Chemical product producer General Beltings Holdings Limited (GB) recorded an overall gross profit increase of 246% for the first half year ended 30 June 2019.
The increased gross profit is attributed to a turnover increase by 100% compared with the same period last year due to a favourable product mix and the price movement dynamics prevailing in the macro-economy.
“Operating costs increased by 59% notwithstanding the inflationary pressure on costs. As a result an operating profit of ZWL 1.5 million was recorded against a prior year loss of ZWL 86 000,” Group Chairman G Nhemachena said.
The chairman said both the rubber and the chemicals divisions recorded growths in turnover in their niche markets where opportunities existed.
GH, however, recorded decreased volumes in both the chemicals and rubber divisions.
“Total volumes decreased by 30 % to 327 metric tonnes when compared with same period prior year due to inactivity in the first quarter at the rubber division as the business remodelled in response to key policy changes,” Nhemachena said.
“The decline in volumes at the Chemicals division of 16 % at 241 metric tonnes was attributable to deflated downstream demand in the economy.”
“they challenged the business in terms of access to foreign currency, power outages and inflationary pressure on costs which negatively affected downstream demand,” Nhemachena explained.
Nhemachena also said the average cost of borrowing at 14 % per annum resulted in an interest expense of ZWL94 992.
“Despite policy fluidity and a rising inflation rate, the company is expected to withstand the headwinds to preserve value while taking advantage of any opportunities that may arise in the key markets it serves,” the chairman said.