Illovo posts K41bn revenue
Sugar manufacturer Illovo Sugar (Malawi) Limited has reported half year revenue of K40.9 billion (about $102m), 32 percent above the prior period, despite operating profit remaining static due to the impact of material fair value gains.
The Malawi Stock Exchange (MSE)—listed company’s operating profit stood at K14.3 billion with net profit recorded at K9.5 billion, a jump from K9 billion same period last year, according to unaudited financial statements for the year ended September 30 2013.
But the company said, for the full year, expected sugar demand on the local market will be fully satisfied with total anticipated sales of 160 000 tons, slightly above that of the previous year.
“For the full year, regional sales are expected to be down compared to the previous year and exports to the EU and USA slightly up on the corresponding period,” said Illovo, in the financial statement released over the weekend.
On the operational front, the company said after the completion of off-crop maintenance programmes at Nchalo in Chikhwawa and Dwangwa in Nkhotakota, both factories started the 2013/14 crushing at the beginning of April 2013.
It said the Nchalo start-up was delayed by heavy rains across the estate and, since then, operations there have been challenged by seasonal rains.
“Consequently, cane supply has been interrupted and has impacted sugar recoveries. Dwangwa has performed consistently well during the season,” said the company.
Illovo, whose assets have jumped 30 percent to K80.4 billion from K61.8 billion, said sales into the domestic market for the six months were slightly ahead of expectation, with sales to export and regional customers generally in line with budget.
Illovo is working flat out to recover the slow start of operations and ensure that Nchalo and Dwangwa harvest and crush all available cane to achieve a full year sugar output of around 290 000 tons, slightly down compared to over 300 000 tons last season.
The company has warned that profit for the full year is expected to be slightly lower than that of the previous year, with rising input cost managed.
“The business has a strong cash flow and balance sheet,” said the company, which will pay an interim dividend of K7.50 per share, up from K7.40 per share last season.
Illovo, one of the blue chips of the local bourse with 713 million shares on issue, closed last week at K267 per share.
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Illovo posts K41bn revenue |The Nation Online