MUMIAS Sugar yesterday warned that its profits for the year ending June 30, 2013 will be lower by more than 25 per cent of the last financial year after it posted a loss for the six months of 2012.
The giant sugar manufacturer reported a loss before tax of Sh1.6 billion for the six month ended December 31, 2012 down from a profit of Sh1.2 billion the other year. It recorded a net loss of Sh1.1 billion, down from a net profit of Sh825 million in 2011.
Revenues dipped to Sh5.4 billion, down from Sh6.9 billion with all the firm's costs going up. Marketing and distribution costs doubled while administration expenses, finance costs the cost of sales also shot up.
The miller said the first half of last year was challenging due to cane shortages arising from declining yields as a result of drought experienced in late 2011 and early 2012.
The listed firm also blames cane poaching by competitors for the declining fortunes."Consequently, our intergrated production plans of sugar, co-generation (energy), ethanol and water have operated below the installed capacity," the firm said in a cautionary statement to the Nairobi Securities Exchange.
Mumias however said the outlook for the second half of the year is positive with improved profitability expected."The company has completed its diversification initiatives whose benefits will be realized in the coming years," Mumias said.