Par Value: 2/-
Closing Price: 0.27
Total Shares Issued: 1530000000.00
Market Capitalization: 413,100,000
EPS: -9.9
PE: -0.027
HY Net revenue 25.922m vs. 680.514m -96.191%
HY Cost of sales [948.169m] vs. [1.770007b] -46.431%
HY Gross loss [922.247m] vs. [1.089493b] -15.351%
HY Fair value gain/ [Loss] on biological assets 0.030m vs. 5.065m -99.408%
HY Other operating income 4.300m vs. 2.967m +44.928%
HY Marketing and distribution costs [19.196m] vs. [45.347m] -57.669%
HY Administrative Expenses [240.034m] vs. [630.820m] -61.949%
HY Finance income [3.371m] vs. 2.732m -223.389%
HY Finance costs [812.348m] vs. [781.157m] -3.993%
HY Loss before taxation [1.992866b] vs. [2.536053b] +21.419%
HY Loss after taxation [1.534507b] vs. [1.952761b] +21.419%
Basic and diluted EPS [1.00] vs. [1.28] +21.875%
Cash and cash equivalents as at 31st December [3.347890b] vs. [2.637417b] -26.938%
RESULTS OVERVIEW
During the six months period from July 2018 to December 2018, the company recorded sales revenue of Kshs 25.9 million compared to Kshs 680.5 million in the six months ended 31st December 2017. The 96% drop was occasioned by lack of product for sale following the stoppage of the production lines during the period under review. 245,798 litres of Extra Neutral Alcohol (ENA) and 138,000 litres of Technical Alcohol (TA) carried over from previous financial year were sold at an average price of 96 and 20 per litre respectively. There were no sales of sugar and export of power. The company received Kshs 4.3 million from rentals and disposals. Cost of sales reduced by 46. to Kshs 948 million down from 1.7 billion as a result of the production stoppage. Prudent cost management and reduced production activity yielded significant drops in administrative costs and marketing cos. of 62. and 58% respectively compared to previous period. Finance costs increased by 4. to Kshs 812 million compared to Kshs 781 million as a result of loan default penalties, interest and forex exchange losses realized in the period. The loss after tax improved by 21% to Kshs 1.53 billion compared to Kshs 1.95 billion reported during the previous year.
FUTURE OUTLOOK
Board and Management are optimistic that there will be improved performance in the second half of the year through the production of Extra Neutral Alcohol and intensified cost cutting measures on controllable costs such as employment related expenditure, fuel, factory spares and capital expenditure. The distillery has been successfully positioned to operate as a distinct plant independent of the Sugar and Cogen plant Maintenance of the sugar plant is ongoing.
The Board and Management are engaging the key stakeholders for the turnaround of the company including consideration for a strategic investor. Discussions with the lenders to restructure the debts and extend the standstill arrangements are ongoing.
The recent payment of farmers arrears by the Government of Kenya is expected to motivate the farmers to embark on sugar cane growing. Farmer engagement through extensions and mobilization within the cane zone is ongoing. The Board and Management have embarked on Nucleus estate rehabilitation and are confident that sugar production will commence as more sugar cane is availed for milling.
DIVIDENDS
The Board of Directors does not recommend payment of an interim dividend for the first half of the year.
Mumias Sugar Company Limted FY 2018 results through 30th June 2018 vs. 30th June 2017
FY Revenue 1.379223b vs. 2.091751b -34.064%
FY Cost of sales [3.893965b] vs. [5.279897b] -26.249%
FY Gross loss [2.514742b] vs. [3.188146b] -21.122%
FY Fair value gain on biological assets 17.967m vs. 97.137m -81.503%
FY Administrative expenses [1.923628b] vs. [2.329932b] -17.438%
FY Impairment of assets [4.923776b] vs. [2.572703b] +91.385%
FY Finance costs [679.541m] vs. [1.500153b] -54.702%
FY Loss before tax expense [10.111962b] vs. [9.531178b] -6.094%
FY Tax [Expense]/ income [5.029291b] vs. 2.757244b -282.403%
FY Loss for the year attributable to the owners of the company [15.141253b] vs. [6.773934b] -123.522%
Loss per share [9.90] vs. [4.43] -123.476%
Total Equity [14.385103b] vs. 756.580m -2,001.333%
Cash and cash equivalents at end of year [2.762408b] vs. [2.700735b] -2.284%
RESULTS OVERVIEW
During the year, the Company suffered a net loss after tax of Kshs 15.1 billion against the previous years loss of Kshs 6.8 billion. The steep rise in loss was mainly driven by a 101% increase in impairment charges to our plant and machinery of Kshs 4.9 billion from Kshs 2.6 billion charged last year, the de recognition of deferred tax assets, leading to a tax expense of Kshs 5 billion from a tax income position of Kshs. 2.7 billion realized last year and low production following plant shut downs in the 1st and 4th quarters of the financial year.
