Murray and Roberts Zimbabwe (M&R), Zimbabwe’s largest contracting company, has disposed one of its Malawi subsidiaries to management in a bid to rationalise operations.
The second disposal still awaits the Reserve Bank of Zimbabwe’s regulatory approval.
The Zimbabwe Stock Exchange-listed company sold Caridorn abrasives to management at a loss of $30 434 in the first half of the year.
Trading volumes from the two operations decreased by 18% during the period.
“An agreement was reached on 31 May 2010 to dispose of Promat and an anticipated loss on disposal of $270 987 has been recorded. While the Reserve Bank of Malawi has approved the transaction, approval from the Reserve Bank of Zimbabwe is still pending,” M&R chairman Paddington Zhanda said.
M&R is however confident the country’s construction and civil engineering industry is poised to boom in the outlook period as key infrastructure deals have reached an advanced stage.
Zhanda said the company’s hopes have shifted to the second half after anticipated recovery in the infrastructure sector did not materialise in the first six months.
“Various infrastructure opportunities in our project pipeline are close to being finalised and the synergies that exist between the operating divisions in the group will help to maximise the benefit to be derived,” Zhanda said.
The group recorded revenue of $20 million for the first six months from $9,1 million the same period last year.
Continuing operations accounted for $18 million of the total revenue, while discontinued operations contributed
$2,7 million.Discontinued operations are operations of a business that have been sold, abandoned, or otherwise disposed of.
Discontinued operations – Caridorn and Promat – recorded a loss after tax of $452 160 from $131 162 the same period last year.
The group’s manufacturing division recorded revenue of $11,9 million and profit after tax of $2,4 million. The manufacturing’s arm capacity utilisation levels were at 45% in the first six months of the year.
A total of 3 550 tonnes were traded in the first six months of the year.
The construction division accounted for $6 million and loss after tax of $2 million as the division was adversely affected by a very low order book.
“An amount of $1,6 million was provided for on the debt that arose on the new British Embassy contract.
The recovery of this debt is being pursued through legal process led by our lawyers,” Zhanda said.