HomeBusiness DigestLoss-making Zeco set to restructure

Loss-making Zeco set to restructure

In  an  interview with businessdigest, company  director  Marshall  Jonga said  his  company   was considering  converting   its  Ruwa  premises into  a  modern shopping  mall and relocate to its  Workington  premises .

The   development,  he  said, was  expected  to generate  more  income   for  the  group,  given  the high  demand   for  commercial  space  in  Ruwa.
“Our property in Ruwa is well-positioned because of shortage of commercial space in the area.  Demand   for  space  is  high and turning it  into a  shopping mall is expected to create  more  cash  for  the  group “ said Jonga.   

The  company   said  it had  initiated a  plant  modernisation  policy  which   would see the  purchase of  new  machinery in order to reduce production  costs and in turn, losses. The  group  posted  an  after tax  loss  of  US$ 1,9  million year under review, down  50% the prior year.

Company chairman  Philip Chiyangwa  attributed the loss to increased depreciation  of  assets  resulting   from  revaluations which  were  done  the  previous  year. Depreciation  and impairment  losses  grew  to  US$1,6 million, up  from  US$ 0,51 million  recorded in 2010. 

Assets   depreciated  by  3,7%  to US$48,9  million, down  from US$50,8  million in the  comparative period. Low revenue streams also contributed to the loss.

In spite of the losses revenue had grown by 5,5%  to  US$2,1 million. However, operating  expenses  grew by 66% to US$3,7 million.

The loss  per share  was  up 49% to  41 cents, from  the  21 cents  recorded  the  previous  year.  Chiyangwa  said  the loss position was  reflective  of  the crisis  in the  construction  and  manufacturing  industries.

“The  quality  of  the group’s  earnings  is  reflective  of  the  crisis  bedevilling  the industry  we  are operating  in,” said  Chiyangwa. He said most of the company’s capital projects were on hold because   of unavailability of funds.

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