Steelnet record US$5,2m loss

to low capacity across its operations.
The manufacturer of steel pipes, fasteners and agricultural implements said the successive losses recorded over the past two years were now a threat to its ability to continue operations.
Capacity of the group’s operations was mainly affected by inadequate raw materials, significant impairment on property, high borrowing costs and doubtful debt provisions.
The company is in need of fresh cash injection after its rights offer failed to go through last year.
“The group remains in urgent need of adequate capital injection,” said Steelnet in a statement accompanying its results. All three factories require restocking to enable them to service available demand and also grow volumes.”
Steelnet, which unbundled from TPZ group in 2002, comprises of three divisions, BMA Fasteners, which manufactures mild steel industrial fasteners and mining bolts and Tube and Pipe Industries which produces seam welded pipes.
Hastt Zimbabwe, which is based in Norton, manufactures various tractors and animal drawn agricultural implements. Revenue from BMA and Tube and Pipe was US$2 million, which was 71 percent of the total group’s turnover.
Hastt contributed US$852 102 or 29 percent to the group’s total revenue.
Borrowings amounted to US$1,6 million.
Steelnet said it had started restructuring its operations.
“Measures have been implemented to significantly reduce employment costs and rationalise product range. In addition, the disposal of excess land is underway,” said Steelnet. The group has also embarked on a scheme to restructure short-term debt and settle outstanding liabilities.
With a solid infrastructure and asset base, the group is well positioned to improve on capacity utilisation upon access of capital.
Steelnet is ranked among the lowest shares by market capitalisation on the Zimbabwe Stock Exchange.