Roads, mining projects boost Masimba
LIVINGSTONE MARUFU
Zimbabwe Stock exchange-listed construction firm, Masimba Holdings Limited, delivered a solid set of financial results in the 12 months to December 31, 2020, largely driven by the roads and mining infrastructure projects.
This was despite disruptions caused by Covid-19 pandemic, which ravaged the economy in the reviewed period.
Masimba Holdings board chairman, Gregory Sebborn, said the company had a stronger order book, which was evenly balanced between the public and private sectors.
“The roads and mining segments were the main revenue drivers in the period,” Sebborn said.
Revenues for the group grew 248% to ZWL$5.2bn in the year to December 31, 2021 from ZWL$1.5bn reported in 2019 attributed to the stronger order book that prevailed throughout the year.
Earnings before interest, taxes, depreciation and fair value adjustments grew by 125% to $1.1bn from ZWL$477m. The earnings growth, Sebborn said, was mainly driven by improved operational efficiencies on contracting projects, fair value gains realised on the revaluation of investment properties and exchange gains arising from a net foreign currency asset position.
Profit for the year went up 125% to ZWL$327.7m from ZWL$153.8m in 2019.
Masimba’s balance sheet grew to ZWL$4.6bn during the reviewed period from ZWL$2.05bn due to improved profitability and adoption of a value preservation strategy implemented through the acquisition of property, plant and equipment.
The investment property book as at December 31 2020 increased to ZWL$403.6m from ZWL$293,4m while capital expenditure on plant and equipment was ZWL$213.7m from ZWL$591.9m in 2019 due to cost containment measures put in place by the company.
The group’s net working capital improved to ZWL$454.93m from ZWL$316.95m in 2019 while borrowings increased to ZWL$29.23m from ZWL$19.20m mainly to support strategic capital investments and working capital.
Cash generated from operations amounted to ZWL$383.15m from ZWL$589.6m in 2019 and cash utilised in investing activities amounted to ZWL$306.4m from ZWL$589.73m during 2019 full year and was mostly expended on capital equipment.
The three year cumulative capital expenditure of US$7.40m has enabled the group to execute large scale infrastructure projects.
The foreign currency auction system, Sebborn said has contributed to a stable operating environment, the continued improvement of which provides opportunities for implementation of long-term infrastructure projects.
He said the implementation of these projects was also dependent on solid policies that address the “pricing arbitrage risks” as well as creating a conducive environment for business operations.
The board remains alive to the current risks and opportunities and will maintain its value and growth strategy in 2021, Sebborn said.
