Illovo Sugar Malawi Plc has made a net historic profit of K6.1 billion in just the first half of the year which ended on February 28, 2021 — representing a 200% increase compared to K2.1 billion which was made for the same period last financial year.
Making the announcement last Friday at a Stakeholders’ Forum held at Sunbird Mount Soche Hotel in Blantyre Illovo Sugar Malawi Managing Director, Lekani Katandula said it was pleasing to have performed so well despite the global CoVID-19 pandemic, which has paralyzed businesses in the country and the whole world.
“This has been case because of favorable weather conditions for growing sugarcane that resulted into reduced sugar prices in the country since December 2019,” Katandula said.
“We managed to achieve this by focusing on our cost structure. We worked really hard to reduce sugar prices, we did not increase the prices on the domestic market.
“In fact, we sustained a lower price which we did in December 2019 where a packet of sugar was reduced from K900 to K800.”
Katandula also announced that there is an improvement in dividends as this year’s first half the interim dividend stand at K4 per share compared to last year’s K2 per share.
According to the financials that were presented, the company’s production revenue increased by 1% at K74 billion; its finance costs dropped by K.328 billion to K1.7 billion; net borrowings dropped by 32% to K10.4 billion while capital spending dropped by K.327 billion.
On the physicals, there was a 7% increase in sugar production; grower yield increased by 17% while there was 43% increase in grower tons.
On the markets, domestic sales volumes increased by 18% but there was a decrease on export by 17% while overall sales volumes were marginally up to 139kt.
Domestic sales pricing was impacted by cheap illegal sugar imports and consumers’ affordability post CoVID-19; port logistics also negatively impacted deep water export sales while world sugar prices remained low.
On opportunities, the company expects continuation of domestic marketing initiatives; existence of strong regional demands and improved world sugar sales post February 2021 while influx of illegally imported sugar due to price disparity and movements remains as one of its risks.
Illovo Sugar Malawi Plc is listed on the Malawi Stock Exchange with 76% of the issued share capital held by the Illovo Group and the balance by public and other institutional investors.
The company annually cultivates around 1.8 million tons of cane which — together with approximately 350,000 tons produced by Malawian smallholder farmers — results in the production of about 250,000 tons of sugar.
One of the company’s shareholders, Frank Harawa commended the company for doubling the profits and sharing the divides despite the CoVID-19 pandemic which has forced most of the companies to shut down.
Instead, Illovo was one of the corporate companies that contributed resources towards the CoVID-19 pandemic since its outset last year.
As soon as President Lazarus Chakwera announced the National State of Disaster on January 12 following the upsurge of the COVID-19 second wave and appealed to stakeholders and well-wishers to assist, Illovo Sugar Malawi contribute K100 million.
Medical supplies worth K20 million went to Queen Elizabeth Central Hospital in Blantyre and K40 million each for Kasinthula and the company’s other district estate in Nkhotakota.
This contribution was in addition to the K10 million which Illovo Sugar made during the first wave of the pandemic to the Kameza isolation center in form of hospital beds and monitors and a further K60 million support for Blantyre City Council, Chikwawa and Nkhotakota district hospitals during the first wave.
At Kasinthula, the company also renovated a CoVID-19 treatment unit and the medical equipment donated included BP monitoring machines, pulse oximeters, thermometers, stethoscopes, patient supports such as ICU ventilator, nebuliser, oxygen cylinders and oxygen itself.
