Kenya’s Mumias Sugar H1 loss widens, sees better second half

by Reuters 0

Mumias Sugar reported a bigger first-half loss from a year ago, which it blamed on lower sugar prices as well as a prolonged shutdown.

However, it did forecast an improved second half.

Cash-strapped Mumias, which received a cash bailout from the government at the end of January, said its loss widened to 2.08 billion shillings from a restated loss of 407.4 million shilling loss a year earlier.

(READ MORE: Kenya offers $5 mln bailout to rescue troubled Mumias sugar firm)

The firm, whose sugar output accounts for about a third of Kenya’s annual sugar output, said net revenues for the period to end-December fell 62 per cent to 2.67 billion shillings.

Mumias said the loss was largely due to an unscheduled and out of crop maintenance of its factory located in western Kenya 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.

“Despite the challenges … the company looks forward to better performance in the second half of the year following successful resumption of production,” it said in a statement.

Low sugar production, high production costs and low prices resulting from illegal sugar imports further compounded the company’s half year, the firm said.

(WATCH VIDEO: Kenya’s Mumias Sugar reports H1 loss)

Mumias reported a loss per share of -0.95 shillings compared with -0.19 shillings in the first half of 2013.

Mumias said as part of its medium term to long terms plan, it was re-negotiating its payment schedules with creditors.

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.