Masimba’s order book rises 2,41% in H1 on public sector projects

CONSTRUCTION firm, Masimba Holdings Limited’s order book rose by 2,41% to US$254 million for the six-month period ended June 30, 2024, driven by public sector projects.

In the comparable period last year,, Masimba’s order book was valued at US$248 million.

The order book represents the total value of contracts that have been secured but are yet to be completed.

“GDP [gross domestic product] growth has been revised downwards to close the year at 2,0%, primarily due to below-average agricultural output inadvertently affected by the El Niño weather phenomenon. The mining sector is also expected to remain subdued because of lower international mineral prices,” Masimba chairperson Gregory Sebborn said in a statement attached to the firm’s financial results for the half year ended June 30, 2024.

“However, the group’s order book continues to strengthen, closing the reporting period at US$254 million (2023: US$248 million), primarily focused on public sector funded projects. We have adopted a disciplined approach to capital allocation, ensuring we invest for value.”

He said while the government implemented various policy measures to contain inflationary pressures in the economy, the stability of the local currency remained uncertain.

“Our resilient financial position and the discipline embedded in our strategic foundations will continue to provide us with the financial strength and flexibility to fund our growth and deliver healthy returns to shareholders,” Sebborn said.

He said revenue increased by 30% to USD$31,5 million in the period under review from the comparable period last year.He added that the improved performance was on the back of a solid order book in the roads and earthworks, mining, housing infrastructure and buildings segments.

However, the chairperson noted that the proportion of the United States dollar-denominated revenues reduced to 63% for the period under review, from 71% in 2023, owing to the order book being skewed towards government funded projects.

“The contracting business delivered good results in the period under review. Notwithstanding, conversion of the order book has been below projections due to liquidity challenges which forced the unit to exercise extra caution in managing the scope of contracts to be executed,” Sebborn said.

“The quarry mining operations continued to support the contracting business with provision of aggregates, recording a 100% growth in volumes to comparative period. However, higher volumes could have been achieved if they had not been affected by liquidity challenges in the contracting unit.”

Sebborn said the property segment contributed positively to the group’s performance and had a 100% occupancy in the period under review.

Profit after tax for the firm was muted at US$3,62 million for the half year, compared to the US$3,44 million recorded over the 2023 comparative timeframe.

This was largely due to a fair value adjustment depreciation of US$2,23 million during the period under review, from a 2023 comparative of US$740 093.

“The group’s financial position remained robust with a strong and firm asset base, as total assets closed the period at US$79,6 million (2023: US$85,8 million). The group’s liquidity ratios improved with the current and quick ratios at 1,18 (2023: 1,01) and 1,07 (2023: 0,94), respectively,” Sebborn said.

“As at end of financial period, total borrowings were at US$1,3 million (2023: US$1,9 million), resulting in low gearing ratios of 4% (2023: 8%).”

He said the group’s level of borrowings were sustainable given the current lending rates and the economic outlook-newsda