• The six months ended 30 September 2025 show earnings increasingly shaped by cost discipline, automation benefits, and currency stability rather than sales volumes
• Associate income and consumer-facing growth provided earnings ballast during the interim period, reducing losses despite sustained pressure in industrial sugar demand
• The period reflects a strategic pivot toward durability, with cash flow recovery and operational efficiency laying groundwork for future earnings leverage

Harare- Star Africa’s performance under review relates specifically to the six-month interim period ended 30 September 2025, a timeframe that sits at an inflection point for the Group as it recalibrates its operating and financial model following the change in functional currency and sustained macroeconomic constraint. This half-year period is best understood not as a snapshot of steady-state earnings power, but as a transitional phase in which strategic, structural, and behavioural adjustments are becoming visible in the financial outcomes.

Against this backdrop, the 25% decline in consolidated revenue to USD27.3 million reflects a deliberate contraction driven by demand realities and pricing resets rather than operational distress. The period captures the first full expression of a business adjusting to altered consumption patterns, fiscal interventions such as the Sugar Tax, and a tighter liquidity environment that has reshaped purchasing decisions across industrial clients.

Within the six months ended 30 September 2025, volume compression at Goldstar Sugars dominated the top-line narrative, with sales declining by 26% year on year. However, the more instructive development during this interim period is the partial insulation of operating performance from volume decline. The operating loss narrowed to USD252,337 from USD272,666 in the comparable prior period, despite materially lower throughput.

This reflects the cumulative effect of productivity gains, cost rationalisation, and early benefits from the refurbishment and automation programme underway. During this half-year, management demonstrated that fixed-cost intensity is being progressively reduced, allowing the business to operate closer to breakeven even in a subdued demand environment.

The interim period also marked a fundamental shift in financial stability through currency normalisation. For the six months to September 2025, exchange movements contributed a gain of USD841,456 compared to a significant loss in the prior comparative period. This change was not incidental; it resulted from the Group’s transition to USD as its functional currency at the start of the financial year.

During this reporting period, currency volatility ceased to be a dominant driver of earnings unpredictability, allowing management to focus on operational levers rather than defensive financial positioning. The improvement in operating cash flows to an inflow of USD688,841 over the six-month period reinforces the view that cash discipline and working capital control have materially strengthened.

A defining feature of the six months ended 30 September 2025 was the contribution from the Group’s associate investment. The share of profit from the associate increased to USD427,625 for the interim period, up 64% from the prior comparable period. This income materially altered the earnings profile of the Group during the half-year, reducing the loss before tax to USD49,383 and highlighting the strategic value of diversified earnings streams.

During this period, the associate effectively functioned as a stabilising earnings counterbalance to domestic volume pressure, illustrating the benefit of geographic and operational exposure beyond the immediate regulatory and consumption dynamics of the local sugar market.

The interim period also revealed divergent momentum across operating segments. While the sugar refining business remained under pressure throughout the six months to September 2025, Country Choice Foods delivered a strong counter-cyclical performance, with volumes increasing by 47%.

This growth during the interim period reflects the resilience of a business-to-consumer model supported by distribution reach, pricing agility, and brand proximity to end consumers. Importantly, the period captures a strategic pivot within this division toward diversification and import substitution, suggesting that future growth is expected to be structurally driven rather than opportunistic.

From a balance sheet perspective, the six-month period was characterised by consolidation and internal reinforcement rather than expansion. Total equity declined to USD10.7 million by 30 September 2025, largely due to non-cash revaluation movements and functional currency translation effects recorded during the period.

At the same time, the capital structure remained controlled, with borrowings largely secured and denominated in USD, and a gradual shift away from overdraft reliance visible during the interim period. The Group exited the six months with improved liquidity positioning relative to the start of the financial year, despite ongoing operating losses.

In aggregate, the six months ended 30 September 2025 represent a period in which the Group prioritised structural resilience over short-term growth optics. The interim results suggest a business preparing for a future defined by automation, disciplined capital deployment, and diversified earnings rather than scale-driven expansion.

While policy constraints such as the Sugar Tax continued to weigh on margins throughout the period, the operational response indicates an acceptance that such constraints may persist. As the Group moves into the second half of the financial year, the foundations laid during this interim period position it to convert any marginal recovery in demand into a disproportionately stronger earnings outcome, reflecting a business that is being reshaped for durability rather than cyclical dependence.

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