• Tue. Apr 23rd, 2024

Star Africa full year operating profit up 255%

ByEconomic Times

Sep 22, 2022

By ETimes

Star Africa posted on Thursday a rise of 255% in full-year operating profit, but the sugar manufacturer continues to make an effort to find the whereabouts of the few remaining local scheme creditors in order to pay the modest amounts that are still owed.

Debt Repayment under the Secondary Scheme of Arrangement has progressed well and ended on 3 February 2022. The gearing position is anticipated to be improved, and the company will be able to refocus funding on important plant maintenance and upgrading, ultimately leading to an increase in capacity utilisation.

“Out of the total liabilities that were originally under the Scheme, ZWL759,002 remains unpaid, as the business cannot locate the creditors. Efforts to trace their whereabouts continue,” said group chairman Rungamo Mbire in a statement accompanying the results.

“Following the Scheme’s expiration, creditors’ rights to potentially convert the debts into equity have ceased to be enforceable.”

Production, purification, marketing, and distribution of sugar products as well as the manufacture of specialty sugar products, food items, and snack items are the core business activities of Star Africa.

The group’s inflation adjusted turnover for the year ended 31 March 2022 rose 50% to ZWL13.16 billion from ZWL8.78 billion.

“The improved financial performance for the year allowed the company to substantially settle the legacy liabilities, which were significant in the prior year,” he said.

“The reduction in debt levels resulted in notable savings in interest costs and foreign exchange losses.”

The financing cost declined from ZWL104.28 million to ZWL1.45 million. It achieved an exchange gain of ZWL45.92 million in the current year, which was primarily due to bank and cash balances denominated in foreign currencies.

In operations, Goldstar Sugars recorded a 38% increase in production volumes, from 59,571 tonnes achieved in 2021 to 82,399 tonnes in the year under review. This was mainly because of the capital expenditures made and the strict equipment maintenance schedule. Granulated sugar continued to be in high demand, which led to a 37% increase in sales volumes.

At Country Choice Foods, a 29% increase in production of sugar specialties was recorded from the 1,488 tonnes recorded in 2021 to 1,920 tonnes achieved in the year under review.
Due to the higher occupancy levels, the property business unit saw a 55% rise in rental income from ZWL35.80 million in the prior year to ZWL55.43 million in the period under review.

Its associate, Tongaat Hulett Botswana, recorded a profit for the year of ZWL162.92 million, of which the company’ share was ZWL54.31 million after converting the earnings into ZWL at the auction rate.

In the outlook, the company said it will keep putting its emphasis on retooling the company with the goal of boosting productivity throughout its strategic business units.

It did not declare a dividend, citing the need to refurbish and replace critical items of plant and machinery – Harare

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