Omega Ukama 
ZECO Holdings (ZECO), a perennial loss-maker, says it has already begun to see improvements in its performance as a result of its recent restructuring from a rolling stock business to a property investment and development company.
The company shifted its focus earlier this year, which shareholders approved in August. In a trading update for the fiscal quarter ended September 30, the company reported that inflation-adjusted revenue increased by 101 percent to $14,2 million compared to the same period last year.
“The performance of the group will largely depend on the economic environment, which affects production and operating costs.
“However, at a group level, we have realised revenue from our real estate businesses in which we are letting out some spaces. This had a positive effect on working capital,” read the update. “Despite market liquidity challenges, the business remains thriving and has measures to cover working capital needs and other capital expenditures… under challenging operating circumstances, we believe the business innovation and the strategic new thrust will help the company to continue to thrive.”
The company said it would continue its “multifaceted” response to the increasingly competitive environment by pursuing new market segments, widening its portfolio. ZECO chairman Benjamin Rafemoyo, pictured, has said the company will continue to pursue new strategic directions to preserve and enhance shareholder value.
“We expect the new path the company has taken to cushion any negative effects although we expect a slight reduction in activities,” Rafemoyo said in a statement accompanying the company’s results for the half-year to June 30, 2022.
Shares in the company were temporarily suspended from trading on the Zimbabwe Stock Exchange in February, after it implemented the restructure without shareholder approval, a contravention of listing rules. ZECO shares only resumed trading after the local bourse was satisfied that the company had taken steps to “purge its regulatory violations”.
At the time of its initial public offering in 2008, the company’s primary business involved the assembly and refurbishment of locomotives and rolling stock.
“The uncertainties surrounding the railway transportation industry over the years, the closure of many mines, and the informalisation of the mining sector have put paid to the company’s prospects as a rolling stock company,” ZECO said in a circular to shareholders earlier this year.
