By Duncan Mlanjira
Illovo Sugar Malawi Plc financials for the year ended August 31, 2021 saw a revenue increase of K163 billion from K147 billion during the same period of 2020 which represents an increase of 11%.
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From this revenue, the company posted K20.5 billion as net profit, representing 647% increase while operating profit had an increase of 293% at K32 billion.
The company has declared a dividend of K14 per share but a final dividend of K4 per share will be proposed for the shareholders’ approval at the forthcoming annual general meeting to be held this coming February 22.
Finance costs dropped by K1.2 billion to K2.7 billion, net borrowings dropped by 50% to K10 billion while capital spend increaseed by K2.7 billion.
This was announced on Wednesday at a press briefing the company’s Managing Director, Lekani Katandula held at Sunbird Mount Soche Hotel in Blantyre in the company of Finance Director Kondwani Msimuko where they also disclosed that on the markets, domestic sales volumes increased by 17% increase to 173kt with overall sales volumes up by 9% increase to 297kt.
Katandula (left) and Msimuko
However, export sales volumes decreased by 1% to 124kt, saying port logistics negatively impacted deep water exports sales.
The company’s sugar production increase by 6% to 279kt while the tons of cane crushed that the company produces on its own (MCP) increased by 6% increase to 1,867kt but MCP yield decreaseed by 3% to 98tch.
Grower yield increased by 2% to 75tch while grower tons increased by
23% to 544kt.
Opportunities are that there was lower illegal imports from neighbouring countries since Illovo Sugar products are relatively lower priced — thus not making business opportunities for smugglers.
On risks included CoVID-19 impact on staff welfare and logistics; continued cost pressure on raw materials; projected lower rains leading to higher irrigation costs and a drop in sugar production and impact of flooding at Nchalo as a result of the Cyclone Ana that devastated the Lower Shire.
He reiterated the challenges that they faced due to the floods that included several of the company’s sugarcane fields damaged as well as irrigation infrastructure; dykes; estate roads; a number of staff houses and other non-irrigation infrastructure.
Illovo Sugar Plc swiftly responded on its surrounding communities in distress who were and are facing devastating impacts and to date it has provided tents and piped water to the flood victims; refurbished a maize mill to enable communities to continue processing maize for food and set up the continuing supply of potable (drinking) water to the estate villages and Nchalo trading centre.
The company also completed the temporary repair of the Nchalo/Bereu road before the government came in taking the responsibility that what affects the community it thrives is also affects their business.
As the company switched to using fuel powered generators for its operations, Illovo strongly corroborated with ESCOM to restore power both to its estate and the sorrounding communities.
He also reported that fortunately, the factory and warehouse together with the sugar that was in storage, was not been affected.
The company’s estate is also supplying liquidated chlorine to the villages which are inaccessible by water bowsers and given the situation and the vulnerability of the surrounding communities, Katandula pledged to continue to closely monitor developments in order to detect any outbreak of water borne diseases.
