NAIROBI, Kenya Jan 31 – Mumias Sugar Company has reported a 21.2 percent decline in the half year ended 31 December 2010, with after tax profit standing at Sh816.3 million.
The company had recorded Sh1.036 billion during the similar period in 2009.
In a statement, the company attributes the drop in profitability to heavy rainfall experienced during the period from August to December, which hampered sugar cane delivery leading to depressed production.
"The results for the six months ended 31 December 2010 were below expectation. The company recorded a 22 percent decrease in earnings over the same period last year," the company board said in a statement to the Nairobi Stock Exchange.
During the first six months, revenue dropped to Sh7.32 billion from Sh7.68 billion and the directors did not declare an interim dividend. Earnings per share dropped to Sh0.54 from Sh0.68.
Production of crushed sugarcane fell four percent to 1.09 million metric tonnes while sugar produced declined 7 percent to 113,521 tonnes.
The Sugar Company sold 108,110 tonnes of sugar, seven percent less of the 117,081 tonnes sold a year earlier.
The company has however put in place a number of revenue diversification schemes, which have given it confidence of improved performance in the second half of the year.
Mumias has started the construction of an ethanol distillery, with a capacity to produce 22 million litters of ethanol annually. The plant is expected to be commissioned in the first quarter of 2012.
The company is also constructing a water bottling company due to be commissioned by September 2011.
"The board of Directors is cautiously optimistic that the second half will be significantly better than the first half and that the full year results will be better than those achieved in the last financial year," company secretary Emily Otieno said.
The company expects global sugar prices, currently in the region of $760 per tonne (Sh61,750) to be sustained for the rest of the financial year.
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