Low sugar prices and small crops have impacted Mackay Sugar, leading to job cuts as part of an efficiency initiative
As most recently highlighted in February, low sugar prices and small crops have impacted Mackay Sugar. The company has now confirmed it will be reducing staff numbers as part of an efficiency initiative. While 34 positions will be removed, only four people are to lose their jobs, with the rest coming from not refilling vacant roles and merging roles.
Mackay Sugar is a cyclical business with a long trading history and has managed through similar periods before. Most importantly, MSL has a significant asset base in marketable, easily divestible assets and many options to sell or monetise assets as needed. MSL has property, plant and equipment with a book value of $321m, $140m in associated investments and a net asset position of $295m at 1H16. The group’s recent Sugar Terminals Limited shares transaction which generated $26.5m is an example of its ability to monetise assets as needed.
Please refer to the previous articles
for a full description of the company’s financial position.