Illovo Sugar (Malawi) plc has posted a K33.7 billion profit in the half-year period ended February 28, up from the K9.2 billion reported for the same period last year, published financial statements from the firm show.

The Malawi Stock Exchange (MSE)-listed sugar manufacturer, in its financial results for the six months ending February 28 2023 published on Wednesday, said agricultural and factory operations during the review period registered commendable output hence the performance.

Illovo Sugar production in progress

A statement accompanying the results co-signed by board chairperson Jimmy Lipunga and managing director Lekani Katandula, said aagricultural operations progressed well in the final cane crushing season at both estates in the process producing good quality sugarcane.

Reads the statement in part: “Deliveries of cane from growers also supported the milling operations to be within expectation though plant mechanical challenges delayed production at certain times during the period.

“Fuel shortages in the country, however, hampered agricultural, factory and sales logistical operations, resulting in additional costs for doing business but the country however started registering significant rainfall towards the end of December 2022 and this contributed significantly to cane growth.”

Meanwhile, the company says it expects that the repair and rehabilitation efforts that have been undertaken on the Electricity Generation Company infrastructure will yield positive results in terms of generation of sufficient power to the entire country. 

“The group intends to leverage the same to ensure that both agricultural and factory operations achieve excellent output, coupled with preventive plant maintenance programmes.

“It is hoped that agricultural improvement initiatives will continue to further improve agricultural performance for the benefit of the entire business and hopefully conducive weather patterns will further support the agricultural activities,” said the statement.

The sugar manufacturer has, however, said the scarcity of foreign currency, rising inflation, high interest rates and volatile exchange rates will continue to have a notable impact on the profitability of the business.

“The Group intends to continue applying significant efforts to ensure that cost management and efficient operations remain focus areas,” said the statement.

In respect to the six-months’ performance, the company has since declared to pay a dividend of K10 80 per share, up from K5.56 per share paid in a similar period last year.

Illovo Sugar Malawi listed on the Malawi stock Exchange in 1997 with a value of K1.5 billion shares and has since grown in value to K799.97 billion.

Meanwhile, the company’s share price is among the highest on the local shares market at K1 121.80.

The company which annually cultivates around 1.8 million tons of cane which together with approximately 350 000 tons produced by Malawian smallholder farmers has two estates in Dwangwa and Nchalo.

Sugar remains one of the country’s forex earners and Illovo Sugar (Malawi) plc, which has a 97 percent market share, employs about 9 500 people.

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