daniel chigunweEnacy Mapakame
Business Reporter
Listed conveyor belts supplier, General Beltings Holdings Limited (GB Holdings) is upbeat about its performance this year and going forward, as its key markets – mining and agriculture – continue to present growth opportunities.
The group has already seen a strong volume performance for the first half of 2022, and at 307 tonnes, volumes were 48 percent above the same prior year period’s 207 tonnes.
General manager Wilbroad Tsuroh cited firming commodity prices as presenting a source of optimism for the mining sector and the conveyor belts supplier, while the agriculture cluster also presents growth opportunities. Demand for chemicals in the agriculture sector is expected to boost earnings for its business unit – Cernol Chemicals, which is also expected to help market retention and consolidation.
Last year, Cernol Chemicals’ total volumes of 1 178 tonnes represented an increase of 196 percent from the prior year’s 398 tonnes due to consolidation efforts in new market niches with deliveries in the fourth quarter accounting for 514 tonnes.
Both mining and agriculture sectors are expected to anchor the economic growth together with other sectors such as manufacturing, tourism and construction under the National Development Strategy (NDS1) which should usher the country into an upper middle income economy.
“The company’s key markets continue to offer opportunities as the sectors it serves have underlying potential,” said Mr Tsuroh in an update in the group’s 2021 annual report.“The resurgence of commodity prices in the mining sector are a source of optimism as evidenced by the planned expansion in the platinum, gold and energy sectors.
“Successful product trials concluded in the prior year and the subsequent placement of trial orders in new sectors point to a significant possible market breakthrough for General Beltings.“Agriculture remains pivotal in the Zimbabwean economy.
Cernol’s retention of its traditional markets and its attendant in- process chemicals is expected to drive demand for the company’s products as the economy opens up and customers opt to buy local.
The above opportunities resonate well with the country’s vision 2030 Development strategy of making Zimbabwe a middle-income country,” he said.
During the year under review, GB’s overall volumes increased by 113 percent at 1488 metric tonnes when compared with prior year’s 699 metric tonnes. Following concerted effort to penetrate and consolidate in new markets, the chemical division shored up volumes in the last quarter which contributed significantly to the increase while the rubber division benefited from a consistent order book throughout the year.
At $575 million, total turnover was 7 percent above prior year’s $537 million attributable to the increased volumes.
Gross profit at $246 million dropped by 11 percent from the prior year’s $278 million.Operating costs came in at $203 million, which was an increase of 35 percent due to the costs that tracked the parallel exchange rates. As a result, a net operating profit of $44 million was recorded against the prior year’s $140 million.
Volumes at the rubber division increased 3 percent to 310 tonnes compared with the prior year’s same period of 301 tonnes driven by a consistent order book and improved throughput.
Due to the pricing constraints the divisional turnover at $290 million dropped by 17 percent from the prior year’s $347 million.
Online Reporter