Industry

Mumias Sugar warns of wider annual loss

mumias

Mumias Sugar’s shares closed at Sh2.30 on Tuesday, after hitting a year low of 2 shillings on August 20th. PHOTO | FILE | NATION MEDIA GROUP

Mumias Sugar warned on Wednesday that projected losses for the year to June 2014 would be bigger than the previous year's pre-tax loss of 2.24 billion shillings ($25.3 million).

"The company wishes to report that the projected loss for the year ended June 30, 2014, will be more than 25 per cent compared to the loss reported for the same period in 2013," it said in a profit warning.

It blamed "a significant drop" in sugar prices due to illegal sugar imports and a shortage of cane due to a poor harvest. The company also said it was restructuring management to address the challenges.

Mumias said in June it had dismissed two top managers who were suspended in April while the company investigated what it had said at the time was "questionable sugar sale and importation transactions".

READ: Mumias Sugar to retrench 300 in turnaround drive

Kenya has used high tariffs to protect its sugar farmers but the policy has encouraged smuggling of cheaper sugar imports.

The firm's shares closed at Sh2.30 on Tuesday, after hitting a year low of Sh2 on August 20th. The year high was Sh4.20, which it reached in March.

READ: Mumias Sugar share drops to all-time low of Sh2.30