After the business reported a profit for the year of ZW$ 1.45 billion in historical terms, sugar processor Star Africa Corporation says it will withhold dividend to its shareholders for the year ended March 2022 and save cash for an expensive plant and equipment maintenance program.
The group also suspended the interim dividend earlier citing the need to channel resources towards retooling.
In its FY-22 results statement, the company said it will continue with its focus on retooling the business, with a view towards increasing productivity across its strategic business units.
“Considering the Company’s focus on refurbishing and replacing critical items of plant and machinery, the Board has taken a decision not to declare a dividend for the year ended 31 March 2022,” the group said.
Furthermore, the group said the retooling program is aimed at a budgeted production and sales throughput of 100,000 tonnes for the 2023 financial year.
Revenue grew to ZW$ 10.18 billion from ZW$ 3.83 billion previous year mainly buoyed by the increase in sales volumes of granulated sugar which increased from the 60,388 tonnes sold in the prior year to 82,500 tonnes in the 2022 financial year
This increase was buoyed by a 38 percent increase in production volumes at the refinery from 59,571 tonnes recorded in 2021 to 82,399 tonnes in the year under review.
“The business remains in a sound financial position with sufficient liquidity to settle its obligations as they fall due. Due to an increase in productivity and sales volumes in the prior year and that which is anticipated for the future, the business will continue generating sufficient cash flows to meet its daily working capital needs and for capital expansion,” said Star Africa Corp.
The improved financial performance for the year allowed the Company to substantially settle the legacy liabilities, which were significant in the prior year. The reduction in debt levels resulted in notable savings in interest costs and foreign exchange losses.