Illovo Sugar (Malawi) Limited, the only sugar manufacturing company that is listed on Malawi Stock Exchange (MSE), has posted its financial results for the year 2012/13.
The group’s revenue jumped by 73.15 percent during the year to close at K63.2 billion (about $158m) from the previous year’s K36.5 billion (about $91.2m).
The company says sugar production was good at the back of notable plant efficiencies at Dwangwa and Nchalo factories which exceeded the previous season’s results.
“Sugar production totalled 300,000 tonnes (from 283,000 tonnes), translating into an improvement of 6 percent. Net finance cost soared 179 percent up to close at K1.1 billion (from K0.41 billion) while the tax expense took a jump of 153 percent at K9.1 billion ( from K3.6 billion),@ Illovo says.
The group’s balance sheet has reported a growth of 55 percent to K63.9 billion (about $160m) from K41.2 billion (about $103m) on its total assets (total equity and liabilities).
“The cane roots went 44 percent up to close at K14.7 billion (from K10.2 billion). Property, plant and equipment closed at K11.8 billion (from K8.6 billion), an increase of 37.2 percent,” says Illovo.
The group will pay a total dividend of 1465 tambala per share up from 795 tambala), which translates into an increase of 84.3 percent and the directors are expected to propose a final dividend of 50 tambala per share at the forthcoming Annual General Meeting.
“All these increases compounded pressure on the profitability of the company, but the implementation of phased sugar price increases during the year and the improvement in revenue stream in kwacha terms from the sale of sugar into favourably prices export market established through our well organised marketing structures enable the company to protect its operating margin and ensure a continuing return to its shareholders,” reads the statement accompanying the results.
In terms of prospects, the company expects to achieve a cane harvest of a similar size during the forthcoming year. Its local market sales are expected to be given preference but the anticipated continuation of the uncertain and difficult economic environment is likely to result into marginal growth of sugar sales in the local market.
Illovo plans to carefully manage stock levels to ensure adequate sugar supply to the domestic consumer while taking advantage of export opportunities in order to maximise revenue streams.