HARARE — Manufacturing concern GB Holdings’ losses worsened to $3 million in the full-year to December, from $2,1 million in the prior year, dragged down by narrowing revenues and increasing operating costs, the company reported on Friday.
Revenue was down 26% to $3,8 million year on year as the economy continued to slowdown while operating costs advanced to $3,6 million from $3,3 million.
The group accessed $1 million in bailout funding under the Distressed Industries and Marginalised Areas Fund, a joint government and Old Mutual facility for troubled companies, which had improved working capital, but weak consumer demand was reflected in the poor had weakened performance.
“The disbursement of the Distressed Industries and Marginalised Areas Fund funds in the first quarter of the year resulted in significant raw materials cost savings and enhanced the company’s market competiveness,” the company said.
“The benefit of this initiative dissipated during the latter course of the year as demand plummeted owing to the liquidity crunch in the economy which resulted in poor debtor performance and longer working capital cycles.”
GB is the only sole manufacturer of conveyor belting in Zimbabwe and the second such plant in Africa. It supplies virtually all the country’s requirements as well as regional markets but is having to contend with competition coming from cheap imports.
Volumes at 990 metric tonnes were 19% lower than the prior year with the group’s rubber and chemical divisions both recording lower margins.
Going forward, the company said access to more capital and improved demand anchored on a new government economic blueprint promoting locally manufactured goods is expected to spur growth.
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