General Beltings finds the going tough

US$2,9 million was 8 percent lower than the US$3 million recorded last year.
General Beltings management attributed the depressed volumes and turnover to “domestic working capital challenges”.
During the period under review, the company’s gross margins declined by 9 percent due to several factors including low capacity utilisation at its rubber division, increased raw material and labour costs.
The company also reported achieving operating cost savings during the six months period.
Finance costs at US$65 000 were 3 percent lower than in the prior comparable period despite a reduction in the short-term debt.
A net cash-flow of US$431 000 was recorded resulting in net asset decline of 10 percent from last year end.
In respect of its subsidiaries, the rubber division experienced a decline in volumes by 24 percent at 124 tonnes, while turnover dipped by 17 percent at US$1,6 million.
Management attributed the constrained performance to low demand as a result of the liquidity challenge.
Cash shortages also affected the operational aspects of the business.
General Beltings chairman Mr Godfrey Nhemachena said in a statement accompanying the results:
“Challenges associated with cash shortages delayed delivery of raw materials and adversely affected performance in spite of a significant order book. The division managed to fend off competition on both the pricing and technical back up fronts.”
On a positive note, the company’s exports into the region increased by 269 percent to US$96 000, although this growth could have been higher on adequate funding, said management. The chemicals division recorded turnover of US$1,3 million, which was 3 percent below the prior comparable period figure of US$1,4 million.
Although volumes declined by 8 percent at 531 tonnes from the previous period, management reports that gross margins were contained within 5 percent of the prior year period figure, a factor they attributed to a favourable product mix. During the half year, company shareholders approved the raising of additional long-term capital. It is on this basis that management foresees a return to profitability.