Mumias half year sales drop to Sh25m on sugar line shutdown

Mumias Sugar Company’s #ticker:MSC sales revenue in the six months to December dropped by a whopping 96 percent to Sh25 million from Sh680 million the previous year.

The miller attributes the decline to lack of products for sale during the period following stoppage of its production line between July and December.

Despite this the miller’s net loss for the period stood at Sh1.53 billion, narrowing by 21 percent from Sh1.95 billion reported in the previous year, attributed to reduced costs.

The company’s earnings were hit hard during the review period on account that sugar, which provides over 80 percent of its earnings, was not available for sale due to scarcity of cane that saw the firm halt its operations.

The company also did not export power to the national grid, hence missing out on earnings from the additional revenue stream.

The troubled listed miller had resumed electricity sale to Kenya Power #ticker:KPLC after renegotiated a new power purchasing agreement.

Mumias Sugar, according to its report, survived on the sale of ethanol stocks that were carried over from the previous financial year. The company also made some earnings from rentals and disposals where it made Sh4.3 billion.

With the shortage of cane, Mumias is now banking on ethanol to survive in the wake of a serious financial woes.

“Board and management are optimistic that there will be improved performance in the second half of the year through the production of extra neutral alcohol…,” the firm says.

Mumias Sugar sunk into insolvency to the tune of Sh6 billion after making further losses that saw its total liabilities surpass the total assets in the year ending June 2018.