MANUFACTURING concern GB Holdings recorded a loss for the half year ended June 30 2014 in a development attributed to the prevailing liquidity crunch and depressed demand.
GB is the main manufacturer of conveyor belting in Zimbabwe, supplying virtually all of the country’s needs in this regard.
However, during the period under review the group recorded an operating loss of $820 000 compared to a loss of $781 000 in the prior period.
“The liquidity challenges continued in the period under review aggravating the already depressed demand for the company’s products,” company chairman Godfrey Nhemachena said.
He said in light of these challenges, the company was not spared as downstream demand of the company’s products declined.
“The mining sector which constitutes the largest portion of our business faced viability challenges emanating from depressed price trends and high input costs. It is, however, encouraging to note that the review of royalties in the sector is likely to stimulate demand of the company’s products,” he said.
In his mid-term fiscal policy review, Finance minister Patrick Chinamasa slashed gold royalties from 7% to 5% for large scale miners and removed presumptive tax for small-scale gold producers.
Nhemachena said notwithstanding the current challenges, the company was extensively engaging its customers and was positioning itself to fully satisfy local demand for its products.
“The promotion of locally produced products is expected to spur demand of the company’s products enabling economies of scale to be derived from improved capacity utilisation at the rubber division,” he said.
Turnover stood at $1,47 million, a 28% reduction from figures recorded in the previous period.
The company’s current ratio stood at 0,19 during the period under review.
This ratio is mainly used to give an idea of the company’s ability to pay back its short-term liabilities with its short-term assets.
The higher the current ratio, the more capable the company is of paying its obligations, while a ratio under 1 suggests that the company would be unable to pay off its obligations if they came due at that point.