Mumias Sugar Company Limited has released its half year results for the six months ended 31^st December 2012. In its unaudited 6-month results, the company has reported gross profits of Kshs. 2,255,726,000, down Kshs. 285,555,000 from the previous periods Kshs. 2,541,281,000. Net profits however increased in the same period to Kshs. 866,668,000, up Kshs. 37,573,000 from the previous period’s Kshs. 829,095,000 reported.

The company’s half-year performance comes on the backdrop of a tough period whereby inflation increased from 12% to peak around 20%, high fuel prices and a depreciating Kenya shilling which reached an all time low of Kshs. 107 per US dollar. The company recorded a 6.22% increase in earnings during the period attributable to the improved sugar prices and cost reduction initiatives that the company introduced. While no interim dividend was recommended, the company was awarded a credit rating of A+ (long term) and A1 (short term) by Global Credit Rating Company in December 2011, enabling it receive loans on better terms because of the good credit rating.

What about the next six months?

The company has contracted more farmers and invested in cane development to improve on the cane availability with over 104,000 farmers contracted and Kshs. 2.5 billion invested in cane development. The company observes that while world sugar prices are on the decline, translating to lower domestic sugar prices in the second half of their financial year (January 2012-June 2012), it expects to commission a water bottling plant in March 2012 and an ethanol distillery in April 2012, hopefully leading to improved net financial positions in future. The company is optimistic that the second half of its financial year will be better than the first half and that the full year results will be an improvement over the previous year’s results.