Masimba Holdings Reports 8% Revenue Growth Amid Challenges in 2023

Masimba Holdings, a leading Zimbabwean firm, reports 8% revenue growth despite liquidity challenges, showcasing resilience and strategic management in the construction industry.

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Masimba Holdings Reports 8% Revenue Growth Amid Challenges in 2023

Masimba Holdings Reports 8% Revenue Growth Amid Challenges in 2023

Masimba Holdings, a leading contracting and industrial firm in Zimbabwe , announced an 8% increase in revenue to US$53.8 million for the fiscal year ended December 31, 2023, compared to US$49.8 million in the previous year. The company attributed the growth to a strong order book at the beginning of the year, despite facing challenges in the fourth quarter.

In a statement, Masimba Holdings reported that earnings before interest, taxes, depreciation, and fair value adjustment declined by 11% to US$12.6 million. The company cited slow work execution due to delayed payments from clients and liquidity constraints as the main factors contributing to the decline. The sub-optimal currency payment mix also impacted earnings.

Despite the challenges, Masimba Holdings saw an improvement in total assets, which grew to US$85.8 million, driven by an increase in contracts in progress and receivables. The company made a strategic decision to purchase equipment using short-term facilities, resulting in a decline in the current ratio.

Cash generated from operating activities increased to US$5 million, with a significant portion applied to capital expenditure of US$4.2 million. The company's order book remained balanced between the public and private sectors, while the property portfolio and quarry mining business unit contributed positively to the group's performance.

Why this matters: Masimba Holdings' financial results provide insights into the challenges faced by the construction industry in Zimbabwe, particularly in terms of liquidity and payment delays. The company's ability to maintain revenue growth and invest in capital expenditure despite these challenges highlights its resilience and strategic management.

In the statement, Masimba Holdings' Chief Executive Officer, Canada Malunga, said, "The group's performance in 2023 demonstrates our ability to maneuver the challenging economic environment and deliver value to our stakeholders. We remain focused on executing our strategy and capitalizing on growth opportunities in the market."

Key Takeaways

  • Masimba Holdings' revenue grew 8% to $53.8M in FY 2023, despite 4Q challenges.
  • Earnings declined 11% to $12.6M due to delayed payments and liquidity constraints.
  • Total assets grew to $85.8M, driven by increased contracts and receivables.
  • Cash from operations rose to $5M, with $4.2M invested in capital expenditure.
  • Masimba remains focused on executing its strategy and capitalizing on market opportunities.