- Masimba’s after-tax profit fell 20% to US$2.9m (HY24: US$3.6m)
- Profitability weighed down by staff rationalisation costs linked to constrained liquidity
- Turnover declined 7% to US$29.2m (HY24: US$31.5m), mainly due to delayed government payments
Harare - Masimba Holdings, a Zimbabwe Stock Exchange (ZSE)-listed company providing engineering and infrastructure solutions to the agricultural, commercial, housing, mining, public and water sectors, has recorded a 20% decrease in after-tax profit to US$2.9 million for the half-year ended 30 June 2025, down from US$3.6 million in the comparative period.
During the half-year financials presentation at the company’s head office in Willowvale Harare, management revealed that profitability was weighed down by higher overheads, largely arising from a staff rationalisation exercise.
The restructuring, the company explained, became necessary as constrained liquidity driven by delayed payments on government projects pushed Masimba to streamline its workforce in order to preserve cashflows.
In terms of revenue mix, the public sector remained the largest contributor at 57 percent of turnover, down from 65 percent in the prior year, while the private sector’s share rose to 43 percent from 35 percent.
The shift reflects Masimba’s deliberate strategy to reduce reliance on public sector contracts and diversify earnings across the economy emphasising that private sector clients also offer greater payment consistency and timeliness compared to the public sector, which improves liquidity and enhances the quality of earnings.
As a result , the delayed payments weighed on earnings despite noticeable improvements in operational efficiencies and project margins. Turnover during the review period contracted by seven percent to US$29.2 million from US$31.5 million in the prior year, with the reduction linked to delayed government project payments that slowed down execution momentum in the first quarter.
Gross profit, however, registered an eight percent increase to US$8.3 million compared to US$7.7 million last year, underpinned by improved operational efficiencies and tighter cost controls at the project level.
This performance lifted the gross profit margin to 28 percent, up from 24 percent in the prior year, signalling stronger profitability across ongoing works.
Despite the earnings pressure, Masimba continued to strengthen its operational capacity through significant capital investments. The group spent US$2.6 million on property, plant and equipment in the review period.
Major acquisitions included an asphalt plant financed through a three-year facility, new tipper trucks, mine rigid trucks, horse units, surveying equipment, trailers, a generator, motor vehicles and computer systems.
These investments are expected to improve efficiency and enhance the group’s ability to deliver on both government and private sector projects, positioning the company for sustained growth.
Liquidity improvements were directed towards reducing trade payables, while long-term borrowings increased to finance capital expenditure.
Looking ahead, the company expressed confidence that the group’s performance in the second half of the year will surpass that of the prior year. The optimism is anchored on stronger liquidity, improved operational capacity from recent capital investments, and a more balanced revenue mix between the public and private sectors.
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