Mumias sinks to Sh3.8bn six-month loss on cane poaching
Troubled sugar miller Mumias has posted a 70 percent increase in its half-year loss.
During the six-month period Mumias’ loss stood at Sh3.8 billion up from Sh2.2 billion.
The sugar miller attributed one of its worst results to continued sugarcane shortage on account of rampant poaching in the area as well as changes to sugar pricing.
“The Sugar industry continued to experience a shortage of sugar cane in the west Kenya sugar belt with negative consequences on the raw material requirements. Proliferation of mills without cane development programs continues to generate fierce competition for the available cane,” Mumias chairman Kennedy Mulwa said.
Mumias’ revenues dropped 49 percent to Sh1.5 billion as a result of the reduced cane crashing.
During the six-month period Mumias crushed 319,746 tons of sugarcane, which was 45 percent lower than the previous year.
In July last year, Mumias temporarily stopped operations due to a lack of the raw material and has been operating below capacity.
Mumias generated Sh453 million from the sale of ethanol.
The sugar miller is currently in talks with Kenya Power for a new power purchase agreement after the firm failed to produce any electricity.
“Due to low production and capacity utilization, exports to the national grid were not undertaken during the period hence no power export revenue was earned,” the chairman said.
The sugar miler has given a grim outlook for the rest of the year, issuing a profit warning for its full year results.
“The board of directors is taking measures to safeguard shareholder value in responding to challenges facing the company including cost management, accelerated cane development plans, restructuring of existing long term loans and collaborating with shareholders to add funds,” Dr Mulwa said.
Mumias assets currently match its liabilities at Sh26.7 billion.
The government has so far injected Sh2 billion into the miller but is yet to turnaround its fortunes.
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