Perennial loss-maker ZECO Holdings FY16 revenue down 35pct

Perennial loss-maker ZECO Holdings FY16 revenue down 35pct

HARARE, May 15 (The Source) – Perennial loss-maker ZECO Holdings said its revenue for the full year to December fell 35 percent to $369,000 as the performance of the group’s subsidiaries continues to deteriorate.

Although ZECO’s administrative expenses decreased by 27 percent to $1,86 million in the period from $2,55 million in the prior year, they are still five times more than the group’s revenue.

Notwithstanding cost containment measures, revenue could not cover operating costs resulting in an operating  loss of $1,641 million compared to the $2,346 million loss recorded in the prior year.

The group made an after-tax loss of $1,2 million from $1,8 million recorded in the prior year.

Total assets declined by 2.7  percent to $40,7 million from $41,8 million previously.

ZECO had accumulated losses of $15,4 million as at year end, resulting in total equity falling 5.5 percent from $24,3 million in the previous year to $23 million.

Group chairman  Philip Chiyangwa said the group’s flagship subsidiary, Delward Engineering, which relies on infrastructure projects, did not undertake major projects during the year and the power generation projects the company had earmarked for the period under review were all shelved.

Additionally, another subsidiary, Crittall Hope, took a hit due to the continued slump in construction activity.

“However, the restructuring of the business, which happened towards the end of the period under review, is expected to start bearing fruit in 2017,” said Chiyangwa.

He also said the process of remodelling the group’s subsidiary, Zimplastics continues under challenging environment.

In December last year, the Zimbabwe Stock Exchange suspended ZECO from trading on the local bourse for a three-month period for failing to pay listing fees and failure to hold meetings with shareholders. The suspension was however lifted on March 31, 2017 after the company complied.