On-going infrastructure projects excite construction companies

Zimbabwe Stock Exchange (ZSE) listed firms with a focus on construction are excited by the number of infrastructure projects that are in the market driven by Government, corporates and individuals as they form a critical mass for sustainable revenue and profitability in the short to medium term.

The companies noted that several on-going infrastructure projects have a direct positive impact on their financial performance.

To sustain growth, they said a conducive business environment underpinned by stabilisation of the economy and consistent good supply of electricity will help improve efficiencies and margins.

In its abridged financials for the six months ended March 31, 2023, Willdale Limited said it is excited and encouraged by the number of building projects that are in the market driven by both corporates and individuals.

ZIMBABWE Stock Exchange (ZSE)

“The backlog for individual housing remains huge while the Government is driving construction of housing in all provinces. These and other infrastructure projects will provide the critical mass for sustainable revenue and profitability in the short to medium term.”

Cement manufacturing firm, Lafarge Cement Zimbabwe Limited which is set to formally change its trading name to Khayah Cement Limited at the forthcoming extraordinary general meeting on 7 July, said it is tapping into Government projects that also include agriculture.

“Encouraging signs are being observed in the individual household sector and Government-funded infrastructure projects,” reads part of the unaudited preliminary financial results for the year ended 31 December 2022.

“There is also higher economic activity in the agricultural sector which is being spurred by Government-driven initiatives. The Company is uniquely positioned to support the agricultural sector through its Dry Mortar Products which include agricultural lime. Consequently, the Directors are satisfied with the positive trend in production, sales, and profitability recovery despite power outages, and that overall performance will continue improving going forward.”

Willdale noted that it remains hopeful that the economy will soon stabilise providing a much improved operating environment adding that a consistent good supply of electricity will help improve efficiencies and margins.

While sales volumes declined by 16 percent compared to the prior period largely due to low stock availability, Willdale said demand for bricks remained firm as several projects resumed after the rainy season.

“Housing development for both cluster homes and individual units accounted for most of the sales, with significant contributions also noted from improvements in educational facilities,” it noted.

Last week, in its interim consolidated financial statements for the six months ended 31 March 2023, Power Speed Electrical, a former Zimbabwe Stock Exchange (ZSE) listed electrical, hardware, and building products supplier said the diaspora community is driving a boom in residential construction countrywide, a development that is pushing the demand for building materials.

The demand for building materials is seen as a positive signal of economic growth and a confidence booster in the country.

It said strong funds flow from the diaspora is driving a boom in residential construction throughout the country, which is, in turn, driving demand for building materials.

The firm noted that it has substantially improved its ability to service the market and expects continued growth from the diaspora.

Zimbabweans in the diaspora remit funds that are largely directed toward buying residential and commercial real estate.

National Development Strategy 1 (NDS1)

Housing delivery is one of the 14 national priorities under the National Development Strategy (NDS1), and the key result for the housing thematic area is the delivery of affordable and quality settlements in urban and rural areas.

To reduce the national backlog, the Government, private sector and individuals are working together to roll out construction projects, which also entails provision of onsite developments such as roads, water, and sewer reticulation services at existing projects.

This is aimed at reducing the national backlog, which stands at 1,5 million.

President Mnangagwa

The country is firmly on course to meeting its target of constructing 220 000 housing units by 2025, with 136 850 stands having been fully serviced while 49 150 houses have been constructed and completed since 2021 when President Mnangagwa launched the National Human Settlements Policy.

Since the inception of the National Development Strategy 1 (NDS1), a total of 3 902 301 jobs have been created in the construction sector through servicing of stands, manufacturing of materials, and retail and hardware sales, Cabinet said last week.-chronicle