STAR Africa says it remains confident of an improved performance in the current year on account of the upgraded plant at Gold Star Sugars Harare (GSSH) and the improved market conditions.
In a statement accompanying the results for the six months period to September 30 2015 Chairman Joe Mtizwa said the ongoing plant commissioning exercise has already resulted in the plant producing
good quality sugar that meets specifications of all customers.
Meanwhile, according to the interim results, the group’s going concern status remains threatened as the company continues to report significant losses.
For the period under review, the company`s reported loss widened to $5.3 mln compared to a loss of $3.7 mln same period last year. As at September 30, 2015, the company’s total liabilities exceed total assets by $36.5 mln compared to $31 mln in 2014 and current liabilities exceed current assets by $60.4 mln.
However, the company says it is implementing key deliverables as part of its turnaround plan, but continues to miss the set targets as it has not been able to meet all terms of the Scheme of Arrangement
entered into with its creditors and lenders in 2013.
Mtizwa, said efforts to dispose Blue Star Logistics and the company’s 33% shareholding in Tongaat Hullett Botswana to settle part payments to lenders and creditors remain futile.
Revenue for the six months improved 133% to $6.61 mln compared to $2.826 mln same period last year. Finance costs for the period also increased to $2.6 mln from $2.2 mln in prior year.
In terms of operations, GSSH produced 5 184 tonnes of refined sugar compared to 376 tonnes produced same period last year.
Mtizwa said sales were adversely impacted by low production volumes as the plant operated for only three months mainly due to low off take from the market.
“However, the implementation of the duty structure announced by the Minister of Finance on imported sugar has begun to see improvement in off take by industrial customers,” he said.
Mtizwa said GSSH plant now produces quality sugar and has entered a nationwide distribution arrangement with a major wholesaler for Gold Start refined sugar for direct consumption with a view to boost the volume of table sugar.
At Country Choice Foods, the unit realised an operating profit of $133 005 which is 46% higher on last year’s $289 726 same period comparable.
Blue Star Logistics business profitability was affected by low business volumes from GSSH and the impasse between government and platinum producers on tax related issues which resulted in Blue
Star not moving product for its two customers for two months.
“Although BlueStar Logistics is profitable, efforts continue unabated to dispose of it as part of efforts to raise funds for the settlement of debts under the Scheme of Arrangement,” he said. FinX
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