ZSE-listed-sugar processor, Star Africa Corporation managed to sustain profitability in the full year ended 31 March 2020 after posting a profit after tax of ZWL$ 55 million (inflation adjusted), a decrease from ZWL$ 68 million achieved last year.
The slump in profits was a result of foreign exchange losses on foreign borrowings and investment properties revaluations.
The Group’s property subsidiary, Silver Star Properties recorded a decrease in turnover from ZWL$5 million recorded in prior year to ZWL$ 4.4 million due to relatively lower rentals in a sector that has been adversely affected by the deteriorating economic conditions on the market.
“Profitable performance was impacted by a fair value adjustment on investment properties and net finance costs which resulted from foreign exchange losses on foreign borrowings. As a result, the Group realized a Profit after Tax of ZWL$ 55 million, compared with ZWL$ 68 million achieved last year,” the Group said in a statement accompanying its results released this afternoon.
Total turnover increased by 114% to ZWL$1 210 billion compared with ZWL$565 million realized in prior year while Earnings before Interest, Tax, Depreciation and Amortization (EBITDA) increased by 115% to ZWL$206 million relative to ZWL$96 million that was achieved last year as a result of cost management strategies.
At the Goldstar Sugars Harare unit, sugar production recorded 65 568 tonnes compared with 72 252 tonnes of refined sugar produced in prior year with sold units for the period reaching 63 993 tonnes against 71 683 tonnes sold last year signifying a 9.3% decrease in production.
“Decrease in production was attributable to prolonged power outages experienced in July and August 2019 and intermittent water supplies which adversely affected output at the sugar refining plant during the year under review. Power supply, however, improved significantly in the last quarter of the year,” the company said.
At Country Choice Foods (CCF), the Group’s unit for sugar cropping by-products such as icing sugar, caster sugar, old-fashioned brown sugar, volumes went down eight percent on the back of low disposable income.
At Tongaat Hulett Botswana (THB), the Group’s associate which has maintained dominance of the Botswana sugar market, profit after tax of ZWL$34.6 million was earned of which the Group’s share was ZWL$ 11.5 million after converting the earnings into Zimbabwean Dollars at the official exchange rate as at 31 March 2020.