Illovo sugar profits fall to K13.5 billion

Illovo sugar (Malawi) Limited overall profits dropped by 39 percent to K13.5 billion from K18 billion. Headline earnings decreased by 28 percent for the year ended March 31, according to audited financial statements published this week.

The company’s financial statement indicates that during the season, operations at both Nchalo in Chikwawa and Dwangwa in Nkhotakota commenced later than planned due to wet weather at the beginning of the season.

The sugar manufacturer notes that plant reliability performance at Nchalo was below expectations for the season, which impacted negatively on sugar production. However,Dwangwa had a satisfactory performance for the season.

Overall sugar sales into the local and export markets amounted to 273 000 tonnes, with the domestic market accounting for over 60 percent of the volumes and 40 percent was exported to Europe, North America and other regions.

The company says sales into the regional market were below expectations mainly due to cheap world market sugar being imported into the region and import license restrictions implemented by the Zimbabwean authorities.

During the year, total sugarcane production for the season amounted to 2.4 million tonnes of which 450 000 tonnes represented 19 percent of total cane harvest.Final sugar production for the season totaled 283 000 tonnes.

In terms of the economy, the company notes that inflation rates together with exchange and interest rate movements will continue to have a marked effect on profitability; hence, it has vowed to maintain focus on cost control initiatives driven through its ongoing continuous improvement programmes.

The Malawi Stock Exchange (MSE)—listed company has declared dividends worth K13.2 billion.