Kenya, November 3rd – Kenya’s troubled miller-Mumias Sugar Company will not release its financials for the year ended June 30, 2017 until end of this month, the company’s board has said.
The Nairobi Securities Exchange -listed firm has sought a month-long extension from the Capital Markets Authority (CMA) to allow it complete an ongoing internal audit, becoming the second public listed company in Kenya to delay its financials after Uchumi supermarkets.
The Western Kenya based miller says the move is to allow enough time to finalize aspects of the audit process with its lenders and the government, before communicating the results to the shareholders and the general public.
“Pursuant to Regulation 63(7) of the Capital Markets (Licensing Requirements) (General) Regulations, 2002, Mumias Sugar Company Limited hereby announces that the publication and submission of the audited annual financial statements of accounts for the period ended June 30, 2017 will delay by one month to November 30, 2017,” board chairman Kennedy Mulwa said in a public notice.
“ The board of directors has taken this step to ensure that upon release, the statements reflect a true and fair view of the financial state of affairs at the company, a responsibility the shareholders has bestowed upon them,” he added.
CMA directs that financial statements should be prepared in accordance with International Financial Reporting Standards and meet the minimum standards set out in the listing rules.
Interim reports should be published within 60 days of the interim reporting date and annual reports within four months of the company’s financial year end.
The deadline for submission of financial results was October 31.
The cash-strapped miller has in recent years struggled to meet its financial obligation, blamed on poor management and increased competition from cheaper imports.
The move has seen the miller slowly lose its market share where it controlled two thirds of Kenya’s sugar market.
It had earlier this year issued a profit warning, saying its earnings for the year ending June 2017 are likely to drop by more than 25 per cent.
Last year, the firm recorded a Sh4.73 billion net loss in the financial year ending June 30, 2016, higher than the Sh4.64 billion net loss posted in 2015.
The losses were blamed on an acute shortage of raw materials (sugarcane) which led to factory underutilization, resulting in high cost of production.
It has heavily depended on a government bailout where the state has disbursed Sh3.1 billion in the last four years to support its operations.
However, the firm is still struggling to repay debts running into billions of shillings, including those owed to sugar cane farmers, derailing its revival efforts.
Mumias joins its NSE listed peer – Uchumi Supermarkets Plc which has also postponed its results.
The retailer has said its financial results for the fiscal year ending June 30, 2017 will be approved and published on or before November 15, 2017.
CEO Julius Kipng’etich said the postponement is as a result of delays in receipt of some confirmations required to facilitate completion of the audit process.
By Martin Mwita