ZECO Holdings posts wider loss despite strategic shift to property development

ZECO Holdings, a company owned by flamboyant businessman Philip Chiyangwa, reported a wider loss for the year ending December 31, 2023, despite a significant shift in its strategic focus.

The company is transitioning from a “rolling stock” business to a residential and commercial property development company.

Now, ZECO is hopeful this transition will start bearing fruit this current financial year and going forward.

“The group’s performance was subdued as we continue the transition to a new strategic focus. Positive performance is expected this year due as the strategic focus will start bearing fruit,” said the company in a performance update for the year under review.

The group recorded revenues of $790 million for the year under review from $644 million in the prior year.

However, while revenue increased year-over-year, ZECO’s loss grew to $3 billion compared to $18 million the previous year.

Their independent auditors raised concerns about the company’s ability to operate in the long term (going concern).

However, management believes the property development sector holds more promise than their previous business and is hopeful the transition will pay off in the coming year.

They point to government investment in infrastructure as a potential tailwind.

However, the company also acknowledges a slowdown in the national economy, with GDP growth projected to fall from 5.3 percent in 2023 to 3.5 percent in 2024.

Despite the challenges, ZECO management remains optimistic about the future and their ability to deliver value to shareholders.-ebusinessweekly