HARARE – Masimba Holdings’ revenue for the five months ended 31 May increased to US$24.7 million from US$16.5 million reported in the prior comparable period last year, driven by the company’s firm order book which as of 31 May stood at US$253 million.
The order book was largely skewed towards the government related projects comprising 74% with the USD to ZWL proportion of the order book currently at 61%, thanks to a change in the government payment model.
Roads and earthworks contributed 59% of revenue, while the mining sector and housing infrastructure contributed 31%, and 7% respectively .
With government-related projects, comprising 74% of the order book Masimba said this position is likely to change, as they are currently in the process of ”a major contract” in the private sector, in the range of US$50 million, which will also improve the company ratios in terms of government-related projects.
While there was no significant capital expenditure in this period, despite an approved amount of US$3 million expenditure, Masimba is expecting to get the capital in the second half of the year.
Speaking to FinX on the sidelines of AGM the CEO Fungai Murahwa said they are currently negotiating a 10-year equipment supply deal with a German company at a cost of 9% per annum. He added the equipment will go a long way in reducing emissions and addressing ESGs.
Through this deal, Masimba will be able to contain its borrowings at US$1.9 million the long tenure of the deal enables the company to finance it with working capital, reducing borrowings in the process.
Shareholders’ equity as at 31 May 2024 improved to USD26.6 million from USD24.2 million as of 31 December 2023 with the increase is attributable to a positive business performance in the period under review.
With the government having recently declared a drought for Masimba the outlook is forecast to remain fragile if one factors in the continuing inflationary pressures and potential delay in payments on government-funded projects. The fact that the majority of the projects are government related means Masimba’s profitability might be affected.
Given the above challenges the company will continue to streamline its operations, contain costs, and fund preservation as well as unlock value on its landbanks.
Murahwa said the group is progressing as per plan with regards its strategy to dispose part of its developed land banks in Bulawayo and Shurugwi as part of unlocking value.
