Incomplete audit to delay release of Mumias Sugar results

Mumias Sugar Company’s entrance. FILE PHOTO | NMG
Mumias Sugar Company’s entrance. FILE PHOTO | NMG 

Troubled miller Mumias Sugar Company #ticker:MSC will delay the release of its financials for the year ended June 2017 citing the need for extra time to complete an ongoing internal audit.

The NSE-listed firm said Tuesday that it has sought a month-long extension from the Capital Markets Authority (CMA) to allow it finalise aspects of the audit process with its lenders and the government before communicating the results to shareholders and the general public.

“Mumias Sugar Company announces that the publication and submission of the audited annual financial statements of accounts for the period ended 30 June 2017 will delay by one month to 30 November, 2017,” said Mumias board chairman Kennedy Mulwa in a statement.

“The board of directors has taken this step to ensure that upon release, the statements reflect a true and fair view of the financial state of affairs at the company,” he added.

The deadline for submission of results to Kenyan financial authorities is October 31.

Financial troubles

The cash-strapped miller, which at its peak controlled two thirds of Kenya's sugar market, has in recent years ran into financial headwinds after amassing debts, poor management and increased competition from cheaper imports.

The miller said early this year that it foresees its earnings will drop by more than 25 per cent for the year ending June 2017.

In the financial year ending June 30, 2016, it recorded a Sh4.73 billion net loss, higher than the Sh4.64 billion net loss posted a year before in the review period.

The company attributed the losses to an acute shortage of raw materials that it said led to factory underutilisation, resulting in high cost of production.

The government has in the last four years disbursed Sh3.1 billion towards revival of the company's operations.

However, the firm is still struggling to repay debts running into billions of shillings, derailing revival efforts.