The acute cane shortage significantly hindered the plant throughputs with cane delivered dropping by 32% to 283,435 tons compared to 417,347 tons last financial year.
Sugar produced was 14,622 tons, a drop of 8% against 15,891 tons achieved last year. The distillery yielded 3.2 million litres of ENA compared to 6.9 million last year, while the Cogen plant exported 3,581 MW to the national grid.
Turnover for the year reduced to Kshs. 1.37 billion as compared to previous year Kshs. 2.09 billion mainly because of the reduced sales volumes across the companys products following the long closure of the factory.
Focus oil prudent cost management saw the administrative costs reduce by 17% from Kshs 2.3 billion to Kshs 1.9 billion in the year
FUTURE OUTLOOK
Our key stakeholders have continued supporting the companys turnaround initiatives. The Government of Kenya has settled over Kshs 0.7 billion owed to Mumias Sugar farmers. This is expected to have a positive impact on future cane availability. In addition, the ongoing Government of Kenyas concerted efforts to crackdown on illegally imported sugar and ethanol and the push to resume cane zoning are all very encouraging initiatives that will greatly support, MSCs turnaround strategy and help revive the ailing sugar sector
Discussions with the lenders to restructure the debts and extend the stand still arrangements are ongoing to obtain much needed financial relief. The Board is seeking to enlist the support of the lenders to identity a suitable and competent strategic partner to enhance the financial capabilities to enable full business recovery.
The Board approved the implementation of a five year strategic plan 2018/2022 focussed on increasing plant productivity, staff rightsizing, leasing of non core assets and enhancing cane supply. These coupled with improved power export returns and the independent operation of the distillery should see the companys fortunes improve in the coming years.
The Board of Directors view the Companys outlook as positive and that the on going initiatives will stabilize and revitalize the Company.
DIVIDEND
The directors do not recommend payment of a dividend.
BY ORDER OF THE BOARD
DR. KENNEDY NGUMBAU, HSC
CHAIRMAN
Conclusions
Please make your own.
HY Net revenue 680.514m vs. 1.529136b -55.497%
HY Cost of sales [1.770007m] vs. [2.968290b] -40.369%
HY Gross loss [1.089493b] vs. [1.439154b] -24.296%
HY Fair value gain/ [Loss] on biological assets 5.065m vs. [39.717m] +112.753%
HY Other operating income 2.967m vs. 33.035m -91.019%
HY Marketing and distribution costs [45.347m] vs. [41.107m] +10.315%
HY Administrative Expenses [630.820m] vs. [1.490550b] -57.679%
HY Finance income 2.732m vs. 6.170m -55.721%
HY Finance costs [781.157m] vs. [821.076m] -4.862%
HY Loss before taxation [2.536053b] vs. [3.792399b] +33.128%
HY Loss after taxation [1.952761b] vs. [2.920147b] +33.128%
Basic and diluted EPS [1.28] vs. [1.91] +32.984%
Cash and cash equivalents as at 31st December [2.637417b] vs. [2.498545b] -5.558%
Company Commentary
Lower revenues as a result of the combined impact of reduced sugar net prices and lower sales volumes due to the shortened production time
Operating costs dropped by 38%
Conclusions
Improved year on year but still loss making.
I cannot see the Path back to Profitability.
