BY MISHMA CHAKANYUKA
Manufacturing concern, starafrica Corporation posted a profit after tax of ZWL$8,8 million in the year ended March 31, 2019 from a loss after tax of ZWL$3,8 million recorded in 2018 due to an increase in volumes and cost management strategies.
In a statement accompanying the group’s financial results, chairman Joe Mutizwa said this was the first time the company had recorded an after-tax profit since the adoption of the multi-currency system in 2009.
Revenue increased from ZWL$48,1 million recorded in 2018 to ZWL$72,7 million in 2019.
Earnings before interest, tax, depreciation and amortisation (EBITDA) increased from ZWL$3,1 million in 2018 to ZWL$12,4 million in 2019.
Mutizwa said the state of the balance sheet was now positive following the conversion of a cumulative ZWL$48,1 million worth of debt to equity as provided for under a second scheme of arrangement with creditors which came into effect on February 3, 2017.
The scheme of arrangement, expiring in 2022, remains in place with 72% of creditors having exercised their conversion option.
Total liabilities more than doubled from ZWL$41,7 million in the previous year to ZWL$91,8 million.
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The group operates four business units; Goldstar Sugars Harare (GSSH), Country Choice Foods (CCF), Tongaat Hulett Botswana and a property business.
GSSH recorded a 14% increase in production and sales volume despite facing challenges procuring imported raw materials.
“GSSH produced 72 252 tonnes of refined sugar compared to 63 182 tonnes produced in prior year and sold 71 683 tonnes against 62 889 tonnes sold in the comparative period. The plant was recertified by The Coca-Cola Company as well as Food Safety certification under the FSSC 22000 series,” Mutizwa said.
CCF achieved an increase in EBITDA from ZWL$0,5 million last year to ZWL$3,5 million in the period under review driven by an increase in sales volumes and a change in product mix.
The group’s Tongaat Hulett Botswana operations recorded after tax profit of ZWL$3,9 million. The property business recorded an increase in EBITDA from ZWL$0,1 million in prior year to ZWL$1,1 million in 2019 due to better rental yields complemented by marginal increases in occupancies in the year.
“We are pleased with the healthy demand for our products and are confident that the existing production capacity which is being gradually buttressed through phased refurbishments will be able to meet forecast local and export demand,” he said.
“Export prospects that arose from business scouting that took place in the year in the region and in Central Africa will be followed through and the group is confident of at least doubling export tonnage achieved in the year.”
