adminBrighton Gumbo Business Reporter
SUGAR processor, Starafricacorporation Limited has posted a $5.3 million loss for the half year-ended September 30, 2015 compared to $3.7 million recorded the same period last year.
The sugar processor saw an increase in depreciation and net finance costs, suffering an impairment loss of $87,654 and restructuring costs of $394,464.
Starafricacorporation reported in a statement accompanying its financial results for the half year ended September 30, 2015, that its depreciation grew during the period by 49 percent to $666,464 from $344,915 recorded last year.
The net finance costs recorded increased by 15 percent to $2.5 million from $2.2 million for the same period last year.
The firm’s chairman Joe Mutizwa said the six months under review were characterised by a difficult operating environment.
He said among challenges faced in the operating period was the liquidity crunch and interrupted power supplies among others.
“Sales were adversely impacted by low production volumes as the plant operated for only three months mainly due to low off take from the market,” he said.
Star Africa’s Harare-based subsidiary, Goldstar produced during the period under review 5,184 tonnes of refined sugar compared to 376 tonnes produced last year.
However, Mutizwa said a national distribution arrangement had been put in place that includes a major wholesaler for Goldstar refined sugar.
He said the deal was for direct consumption with a view to boosting the volumes of table sugar.
Country Choice Foods, another division for Star Africa realised an operating profit of $133,005 for the six months under review, which was 46 percent 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 Goldstar Sugar Harare (GSSH) and the impasse resulted in Bluestar not moving products for its customers for two months,” said Mutizwa.
Despite the poor financial results, Star Africa has pinned its hopes on a plant upgrade at GSSH.
Sixty percent of the plant has been upgraded using equipment sourced from India and assessment for functionality has also been made by the consultants.
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