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Masimba keeps healthy order book

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BY TAURAI MANGUDHLA

ZIMBABWE Stock Exchange-listed construction outfit Masimba Holdings Limited says it has built up a strong project pipeline in the past year, with a healthy order book in place to sustain operations.

In an interview with NewsDay Business yesterday, company secretary Pearl Mutiti said Masimba had confronted a volatile environment that was precipitated by the COVID-19 pandemic with strong inbuilt systems that helped it minimise the impact.

However, the firm lost over 3 000-man hours as the health scourge partially grounded most businesses.

“The company’s order book is strong and comprising of roads, mining, education and housing infrastructure,” Mutiti said.

She said even before the pandemic struck, Masimba had always taken safety issues seriously, which came in handy when the pandemic shook the markets.

Masimba was one of the five domestic firms that clinched deals to expand and resurface the multi-billion-dollar Harare-Beitbridge Highway where it has already opened a 30,2 kilometre section of the trunk road to traffic near Masvingo.

Mutiti said a further 10-kilometre stretch of the highway would be completed next month. The firm has been at the centre of a huge reconstruction effort in Cyclone Idai-hit Manicaland province where roads and other infrastructure sank after floodwater swept ashore two years ago, with authorities ordering mass evacuations.

She said 10km had been opened to traffic on the Odzi-Marange-Zvipiripiri Road in the region, with a further 7,4km due for completion by June.

In October last, year President Emmerson Mnangagwa commissioned the Skyline-Chimanimani Road, one of the worst affected by the cyclone, after its completion by Masimba. “Notwithstanding our strong systems, the company lost 3 087 man-hours resultant from meeting the prescribed isolation requirements. In addition, the company spent $2,4 million to strengthen the COVID-19 mitigation measures. We have always emphasised on the safety and health of our people and the environment. Accordingly, when the pandemic broke out, it was easier for us to transition into the rigid protocols of COVID-19 because we are used to operating under very strict SHEQ(safety, health environment and quality),” Mutiti told NewsDay Business.

Supply chains were disrupted during the lockdown and transportation of people and materials was affected, but the impact on the group’s earnings was minimal, she said.

Chairman Gregory Sebborn,  in the firm’s financial results for the year ended December 31, 2020, said inflation adjusted revenue rose 248%  to $5,2 billion from $1,4 billion during the comparable period in 2019, as profit after tax grew 113% to $327,38 million.

“The foreign currency auction system has contributed to a stable operating environment, the continued improvement of which provides opportunities for implementation of long-term infrastructure projects,” Sebborn said.

“However, we urge the authorities to pursue appropriate policies that will mitigate the pricing arbitrage risks. The group, as at reporting date, had a solid order book that included roads, mining and housing infrastructure and its execution thereof will largely be dependent on the sustainability of the current operating conditions as alluded to above. The order book is evenly balanced between the public and private sectors. The board remains alive to the current risks and opportunities and will maintain its value and growth strategy in 2021,” he added.

The earnings growth was driven by improved operational efficiencies on contracting projects and fair value gains realised on the revaluation of investment properties.

“The group’s net working capital improved to $454,9 million (2019: $316 951 651), while borrowings increased to $129,2 million (2019: $19,2 million), mainly to support strategic capital investments and working capital,” Sebborn said.

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