Malawi sweetens Illovo group profits

Illovo Sugar (Malawi) Limited, a subsidiary to the regional sugar producer, contributed the largest chunk of profits of up to 762 million rand, about 40 percent of the group’s 1.886 billion rand.

According to the group’s financial statements for the year ended March 2014, the group which also has presence in five other countries—Mozambique, South Africa, Swaziland, Tanzania and Zambia—experienced a marginal slump in its operating profits from 1 887 million rand in 2013.

The financial statements show that Illovo Sugar (Malawi) Limited has contributed the largest chunk of profits among the six countries, however, slumped from 899.3 million rand, about half to the year’s profits in 2013.

But according to the available figures, although Malawi had the largest area under cane at 20 108 hectares out of the group’s total 70 046 hectares in 2014, Illovo Malawi had the third highest value of assets at 2 billion rand in the group with Zambia leading the pack at 3 billion rand in total assets.

Earlier, Illovo Malawi noted that sugar reforms in the European Union (EU) market may adversely affect the company’s performance.

But the sugar manufacturer said it is pivoting towards the local market and ensuring that it remains a low cost sugar producer.

Malawi’s performance during the season has been affected by plant failures which impinged on the production of sugar.

In its 2013/14 financial statements, Illovo Malawi noted that its two factories at Dwangwa in Nkhotakota and Nchalo in Chikhwawa experienced various plant operational breakdowns during the crushing period.

The statement, however, noted 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.

In the 2013/14 season, Illovo Malawi announced an overall profit fall of by 12 percent to K29 billion while headline earnings—profits that exclude sale of assets—slumped to K19 billion.