Star Africa registers a 35% revenue growth on ZSE
By Allan Mbotshwa
Sugar production entity, Star Africa Corporation A 35% increase in turnover was recorded in the period under review, from ZWL73.52 billion to ZWL99.41 billion.
However, the Group’s operating profit receded by 723%, from ZWL4.73 billion in the prior year comparative period to negative ZW29.45 billion for the six months ended 30 September 2023.
The lower operating profit was a direct result of reduced sales volumes and increases in operating costs in real terms.
Goldstar Sugars (GSS) experienced a 41% decrease in sales volumes of granulated sugar compared to the same period in the previous year.
The decline was mainly due to depressed demand caused by the influx of cheaper sugar imports, after the suspension of duty on basic commodities.
Additionally, the refinery was closed for three months from July to September 2023 owing to relative upward price adjustments by the sole local supplier, which made the business’ products uncompetitive relative to imports.
Country Choice Foods (CCF) also experienced a decline in sales volumes of sugar specialties during the same period.
Sales volumes dropped by 46% due to the erratic supply of raw materials from GSS.
The Company is working on increasing its production capacity and satisfying local demand for its granulated sugar and specialties.
In the Properties Business revenue performance improved significantly with ZWL650.49 million of rental income being recorded, compared with ZWL352.42 million in the prior comparative period.
Tongaat Hulett Botswana recorded a profit for the period under review of ZWL2.65 billion, of which the Company’s share was ZWL882.52 million after converting the earnings into Zimbabwe Dollars at the Reserve Bank of Zimbabwe Auction exchange rate as of 30 September 2023.
Considering the Company’s focus on ensuring that adequate working capital is maintained, the Board has taken a decision not to declare a dividend for the six months ended 30 September 2023.
Despite the challenges faced in the six months ended 30 September 2023, the company has strategically implemented measures aimed at ensuring a return to profitability and positive cash flow generation.
Management has assessed the Group’s going concern position by considering the current trading activities, financial position, and projected requirements.
The industry has sufficient production capacity and capability to avail good quality sugar in sufficient quantities to meet the country’s requirements.