General Beltings (GB), a manufacturer of textile reinforced rubber products, posted a $616 000 loss after tax in the six months to June 30, after it was weighed down by working capital challenges and declining volumes at its divisions.
Report by Business Reporter
Volumes for the period were down 9% at 641 tonnes while turnover was 8% down from $3 million during the same period last year.
In a statement accompanying the company’s interim results, GB chairman Godfrey Nhemachena said finance costs were 3% lower at $65 000, despite a
$260 000 reduction in the short-term debt.
“Gross margins declined by nine percentage points due to low capacity utilisation at the rubber division, increased raw materials and labour costs,” Nhemachena said.
He said the rubber division managed to fend off competition on both the pricing and technical fronts.
The division’s regional exports were up 269% to $96 000.
“The gains made last year were eroded as local demand was depressed by the liquidity challenges obtaining in the country.
“As a result, volumes declined by 24% at 124 tonnes while turnover declined by 17% at $1,6 million.
“Challenges associated with cash shortages, delayed delivery of raw materials and adversely affected performance in spite of a significant order book,” Nhemachena said.
Turnover for the chemical division was 3% down to $1,3 million from $1,4 million at the same period last year.
Volumes for the division were 8% down to 531 tonnes.
“The optimism existent at year end premised on identified opportunities in the timber and ‘in-process chemicals’ for the chemicals division still abounds while the recovery of the mining, agricultural and manufacturing sectors still anchors the hope for the rubber division,” he said.
In June, GB managing director Wilbroad Tsuroh told an annual general meeting that the company would sell its offices in Harare to raise $4 million working capital for the group.
The decision followed failure by the company to access $1 million funding from the $40 million Distressed Marginalised Areas Funds.