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StarAfricacorporation’s revenue for the six months to September fell 60 percent to US$6,9 million due to a decline in sugar production at Gold Star Sugars Harare, the company has said.
Sugar production at Gold Star significantly dropped 44 percent, hindered by inefficiencies arising from the use of obsolete plant and a three-month plant shut- down due to civil works that were being carried out in preparation for the plant upgrade.
Cheaper sugar imports flooding the local market have also negatively impacted sales volumes. Loss for the period worsened by 8 percent to about US$5,2 million.
Finance costs increased by 33 percent to US$2,8 million.
On the balance sheet, total assets declined by 12 percent to US$37 million, with assets designated as held for sale represent 32 percent of the total assets of the company at US$11,8 million. Cash flows remained strained on the poor operating performance.
starafricacorporation says it is hoping to conclude the disposal of its shareholding in Tongaat Hulett Botswana and Bluestar Logistics by the end of next month.
The company said considerable progress had been made on the plant upgrade project at Gold Star Sugars Harare. Approximately 70 percent of the equipment has been manufactured and inspected by Societe Generale de Surveillance, a leading global inspection, and verification, testing and certification services provider.
The first batch of the equipment was dispatched on last week and is expected to arrive at Gold Star in the second half of next month while the last batch is to be dispatched from India in the last week of February next year. Civil works have been completed and installation of new equipment is scheduled to commence in January 2014.
starafricacorporation has been facing serious challenges for the past four years. The losses incurred over this period have seriously distressed the company. Cost of production has continued to be relatively high while cheaper imports are snatching some of the company’s local market.
Online Reporter