ZSR makes $4b. profit despite loss from sugar operation

Although its domestic sugar business made a staggering loss of $826.4 million, ZSR Corporation, still managed to make a net profit of $4.1 billion, nearly ten times the profit of $437.7 million it made last year.

According to its results for the year ending March, ZSR saw its turnover increase almost three-fold from $16.6 billion to $48.5 billion with the bulk of the sales coming from its other group businesses.

These businesses, which include Red Star Wholesalers, Bluestar Transport and Polyfilm contributed $38 billion while the sugar business only contributed $9.4 billion.

Last year the sugar business contributed $6.6 billion while the other businesses brought in $9.7 billion.

The Botswana associate company contributed $1 billion this year compared with $371.3 million last year.

The company says it made a loss of $826.4 million on the sugar business this year compared with a loss of $124 million last year largely because of price controls.

These have since been lifted but the company is likely to face other problems such as reliability of the supply of electricity and coal, as well as the movement of raw sugar to the refineries.

The railway system, it says, is slowly grinding to a halt. Last year it sold 184 401 tonnes of sugar on the domestic market, down from 219 974 tonnes the previous year. It says the decline was largely due to frequent production stoppages at the Harare refinery.

Exports fell by 11 percent to 29 813 tonnes. Other businesses posted a profit before interest of $6.8 billion with the bulk of the profits coming from Red Star Wholesalers whose results included seven months of trading from Bhadella Wholesalers which was acquired by the group in September last year.

Kabwe Industrial Fabrics performed poorly and the company is planning to dispose of the operation.

The Botswana associate made a net profit of $125.6 million, up from $63 million.

The company says it is engaged in a strategic expansion programme which saw it acquire the majority take in Advance Wholesalers in exchange for 62.5 million shares.

(48 VIEWS)