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LISTED refined sugar producer Starafricacorporation Ltd narrowed its loss before tax from $12 million to $7 million for the year ended March 31, 2015. Finance costs during the period under review were lower at $3,9 million, compared to $4,8 million in the prior year. Key operation, Goldstar Sugars Harare (GSSH) saw a 68 percent rise in output from the previous year to 7,743 tonnes. However, the group reported that sugar sales volumes were negatively affected by “low production volumes and low off-take from the market due to lower priced imported sugar.”
The group said it is convinced that the local industry has the capacity to meet local demand and urges for interventionist policies in respect of sugar imports.
“The sugar industry continues to lobby government for the levelling of the playing field so as to make locally produced sugar competitive against imported sugar, in light of the fact that the local sugar industry now produces good quality sugar that meets all market segment requirements and in quantities that meet market demand,” said chairman Joe Mutizwa in a statement accompanying the results.
Upgrade of the GSSH plant is now at 60 percent, the group has reported, with the 60 percent having been “assessed for functionality by sugar technology consultants from South Africa.”
Country Choice Foods posted a profit of $506,000, up 53 percent from $330,000 recorded in the prior year. Meanwhile, discontinued operation — Bluestar Logistics — is still in the process of being disposed with negotiations with a prospective purchaser in progress. The sugar refiner is also still looking for takers for its 33 percent stake in Tongaat Hulett Botswana (THB) to raise funds to make part settlements to creditors and proposed a debt to equity swap to improve its balance sheet.
Starafricacorporation maintains a positive outlook for the new fiscal year, on the basis of the GSSH plant upgrade, as well as “anticipated upturn in the market”.
Mutizwa applauded the introduction of the 10 percent plus $100 duty on imported sugar in the recent mid-term fiscal policy, saying it will boost the company’s sugar sales to industrial customers. Notwithstanding the internal optimism, the company’s auditors, Ernst & Young Chartered Accountants (Zimbabwe) have highlighted concern over Starafricacorporation going concern status after a sixth consecutive full-year loss.
“We draw our attention to Note 28 to the financial statements, which indicates that the group has continued to report significant losses in the last six years and recorded a net loss for the year ended March 31, 2015 of $7,2 million,” said the auditors. — BH24.
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