Zimbabwe leading sugar producer, Star Africa Corporation has revealed that industry has adequate capacity to meet both national and export requirements while calling for the government to quickly resolve the recent market volatility that resulted in price hike.
According to the group chairman Joseph Mutizwa, the company is hopeful that market volatilities will be quickly solved to enable them to consolidate their domestic volume recovery.
“The company is hopeful that the recent market volatility that resulted in price hikes and limited inputs supply will be quickly resolved to enable the Group to focus on consolidating domestic volume recovery, improving plant efficiencies and expanding the export base. Product innovation will continue to be pursued aggressively at Country Choice Foods.
“The Sugar Industry’s capacity is more than adequate for both national and export requirements. Despite the austerity measures introduced in the 2019 National Budget, the outlook for the company is positive given the significant progress made to date on restructuring the balance sheet, rebuilding volumes and streamlining costs.
“The focus going forward is to further reduce the debt burden, improve plant availability and ramp up exports. The path to sustainable profitability needs to be further entrenched over the next twelve to eighteen months,” he said.
Meanwhile Group’s turnover for the half year ended 30 September 2018 grew by 21% to $27.9 million against $23.2 million recorded in the prior year comparative period while Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) grew by 13% to $2.1 million.
“EBITDA margin erosion was a result of steep and repeated price increases that were experienced in certain cost lines including packaging, repairs and maintenance, materials and process reagents.
“The Group achieved a Profit Before Tax of $0.5 million against a Loss Before Tax of $1.3 million incurred in the comparative period on the back of improved Turnover, overhead rationalization and reduction in the interest burden following conversion of debt to equity by most Secondary Scheme creditors,” added Mudzingwa.
