GB Holdings turnover down 10% in 5 months to May

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Ryan Chigoche

HARARE – General Beltings turnover in the five months to May dipped 10% to US$ 1.87 million from US$2.077 million posted in the same period last year as the group was weighed down by the rubber division which was hit by waning demand from the mining sector.

The dip in turnover comes despite the group starting the year strongly, buoyed by reasonable stocks of raw materials to augment and  expedite the available order book then. However, low demand from the mines negatively impacted the group’s rubber division and the group at large.

In the five months to May, the division’s volumes at 123 tonnes were 22% lower than the 158 tonnes posted in the same period last year. Resultantly turnover for the unit dropped 27% to  US$1.18 million.GB attributed the dip in performance to low demand on the back of depressed PGM prices in the period. Contributions of substitute orders obtained from gold, timber diamonds mine at US$500 000 was not enough to cover overheads fully.

The chemicals division reported  turnover of US$693 000 in the period was 35% higher than the same period last year as volumes also shot up 84% to 267 tonnes from 145 tonnes posted in the same period last year.

The division recorded topline growth as they made significant inroads in recovering traditional markets despite stiff competition. However GB acknowledged that the group’s divisions are still grappling with the influx of cheap imports of conveyor belts and chemicals which continue to give them pricing pressure.

On the outlook the group is expecting to bounce back as they are anticipating the rebound in PGM prices  in the second half of the year which will stimulate demand for its  rubber division products. Repeat business from the power sector and other sectors is also expected to help the division pull through.

GB also painted a positive outlook for its chemicals division as Cernol Chemicals  is set to continue recovering lost market share , consolidating its position in its traditional formal markets as the business pursues its turnaround path.

”Management , under the guidance  of the board , will continue to stay alert to any signals that can feed into the decision making process in order to optimise productivity,” management told an AGM this morning.

Meanwhile the operating environment in the period, saw the introduction of the Zimbabwe Gold currency which has brought exchange rate and price stability taming inflation in the process .However just like its predecessor the RTGS, GB reported that importing raw materials using the local currency  remains a challenge as the company highlighted the importance of the greenback in its operations.

 

 

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