Illovo Sugar profits fall to K29 billion

Illovo Sugar (Malawi) 2013/14 overall profits fell by 12 percent to K29 billion while headline earnings—profits that exclude sale of assets—slumped to K19 billion (US$46 116 504.9), according to financial statements.

The company’s financial statements posted on its website indicate that during the season, average cane yields from own estate land were markedly down at Nchalo in Chikhwawa compared to the previous year but had shown a satisfactory increase at Dwangwa in Nkhotakota.

Illovo notes that both factories experienced various plant operational breakdowns during the crushing period.

The report, however, notes that investment in capital projects at both sites, together with the ongoing implementation of continuous improvement programmes, were focused on the production of a quality sugar product to further enhance sales to both local and international customers.

The sugar company further notes that in terms of agricultural operations it is envisaged that in the year ahead, with the full implementation of the Nchalo intensive crop recovery programme coupled with additional cane from newly developed outgrower areas, and a return to more normal weather conditions at both estates that the overall harvest will increase.

During the year, total sugar sales for the year amounted to just in excess of 290 000 tonnes. The domestic market accounted for 58 percent while the rest was exported to Europe, North America and the region.

In the previous season 55 percent of sugar was sold to local market direct consumption and industrial consumers.

It is noted that local market sales tonnages are forecast to increase marginally but more robust growth is anticipated in the export market.

But Illovo notes that in 2013/14 season economic conditions remained challenging with exchange rate and interest rate fluctuations difficult to predict and manage.