AICO’s half-year loss

AICO Africa Limited plunged into a $5 million half-year loss, weighed down by high finance costs and interest bills, despite turning over modest revenues of $115 million.

Finance costs amounted to $13,7 million for the six months and total non-current liabilities amounted to $33,7 million. Capital expenditure for the group during the six months amounted to $13,4 million.

Group chief executive, Pat Davenish, said the business was affected by working capital shortages during the period. The spinning business was also debilitated by unfavourable market conditions.

Cotton uptake fell to 103 224 tonnes from 111 075 tonnes last year due to a smaller national crop size but revenue was $80 million due to higher selling prices. He said seed production was up 17% due to increased production in East Africa – demand for seed has also remained high.

"Liquidity constraints, characterised by lack of much needed medium and long-term financing, has continued to affect growth of business. Power shortages have also remained unresolved," said Davenish.

AICO is optimistic about the recovery of its FMCG business led by Olivine Industries that has so far been capitalised to the tune of $4,5 million. Initially, shareholders proposed a $15 million injection into operations. Davenish said $7,5 million equity was expected in the company by January next year, $1,6 million being AICO's portion and the remainder from partners.

Post published in: Business

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