Diversified conglomerate, starafricacorporation Limited narrowed its loss to $3,3 million for the six months ended September 30 due to an improvement in production and efficiencies as well as disposal of a loss making unit.
BY VICTORIA MTOMBA
In the same period last year, the conglomerate posted a loss of $5,3m.
In a statement accompanying the group’s results, the company’s chairman, Joe Mutizwa said during the six months under review, significant improvement in production, efficiencies and sales resulted in the operating loss decreasing by 84% over the prior period in September 2015.
“The reduction in losses was due to improved production at Gold Star Sugars Harare (GSSH), improved profits at Country Choice Foods and the disposal of Bluestar logistics, which was making losses,” he said.
“Finance costs for the period under review were $2,9m compared with $2,6m in the comparative period due to the effect of compound interest on debt, which remained unpaid over the period.”
During the period under review, the group achieved a turnover of $14,3m compared to $6,6m same period last year.
GSSH produced 17 756 tonnes of refined sugar, compared to 5 184 tonnes produced in the comparative period. Production increased to 5 085 tonnes in September 2016, from 1 120 tonnes in April 2016.
Mutizwa said the company was now working on improving sales volumes of table sugar through nationwide distribution of the product.
Country Food Choice realised a profit of $214 910 for the six months under review, which is 62% above the $133 005 achieved in the comparative period.
The group forecast that improvements in production and sales will continue in the second half of the financial year.
“The company will procure a water treatment plant so as to secure water supply to the plant at GSSH,” Mutizwa said.
“The secondary scheme of arrangement will provide much needed breathing space the company’s cash flows, while the refurbishment of the un-upgraded section of the plant at GSSH and its commissioning will set the stage for profitable performance in the financial year ending March 2018.”
The company was put on a secondary scheme of arrangement last month, that provides a six months moratorium on the payment of interest and restructures the settlement of debts for periods of up to eight years, Mutizwa said.