Zeco is optimistic about the new strategic approach

Zeco is optimistic about the new strategic approach

DStv

Zeco Holdings is optimistic about a turnaround in fortunes following its strategic shift into residential and commercial real estate development.

The Zimbabwe Stock Exchange (ZSE) listed company is owned by flamboyant businessman Philip Chiyangwa.

The group that traditionally built railway carriages and locomotives through its public service subsidiaries in Zambia, Tanzania, Mozambique, Ethiopia and Kenya announced last year that it was moving from a “rolling stock” business to a property development company.

Despite widening its losses last year. He remains optimistic about his new approach.

“We also expect new business once we complete construction of the new retail space. The company will continue to positively innovate in the competitive environment by pursuing new market segments, including the construction industry, for our other business unit,” Zeco said in its first quarter business update.

In terms of retail space, store occupancy stood at 69.57 percent, an improvement from 53.33 percent in the same period last year.

“Moderate occupancy rates are indicative that the space is entering the growth stage as construction and renovations take place,” the group added.

During the period under review, revenue saw a positive improvement compared to the previous year, mainly driven by inflation.

Historically, revenue for the first quarter of the previous year amounted to ZW$63.99 million, compared to ZW1,165.20 million for the first quarter of the current year.

“The group’s performance was largely dependent on the economic environment which affected the cost of production and operating costs. However, at the group level we also earned income from our commercial spaces business, which had a positive effect on working capital,” Zeco said.

The company expects tight monetary conditions to continue with less liquidity in a bid to stabilize the new local currency, Zimbabwe Gold (ZiG).

The company’s losses rose to ZW3 billion from $18 million a year earlier, which the group attributed to a strategic shift toward new businesses.

FCB