RUBBER and chemical manufacturer General Beltings Holdings Limited has recorded a 53% increase in turnover to ZW$3 billion for the year ended 31 December 2022 compared to the prior year’s ZW$2 billion despite the decrease in sales volume.
PRISCA TSHUMA
Overall volumes fell from 1 488 metric tonnes in 2021, which included 514 metric tonnes of Covid-related business to 944 metric tonnes in 2022.
Group chairperson Godfrey Nhemachena attributed the positive turnover to increased market consolidation and product mix.
“The company’s improved process efficiencies and strong technical partnerships cushioned it against the logistical constraints,” he said.
Despite stiff competition from imports, Nhemachena said the company kept its prices, product quality, and turnaround times competitive.
“The order book firmed up as consumers of the company’s products opted for a local producer as a mitigant against their own supply risk,” he said.
Due to improved overhead recoveries, gross profit increased by 96% to ZW$1.6 billion in the period under review, compared to ZW$846 million in the previous period. The company also increased its operating profit by 274% to ZW$564 million from ZW$151 million the previous year.
Despite unrelenting inflation and increased dollarisation, operating expenses at ZW$ 1.183 billion were 69% higher than the prior year’s ZW$698 million due to cost-cutting measures implemented during the year.
In 2022, the operating environment was characterised by high inflation, with year-on-year inflation reaching 243.8%, up from 61% in the same period the previous year.
As a result, aggregate demand fell as disposable incomes were decimated as the economy became more dollarised, while punitive interest rates of more than 200% discouraged borrowing.
According to Nhemachena, the rubber division volumes increased by 22% to 379 metric tonnes in comparison to the same period the previous year, which was driven by growth in the mining sector. This resulted in a 144% increase in turnover to ZW$2.126 billion from ZW$995 million in 2021.
“The division was buoyed by a consistent order book and improved throughput despite intermittent shortages of raw material in 2 months of the year,” said the chairperson.
Cernol Chemicals total volumes were 564 metric tonnes, a 52% decrease from the previous year’s 1 178 metric tonnes, dragging down division turnover by 11% from ZW$983 million in 2021 to ZW$884 million in 2022.
“The decline in volumes was attributable to depressed aggregate demand and the absence of exceptional Covid-19 business recorded in the prior year,” he said.
Meanwhile, the group recorded a net profit of 105 million from a loss of 40 million recorded in the prior year.
Going forward, the company expects to deliver an improved performance in 2023, though the supply of industrial power remains a significant operational risk that threatens the company’s current growth momentum.
