Overvalued Zim currency to reduce ZSR export earnings

Eric Chiriga


ZIMBABWE Sugar Refineries (ZSR) says its sugar exports declined by 17% while domestic sugar sales slumped by 33% in the year ended March due to insufficient raw sugar supplies.

This comes against the backdrop of government recently taking over

Mkwasine Estates under the land reform programme. Mkwasine is the biggest sugarcane producer in the country.

“Domestic sugar sales of 99 510 tonnes were 33% lower than the 149 392 tonnes sold in the same period last year due to inadequate raw sugar deliveries from the estates,” said ZSR chairman, Oliver Chidawu.

Chidawu said fuel shortages and other logistical challenges resulted in inconsistent and insufficient deliveries of coal and raw sugar to the company’s two refineries.

“Refined sugar exports to Botswana and Namibia at 28 000 tonnes were down 17% compared with last year,” Chidawu said.

He added that while the 1 566% devaluation of the local currency during the year contributed significantly to income and offset some of the decline in volumes, the overvalued currency since January  would compromise export earnings.

Chidawu said the wholesale and retail business, comprising Red Star which recently listed on the local bourse, Advance and Spar Western, achieved a profit before tax of $537 billion, $217 billion of it being interest received from operating cash-flows and IPO proceeds still held at year-end.

He said the packing business comprising Polyfilm Plastics and Highfield Bag contributed $349 billion to the group’s results.

“The property and engineering divisions each contributed $40 billion and $62 billion to the group’s profit respectively,” said Chidawu.

He said as at March 31, the group’s properties were revalued to $2,9 trillion.

Blue Star Transport, part of ZSR’s transport division, incurred a loss due to chronic diesel and spares shortages and high maintenance costs, all of which adversely affected haulage volumes.

During the year, the group allocated $50 billion to Blue Star Transport to rehabilitate its fleet.

The group achieved a 2 630% increase in earnings per share in the period under review.

Turnover increased by 464% to $7,7 trillion while a pre-tax profit of $1,5 trillion was registered.