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GB records loss

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GB Holdings Limited recorded a $728 000 loss for the half year ended June 30, 2013, compared to a $616 000 loss in the same period prior year.

GB Holdings Limited recorded a $728 000 loss for the half year ended June 30, 2013, compared to a $616 000 loss in the same period prior year as it succumbs to a myriad of macroeconomic challenges.

Business Reporter

In its unaudited interim results statement, GB said revenue for the period declined to $2 million from $ 2,9 million as a result of acute low liquidity levels.

GB chairperson Godfrey Nhemachena said volumes declined by 30% to 447 metric tonnes due to low raw materials stock levels and a small order book after the expected resurgence of the mining sector and expected implementation of infrastructural water projects failed to take off.

He said the company focused on fund-raising initiatives that resulted in the company accessing $1 million from the Distressed and Marginalised Areas Fund (Dimaf) which were applied towards economic sourcing of raw materials to enhance the company’s competitiveness in the market.

“Fund-raising initiatives will continue in the second year in an effort to improve the company’s market position and competitiveness,” Nhemachena said.

“Due to low levels of investment in plant and machinery since dollarisation, the sought funds will be applied towards additional working capital and plant optimisation. This effort is expected to address the anticipated improved demand of the company’s products from both the mining and agriculture sector which is expected to rebound in the short term.”

The company’s operating loss for the half year declined by 21% to $883 000 from $732 000 in the same period last year.

During the period under review, Nhemachena said capacity utillisation was reduced to an average of 15%.

“Although competition from imports will be inevitable, the company believes that with the appropriate funding, it can fend off competition through competitive pricing, product and adequate technical support,” Nhemachena said.

He said the company’s access to cheaper Dimaf money had resulted in savings in the cost of funds.

However, the increased borrowings resulted in finance costs being 39% above the prior year at $103 000.