STARAFRICACORPORATION Limited’s (starafricacorporation) liquidity weakened 6% to 54 US cents per dollar of short-term debt in its half year ended September 30, 2025, placing the group in technical insolvency for its second half, despite narrowing losses.
This fall in liquidity is from a prior year comparative of 58 US cents to every dollar of short-term debt.
starafricacorporation’s slippage in its liquidity position is owing to the group reporting payables and provisions of US$13,65 million for the period under review from a 2024 comparative of US$10,81 million.
Yet, during the same half-year period under review, the group recorded a loss after tax of US$189 105, compared to a loss of US$457 842 last year.
“The reporting period was characterised by a continuation of the challenging macroeconomic conditions seen in the previous financial year. The central bank’s sustained tight monetary policy successfully stabilised the local currency and moderated inflation. However, these measures also constrained liquidity, leading to suppressed consumer demand,” starafricacorporation chairman Rungano Mbire said in a statement attached to the group’s half-year results for the period ended September 30, 2025.
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“This impact was partially offset by robust economic activity within the mining sector and a favourable agricultural season. Our business-to-business (“B2B”) segment, the Group’s primary revenue driver, faced ongoing volume pressure.
“While the beverages sector saw growth, their demand for sugar declined, as manufacturers pivoted towards non-nutritive sweeteners to mitigate the impact of the sugar tax.”
He said the company continued to engage the government on the sugar tax to be reviewed.
“To counter these headwinds, the company has focused on aggressive cost containment and operational restructuring,” Mbire said.
“Our ongoing plant refurbishment and automation programme, scheduled for completion in FY 2027, has already begun to yield lower conversion costs and enhanced control over production and operating costs.”
An exchange gain of US$841 456 helped the group narrow its loss-making position during the half-year period under review, from an exchange loss of US$5,36 million in the 2024 comparative period.
“Consolidated turnover for the period decreased 25% from US$36,2 million to US$27,3 million, primarily due to a reduction in sales volumes of 26% at Goldstar Sugars,” Mbire said.
“Industrial customers’ uptake was lower, as they adjusted their usage to contain the impact of sugar tax.
“Operating loss reduced from US$272 666 to US$252 337 on the back of productivity improvements, cost rationalisation exercise savings, better working capital management and reduced exchange losses owing to a stable exchange rate.”
According to starafricacorporation, Goldstar Sugars sales volumes for the sugar refining operation were 27 208 tonnes, being 26% below the prior year comparative of 36 625 tonnes.
“Production, which was demand driven, was 28 686 tonnes compared to 36 818 tonnes in prior year,” Mbire said.
“B2B demand was weaker, largely affected by key customers lowering their sugar usage to contain the impact of the sugar tax by using non-nutritive sweeteners.”
Comparatively, the group’s Country Choice Foods specialties volumes increased 47%, from 663 tonnes in the comparative period to 976 tonnes.
This was owing to the firm optimising this division’s current product portfolio.
The firm’s overall performance led to its balance sheet weakening as total assets were recorded at US$29,55 million as of September 30, 2025, from US$31,72 million in March.
“The lack of progress in addressing key value chain issues on the sugar tax and VAT classification continue to negatively impact margins,” Mbire said.
“The group will continue to engage government through the Zimbabwe Sugar Association on these important policy matters, as they have an impact on the Zimbabwe Sugarcane Industry Development Strategy to double output in the next 10 years.”
