Zimbabwe: Infrastructure projects bode well for Masimba Holdings

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Construction company Masimba Holdings, listed on the Zimbabwe Stock Exchange (ZSE), says the government’s sustainable funding of large infrastructure projects and the prospect for mining could bolster its order book and financial position.

The government has raised $ 33.6 billion as part of the gradual road rehabilitation program.

In addition, Masimba Holdings is part of a local consortium of companies that has been commissioned to modernize and widen the Beitbridge-Masvingo-Harare motorway.

Gregory Sebborn, chairman of the group, said on a balance sheet for the half-year to 30 a stable economic environment.

“Although the impact of Covid-19 on the global economy is unknown, the board remains optimistic given the government’s continued strong performance in funding large infrastructure projects and the growing mining prospect driven by fixed commodity prices,” he said.

Mr Sebborn said the group spent $ 7.8 million on various programs during the reporting period, including supporting the 2021/22 farming season, particularly the small-scale irrigation systems in the Manicaland area.

“As of the balance sheet date, the group contributed $ 8.5 million to the National Development Fund to source Covid-19 vaccines.”

During the six-month period, group sales rose 58 percent to $ 2.2 billion from $ 1.4 billion for the same period in 2020, largely driven by steady backlog in mining, infrastructure and roads .

“In addition, revenue in US dollars as a percentage of total revenue for the period improved from 20 percent in 2020 to 35 percent due to a diversified project portfolio.

Pre-tax income rose 19 percent more slowly to $ 435 million from $ 364 million, mainly due to poor weather in the first quarter that negatively impacted productivity, particularly in the street segment.

The Group’s financial position improved to $ 6.7 million from $ 5.5 million a year ago through the acquisition of investment property, plant and equipment in line with its value preservation strategy.

Mr Sebborn said capital expenditures were funded by a combination of internal and external resources, increasing borrowing to $ 255 million, compared to $ 156 million, a sustainable debt of 10 percent.

He added that ongoing contracts, contract receivables, and other receivables of $ 3.6 million increased 9 percent, compared to a 39 percent increase in sales volume.

The positive development can be attributed to the improved debt collection in the reporting period, according to Sebborn.

“Consistent with the business strategy of credit risk management, trade payables increased to $ 3.4 million, primarily due to prepayments from customers,” he said.

Mr. Sebborn said the group’s working capital ratios remained satisfactory as cash flow from operating activities improved to $ 266 million.

He said most of the cash generated was used to invest $ 114 million in investment and $ 162 million in investment real estate to support and expand the growing order book.


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