Masimba scrambles to hedge as concurrency pressure builds

CLOUDINE MATOLA

Masimba Holdings Limited, one of Zimbabwe’s leading construction and infrastructure development firms, is aggressively repositioning its business model, diversifying its project portfolio and tightening operational efficiencies to shield itself from mounting currency and liquidity risks triggered by government policy shifts.

The move comes as authorities step up efforts to entrench the Zimbabwe Gold (ZWG) as the dominant transaction currency, including settling supplier and contractor invoices in local currency, a development that is sending ripples across the corporate sector.

Masimba chairman Gregory Sebborn warned that the transition towards a mono-currency regime by 2030 will fundamentally reshape the operating environment.

“The Ministry of Finance’s recent pronouncement on settling supplier and contractor invoices in ZWG, alongside its intention to transition towards a mono-currency by 2030, signals potential shifts in the operating environment,” Sebborn said.

“While these changes introduce considerations around liquidity and currency risk, Masimba remains committed to proactive engagement and prudent risk management.”

At the heart of Masimba’s response is a deliberate shift away from concentration risk. The group is broadening its exposure across multiple sectors—including mining, housing, building, and road construction—while also stepping up its participation in private sector projects to reduce dependence on government contracts.

“We are strengthening our approach by diversifying our project portfolio mix to reduce reliance on any single market or sector,” Sebborn said. “This mitigates exposure to currency fluctuations while enhancing operational efficiency and technical excellence to sustain competitiveness under evolving conditions.”

Despite the tightening macroeconomic backdrop, Masimba’s core contracting business remains resilient, underpinned by a robust and expanding order book now valued at US$278m.

The group has secured significant new contracts across key sectors, reinforcing its market leadership and strengthening revenue visibility in the medium term.

“The contracting business continues to demonstrate its strength, supported by a robust and growing order book,” Sebborn noted.

“The addition of new orders across mining, housing development, and road infrastructure reinforces our market leadership and enhances future revenue prospects.”

However, beneath this strong pipeline lies a more complex reality.

Sebborn cautioned that persistent liquidity constraints in the domestic financial system could slow project execution timelines, even as government ramps up infrastructure spending.

“While we commend the government’s ongoing commitment to infrastructure investments, project execution timelines may be affected by limited funding and liquidity in the domestic financial market,” he said.

In response, Masimba is increasingly turning to private sector clients as a strategic hedge against delayed payments and funding bottlenecks associated with public sector projects.

This shift is designed to manage concentration and credit risks more effectively, while ensuring a more balanced and sustainable growth trajectory in a volatile economic environment.

The approach reflects a broader recalibration underway across Zimbabwe’s corporate landscape, as firms brace for the implications of a tighter monetary regime and reduced access to foreign currency.

Against this backdrop, Masimba delivered a measured but resilient financial performance in 2025.

Revenue grew by 9.6% to US$61.5m, up from US$56m in the prior year, driven largely by strong activity in the housing development segment.

Earnings before interest, tax, depreciation and fair value adjustments (EBITDFVA) rose to US$12.3m from US$11.8m, supported by the uptick in revenues.

Net profit after tax edged higher to US$6.5m from US$6.4m, reflecting stable profitability despite mounting cost pressures and macroeconomic uncertainties.

Masimba’s strategic shift underscores the high-stakes balancing act facing Zimbabwean corporates as the country edges towards a mono-currency system.

For infrastructure players in particular, where long project cycles, heavy capital requirements, and exposure to government contracts are the norm, the ability to manage currency risk and liquidity shocks will be critical.