Mumias profits break Sh2bn ceiling
Mumias Sugar Company CEO Evans Kidero addresses the media yesterday at the Serena hotel in Nairobi.
Mumias Sugar Company yesterday said it had broken through the Sh2 billion pre-tax barrier, chalking up Sh2 billion earnings in the year ended June 30.
The profit before tax rose 20.4 per cent from Sh1.8 billion of previous year. Improved profitability of the company was attributed to a 6.5 per cent increase in sales and ebbing threat from Common Markets for Eastern and Southern Africa (Comesa) following dwindling global stocks of the commodity. A deficit of four million tonnes is projected this year in the world as rampant China soaks more sugar.
Mumias Sugar Company CEO Evans Kidero addresses the media yesterday at the Serena hotel in Nairobi. Photo/Correspondent
Managing director Evans Kidero said Kenya and the East African region would experience sugar deficits in near the future.
"The challenge is for Kenya to fulfil this domestic and regional demand. I don't think the millers in the other countries can do this on their own," he said, adding that Mumias was working on it. Mr Kidero, however, told an investor briefing at Nairobi's Serena hotel yesterday that the Mumias was in the process of moving away from Sugar production as the main source of income, starting with a $35 million investment in power production.
Mumias in the year increased profit after tax 18.3 per cent, from Sh1.3 billion to Sh1.5 billion. The company has retained Sh634 million for capital expenditure, on top of Sh524.9 million it reserved last year. MSC, the CEO said, would use a combination of debt and equity in its expansion.
Its earnings per share rose 18.2 per cent from Sh2.53 to Sh2.99.
The listed company, where the Government is set to sell 18 per cent stake to the public, is giving a total of Sh892 million in dividend, making a dividend payout ratio of 58.5 per cent.
It has proposed a dividend of Sh1 on top of an interim payout of 75 cents a share.
During the year sugar produced fell marginally by 1.25 per cent following burning of plantations but sugar sold rose 6.5 per cent to 275,752 tonnes.
The firm says with installed production capacity of 520,000 tonnes against market demand of 740,000, Kenya was faced with a major shortfall if there was no investment. Mr Kidero said demand of 1.2 million tonnes was expected in five years.
