Volumes for listed rubber and chemicals producer, General Beltings Holdings Limited, has declined by 36 percent owing to Zimbabwe’s complex business operating environment and other micro and macro-economic factors bedevilling the Southern African nation’s economy.
In a statement accompanying the company’s results for the financial year ended December 31, 2019, GB Holdings chairman, Godfrey Nhemachena, said total volumes declined by 36 percent at 636 tonnes when compared with prior year same period volumes of 995 metric tonnes due to reduced activity in the first quarter of 2019 as the business remodelled in the wake of multiple statutory promulgations.
“Both chemicals and rubber divisions reported reduced volumes when compared with prior year due to depressed downstream demand although there were significant recoveries in the later part of the year at the rubber division,” said Nhemachena.
“On an inflation adjusted basis turnover at ZWL 49 million was a 40% increase compared to prior year’s same period ZWL 35 million due to improved internal efficiencies, a favourable product mix at the Chemicals Division and benefits from technical partnerships. Continued monitoring of pricing models in relation to cost volatility enabled the company to gain more ground in the mining sector while at the same time consolidated its market position in the Chemicals division. As a result, operating profit at ZWL 17 million increased by 70% on an inflation adjusted basis compared to prior year’s ZWL 9.7 million as the company benefited from its cost rationalisation processes implemented in its turnaround strategy.”
Nhemachena said due to improved liquidity in the company, finance costs at ZWL 395 000 were contained at 22 % of prior year’s ZWL 1,754 million on an inflation adjusted basis.
He said volumes at the rubber division declined by 34 % to 169 metric tonnes compared with the 257 metric tonnes recorded in the same period prior year due to shortages of foreign currency and reduced downstream demand.
“Despite the volumes decline, the division improved its processes and compared favourably with its regional competitors in terms of pricing and factory turnaround time,” he explained.
“The division recorded improved offtake from the platinum and gold sectors while declines were recorded in the energy and cement sectors. The turnover at ZWL 22.4 million on an inflation adjusted basis was a 149% increase on prior year’s ZWL 9 million.”
He said Cernol Chemicals volumes at 467 metric tonnes were 11 % lower than prior year’s same period volume of 526 metric tonnes due to the persistent shortages of foreign currency.
“However, a favourable product mix and pricing opportunities buoyed its turnover to ZWL 27 million representing a 132% increase on prior year’s ZWL 11.6 million on an inflation-adjusted basis,” Nhemachena said.
