Mumias sugar cuts loss to Sh73 million
What you need to know:
- Mumias Sugar Company has recorded a Sh73.4 million loss in the six months to December 2013.
- An increase in cane crushed ensured the miller registered a significant growth in earnings from ethanol distillery to Sh488 million down from Sh50 million last year.
Mumias Sugar Company has recorded a Sh73.4 million loss in the six months to December 2013. The miller, however, reduced the loss recorded over the same period in 2012, 14 times.
Over the same duration, the firm made Sh1.1 billion loss, with the reversal of the trend indicating that the turnaround strategy is paying off.
The listed miller now says its plan will put it back to profitability in its full year results as improved factory efficiency and diversification strategies begin yielding fruit.
“We have adhered to all the required diversification measures and thus ready for take-off. We are not going to engage in more capital investments,” the company chief executive officer, Mr Peter Kebati, said during a media briefing.
Total net revenue grew by 31 per cent to Sh7.1 billion up from Sh5.4 billion over a similar period last year despite a 3 per cent decline in sugar prices.
UNFAIR TRADE PRACTICES
Mr Kebati attributed the fall in sugar costs to lower global prices and unfair trade practices, but said a 21 per cent rise in sugar production cushioned the company from potential revenue loss.
An increase in cane crushed ensured the miller registered a significant growth in earnings from ethanol distillery to Sh488 million down from Sh50 million last year.
“Overall reduction in cost by 29 per cent is a result of management’s deliberate focus to control cost for efficiency and sustainability,” Mr Kebati said.
Although the miller still faced competition for raw materials, an improvement in factory efficiency resulted in an increase in quantity of sugar extracted.
