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Starafrica stuck in the red

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Local sugar producer Starafrica- corporation narrowed its loss after tax to $8,4 million for the year ended March 31 2012 from $17,1 million attributed to a decision to discontinue some of its operations.

Loss from continuing operations amounted to $6,2 million while that of discontinued operations totalled $2,2 million.

In a statement accompanying the company’s financial results, Starafricacorporation chairperson Passmore Matupire said the company took a decision to streamline operations in line with changes in the macroeconomic environment.

“The strategy to focus on the core business of sugar refining and distribution is beginning to bear fruit,” Matupire said.

“All business earmarked for disposal, with the exception of Arthur Garden Engineering, Marathon Tyres and WestBev was disposed of in the financial year under review.”

Finance costs for the year under review was $4,6 million compared to $5,7 million in the previous year.

Matupire said the tenure of critical loan facilities was extended to an average of two years and interest rates were reduced to 12% and below.

“It is therefore expected that finance costs for the year ending March 2013 will be much lower,” he said. Matupire said immovable property disposals were also largely successful in light of the prevailing market liquidity, realising total proceeds of $8,5 million. “The process of selling immovable property and the remaining non-core business is ongoing,” he said.

The group continuing operations, Goldstar Sugars Harare production, increased by 20% to 55 928 tonnes for the financial year under review compared to 46 515 tonnes in the previous year.

“Production continued to be hampered by the age of the plant, which is in the process of being upgraded, as well as Zesa power cuts,” Matupire said.

Country Choice Foods recorded a profit of $833 000 for the year ended March 31 2012 compared to $730 000 in the previous year.

Overall volumes surpassed those of the previous year by 32% spurred by good product quality. The group’s industrial business Blue Logistic’s operating profit was up to $575 000 for the year compared to $156 000 in the prior year.

Matupire said the industrial division posted a combined loss before tax of $1,3 million as at March 31 2012 compared to $1,8 million in the previous year.

He said the upgrading of Goldstar Sugars Harare plant would be completed by March next year.

The disposal of the Red Star Holdings Limited listing on the Zimbabwe Stock Exchange, according to Matupire, was still on hold pending addressing liabilities on its balance sheet.

Red Star Wholesalers and R Chitrin and Company Zimbabwe (Pvt) (Ltd) were undergoing liquidation.
WestBev (Pvt) (Ltd) is also set to apply for liquidation.

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