Mumias Sugar has released its financial results for the six months ended December 2016 posting a 40 per cent decline in net revenue to Sh 1.53 Billion compared to Sh 2.98 Billion posted in the previous period in 2015.
The company went further ahead to issue a late Profit warning with Loss Before Tax widening further by 70 per cent to a record Sh 3.792 Billion vs Sh 2.23 Billion recorded during a similar period in 2015.
The Nairobi Securities Exchange listed company blamed the huge drop in earnings on shortage of raw materials (cane) and factory underutilization resulting into high unit costs of production.
Over this period, the company crushed 319,746 tons of cane, which is 45% lower compared to 581,541 tons crushed in the same period in 2015. Sugar produced was 12,197 tons, a decline of more than 67% compared to 36,510 tons produced in HY 2015.
Revenue from Ethanol increased 4% to Sh 453 Million vs Sh 435 Million in HY 2015. Over this accounting period, Ethanol prices increased from Sh91 to Sh 95 currently.
The board also noted that they are in talks with the government to get additional funding aka “Bailout”.