Zeco Holdings Limited's revenue grew by more than half in its third quarter ended September 30, 2024, despite the engineering concern being in an illiquid position.
Heading into the third quarter, Zeco recorded having nearly ZiG0,16 to every ZiG of short-term debt, as of June, leaving the firm in a gravely illiquid position.
In a trading update for its third quarter ended September 30, 2024, Zeco said its revenue for the period was ZiG941 913,40, against the previous year’s third quarter revenue of ZiG621 867,75.
“Revenue was moderate over the period. The current year’s third quarter revenue was ZiG 941 913,40, while the previous year’s third quarter revenue was ZiG621 867,75,” Zeco said.
“In the future, the group’s performance will be heavily influenced by the economic climate, which has an impact on operating and productions expenses,” the company revealed in a trading update.” However, Zeco said it anticipated more income from increased office space as well, which would improve its working capital.
“In the future, the group’s performance will be heavily influenced by the economic climate, which has an impact on operating and productions expenses. However, we anticipate more income from increased office space as well, which will improve working capital,” Zeco said.
On the real estate business, the shop occupancy rate during the period under review was 30,77%, down from 48,14% in the third quarter of last year.
“We expect the occupancy to increase in the near future as we roll out marketing activities and enhance current renovations. Administration expenses stood at 15,24% and property expenses at 8,24% for the quarter,” Zeco said.
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“We expect the tight monetary conditions to persist at the back of measures introduced by authorities with an improvement in economic conditions during the last quarter on the back of rising commodity prices.”
Zeco said under these conditions, it expected new business and that the firm would continue to positively innovate in the competitive environment by pursuing new market segments. The increase in revenue for the quarter under review, comes after Zeco recorded revenues of ZiG689 591 for the six months ended June 30, 2024, compared to a restated figure of ZiG8,03 million for the same period last year.
During its half year performance, the group recorded a loss of ZiG1,65 million.
Back in May, Zeco’s auditors, MGI Chartered Accountants, raised concern over the firm’s ability to continue operating, amid having just 19 ZWL cents to every dollar of short-term debt leaving it illiquid.
This illiquid position, as identified in Zeco’s financial results for the year ended December 31, 2023, came despite management putting preservative measures in place to secure the company’s liquidity.
Resultantly, Zeco remained in the red after posting a loss of ZWL848,93 million (US$139 062,06) for the year ended December 31, 2023.
However, this was a narrower position from the 2022 comparative loss of ZWL1,09 billion (US$1,6 million).
MGI noted that the firm’s balance sheet created material uncertainties over future operating results and cash flows.
Businesman Phillip Chiyangwa is a major shareholder in Zeco.
