trolling about half the industry’s
profit. Molson Coors Brewing Co. has
already agreed to acquire SABMiller’s
58 percent stake in MillerCoors for
$12 billion, while a 49 percent stake
in China Resources Snow Breweries
Co. may also need to be sold.
Selling Peroni and Grolsch “would
help reduce leverage and doesn’t
make the SABMiller acquisition less
attractive,” Javier Gonzalez Lastra,
an analyst at Berenberg in London,
said by phone. “They are attractive
assets. They’re very well positioned,
internationally recognized brands.”
Peroni and Grolsch could fetch $1
billion to $1.2 billion, Susquehanna
Financial Group analyst Pablo Zuanic
estimates. Potential buyers include
Japan’s Kirin Holdings Co. and Carls-
berg A/S, he said in a Nov. 30 note.
“Divesting Peroni and Grolsch should
have minimal effect on the upside”
that the Budweiser maker will gen-
erate from buying SABMiller, Zuanic
said. A sale “would be within our
expectations, and we would see this
as a positive sign if it paves the path
to regulatory approval of the deal.”
AB InBev shares were little changed
at 121.55 euros at 9:10 a.m. in
Brussels. SABMiller was almost
unchanged at 4,046 pence in Lon-
don.
“These beers are loved by consum-
ers and we are very proud of them,”
SABMiller Chief Executive Officer
Alan Clark said in the statement.
“Until the change of control we will
continue to invest in growing these
great beers and supporting our tal-
ented people who brew, sell and
manage them.”
Any sale would be conditional upon
completion of AB InBev’s acquisition
of SABMiller, the companies said. -
Bloomberg●
internatioNAL News14
AB InBev to explore sale of SABMiller's European premium brands

15. By Nigel Gambanga
The last time anyone was counting,
Zimbabwe’s internet penetration stood
at 44,5 percent. This figure was pre-
sentedrecentlybyPOTRAZ,thenational
telecoms regulator in its second quarter
report for 2015.
This percentage, which is a reflection of
the extent to which the internet is being
accessed by the citizens of this country,
was a 0,2 percent increase from the
previous quarter. However, one other
remarkable pattern was also displayed
in the same POTRAZ report.
In the first half of 2014, we were actu-
ally experiencing an increasing internet
penetration rate. It jumped from 43,1
percent in the first quarter of 2014, to
47 percent and from the second to the
third quarter of 2014 it rose marginally
to 47,5 percent.
In the two consecutive quarters, it fell
from its 47,5 percent high to the 44,3
percent that was being rebounded from
in the latest report. So what seems like
an improvement in internet penetration
is actually a feeble attempt at recover-
ing lost ground.
What caused the change?
There a lot of factors that could be sin-
gled out for low internet penetration.
Limited infrastructure investment from
operators is one drawback, then there’s
the cost of internet services and sup-
porting tools like devices for accessing it
that keeps users at bay.
A receding penetration, however, had
to have been caused by other factors.
In the Zimbabwean context, it’s easy to
point to a wheezing economy that has
made online access less of a priority for
most people over the past year.
There is one other huge change that
happened during the period of decline.
The government introduced a 25 per-
cent import duty on mobile devices in
the last part of 2014.
This meant that distributors passed on
thecosttotheconsumerandalldevices
became more expensive. Whatever
excitement that was being cultivated in
having that first internet experience on
mobile devices was pacified by higher
device costs.
In the absence of harder data, it can
be argued that the import duty might
not be the leading factor. Instead we’ll
have numbers on reducing disposable
incomes being brought up to explain
every industry lull.
But the trends from POTRAZ are too
compelling to ignore here. This is the
case especially after the telecoms oper-
ators have all voiced their challenges
with the import duty on devices and its
effect on their industry.
These same troughs in internet pene-
tration have a correlation with telecoms
revenue. In an industry where voice
communication is losing sex appeal,
the outcomes of broadband pricing are
going to be a key determinant of overall
telecoms performance.
One would expect a stronger, unified
lobby from telecoms operators to have
this duty removed or, more realistically,
revised downwards to accommodate
the impact it could have on their future
revenue prospects.
By now, the State should have noticed
how “minor adjustments to the tele-
coms sector can have a huge impact
onoperationaloutcomesandultimately,
the taxes repatriated at the end of the
year. - TechZim●
15 analysis15 analysis
How taxes could have negatively affected Zimbabwe's internet penetration