- General Beltings Holdings recorded a full-year loss of ZWL108 million in FY23, reflecting a 78% decrease in profitability compared to the previous year's figures
- Despite an increase in revenue, the company experienced a 2.5% drop in total volumes, resulting in the decline in profitability
- Operating costs significantly rose by 150% due to inflation and dollarized quasi-institution costs, contributing to the decrease in operating profit
Harare- General Beltings Holdings, a manufacturer and distributor of conveyor beltings, rubber, and chemical products, experienced a significant decline in profitability in the fiscal year 2023. The company recorded a full-year loss of ZWL108 million, marking a 78% drop from its previous year's profit of ZWL504 million.
Established in 1968 and listed on the Zimbabwe Stock Exchange on 1 January 2002, General Beltings Holdings Limited (GBH) specializes in producing general-purpose and specialized reinforced conveyor beltings, as well as rubber and chemical products. Their product range encompasses various types of beltings such as rubber-covered belting, polyvinyl chloride (PVC) belting, light-duty PVC belting, solid-woven belting, transmission belting, and conveyor belt rubber skirting.
The company's primary customers are Anglo-American Corporation and De Beers. Additionally, General Beltings has two subsidiaries: Pigott Maskew, which manufactures rubber products for the mining, manufacturing, and construction industries, and General Beltings itself.
Despite an increase in revenue, GBH experienced a decline in profitability due to a 2.5% decrease in total volumes, dropping from 944 metric tonnes in the previous year to 921 metric tonnes.
Within the rubber division, volumes declined by 0.3% from 379 metric tonnes to 378 metric tonnes.
However, revenue for the division increased significantly to ZWL21 billion from ZWL10 billion, primarily driven by inflation-induced pricing.
On the other hand, Cernol Chemicals, a subsidiary, witnessed volume growth of 36% in the fiscal year 2023, reaching 543 metric tonnes compared to the previous year's 397 metric tonnes. This growth was attributed to the slow recovery of Cernol Chemicals' traditional markets from the lingering effects of the COVID-19 pandemic.
The company's turnover also saw a substantial increase, rising to ZWL8 billion, a 98% surge from the previous year's ZWL4 billion. This growth was a result of a shift in the marketing mix and inflationary factors.
Godfrey Nhemachena, the Group's chairperson, stated that the rubber division improved its internal processes and overhead recovery by commissioning a refurbished boiler and introducing two new presses.
Meanwhile, Cernol Chemicals continued to explore new market niches while defending its existing markets.
General Beltings faced significant operating costs amounting to ZWL15 billion, which was a 150% increase compared to the previous year's ZWL5 billion. These increased costs were largely due to inflation and dollarized quasi- institution costs.
Consequently, the company's operating profit declined by 150% to ZWL2 billion from the previous year's profit of ZWL3 billion, primarily driven by increased dollarization and inflationary pressures.
Looking ahead, Cernol Chemicals aims to focus on recovering its traditional markets while adapting to emerging models of hospitality offerings. The company also seeks to strengthen its market position in new market niches by pursuing strategic partnerships with existing and new partners.
General Beltings also aims to consolidate its presence in the energy and cement manufacturing sectors, aligning with the objectives outlined in the National Development Strategy 1, which emphasizes the growth of the mining sector and non-Platinum Group Minerals.
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