Illovo Sugar (Malawi) plc operating profit dropped from K82 billion in 2023 financial year to K59 billion last year despite registering an increase in revenue to K314 billion from K272 billion.
The figures were presented in Blantyre on Friday during an investors day forum when the company’s management met shareholders to explain the performance and get their views.
The Malawi Stock Exchange-listed company’s interim finance director Joaquim Vazi said among others, cyclones and theft at Nchalo Estate in Chikwawa affected sugar production, leading to reduced sales.
He also said the 44 percent kwacha devaluation effected in November 2023 affected the company’s business.
Vazi also said the 40 percent corporate income tax on taxable profits above K10 billion that was introduced last year affected the income.
Said Vazi: “That also resulted in a drop in the net profit. The impact of the change in the tax regime alone resulted in a K10 billion additional drop in the net profit.”
On his part, Illovo Sugar (Malawi) plc interim managing director Kondwani Msimuko agreed with Vazi, saying the 40 percent tax was a contributing factor.
“[It] resulted in an increase of K10 billion more tax payments than in the previous year. So, we were explaining why our net profits had a significant drop.
“That was one of the contributing factors, not all the contributing factors,” he said.
Msimuko, however, said despite shocks that also affected sugarcane production, the company will continue the production to meet market demand.
He added that if there are traders holding the commodity in anticipation of scarcity, “that day will never come”.
Minority Shareholders Association of Listed Companies secretary general Frank Harawa said the shareholders were not satisfied with the company’s recent performance.
During the meeting, the company also highlighted a number of re-investments it intends to embark on ,including installing an efficient irrigation system.
