Starafrica minimises loss position to $1,3m

SUGAR producer, star africa corporation has minimised its loss position to $1,3 million for the half-year ended September 30, 2017 from $3,3 million in the comparable period last year on the back of a 63 percent rise in turnover.

The group, which owes creditors over $60 million, is under a High Court sanctioned scheme that has allowed it to continue operating after agreeing terms with its creditors on a way forward.

About half of the debt was purchased by the Zimbabwe Asset Management Company in a debt-equity swap deal.

Star africa corporation’ s revenue during the six months surged to $23,2 million from $14,3 million due to a rise in sales.

“The group’s sugar sales in terms of volumes increased by 70 percent from 17 740 tonnes in prior year comparative period to 30 238 tons in the half year under review,” said group chairman Joe Mutizwa.

The improved financial position also saw the group recording a positive Earnings Before Interest, Tax, Depreciation and Amortisation (EBIDTA) which closed the period at $1,9 million from a negative $0,3 million. Mutizwa said EBIDTA was however still low to cover the group’s finance costs which resulted in the loss position.

“The improving operational profitability is however dampened by finance costs which almost entirely relate to the legacy debt,” he said.

He said the company was in discussions with some of its debtors to turn their debt into equity.

“Conversion enhances the prospect of a full and quicker recovery of the company,” he said.

In the outlook, Mutizwa said the firm was now focusing on increasing exports into the region.

“To that extent, the company has already completed requisite export registrations with Comesa and Sadc and is on a marketing drive with a view of achieving firm sales before the end of the financial year,” he said, adding focus was also on introducing new products. — New Ziana.