- Zeco Holdings reported a 39.5% revenue increase to ZWG 1,655 million in 2024, despite a widened loss of ZWG 549,281
- The company's total assets soared to ZWG 147 million
- Positive cash flows of ZWG 4,683 million signal potential for future profitability, contingent on effective governance and project execution
Harare- Zeco Holdings, a perennial loss maker, has capped full year 2024 with a widened loss despite revenue growth, reporting a deficit of ZWG 549,281, up sharply from ZWG 254,334 in 2023.
Yet, the company boosted revenue by 39.5% to ZWG 1,655 million from ZWG 1,186 million signalling demand for its new real estate ventures.
Total assets soared to ZWG 147 million reflecting heavy investment in property, while cash flows turned positive at ZWG 4,683 million.
This mixed performance reflects Zeco’s ongoing transition from rail wagons to real estate, a shift fraught with challenges but buoyed by Zimbabwe’s promising property market and a projected 5.3% economic growth in 2025.
The revenue surge highlights Zeco’s pivot to real estate, initiated in 2022 after selling its rolling stock assets for US$4.5 million.
Once a manufacturer of rail wagons and locomotives for African utilities, Zeco faced declining demand due to Zimbabwe’s deteriorating railway infrastructure, mine closures during the Mugabe era, and informal mining practices.
Zeco’s struggles are compounded by internal challenges. Leadership issues have plagued the company, with allegations that executives, including those tied to Philip Chiyangwa, prioritised personal gain over strategic revival.
These governance woes, alongside Zimbabwe’s volatile economic conditions marked by currency depreciation and liquidity constraints have made profitability elusive, with no dividends declared in FY2024 and a noted material uncertainty regarding going concern.
Zimbabwe’s real estate market, however, offers Zeco a lifeline. Urbanization and population growth are driving demand for residential and commercial properties, particularly in Harare, where Zeco has invested in plots like a 3,6395-square-meter development acquired for US$2.1 million.
The sector is rebounding, with property values rising due to limited supply and infrastructure projects, such as road expansions and new commercial hubs. A stable ZiG and tight monetary policy have eased inflation, fostering investor interest.
Despite this potential, Zeco’s smaller scale and governance issues limit its ability to compete for premium projects.
Still, opportunities abound in affordable housing, where demand far outstrips supply, with over 1.5 million units needed nationally. Zeco’s planned projects, if executed efficiently, could tap this gap, leveraging its asset base to generate steady rental income or sales.
Looking ahead, Zeco’s path to profitability hinges on operational discipline and governance reform. Streamlining costs, addressing leadership controversies, and delivering on new projects are critical to reversing losses.
The company’s asset growth and positive cash flows offer a foundation, but without tackling mismanagement, Zeco risks squandering Zimbabwe’s real estate boom.
With the right strategy, it could mirror regional peers who turned property investments into stable revenue streams.
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