Masimba Holdings saw its revenue fall by 43% in the first quarter of 2025, a sharp decline driven by the company’s move to cut back on government contracts and turn to more dependable private sector clients.
The shift shows the impact of delayed payments to contractors involved in state infrastructure projects, and the risk companies face when dealing with government.
Masimba is one of the largest contractors on government projects. While these contracts helped Masimba and other companies build their order books and build new capacity, payment delays have hurt their books and forced them to look to private clients for more consistent business.
Revenue for the quarter fell to US$8.1 million from US$14.3 million in the same quarter last year. Masimba’s order book now has more private clients than government.
Says the company: “The decline in revenue was attributable to strategic initiatives to manage exposure to public works and focus on growing private work, and as at reporting date, contributed 92% of revenues (2024: 40%).”
Masimba says it had to “suspend works (in the public sector) to manage credit risk”.
In the public sector, Masimba is one of five local companies working on the Beitbridge highway. Its private contracts include civil works at the under-construction Karo platinum mine, which has been delayed by the impact of weak global platinum prices. Private projects also had their problems for Masimba in the quarter, as heavy rainfall caused it to suspend some works.
The difficulties facing contractors are no secret to government. In April, Finance Minister Mthuli Ncube admitted that the state was behind on payments.
“As the government, we acknowledge that we have been in arrears with contractors, particularly those in the transport and infrastructure sectors. This is due to cash constraints that we face,” Ncube told Parliament. “We keep encouraging them to do more work while we settle those arrears.”
Ncube said Treasury had paid US$15 million to settle part of the outstanding bills owed to the Beitbridge highway contractors. He did not disclose the full amount of arrears still owed.
