KENYA – Mumias Sugar reported a bigger first-half loss from a year ago, citing lower prices as well as a prolonged shutdown, but forecast an improved second half.
The cash-strapped miller, which received a bailout from the government at the end of January, said its loss widened to Sh2.08 billion ($22.8 million) from a restated loss of Sh407.4 million a year earlier.
The firm, whose sugar output accounts for about a third of Kenya’s annual production, said net revenues for the period to end-December fell 62 per cent to Sh2.67 billion.
Mumias said the loss was largely due to an unscheduled maintenance of its factory in October, November and December due to cane shortage.
“The revenues were impacted by the production time lost during the two and a half months maintenance shutdown as well as cane shortage and a lower average net cane price per tonne of sugar realised during the first quarter,” Mumias said in a statement.
“Despite the challenges… the company looks forward to better performance in the second half of the year following successful resumption of production.”
Low sugar production, high production costs and low prices resulting from illegal sugar imports further compounded the company’s half year, the firm said.
Mumias reported a loss per share of 95 cents compared with 19 cents in the first half of 2013.
The firm said it was re-negotiating its payment schedules with creditors as part of its medium term to long terms plan.
The government said as part of the bailout, it would seek to change the company’s management and prosecute any managers who may have led to the company’s near-collapse.