Ilovo Sugar (Malawi) plc says it expects its after-tax profit for the year ended August 31 2023 to jump to between K53.2 billion and K58.5 billion for the year ending August 31 2023.
During the same period last year, the firm registered a profit-after-tax of K26.6 billion.
In a trading statement published on Monday, Illovo Sugar Malawi plc company secretary Maureen Kachingwe said the expected profits represents an increase of between 100 percent and 120 percent.
She, however, indicated that the information on which the trading statement is based has not been reviewed by its auditors.
In terms of listing requirements, a listed company is required to publish a trading statement as soon as there is a reasonable degree of certainty that the financial results for the period to be reported upon will differ by at least 20 percent compared to the previous corresponding period.
Sugar production at Illovo Sugar Malawi plc
Reacting to the development, Minority Shareholders Association of Listed Companies secretary general Frank Harawa said shareholders are upbeat on getting better dividends.
He said: “Illovo has grown from strength to strength and our expectation is for the company to continue on this path which has over time prompted better dividends for shareholders.”
In the half-year period ended February 28 2023, the local sugar manufacturer posted a K33.7 billion profit, up from K9.2 billion reported during the same period last year.
In his explanation of the profit jump, Illovo managing director Lekani Katandula said the performance reflects the many initiatives the company is undertaking to become much more market and consumer-centric.
He said: “The route to consumer initiative for delivery of sugar to the last mile customer continued to deliver increased sales growth and coupled with reduced arbitrage at the borders with Mozambique and Zambia, ensured achievement of volume and revenue targets and successful pursuit of commercial imperatives.”
Over the past few months, the local sugar manufacturer has faced criticism from consumers and other stakeholders who feel local sugar prices are exorbitant and require import competition.
Illovo Sugar (Malawi) plc is the country’s biggest sugar manufacturer and annually cultivates around 1.8 million metric tonnes (MT)of cane from its two estates in Dwangwa, Nkhotakota and Nchalo in Chikwawa, employing about 9 500 people.
This is supplemented by approximately 350 000 MT produced by Malawian smallholder farmers.