Zeco Holdings is counting on Zimbabwe’s construction sector sustained growth to drive demand for its steel products after it recorded a decline in revenue during the first quarter ended 31 March 2026.
The engineering group – which saw revenue for the quarter decline by 3,4 percent to ZiG2,178 million – said ongoing residential and commercial building projects across the country are expected to create opportunities for its manufacturing business, particularly wholly-owned subsidiary, Crittall Hope.
Crittall Hope produces steel window frames, roller shutter doors and related fittings for the construction industry.
In a trading update, Zeco chairman Benjamin Rafemoyo said the group’s performance during the quarter was affected by prevailing economic conditions.
“The performance of the group was largely influenced by the broader economic environment which impacted production and operating costs,” Rafemoyo said.
Despite the softer performance, management remains optimistic that activity within the construction sector will support demand for its products going forward.
“Ongoing construction projects should bolster sales for window and door frames,” Rafemoyo said.
The construction industry has remained one of Zimbabwe’s more resilient sectors, supported by investment in housing developments, commercial buildings and infrastructure projects that require steel-based construction materials.
While manufacturing operations faced pressure during the reporting period, Zeco’s property division continued to show signs of improvement.
The group has in recent years shifted part of its strategic focus towards real estate development, expanding into both residential and commercial property projects as part of efforts to diversify revenue streams.
Management has also been disposing of underperforming assets and reallocating capital towards businesses with stronger growth prospects.
The property segment delivered encouraging results during the quarter, with occupancy levels at the group’s retail space improving significantly.
Occupancy at Palm Estate increased to 55,88 percent from 46,67 percent recorded during the corresponding period last year, largely due to intensified marketing efforts aimed at attracting new tenants.
“Business stability at Palm Estate is expected to improve once an anchor tenant occupies additional space,” Rafemoyo said.
Despite the positive momentum in the property division, the group cautioned that rising operating costs remain a concern.
Administrative expenses rose by 40,96 percent during the quarter, while property-related costs increased by 15,66 percent.
Looking ahead, management warned that geopolitical developments could place further pressure on business costs.
“We expect inflationary pressures to emerge, driven by rising fuel prices linked to geopolitical tensions in Iran and the Middle East. Tight monetary conditions persist, supporting currency stability,” Rafemoyo said.