Masawara Plc CEO Shingai Mutasa says the London Alternative Investment Market listed group will be profitable at the end of 2013 after implementing a host of measures to revamp operations.
Report by Taurai Mangudhla
This comes after Masawara incurred an after tax loss of US$4,2 million in the first half of 2012 on account of underperformance of its business units compared to a profit after tax of US$1,7 million during the corresponding period in the previous year.
Mutasa, a major shareholder in the diversified group, told businesdigest on the sidelines of a Business Unusual conference in the capital recently the group would focus on its core competencies while adopting new innovative strategies to grow shareholder value.
“We will definitely be profitable next year. We will first do more and more of what we are good at while improving the business that we have. We will also find great leaders for our business and support them with capital,” he said, adding the immediate solutions were part of a long term strategy to improve the company’s position and maintain profitability.
“Unfortunately it was painful, you know, it’s not nice to go in public and say I have lost money for my investors but I think it’s part of the journey that Masawara is going through. I think the investors who put money into Masawara are going to benefit in the long term,” Mutasa said.
After the interim loss Masawara said profitability of its TA Holdings Limited, which is chaired by Mutasa, is expected to improve during the second half of the year following the resumption of the production of ammonium nitrate at Sable Chemicals in May 2012.
“The focus will be to ensure that Sable Chemicals is able to decommission the electrolysis plant by January 1, 2013, and thereafter rely entirely on imported ammonia to produce ammonium nitrate,” said the Masawara board in a statement.
After the reporting period, Masawara launched a WiMAX network by Dandemutande, a wholly-owned subsidiary of Telerix Communications (Private) Limited.
The group also said it expects the recovery of the TA insurance businesses in Zimbabwe to continue for the remainder of the year. The refurbishment of the Zimbabwe hotels had begun and was expected to be complete by end of 2013. The hotels’ refurbishment together with the opening of a conference facility in Harare, were expected to increase the hotel revenue.
Masawara also identified new operators for its fuel (service station) business, Zuva and expected this to result in reduced site running costs, which will in turn increase profitability.
Mutasa said Joina City occupancies were 90% for retail space and about 60% for office space as management identifies good quality tenants.
“It’s not that we can’t get more but we have been deliberate about the kind of tenants we bring in, rather than having people moving in and out quickly, I want sustainable tenants,” he added.