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Mr Malunga

Business Reporter
CONSTRUCTION and manufacturing group, Masimba Holdings’ revenue for the six months to June 2014 slowed down 22 percent to $13,6 million from $17,4 million in the same period last year.
The group’s performance was pulled down by a 32 percent decrease in the construction division.
Contracting turnover fell 32 percent to $7,7 million from $11,4 million recorded in the comparative first half of last year.

Masimba chief executive officer Mr Canada Malunga said contracting turnover fell as a result of the continued slowdown experienced in project revenues owing to the absence of large scale projects in the country due to the liquidity crisis during the reporting period.

Mr Malunga said while Masimba Construction order book is firm at $41 million, a significant portion of the order book at $19 million remains inactive due to funding difficulties facing the company’s clients. The company’s active order book stands at $8,6 million.

The order book is driven by telecommunications and housing projects.
The manufacturing business contributed $5,8 million from $6,1  million or 43 percent compared to the same period last year.

The manufacturing division showed up the business’s revenues and is currently running at 24 percent on last year.
However, Mr Malunga expects a “stronger” second half performance driven by a surge in demand from the civil sector of the business supporting housing at Proplastics.

“We have set a target return at Proplastics of 10 percent, currently we are at 5 percent as we commission our new plant by the end of the year.
“We have seen a resurgence of interest coming through from agriculture, which we started noticing in March this year and gathered momentum in April and has not slowed down since then.

“We expect that the demand going into agriculture possibly is going to
go well into November,” said Mr Malunga.

A number of clients at Proplastics have been put on cash basis in light of the credit and liquidity risks the country is growing through.
“We believe that the six months to December will remain very harsh,” said Mr Malunga.

“We believe that the second half will be stronger than the first half mainly driven by Proplastics. Construction will continue to be slow but certainly will be stable in the second half but with much more exciting prospects at the beginning of 2015.

Masimba expects the properties units to contribute to group results in the first half of 2015.
The company disposed of low yielding investment properties with a book value of $470 000 and the proceeds were applied towards reducing the group’s borrowings during the period under review.

Masimba sees opportunities particularly in the property development market in the short term. The group has invested in plant mordenisation that will increase capacity, efficiencies and product range.

“To this end the first phase of the plant mordenisation programme comprising the commissioning of the new HDPE plant at Proplastics has been rescheduled to September following manufacturing delays in Europe,” the company said.

“We are happy to advise that the machine is now between Harare and Durban and the first part should be able to come out on September 15.
“That will transform Proplastics business in that we will be able to offer much more comprehensive solutions particularly to mines.

“We believe that our product which is much more environmental friendly and price competitive will offer solutions to the market,” said Mr Malunga.
The company said it has reduced exposure to the Government having collected more than $1 million from the $5,7 million owed by the Government. The Government currently owes Masimba $4,4 million.