Sugar imports, restrictions dampen regional sales

Cheap international sugar imported into the Sadc region and import restrictions implemented by Zimbabwe authorities stopping sugar sales have affected trade of the commodity into the regional market, Illovo Sugar (Malawi) Limited has said.
The Malawi Stock Exchange (MSE)-listed sugar manufacturer, however, said sales into the domestic market for the six months ending September 30 2014 were ahead of the target.

 
“Adverse market pricing pressure has also impacted sales revenue from the European Union [EU] market,” said a statement accompanying financial results for the year ended September 30 2014.
Illovo’s after-tax profit has slightly reduced to K9.3 billion from K9.5 billion same period last year, while revenue has jumped by 27 percent to K51.7 billion from K40.8 billion same period last year.
The company, whose assets have jumped to K106 billion from K90 billion, said concerted effort will be made to harvest and crush the cane crop at Nchalo in Chikwawa and Dwangwa in Nkhotakota estates prior to the onset of the rain and it is envisaged that the full year sugar production will be slightly lower than the previous year.

 
“Overall sugar sales for the full year will match those achieved in the previous year, however, an anticipated change in the sales mix will result in an increase in domestic market sales,” said the statement.
The sugar manufacturer, which is the largest contributor of profit for the Illovo Sugar Group, has declared an interim dividend of 750 tambala per share and will be payable in January 2015.
In terms of operations, the company said Nchalo and Dwangwa started later than planned due to wet weather at the beginning of the April 2014.

 
It said performance at Nchalo been below expectation for most of the season with some plant failures and subsequent impact on sugar production, with Dwangwa having a steady run to date.
Illovo Sugar (Malawi) is one of the blue chips on the 14-counter MSE.