Illovo Sugar (Malawi) Plc posts K9.213bln half-year profit after tax

Illovo Sugar Malawi Plc, which made a net profit K20.5 billion in its 2021 financial year, has posted K9.213 billion as its 2022 half-year profit after tax — up from K6.116 billion performance of the same period in 2021, representing 51% increase.

This was disclosed on Friday, July 15 at the company’s Investors Forum at Sunbird Mount Soche Hotel in Blantyre where an interim dividend was declared of K5.56 per share — up from K4.00 in 2021.

Production volumes are at 102,000 metric tons, down from 105,000 in 2021, which has gone down by 3% while sales volumes are up by 11% — at 154,000 from 139,000.

Revenue went up by 24% from K74 billion in 2021 half year to K92.0 billion; operating profit at K14.2 billion from K10.6 billion; net debt at K5.1 billion from K22.4 billion which is down by 77% with finance cost down by 53% at K0.8 billion from K1.7 billion in 2021 half year.

Cyclone Ana in January, which devastated the Lower Shire where Illovo operates it Nchalo Estate, impacted the business as its interruption estimate is at K8.2 billion with material damage at K7.1 billion.

In February, the company disclosed that its 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 represented an increase of 11%.

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 declared a dividend of K14 per share but a final dividend of K4 per share was proposed.

Finance costs dropped by K1.2 billion to K2.7 billion, net borrowings dropped by 50% to K10 billion while capital spend increased by K2.7 billion.

The devastation of Cyclone Ana included damages to several of the company’s sugarcane fields as well as irrigation infrastructure; dykes; estate roads; a number of staff houses and other non-irrigation infrastructure.

But Illovo Sugar 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.

The company was incorporated in Malawi on May 31, 1965 as a private company — Sugar Corporation of  Malawi (SUCOMA) before it was converted to a public entity on September 15, 1997.

Illovo Group Holdings  Limited, through Sucoma Holdings Limited, holds 76% of the issued  share capital while balance of the shares is being held by the public and  other institutional investors.

The ultimate holding company is Associated British Foods plc (ABF), of the United Kingdom.