Business / Companies
Chiyangwa's ZECO stagnates
31 Mar 2014 at 15:02hrs | Views
Listed engineering firm ZECO Holdings has remained stuck in the red after posting a loss of $3,3 million for the year ended December 31 2013 due to high operating costs.
The $3,3 million loss was the same figure posted in the prior comparable period (2012). In FY 2011, the group posted an after-tax loss of $1,9 million.
ZECO's revenues during the period declined to $0,6 million from $1,5 million in the prior period, which the company attributed to depressed market conditions.
The group was further weighed down by administrative expenses which stood at $3,8 million in 2013, similar to prior period. During the period, the group undertook a retrenchment exercise, that resulted in a once-off charge of $0,4 million.
Additionally, the group's huge base of property, plant and equipment resulting in depreciation and impairment of $1,4 million further contributed to the loss position.
In terms of the performance of its subsidiaries, ZECO's flagship Delward Engineering performed below par due to "the lack of significant local infrastructure activity". However, board chairman Philip Chiyangwa said the firm had entered into deals that could boost performance in this year.
"On the local market, the company has entered into a strategic alliance with a private rail operator, which should result in more work and improved performance for the company.
Delward also successfully negotiated and sealed a major contact with a foreign-based company which won a local infrastructure tender and work has already commenced." He said in a statement accompanying the financial results.
Regarding Crittal Hope, management said the steel construction materials subsidiary had a "flat performance".
The group was rather cryptic on Zimplastics, saying it "has been affected by changing local dynamics".
The $3,3 million loss was the same figure posted in the prior comparable period (2012). In FY 2011, the group posted an after-tax loss of $1,9 million.
ZECO's revenues during the period declined to $0,6 million from $1,5 million in the prior period, which the company attributed to depressed market conditions.
The group was further weighed down by administrative expenses which stood at $3,8 million in 2013, similar to prior period. During the period, the group undertook a retrenchment exercise, that resulted in a once-off charge of $0,4 million.
Additionally, the group's huge base of property, plant and equipment resulting in depreciation and impairment of $1,4 million further contributed to the loss position.
In terms of the performance of its subsidiaries, ZECO's flagship Delward Engineering performed below par due to "the lack of significant local infrastructure activity". However, board chairman Philip Chiyangwa said the firm had entered into deals that could boost performance in this year.
"On the local market, the company has entered into a strategic alliance with a private rail operator, which should result in more work and improved performance for the company.
Delward also successfully negotiated and sealed a major contact with a foreign-based company which won a local infrastructure tender and work has already commenced." He said in a statement accompanying the financial results.
Regarding Crittal Hope, management said the steel construction materials subsidiary had a "flat performance".
The group was rather cryptic on Zimplastics, saying it "has been affected by changing local dynamics".
Source - businessdaily.co.zw
