HARARE – Zimbabwe Stock Exchange listed property investment and development company, Mashonaland Holdings’ operating profit surged by 18.9% due to revenue growth in the first quarter ending 31 December 2020. The operating profit margin however declined by 19.5% owing to an increase in total operating expenses.
According to the property firm, Q1 saw a notable increase in business activity across the economy as businesses sought to reduce losses suffered in the second and third quarters. Occupancy levels increased from 77.7% to 79.4%. In monetary terms, the company’s revenue for the quarter was ZW$66.2 million against ZW$44.9 million recorded in the comparative quarter to 31 December 2019.
“The improved revenue performance was also driven by new leases concluded in Q1,” the company said.
According to the company’s managing director Gibson Mapfidza, Mashonaland Holdings’ operating expenses increased by 59% to ZWL$30.7million driven by movement in unofficial market exchange rates which had a bearing on the Zimbabwe Dollar value of materials and services consumed by the company.
“Service providers have continued tracking premium exchange rates in the pricing of products and services to hedge against inflation,” he added.
Towards the end of Q1, the second wave of the virus set in with Local Covid-19 infections rising sharply leading to the tightening of the restrictions across the country.
“This, again, affected businesses across the economy mainly in the retail and industrial sectors which recorded a drop in footfall in December 2020. The property market fundamentals have remained depressed due to the difficult macro-economic climate and low business confidence.”
“The occupier sub-market was affected by low demand for office space, this in turn had an impact on development activity. The limited development activity and sales transactions on the market have remained concentrated in the residential sector,” Mapfidza said.
The company’s property investment portfolio value remained at an inflation-adjusted valuation of ZWL$10billion determined from the last valuation performed as of 30 September 2020, however, it is expected to increase following the next valuation as Mashonaland Holdings is pursuing a number of development projects and one housing project has already been okayed for commencement.
Also, the development of the Bluff Hill cluster housing project is on-going with the construction of a model house having commenced in February 2021. “All the necessary approvals and development permits are now in place,” he said.