Ariston posts US$2m loss

Mupawose lamented the liquidity constraints in the local market.
“The group failed to perform to expectation as a result of the unavailability of long-term funding and working capital constraints.
“This has forced it to use expensive short-term finance to fund operations of a long-term nature, perpetuating the mismatch of cash flows,” he said in a statement accompanying the results.
Although group revenues grew by 52 percent to US$14,7 million from US$9,6 million in the prior comparable period, the company registered an operating loss of US$2,6 million before a fair value adjustment of US$700 000.
This led to a loss before tax and interest of US$1,9 million. Finance costs increased by 152 percent consistent with increases in borrowings for working capital requirements of US$2,3 million. Loss after interest of US$2,8 million with a taxation credit largely driven by a deferred tax of US$800 000 led to total comprehensive loss for the year of US$2 million.
The company attributed the loss to a combination of high finance costs, low average prices for export tea and constrained throughput at one of its subsidiaries, Favco.
The Ariston Group has interests in agriculture (macadamia and tea), horticulture, poultry and retail.
Most of the group’s subsidiaries recorded turnover growth although only one registered a profit.
Southdown reported a turnover of US$4,2 million, which was a growth of 60 percent from the previous year.
Ariston said the fair value adjustment resulted in Southdown reporting a profit before tax of US$137 000, compared to US$2,3 million recorded in the prior year.
Favco’s turnover grew by 47 percent and contributed 48 percent to group turnover due to increased activity, but posted an operating loss before interest and tax of US$292 000.
Kent Estate achieved a turnover of US$2,4 million driven largely by resumption of poultry production.
The US$2,4 million accounted for 17 percent of group turnover reflecting a growth of 120 percent from the prior year. Kent Estate, however, registered an operating loss of US$474 million.
The group is, however, optimistic that its engagements with potential strategic partners will open up funding for the group’s long-term operations.