Tight liquidity on the local market slowed down the pace of disposal of Starafricacorporation’s non-core assets with the exercise taking longer than earlier projected.
The Zimbabwe Stock Exchange-listed entity however said the restructuring of the group and unbundling of non-core business was nearing completion.
In a statement accompanying the group’s, unaudited financial results for six months ended September 30, company chairman Passmore Matupire said the group posted a loss before tax of $2,4 million from continuing operations compared to $2 million for the same period last year.
Continuing operations entail sugar refining, packaging and logistics business.
“Progress has been slow as a result of property and business disposals taking longer than projected to materialise in a market still suffering from market constraints, hence the high charges incurred for the six months ended September 30 2011,” said Matupire.
Losses from discontinue wholesale and retail businesses operations amounted to $906 554 before tax compared to $3,8 million in 2010 after accounting for profit realised from disposals of $2,1 million.
The group disposed Rusape Spar to Aucyn Investments. Leases for Red Star Wholesalers Leopold Takawira Avenue Branch and Advance Wholesalers 6th Avenue Branch in Bulawayo were taken over by West Food Distribution Network (West Foods).
“In addition, West Foods purchased the fixed assets in the two branches, took over employees and is using the ‘Red Star’ brand in return for a brand use fee.
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Subject to fulfilment of agreed conditions precedent and the necessary regulatory approvals, plans are underway to sell Red Star Holdings Limited listing to West Foods,” he said.
Matupire said Gold Star sugars produced 31 148 tonnes of white sugar for the period under review, indicating an 18% growth from the output from Harare and Bulawayo refineries last year.
“The Bulawayo Refinery remained closed in the half-year under review. Country Choice Foods traded profitably and posted a profit before tax of $446 598,” the group said.
Blue Star Logistics’ profit before tax stood at $208 314 while PolyFilm Plastics and Highfield Bag registered a volume growth of 16%.
“There was low capacity utilisation as a result of raw material supply constraints resulting in a loss. The property segment posted before tax profit of $155 816,” the group said.
The industrial division recorded a 33% growth in turnover.
Starafricacorporation said the company would show steady and sustained increase in profitability going forward.
