eBusiness Weekly
Enacy Mapakame
Conveyor belts company, General Beltings Holdings Limited, says total volumes for the half year to June 30, 2021 rose 43 percent to 413 tonnes when compared with same period prior year as all divisions recorded volume increases despite a challenging business environment characterised by subdued demand.
Although the business was accorded essential service status during the entire Covid 19 induced lockdown period, the restricted movement globally curtailed demand from the key hospitality and education sectors while logistical constraints were also experienced throughout the value chain and constrained factory throughput.
General Belting’s volumes rose by 39 percent on the back of increased factory throughput and improved internal efficiencies.
Cernol Chemicals suffered market set back due to the lockdown measures, but it sought alternative markets and volumes increased by 46 percent compared to same period last year.
At $205 million, total turnover was 17 percent below same prior year period’s turnover of $246 million as growth was constrained by limited pricing opportunities and new entrants in the chemicals business.
General Beltings consolidated its market positioning although it had similar setbacks through cheap imports.
During the period under review, overall gross profit of $91 million was recorded, a decrease of 54 percent when compared to same period prior year due to the gains of the rand against the United States dollar and increased overheads underpinned by parallel market exchange rate costings.
“Despite the inflationary pressure, operating costs decreased by 31 percent due to robust cost control measures. As a result an operating profit of $36 million was recorded against $114 million of the prior year’s same period,” said the group.
Profit for the period rose 263 percent to $12,069 million from $3,3321 million achieved during the same comparable prior year period.
Basic earnings per share came in at 0,022 cents compared to 0,006 cents in the same period in 2020.
At $439 million, total assets eased 8 percent from $482 million.
Although the possibility of a Covid 19 forth wave poses a picture ahead due to its inevitable impacts on demand as well as causing supply chain disruptions the group is hopeful of maintaining positive performance.
The group is looking at diversifying into other markets while consolidating market share across sectors it serves.
“The company’s rubber division expects to consolidate further in the economic sectors it serves which are pillars in the Government of Zimbabwe’s national development strategy which envisions a middle income economy by 2030.
“The Chemicals division expects to diversify in alternative markets to compensate for the traditional markets whose buoyancy depends on the extent of the lockdown measures. The inevitable effect of SI 127 of 2021 on local input costs will narrow margins due to the multiple exchange rate basis applicable on pricing of goods and input costs.
“Overall the performance out turn for the year will be closer to budget but lower than prior year in real terms,” said the group.
The group did not declare an interim dividend for the period under review to conserve capital in light of the possibility of future Covid 19 waves as well as supply chain disruptions.
