Starafrica revenue jumps 30pc on increased prices

Starafricacorporation says group revenue registered a 30 percent jump to $50,1 billion in the full year to March 31, 2023, largely driven by price adjustments, as volumes were little changed during the period under review.

The company is an established sugar refinery in Zimbabwe, manufacturing and marketing sugar-based products under two well-known brand names, Goldstar Sugar and Country Choice Foods.

The group’s subsidiary companies are Starafrica Operations (Private) Limited and Silver Star Properties (Private) Limited, which is a property division involved in managing commercial, manufacturing, and residential premises in Zimbabwe.

Dr Rungano Mbire, the group’s chairman, said in a statement of the financials that turnover grew 30 percent to $50,1 billion from $38,5 billion in the prior year while the group’s operating profit shrank by 93 percent, from $5 billion in the prior year to $0,4 billion.

“The lower operating profit was a direct result of increases in raw sugar prices and operating costs in real terms. Increasing global inflationary pressures have resulted in a spike in the costs of imported chemicals, packaging, and refinery spares,” he said.

In historical terms, revenue increased by 317 percent, from $10,2 billion recorded in the prior year to $42,5 billion, while operating profit increased by 26 percent to $2,2 billion from $1,7 billion.

During the year under review, sales of granulated sugar produced at Goldstar Sugars (GSS) were stagnant, from 82,500 metric tonnes sold in the prior year to 82,321 metric tonnes during the year under review.

Dr Mbire said this was on the back of pressure from imports after the promulgation of Statutory Instrument 98 of 2022.

The Ministry of Finance and Economic Development later suspended duty on the importation of sugar into the country.

“However, production was adversely affected by raw sugar stockouts and power outages. This resulted in production volumes reducing by 6 percent, from 82,399 metric tons in the prior year to 77,270 metric tons during the year under review,” he said.

He noted the unit continues to focus on the refurbishment and replacement of critical plant and machinery items to improve plant availability and, therefore, the refinery’s throughput in terms of both quantity and quality of granulated white sugar.

In addition, the plant continued to be certified by The Coca-Cola Company (TCCC) and maintained its Food Safety Certification under the FSSC 22000 series.

“These certifications enable the group to supply sugar to TCCC franchisees in the Southern African region and beyond,” said Dr Mbire.

At Country Choice Foods (CCF’s), the group said products continued to dominate the market on the back of competitive pricing.

Dr Mbire said this has positioned the unit’s products among the most affordable in the market; consequently, sales volumes increased by 9 percent, from the prior year’s 1,879 metric tons to 2,048 metric tons.

“The growth in sales volumes was supported by an improvement in the production of sugar specialties, from 1,920 metric tons last year to 2,140 metric tons in the year under review,” he said.

Dr Mbire said the procurement and commissioning of automatic syrup filling and icing packing machines have been crucial in terms of boosting production at the unit.

During the twelve months under review, the unit launched new products into the market, namely drinking chocolate, powdered mahewu, baking powder, cocoa powder, and baking raisins. The group’s property business revenue performance improved significantly, with $337,5 million of rental income recorded, compared with $162,2 million in the prior year.

Dr Mbire said the unit has recovered significantly from the prior year, which was negatively impacted by the Covid-19 pandemic that reduced tenants’ ability to generate income and meet their rental obligations.

“Following the waning of the pandemic, occupancy rates and, consequently, rental collections have increased across the property portfolio,” he said.

Associate company Tongaat Hulett Botswana’s profit for the period under review was $958,1 million, with the company’s share being $319,4 million after converting the earnings into Zimbabwean dollars at the Reserve Bank of Zimbabwe auction exchange rate as of March 31, 2023.-herald