Masimba 4-month revenue up 70pct, profit margin narrows

Masimba 4-month revenue up 70pct, profit margin narrows

HARARE, May 31 (The Source) – Civil engineering group Masimba Holdings on Wednesday said its revenue for the first four months to April was 70 percent ahead of the comparable period last year, driven by increased business from the mining sector and housing construction.

However, gross profit margin softened to nine percent from 15 percent due to  production inefficiencies caused by the high rainfall experienced at the beginning of the year.

Chief executive Canada Malunga told shareholders at the company’s annual general meeting that the company suspended some projects due to incessant rains at the beginning of the year.

Overheards grew by 27 percent and half-year profit is likely to be subdued, Malunga added.

The group’s confirmed order book is at $23 million, with potential business of $15,5 million.

Capital expenditure for the year is estimated at $2,3 million from $1,9 million incurred  in the previous year, financed through a combination of internal funds and loans. The company had already spent $800,000 in the four months.

Malunga said the company will exit Reinforcing Steel Contractors Zimbabwe to focus on construction.

Masimba holds 50 percent stake in  Reinforcing Steel Contractors Zimbabwe while Kosto Holdings Limited of Mauritius holds the other 50 percent.

The construction of the Beitbridge-Chirundu road is expected to boost its top line growth, he added.