HARARE – Listed engineering concern, Zeco Holdings (Zeco), has recorded a sixth consecutive loss since 2009 on the back of deteriorating economic conditions, casting doubt on the company’s future.
However, Zeco board chairman, Phillip Chiyangwa, said the group was introducing various turnaround strategies as evidenced by the reduction in losses from $4,7 million recorded in 2013 to a loss of $2,1 registered in the full year to December 2014.
“The Group’s performance was depressed both in terms of revenue and profitability. Revenue generated from continuing operations declined marginally to $0,501 million from $0,605 million in the prior year.
“Administrative expenses amounted to $2 million compared to $2,6 million in 2014. Discontinued operations accounted for $0,7 million of the current year loss,” he said
Despite operating in a difficult environment, Zeco’s engineering unit, Delward, is currently looking to partner regional and international partners for a cash injection.
“Capacity has largely been under utilised due to the current economic slowdown which has affected most of its local clients.
“The contracts which the company had signed in 2013 and had hoped to benefit from in 2014 only started in earnest, at the end of 2014. The export contract the company had hoped to clench in 2014 was indefinitely put on hold,” Chiyangwa said.
This comes as the engineering group last year indicated it was in trade resumption negotiations with a regional rail operator.
“Strategies are being implemented to establish and re-establish operations within the region. We have reached advanced stages in negotiations over resuming trade with a National Rail operator in the region,” Chiyangwa said.
Zeco recorded a revenue of $200 000, from $300 000 for the half year to June 2014, attributed to reducing disposable incomes and low economic activity.
Chiyangwa also said foreign firms were being given preferential treatment, leading to the poor performance of local companies.
“A major hindrance to revival of the economy is that local capacity is being bypassed in favour of foreign firms hence exporting the much needed jobs and revenue to the fiscus,” he said.
The group which has been trading in the red since dollarisation in 2009, says it is crafting strategies to benefit from a government initiative to construct 1 250 000 houses by 2018.
“With the announcement by government of the new housing policy which will see the construction of 1 250 000 houses by 2018, the group is working on strategies to benefit from the demand for its products that is expected to arise,” Chiyangwa said.
He also assured shareholders that the company debts were expected to be eradicated, should shareholders approve a debt clearance plan which the directors are set to present to them in due course. Daily News
