Zimplow continues to rely on its diversified structure to deliver encouraging and solid performances despite the difficulties in the operating environment.
The group has exposure to the country’s core economic drivers in agriculture, mining and infrastructure development.
Group chairman Godfrey Manhambara, in a statement accompanying the half year results, said the delay in paying suppliers by the government posed challenges in the spending habits of contractors.
In August 2022, the Treasury suspended payments to contractors on the grounds that they were overcharging for goods and services.
“On the mining and infrastructure segment, the delay in settling road contractors remains a bottleneck in the spending patterns of contractors both on fleet maintenance and replacement,” he said.
About 70% of all payments in the economy are made by the government. Typically, the government pays its bills 21 to 30 days after receiving them. Apparently, contracts with government ministries have been overcharged by vendors as insurance against late payments.
However, the government is currently integrating a new procurement platform with its public finance management system in an effort to accelerate payments.
With the new system, regulators could verify that contracts were priced fairly.
Inflation adjusted revenue increased 24% to $6 billion in H1 2021 from $4.83 billion in H1 2021, owing to improved operational performance and volume growth in key group segments.
Profitability increased by 64% over the previous year thanks to increases in exchange and fair value that increased by 12-fold.
“The group remains focused on realigning the working capital position given the need to rely on internal resources arising from increased lead times, delayed remittance of auction funds and reduced demand following the liquidity squeeze driven by monetary policy measures.”
It is geared towards strengthening its balance sheet position by reducing foreign liabilities, and repositioning the group to deliver earth moving equipment through a new Original Equipment Manufacturer (OEM) or supplier.
“In addition, the group is pushing ahead on its commitment to the mining and infrastructure equipment sector and will soon introduce a new corporate brand to service the market’s earth moving equipment needs in line with our customer’s expectations,” he said.
It did not declare an interim dividend – Harare