Sugar miller Mumias’ #ticker:MSC net loss in the six months ended last December narrowed by more than a third largely on reduced operating costs, the struggling sugar company reported on Friday.
After-tax loss dropped 33.22 per cent to Sh1.95 billion compared to a similar period in 2016 after expenses dipped by Sh890 million to Sh1.45 billion, the company said in a statement.
Mumias shut operations in the three months through September after it ran out of cane, providing an opportunity for out of crop (OOC) plant maintenance.
“The main impact of this stoppage flows into the reported financials as seen by the reduced cane crushed and associated production volumes compared to a similar period last year when there was no OOC stoppage,” chairman Kennedy Mulwa said in the statement.
Some 190,291 tonnes of cane were crushed in the October-December period when the company’s mills were running, compared to 319,746 tonnes in the June-December period in 2016.
Lower sales — as a result of a shorter production period amid reduced sugar prices due to sugar import subsidies — cut the firm’s revenue by more than half to Sh680.51 million compared with Sh1.52 billion in the same period in 2016.
The cost of sales consequently dropped 40.37 per cent to Sh1.77 billion in the review period, the country’s sole listed sugar miller said.
“In total volume terms, though sugar made dropped to 9,882 tonnes compared to 12,197 made in the same period last year (2016) due to the impact of the shortened production time, the average monthly production improved by 62 per cent due to a 36.5 per cent improvement in sugar recovery,” Dr Mulwa said.
“This improvement was a result of higher and more consistent factory throughput due to better cane supplies supported by prompt farmer payment, better cane harvesting and transport logistics.”
Volumes of ethanol produced fell by 59.54 per cent to 1,999,126 litres from 4,941,091 litres a year earlier.