Construction firm Masimba Holdings Limited has raised concerns over the government's decision to pay contractors in the local currency, warning that the policy introduces uncertainty and poses significant risks to cash flow management and project planning.
Company secretary Pearl Mutiti said the announcement remains a major concern for the group, particularly given the local currency's history of volatility, which makes long-term financial planning and value preservation difficult.
"The government's announcement to pay contractors in ZWG remains a source of uncertainty and significant risk to cash flow and project planning," Mutiti said.
Despite the challenges, she expressed confidence in the group's ability to maintain profitability and continue its growth trajectory, supported by a strong pipeline of projects.
Masimba posted solid financial results during the first quarter of the year, with revenue increasing by 13 percent to US$8.8 million, while profit after tax rose 12 percent to US$453,000 compared to the same period last year.
"The group delivered a strong and resilient performance during the period under review, reflecting continued operational efficiency, disciplined project execution, and the strength of its diversified project portfolio. Revenue for the quarter grew by 13% compared to the same period in the prior year to close at US$8.8 million, while Profit after Tax increased by 12% to US$453,000," Mutiti said.
She noted that the positive performance was achieved despite difficult operating conditions caused by above-average rainfall and an extended rainy season, which affected construction activities across several projects.
"This performance was achieved despite above-normal rainfall and a prolonged rainy season compared to prior comparable periods, which created challenging operating and construction conditions across several projects. Nevertheless, the Group's project teams demonstrated strong adaptability, effective planning, and solid execution capabilities, enabling projects to continue progressing efficiently under the circumstances," she said.
The company's order book remains robust, driven by a combination of public and private sector projects, providing a strong platform for future growth.
To strengthen operational capacity and improve project execution, Masimba invested US$2 million during the quarter, primarily in hauling and trenching equipment.
Liquidity levels also remained stable during the reporting period. The company's current ratio improved slightly to 1.42 from 1.41 recorded at the end of December 2025, while the quick ratio remained unchanged at 1.26.
"Liquidity for the group remained stable with a current ratio and quick ratio of 1.42 and 1.26 respectively, marginally improving from the closing ratios of 1.41 and 1.26 respectively as at 31 December 2025. The group also incurred capital expenditure of US$2 million in the period under review mainly on hauling and trenching units to boost its operational capacity and improve its execution efficiency," Mutiti said.
The company's performance highlights resilience in a challenging operating environment, although uncertainty surrounding payment arrangements for government contracts remains a key issue that could influence future project execution and financial planning.
- Business Times
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