Companies performance reviews: Bitter pill required
As the listed companies financial reporting season comes to an end, allow me to reflect on the companies results.
We have seen the good, the bad and the ugly. The environment remains difficult for most companies. The main issues being power supply, lack of credit funding and lack of demand due to low FDI, low public and private spending. This is exacerbated by the high wage rate environment.
There are two things companies should do. First is an objective evaluation of managemt performance, isolating environment issues and performance issues. Dare I say appropriate remedial action being taken.
Secondly, companies must streamline operations by discontinuing non viable SBUs, mothballing or disposing unproductive assets and reducing headcount and salaries. The perks of yesteryear are not affordable. This sounds harsh but the reality is that if the current environment continues for another three years (and all signs are that it will), then companies will not be able to sustain the current losses and they will end up closing. We have to prevent these closures for posterity sake.
Which ever way you look at it, it's a bitter pill to swallow but austerity measures at micro level Are unavoidable or 'we all gonna die'.
We have seen the good, the bad and the ugly. The environment remains difficult for most companies. The main issues being power supply, lack of credit funding and lack of demand due to low FDI, low public and private spending. This is exacerbated by the high wage rate environment.
There are two things companies should do. First is an objective evaluation of managemt performance, isolating environment issues and performance issues. Dare I say appropriate remedial action being taken.
Secondly, companies must streamline operations by discontinuing non viable SBUs, mothballing or disposing unproductive assets and reducing headcount and salaries. The perks of yesteryear are not affordable. This sounds harsh but the reality is that if the current environment continues for another three years (and all signs are that it will), then companies will not be able to sustain the current losses and they will end up closing. We have to prevent these closures for posterity sake.
Which ever way you look at it, it's a bitter pill to swallow but austerity measures at micro level Are unavoidable or 'we all gonna die'.
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