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Enacy Mapakame
Despite the challenging business environment, Masimba Holdings Limited reported inflation adjusted turnover increase of 86 percent for the quarter ended March 31, 2020 from the comparative period on the back of improved order book mix and productivity efficiencies across projects.
The period was characterised by limited foreign currency, hyperinflation and utility supply challenges on construction sites, while the outbreak of the Covid-19 pandemic added to an already strained economic environment as lockdowns were effected across economies including Zimbabwe resulting in supply chain disruptions and a general disturbance to productivity across sectors.
However, Masimba started the year with a strong order book with projects dominated by roads and housing infrastructure, mining and agriculture segments.
“In the quarter under review most of the projects progressed satisfactorily and in line with programmes.
“However, disruptions relating to delayed supply of contracting materials, in particular fuel, were occasionally experienced,” said Masimba in a trading update for the quarter under review.
Like most businesses, Masimba suffered the negative effects of Covid-19, which was declared a global pandemic by the World Health Organisation in March, before Zimbabwe announced a national lockdown effective March 30.
For Masimba, the lockdown of March 30 limited access to various projects and suspended works, with the exception of two significant projects, which were categorised as essential works, that the authorities sanctioned to continue operating under controlled Safety, Health, Environment & Quality conditions and WHO guidelines.
Said the firm:
“The lockdown impacted negatively on the commercial aspects of the company in relation to the certification of work done and subsequent payments thereof, resulting in long cash-flow cycles.
“These delays were resolved following the relaxation of the lockdown conditions to Level 2.”
While, Masimba cannot give a clearer assessment of the impact of the Covid-19 pandemic on its business, management remains alert to this risk and ready to implement appropriate mitigatory measures to protect the value of the company.
Analysts in the real estate sector are of the view companies in construction may stand the heat as demand for housing remains high in the country despite the effects of the pandemic, while other infrastructure projects such as roads rehabilitation, irrigation and mining projects are expected to continue creating a ray of hope for the sector.
Online Reporter