Zimbabwe leading sugar producer, Star Africa Corporation achieved a 63% increase in turnover after recording $23.2 million in its half year results ending 30 September 2017 on the back of continued optimisation of post upgrade efficiencies, improvements in quality and quantity, cost containment strategies and positive effects of working capital accessed as part of the Secondary Scheme.
Group chairman, Joe Mutizwa said Star Africa Corporation achieved a 63% increase in turnover which totaled $ 23.2 million compared with $ 14.3 million recorded in prior year with Earnings Before Interest, Tax, Depreciation and Amortization also increasing to $1.9 million from $0.3 million in the prior year.
“The Earnings Before Interest, Tax, Depreciation and Amortization (EBITDA) amounted to $1.9 million, which is not only better than a negative of $0.3 million in prior year but is even higher than the full year EBITDA of $1.6 million achieved last year,” said Mutizwa.
He added that the improving operational profitability was dampened by finance costs related to the legacy debt.
“The interest for the half year totaled $3.1 million and was thus greater than the EBITDA thereby sliding the company into a Loss before tax of $1.3 million against a comparative Loss before tax of $3.3 million for the same period last year.
“The EBITDA was affected by the squeeze on margins from decreasing selling prices which resulted in the earnings not being sufficient to fully cover the finance charges. Efforts to mitigate this situation are more fully described under the Scheme of Arrangement commentary,” further noted Mutizwa.
He added that their associate company in Botswana also performed well and achieved a positive profit, “Tongaat Hulett Botswana the associate company in Botswana performed well and achieved a profit of $ 1.14 million from which the company’s share was $0.4 million.”
Properties Business recorded a turnover of $272 000 against $270 000 achieved in last year’s comparative period.
“It achieved an EBITDA of $105 000 which is lower than $174 000 achieved in prior year. The drop in EBITDA is due to operational and repair costs related to change of tenants and valuation costs incurred in the period under review,” added Mutizwa.