COTTCO Holdings Limited has posted an after tax loss of $9,9 million for the 12 months ended September 30 2014 compared to $27 million loss recorded for the same period last year due to cost cutting initiatives.
BUSINESS REPORTER
The company said during the full year, a low national crop of 135 000 tonnes — a repeat of last season — was recorded due to the stagnation of the national crop due to poor funding by some merchants owing to the risk associated with declining yields and side marketing that has affected the sector.
“Despite these challenges, the company recorded a growth intake and market share to 43 500 tonnes and 32% respectively up from 34 500 tonnes and 24% last year. Production overheads, administrative and finance costs are on average, 50% lower than last year, which is a positive testament to the success of the company’s business rationalisation and cost cutting initiatives,” the company said.
Revenue was down 15% to $17,8 million compared to the same period last year due to a delayed sales off-take and reduction in international lint prices.
“Sales volume as at September are lower than those for last year. However, full year sales volumes are projected to exceed prior year due to higher intake volumes achieved,” the group said.
The company said despite the company paying 63 cents per kg in order to protect its market share, a 30% reduction in the loss from continuing operations was realised during the period under review compared to the same period in the prior year.
Group borrowings were 63% lower to $58,3 million compared to the same period last year and the borrowings included a long-term loan amounting to $4,3 million. During the period under review, capital expenditure continued to be restricted to essential items as the business continued to focus on debt reduction and preservation of cash flow.
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The company projects that demand for cotton will remain high although global lint production was expected to be in excess of demand and this may see a continuation of the depressed lint price scenario.
