HARARE: Diversified conglomerate starafricacorporation Limited has widened its loss to $5,3 million for the half year-ended September 2015 from $3,7 million in the same period last year despite an increase in revenue as costs increased during the period.
Other than suffering an impairment loss of $87 654 and restructuring costs of $394 464, the company saw an increase in depreciation and net finance costs. Depreciation grew to $666 464 from $344 915 recorded last year. Net finance costs were at $2 556 756 from $2 236 382.
In a statement accompanying the group’s financial results, board chairperson Joe Mutizwa said the six months under review were characterised by an adverse operating environment which was compounded by challenges associated with a contracting economy, liquidity constraints and interrupted supply of utilities.
“The company remains confident that the current year will see an improved performance on account of the upgrade plant at GSSH (Goldstar Sugars Harare) and the improved market uptake. The ongoing plant commissioning exercise has already resulted in the plant producing good quality sugar that meets the specifications of all our customers. The cost reduction measures being undertaken and a stable domestic market for sugar will result in the company operating viably,” Mutizwa said.
In the period under review, revenue grew to $6,6 million from $2,8 million in 2014. GSSH produced 5 184 tonnes of refined sugar compared with 376 tonnes produced last year.
“Sales were adversely impacted by low production volumes as the plant operated for only three months mainly due to low offtake from the market. However, post the reporting period, the implementation of the duty structure saw an improvement in off-take by industrial customers. The company is grateful to the government for stabilising the domestic sugar market scenario where the GSSH plant now produces good quality refined sugar that meets all market segment requirements,” Mutizwa said.
He, however, said a national distribution arrangement had been put in place with a major wholesaler for Goldstar refined sugar for direct consumption with a view to boosting the volumes of table sugar. Country Choice Foods realised an operating profit of $133 005 for the six months under review, which was 46% up from the profit realised last year.
“This performance was achieved against competition from imported goods. Bluestar Logistics business profit performance was adversely affected by low business volumes from GSSH and the impasse resulted in Bluestar not moving products for its customers for two months,” Mutizwa said.
