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Business Editor
Masimba Holdings’ turnover in the five months to May is 25 percent below last year following a weak performance from construction and flat Proplastics.
Chief executive Mr Canada Malunga told the AGM yesterday that the trading environment has continued to deteriorate with construction turnover going down 33 percent while Proplastics is flat on 2013.
“Correspondingly the GP margins are holding on 2013 but the impact of the turnover decline has an adverse impact on the EBITDA line,” he said.
EBITDA is at a negative $127 000 an improvement of the negative $263 000 last year.

Operating overheads, an area Mr Malunga said the group was paying close attention to, were down 18 percent and are estimated to close the year down between 20-25 percent

He said the operating environment was difficult to forecast due to lack of competitively priced capital to fund infrastructure projects.
Mr Malunga also made a moan about Chinese contractors now dominating the construction space as this goes against Zim Asset.

“We encourage Government to urge Chinese contractors now dominating the construction space to work with local contractors.”
The order book to December was at $52 million; $23 million of which was active. Malunga, however, said progress on the active order book was slow due to the liquidity challenges facing infrastructure clients.

He added that discussions on resuscitating work on the inactive order book are ongoing.
“We anticipate that works on the main education infrastructure projects will resume before year the end of the year.”

In terms of property development, Mr Malunga said the group will now start developing Monavale in October but for now financial arrangements were being finalised. The group will also develop an office block at the former Masimba offices along Sam Nujoma St.

“Designs are complete and discussions with financial partners are progressing well.”
The $700 000  Proplastics plant will now be commissioned in August following delays in Germany but it was now sailing from Europe.
The plant is expected to contribute to cash-flows in December.

Proplastics performance to December will be steady and buoyed by local water and sanitation projects together with the improved presence in the region.
He said the major areas of attention remained cost containment, cash collection and cash preservation.

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