* Operating profit was at MK81.9 billion, which is up from MK39.5 billion in 2022 with net cash holdings at +MK69 billion
* Up from +MK5.3 billion while MK51 billion was for foreign payables from MK20 billion
By Duncan Mlanjira
From a total of MK272.5 billion revenue made in 2023 financial year — an increase from MK186.6 billion realised in 2022 — Illovo Sugar Malawi Plc has posted MK56.8 billion net profit, which is up from MK26.6 billion made in 2022.
Advertisement
At a stakeholders indaba held at Sunbird Mount Soche in Blantyre, the company’s Finance Director, Kondwani Msimuko announced that operating profit was at MK81.9 billion, which is up from MK39.5 billion in 2022 with net cash holdings at +MK69 billion — up from +MK5.3 billion while MK51 billion was for foreign payables from MK20 billion.
On his part, Illovo Sugar Malawi’s Managing Director Lekani Katandula highlighted some key challenges the company faced such as the Sugar Industry Bill; import licences and unusual rainfall pattern of tropical cyclones, whose impact affected power supply.
Other challenges included currency exposure & liquidity that affected critical supplies such as fuel and farm inputs; exceptional inflation pressure; forex regulation and export earnings.
Responses to these challenges include initiating efficient forms of irrigation (drip irrigation), which include investing into the Shire Valley Transformation Programme’s biggest canal project in southern African region.
Finance Kondwani Msimuko
Managing Director Lekani Katandula
Through investment into the Shire Valley Transformation Programme, the company is set to save and reduce on energy demand, which also goes alongside plans to increase its own power generation and supply.
Other responses include agricultural yield recovery programme at Nchalo Sugar Estate; updated pest and disease control strategy; cost rationalisation to mitigate revenue losses (Project Tisinthe & its successor Tiwale).
Weather update
Plans also include enhanced quality focus to reduce bulk sugar production in favour of higher margin sugars as well as increasing active stakeholders’ engagements.
The Shire Valley Transformation Programme is also part of the 2024-2028 Strategic Plan, whose other major projects include irrigation & drainage at Nchalo and Dwangwa estates; boiler emission compliance & replacement project: boiler 4 & 5 emissions abatement; boiler 1-3 replacement with abatement and phase 2 of pre-pack strategy for Limbe, Dwangwa and Nchalo.
In its commitment towards “working together to build a Thriving Malawian Community”, Illovo Sugar has invested over K1.01 billion in community projects that included in education (MK423.1 million); health (MK83.9 million); infrastructure (MK66.7 million); natural disasters (MK122.1 million); potable water (MK299.1 million); and others at MK18.6 million.
Illovo Sugar helps communities to help themselves by sharing irrigation water with 321 farmers, enabling Bester community to overcome challenges of climate change by enabling them to grow food and cash crops during times of flooding and drought.
Illovo Nchalo and Catholic Relief Services are working together to help families own strong, affordable housing in the Nchalo area by investing in community leadership and through the pipeline of projects at the Thriving Community Foundation in Nchalo, community leaders emerge to take ownership and lead the development of their own lives and those of their neighbors around them.
Crop diversification through cotton farming
Affordable housing in Nchalo area
Partnership with Southern Region Water Board
Illovo Dwangwa commenced on economic research on local flow of money to better understand and improve the impacts of the sugar value chain on people’s lives and also through the partnership with Catholic Relief Services, they are working with communities, the Government of Malawi, and financing institutions to design the lowest cost, resilient home, building a prototype at Nchalo Estate.
Going beyond contribution, Illovo Nchalo is working with the Southern Region Water Board to both provide a water source and become an anchor tenant of sustainable potable water systems for all.
On diversifying economies, Illovo Nchalo is leading innovation and making investments alongside farmers in the Nchalo area to understand and attract markets that will enable the re-establishment of the cotton value chain as a secondary industry in the Lower Shire.
Other diversity projects included enhancing the Illovo Women in Leadership (IWIL) forums by launching them in all estates across all functions — activities aimed at enhancing women in the workplace.
The company also holds career talks and investment of wide array of textbooks, including teachers’ and learners’ guides, at 8 secondary and primary schools, and 5 universities across the country with a focus on science, technology, engineering & mathematics (STEM) subjects.
Its total investment into the Malawi University of Science & Technology (MUST) Endowment Fund is now at MWK400 million following initial payment of MWK150 million targeted towards females in STEM roles.
Illovo Sugar Group’s African footprint is in Malawi; Tanzania; Zambia; Mozambique; eSwatini; South Africa and Rwanda.
Advertisement