Mumias Sugar Company Limted FY 2017 Results through 30th June 2017 vs. 30th June 2016
FY Revenue 2.091751b vs. 6.285917b -66.723%
FY Cost of sales [5.279897b] vs. [8.048406b] -34.398%
FY Gross loss [3.188146b] vs. [1.762489b] -80.889%
FY Fair value gain on biological assets 97.137m vs. 133.803m -27.403%
FY Administrative expenses [2.329932b] vs. [2.176058b] -7.071%
FY Impairment of assets [2.572703b] vs. [1.388856b] -85.239%
FY Finance costs [1.500153b] vs. [874.382m] -71.567%
FY Loss before tax expense [9.531178b] vs. [6.070519b] -57.008%
FY Loss for the year attributable to the owners of the company [6.773934b] vs [4.756591b] -42.412%
Basic and diluted loss per share [4.43] vs. [3.11] -42.444%
Total equity 756.580m vs. 7.559964b -89.992%
No dividend
Company Commentary
During the Year Company suffered a net loss after Tax of 6.8b versus 4.8b
Major challenge was the acute sugar cane shortage experienced in the region coupled with a 28% increase in cane price.
Total cane crushed was 407,008 tonnes, a drop of 67% compared to 1,215,566 tonnes crushed the previous year.
a lower production of 15,891 tonnes of sugar was achieved compared to 75,073 tonnes produced the previous year.
Ethanol plant produced 6.9m litres of ENA a 41% drop.
cogeneration and water bottling lines remained non-operational throughout the year.
management made a decision to stop milling operations in the last quarter of the year to focus on cane development activities and factory plant maintenance
resumption of factory operations in October
The Board of Directors view the Companys outlook as positive.
Conclusions
Switch off the lights.
H1 Net revenue 1.529136b vs. 2.977321b -48.641%
H1 Cost of sales [2.968290b] vs. [3.390678b] -12.457%
H1 Gross loss [1.439154b] vs. [413.357m] -248.162%
H1 Impairment of assets [588.486m] vs.
H1 Total costs [1.764247b] vs. [1.840981b] -4.168%
H1 Loss before taxation [3.792399b] vs. [2.229946b] -70.067%
H1 Loss after taxation [2.920147b] vs. [1.560962b] -87.074%
H1 EPS [1.91] vs. [1.02] -87.255%
Shareholders Equity 4.831431b vs. 7.751578b -37.672%
Cash cash equivalents as at Dec 2016 [2.498545b] vs. [2.054085b] -21.638%
No interim dividend
Company Commentary
collaborating with shareholders, including GOK as the significant shareholder, for additional funding.
FY Earnings through 30th June 2016
FY Revenue 6.285917b vs. 5.531357b +13.641%
FY Cost of sales [8.040339b] vs. [7.191569b] +11.802%
FY Gross loss [1.754422b] vs. [1.660212b] +5.675%
FY Administrative expenses [2.125735b] vs. [2.934414b] -27.558%
FY Loss after tax [6.067381b] vs. [6.307257b] -3.803%
FY Loss for the year [4.731026b] vs. [4.644801b] -1.856%
EPS [3.09] vs. [3.04] -1.645%
Total equity 7.693783b vs. 5.932044b +29.699%
Cash and cash equivalents at the end of the year [2.194548b] vs. [2.002149b] -9.610%
Company Commentary
Surplus on revaluation of property, plant and equipment. 9.183849b versus 0
Total comprehensive income 1.761739b versus [4.709761b]
continued decrease in Kenyas sugar production mainly due to cane shortage, as cane farmers in Western Kenya move to produce other crops due to low returns from cane farming
acute cane shortage experienced in Q4 saw sugar production and recoveries heavily curtailed negating the benefits gained in the earlier quarters of the year
Co processed 1,215,566 metric tonnes of sugar cane which is +9.4% versus the previous year
Sugar production increased by 6% to 75,073 metric tonnes
Ethanol production increased by 20% to 12,367,072 litres
Sugar and ethanol revenues increased by 10% and 37%
Water business discontinued.
did not export any power to the national grid [2015 14,692 MWH]
Total Revenues increased by +13.6%
Total overhead costs decreased by 9%
Comes safeguards due to expire in February 2019
No Dividend.
Conclusions
Surging Raw Sugar prices have not lifted earnings. |
