REVENUE at contracting and industrial firm Masimba Holdings increased by 8% to US$53,8 million for the year ended December 31, 2023, due to a strong and firm order book at the beginning of the year.
In 2022, the revenue stood at US$49,8 million.
However, growth declined in the fourth quarter as a conservative approach was taken by the group to align work execution in line with clients’ payment patterns.
“The contracting business commenced the financial year with a solid order book comprising roads and earthworks, water, housing, mining and energy infrastructure projects,” Masimba chairperson Gregory Sebborn said in a statement accompanying the financial results.
Earnings before interest, taxes, depreciation and fair value adjustment declined by 11% to US$12,6 million.
The decline was attributable to slow down of works in the fourth quarter due to delayed payments and liquidity constraints which negatively impacted project efficiencies.
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“In addition, profitability of the group was impacted by the sub-optimal currency payment mix on most of the projects that were not in line with the increased dollarisation of the economy,” Sebborn said.
Total assets of the group improved to US$85,8 million, mainly driven by growth in contracts, in progress and contracts receivables.
The growth in contracts in progress and contracts receivables was attributable to growth in revenues coupled with the impact of delayed payments from clients on the back of liquidity constraints.
The decline of the current ratio to 1,01 compared to the previous period of 1,31 was attributable to a strategic decision to purchase property, plant and equipment with short term facilities to capacitate the execution of long-term projects.
Based on the forecast cash flows, this position should improve in the second half of the 2024 financial year, the company said.
Cash generated from operating activities increased to US$5 million from US$800 000 and this was largely applied to capital expenditure of US$4,2 million.
“The capital expenditure incurred was mainly aligned towards the demands of a growing order book. Capital expenditure was funded by a combination of internal resources and borrowings,” Sebborn said.
Resultantly, borrowings at the end of the financial period closed at US$1,9 million.
Included in borrowings is a US dollar loan amounting to US$1,4 million.
The order book remained balanced between the public and private sectors for the period under review.
“We applaud the government and the private sector’s continued investment in infrastructure development, being the key enabler to economic development,” Sebborn said.
Performance in the property portfolio was firm, and the business unit contributed positively to the group’s performance.
Occupancy of properties remained at 100%.
The quarry mining business unit, Stemrich Investments, contributed positively towards the group’s profitability.
The segment manufactures stone aggregates which are key in the contracting business.