Lower Covid-19-related costs for first half of 2022 at Masimba Holdings
HARARE – For the first six months of 2022, construction firm Masimba Holdings recorded a 22% decline Covid-19 related costs, aided by the easing of lockdown restrictions. When Covid-19 was at its worst, projects dealing with labor shortages, supply chain challenges, and financial pressures had an impact on the global construction sector. From the original crisis in China to building sites all around the world, the consequences spread across the sector. Many contractors lacked the financial means necessary to pay staff salaries and maintain their enterprises in the early phases of the Covid-19 outbreak.
In this time of widespread pandemic, contractors and their sureties face both common difficulties like material shortages and labor inefficiency, but at levels and for lengths of time that have never been experienced before, as well as particular difficulties like stay-at-home orders and government shutdowns of projects deemed “non-essential”. Many construction contracts have low profit margins; therefore, many contractors might not be able to
endure the financial effects of Covid-19. The Covid-19 pandemic undoubtedly altered almost all facets of people’s lives, including their businesses and jobs. Due to the pandemic’s negative effects on the building sector, which is regarded as a vital industry, many construction enterprises have faced and continue to face serious financial
Masimba continues to conduct its business in accordance with the Covid-19 standards that have been approved by the government and the World Health Organization in order to safeguard the health and welfare of its staff, customers, suppliers, and other stakeholders. By the end of September 2022, it will have put mechanisms in place to verify that all of its employees have had the booster shot. “For the period under review, the Group lost 2.448-man hours (2021: 2.673-man hours) and incurred direct Covid-19 related costs of ZWL18.7 million (2021: ZWL23.9 million),” said group chairman Greg Sebborn in a statement accompanying the results. “While Covid-19 cases continue to decline the Board remains on high alert to any future pandemics. Covid-19 did not have a material impact on the group’s liquidity and solvency positions in the period under review.”
However, he said, “it is not possible to assess with absolute certainty its impact on the financial performance for the year ending 31 December 2022.” The Lost Time Injury Frequency Rate (LITFR), which was 0.50 in December 2021, decreased to zero during the time under study. Three million LTIFR hours were completed. Now that the epidemic has passed, many building projects that were put on hold are moving forward, and the majority of companies are eager to add more human resources.
The distribution of the COVID- 19 vaccination increased government trust to the point that the economy could be reopened and COVID-19 limitations could be loosened. The construction sector fared well, and current market developments show that it has a promising economic outlook going forward. Nevertheless, contractors are still dealing with the pandemic’s aftereffects, such as a lack of construction supplies and a dramatic rise in construction prices that might reduce profitability.
Due to inflation, the price of building supplies typically rises every year (an issue that contractors faced even prior to the pandemic). Construction expenses have been considerably affected by the inflation that followed the epidemic, which was very different. Contractors reduced their bids during the pandemic’s early phases in order to stay in business. Typically, there is a long period of time between the signing of a contract and the delivery of finished goods to customers. However, unlike businesses engaged in production or retail, it is difficult to raise prices once a contract has been signed.
A project’s cost is anticipated in advance, and a proposal is submitted for those anticipated costs. As a result, contractors have always found it difficult to deal with unanticipated supplemental expenditures. Since they were unprepared for it, the Covid-19 pandemic’s emergence has had a negative impact on numerous contractors. Moving forward, contractors should always have a backup plan that enables them to minimize unexpected situations that could happen. When submitting a proposal for a project, it is crucial for contractors to consider the current costs and the potential for cost increases.