GMB back in the black

US$25 000 on the back of a massive increase in sales.
GMB chairman Mr Charles Chikaura said the growth in sales was a result of increased market share of Silo products, from less than 10 percent in 2011 to 35 percent in the period under review.

Sales revenue for GMB was US$11,6 million in 2010, before increasing to US$14,7 million in 2011, representing a 26 percent positive variance. In 2012, the parastatal recorded a 134 percent increase to US$34,6 million. Mr Chikaura said the parastatal was solvent, with a debt ratio of 26 percent that indicates that 74 percent of the assets are funded by internally-generated resources.

“The current ratio of 4:1 implies that we have enough short-term assets to settle our short-term obligations and the acid test ratio of 2:1 shows that we have enough liquid assets to settle current obligations,” said Mr Chikaura.

GMB’s asset base grew from US$222 307 519 in 2011 to US$308 883 104 in the period under review with an asset turnover ratio, which measures return on investment in assets, of 10 percent.

Mr Chikaura attributed the growth of the asset base partly to the revaluation gain in some of the parastatal’s properties of US$6,7 million.

Revenue increases were also seen in other income-generating ventures, with the Strategic Grain Reserve, handling and storage turning over US$4,4 million in 2010 up to US$29,2 million in 2011. The figure went up 33 percent in 2012 to US$39 million although annual maize intake went down 15 percent to 212 622 metric tonnes in the period under review from 249 792 metric tonnes in 2011.

This decline was attributed to the 33 percent decline in maize production owing to unfavourable weather conditions and inadequate inputs support.

The parastatal realigned its business with staff reduction and restructuring of its operations, separating the Strategic Grain Reserve from its commercial activities last year. This has seen the retrenchment of 829 employees to date, with 400 more still to lose their jobs.

“Up to 50 percent of our revenues are now coming from the commercial division of our business and we intend to increase this figure,” said Mr Chikaura.

“We are in the process of commissioning maize-milling plants across the country and we are trying to manage costs.”