BY FREEMAN MAKOPA
ONE of Zimbabwe’s biggest sugar producers has shelved exports in response to steep local demand in the past few months, which has outstripped supply.
The Zimbabwe Stock Exchange-listed starafricacorporation said refined white sugar had been attracting fresh consumer interest on the domestic market, and its flagship operation, Goldstar Sugars Harare (GSSH) saw volumes spike by 46% during the half year ended September 30, 2021.
“As a result of the comprehensive capital investment and equipment maintenance plan, GSSH Harare sold 38 294 tonnes against 26 959 tonnes sold in the prior year comparative period,” the firm said in a commentary to financial statements for the review period.
“The 46% improvement in sales was possible due to the demand for white refined sugar on the market which remains high. However, unlike in the prior comparative period, no export sales were recorded in the period under review as all production was absorbed in the domestic market, with demand still highly outstripping supply,” said starafrica.
starafrica’s revenues increased by 38% to $3,92 billion during the review period, compared to $2,84 billion reported during the same period the previous year.
The firm said improved volumes were underpinned by significant recovery from depressed demand in the past year, when a string of hard lockdowns were rolled out to contain the spread of the COVID–19 virus.
The sugar giant recovered to a $116,7 million profit after tax, after suffering a $81,4 million loss during the same period previously.
The results demonstrated the effectiveness of a scheme of arrangement currently underway at starafrica.
The scheme came into force after the Zimbabwe’s Stock Exchange-listed operation hit hard times in the aftermath of the 2008 hyperinflationary scourge, with inefficiencies from its decades-old plants amplifying the turmoil.
Last week, starafrica said 99,9% of creditors had been paid off under the arrangement.
“A notable increase in turnover was noted in the period under review from $2,84 billion to $ 3,92 billion, translating to a 38% increase. The escalation was largely buoyed by the enhanced throughput at Goldstar Sugars and the strength of the demand for all the group’s products which remained high during the period under review.
“The improved turnover is also a recovery from the depressed performance which had been caused by a three-week shutdown in operations between July and August 2020 because of a COVID-19 incident that had occurred at the Harare Refinery,” starafrica said.
The group’s earnings before interest, tax, depreciation and amortisation rose 20% to $579, 68 million compared to $482,10 million recorded in the prior year comparable period. The improved performance was largely due to capital investment and equipment maintenance plan.
At Country Choice Foods, one of the firm’s key units, products continued to dominate the market, with sales volumes increasing by 27% from the prior year comparable period.
Associate company, Tongaat Hulett Botswana recorded a profit after tax of $ 91,1 million.
Starafrica earned $30,4 million after converting earnings into local currency.
The properties business recorded a slight increase in revenue amounting to $12,57 million compared to $12,41 million in the prior year comparable period.