General Beltings posted a 26% increase in revenue of $6,3 million for the year ended December 2011 despite the liquidity challenges facing the economy.
The company recorded an operating loss of $1, 4 million down from $1, 7 million the previous year.
General Beltings chairman Godfrey Nhemachena, said despite the turnover increase, sales volumes decreased by 5% to 1 277tonnes.
The stronger South African rand exerted pressure on margins as raw materials and other input costs increased.
However, improved market penetration and product diversification increased capacity utilisation by 5% to 40%, Nhemachena said.
He said gross margins increased to 30% during the period under review from 27% due to improved product mix and prudent purchasing.
Nhemachena said the global recession that persisted from the previous year adversely affected investment inflows resulting in liquidity shortages during the year thereby affecting the companys product demand.
Due to shortages of long-term funding structures and a slow debtors book, the company incurred a finance costs of $186 000 on borrowings of $750 000 reflecting a cost of finance of 24% per annum, he said.
The company recorded an overall cash outflow of $310 000 and net assets declined by 16% due to operating losses incurred in the year.
General Beltings departments, including the rubber and chemicals divisions, recorded an increase in turnover.
The rubber division contributed 52% to turnover although intermittent supplies of raw materials and utilities due to working capital shortages restricted the division from achieving targeted production and efficiency levels.
The initiatives aimed at reviving Bulawayo industries are expected to benefit the division, he said.
The chemical division is also expected expected to benefit from the revival of the timber and dairy industries.
The division recorded an increase in turnover of $3 million from $2,6 million.
The company did not declare a dividend for the period under review so that it can meet its working capital requirements.