Illovo’s profit increase by 4%

UNAUDITED results for Illovo Sugar Malawi show that its operating profit for the half year to September reflects modest growth over the corresponding period for the previous year, totalling K5.7 billion.

This is an increase of 3.6 percent. Illovo said revenues have grown and reflect the company’s ability to take advantage of premium prices currently on offer within its regional markets.

“However, the current adverse macro-economic environment within the country has depressed sales in the local market, which are over 20 percent down compared to the six months to September 2010.

“This has tempered overall sales growth, although a portion of these volumes not saleable domestically have been directed to regional markets at favourable prices,” Illovo said.

A 1 kilo packet of sugar costs local consumers K200 a price which increased by mid this year due to a host of national economic pressures.

The sugar producer said operating costs have been well controlled in the period under review with financial results for the second half of the current financial year are expected to be better than the previous year and consequently earnings for the full year are anticipated to be at least 10 percent above last year.

However, shortages of fuel and foreign currency continue to exert pressure on the company’s ability to operate at optimal levels and could have an adverse impact on the achievement of full year’s profit targets.

Approximately K1.4 billion will be spent on capital projects during the full year to optimise current production capacity and further secure the ongoing growth of the company.

An interim dividend of K3 per share, an increase from K2.87 in 2010, has been declared in respect of the ordinary shares of the company for the year ending 31st March 2012.

The dividend is payable on 30th December 2011 to shareholders on the register at the close of business on 18th November 2011.

Illovo Sugar is a public company as it is listed on Malawi Stock Exchange.

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