A 74 percent increase in the price of sugar granted in May was only enough to minimise losses but the sugar division of ZSR still incurred a loss of $1.9 billion according to the company’s results for the six months to September.
The company says the price of sugar in Zimbabwe was the lowest in the world. As such this had worsened the smuggling of sugar to neighbouring countries and the escalating black market.
It, however, says the price had since been reviewed in line with current production costs. This has seen the product increasingly becoming available on the open market.
The panic buying, mostly by speculators, seems to be over.
The company still managed to make a hefty profit of $11.3 billion because of business realised from its other operations.
Turnover increased by 555 percent from $14.5 billion to $94.7 billion. The domestic sugar business only contributed $7.3 billion to the total turnover with the remaining $83.6 billion coming from other operations.
The company says it was badly affected by the shortage of coal. It, therefore, sold only 54 283 tonnes of sugar on the domestic market down from 106 029 tonnes during the same period last year.
It exported 14 325 tonnes, down from 16 437 tonnes the previous year.
Other businesses realised profit before interest of $16.9 billion up from just $1 billion the previous year. There was a strong performance from Blue Star, Red Star, Polyfilm, exports and Advance Wholesales which the company acquired recently and holds a 75 percent stake.
The Botswana operation contributed $536 million, nearly a 20-fold increase from $28 million the previous year.
Profit before tax was boosted by a $3.4 billion investment income which was realised from a short-term investment which has since been liquidated.
The company has also transferred its properties into a separate subsidiary.