Online Reporter
Tapiwanashe Mangwiro
Starafricacorporation recorded a strong start to its financial year, with revenue rising 31 percent in the first quarter to June 30, 2026, as higher sales volumes at its sugar businesses boosted operating profit by 58 percent.
The diversified group, which operates Goldstar Sugars (GSS), Country Choice Foods (CCF) and Silver Star Properties, said the performance was largely driven by increased demand and the success of pricing measures introduced in the latter part of the previous financial year.
Granulated sugar sales volumes at GSS increased 38 percent compared with the same period last year, supported by competitive local pricing and stronger market demand.
The company said lower prices introduced to defend market share had succeeded in stimulating demand, although the strategy came with some pressure on margins.
“Strategic lower price adjustments implemented in the latter part of the previous financial year to improve competitiveness were successful in defending market share and in stimulating demand,” the company said in its trading update.
The stronger volumes also helped offset some of the cost pressures facing the business, with operating profit before the group’s share of profit from its associate rising 58 percent year-on-year.
The growth in operating profit was attributed to volume-led revenue expansion and higher sundry income, although the gains were partly offset by increased operating expenses.
Gross profit margin, however, narrowed to 17 percent from 18 percent in the comparative period as higher input costs absorbed part of the benefit from increased volumes.
GSS also faced production disruptions during the quarter, with water supply interruptions and logistics-related plant downtime affecting operations. Delays in the delivery of critical spares, linked to global logistics disruptions, compounded the challenges.
Management responded by commissioning additional boreholes to address water supply constraints.
At CCF, volumes increased 19 percent year-on-year, reflecting sustained customer demand for the company’s sugar specialties. Management said it would continue expanding its distribution network to improve market penetration.
Silver Star Properties recorded steady occupancy rates during the period as the group concentrated on retaining tenants.
There were no rental rate adjustments during the quarter, with the modest increase in rental income attributed to improved tenant occupancy.
The group’s share of profit from its associate, however, fell 25 percent compared with the prior year, largely because of product supply constraints in the Botswana market.
Management said it was working with the associate to address the supply gaps.
Looking ahead, Star Africa expects demand to remain strong during the rest of the financial year and plans to unlock previously underutilised production capacity.
The company also expects improvements in plant availability to support operations, noting that availability had improved since the end of the quarter following more stable utilities and the delivery of critical equipment spares.
Company secretary Mr Dzingayi Maworera said the group would continue focusing on exploiting the opportunities presented by stronger demand while addressing supply constraints.
“StarAfrica will continue to build on this trend by unlocking previously underutilised capacity,” Mr Maworera said. “In addition, the business intends to address the supply gaps at its associate, which presents an opportunity to increase production and sales volumes.”
The group also maintained the quality certifications required to service its major industrial customers, positioning it to pursue further growth as production capacity improves.
The performance came against a relatively supportive operating environment during the quarter.
Starafrica said macroeconomic stability recorded in previous quarters persisted, while inflation remained largely contained by Government policy despite global cost pressures arising from geopolitical conflicts in the Middle East.
Strong mining-sector performance and a favourable tobacco crop also supported aggregate demand and foreign currency inflows, creating conditions that management said contributed to the group’s positive operational performance.
