ZSE-Listed rubber and chemical manufacturer, General Belting (GB) Holdings remained profitable during the three months (Q3) to September 2021 despite disruptions in the supply of raw materials and increased costs.
In its latest trading update, the company said it managed to increase volumes although margins were relatively narrow than previous quarter.
The impact of COVID 19 pandemic in the quarter persisted, worsened by the violent riots in South Africa and the subsequent cyber-attack that conspired in the disruption of logistical flows of raw materials resulting in reduced consumption of the company’s products.
Despite this, the company said volumes for both the chemicals and rubber divisions were 31 percent and 48 percent ahead of same period prior year, respectively with both divisions operating profitably.
However, margins were under severe pressure due to the strengthening of the rand against the United States dollar which resulted in increased raw materials costs.
This was exacerbated by the rapid dollarization in the economy and the consequent basing of local costs on unofficial rates further reducing profitability when compared with same period prior year.
Given the above the company is expected to operate profitably for the rest of the year although at reduced levels when compared with prior year and budget.
The Chemicals division is expected to recover from the effect of lockdown measures which shut off its traditional markets.
The rubber division is expected to maintain its recovery path and its out turn will depend on improved logistical flow of raw materials following the intermittent disruptions at the raw materials suppliers factories.
