Zimbabwe: General Beltings Conveys Bullish Performance

4 December 2020

Listed conveyor belts manufacturer, General Beltings Holdings Limited, forecasts improved performance for the full year on the back of a strong order book.

During the third quarter to September 30, 2020, GB's rubber division had a strong performance that the group anticipates to maintain going forward.

Overall third quarter performance was subdued on the back of effects of Covid-19 shocks.

However, the group is banking on the improved operating environment following the gradual easing of lockdown restrictions, which saw the reopening of the economy resulting in aggregate demand responding accordingly.

Several other companies have acknowledged the improved business environment as the economy gradually reopened increasing trading hours as well as accessibility which has helped boost demand during the third quarter of the year.

The macroeconomic environment was characterised by relative stability of the exchange rate at the auction market that resulted in price stability.

"Although the overall performance to date is below budget due to the unintended lockdown effects globally and locally, the company forecasts to post improved performance when compared with prior year.

"The improved performance at the rubber division is expected to continue on the back of a strong order book and adequate stock cover of raw materials," said GB in a trading update for the quarter under review.

According to GB, the relaxation of lockdown measures and the subsequent opening up of most economic sectors improved the performance of the traditional markets for the chemicals division.

The rubber division performance was ahead of prior year and plan due to improved factory efficiencies and order book.

"However, there was notable increase in local utility costs which impacted negatively on margins," said GB.

For the full year, the chemicals division out turn for the year will be driven by a favourable product mix and solid logistical support.

The group, however, highlighted that the resurgence of Covid-19 is cause for worry as it affects key markets of the chemicals division.

By close of trade on Wednesday, GB was flat at 17 cents but rose 608 percent on a year-to-date basis.

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