Sugar manufacturer, Illovo Sugar Malawi, says it continues to feel lagged effects of the recent 44 percent devaluation of the Kwacha and rising inflation.
This, the firm says, affects its profitability outlook.
This came out during the company’s investor engagement meeting in Blantyre on Wednesday, when stakeholders were updated on the Malawi Stock Exchange company’s performance for the six-month period to February 2024.
It was reported that Illovo Sugar Malawi’s operating profit went down by K20 billion while net profit dropped by K11 billion.
Illovo Sugar Malawi Finance Director Kondwani Msimuko attributed the lower outturn to devaluation, which he said led to exchange losses of about K18 billion.
- Advertisement -
“Furthermore, inflation has put pressure on our expenses, thereby impacting the overall profitability,” he said.
Msimuko said the firm’s low stock and the firm’s experience in recent months also had a bearing on its market performance.
He, however, said the company has recovery strategies in place.
One of the company’s shareholders, Joe Maere, rated the performance as understandable emanating from the current economic situation.
- Advertisement -
- Advertisement -
“The position of the company is quite alright, but it has been dampened by the two things, inflation and the depreciation of the Kwacha, which is an external factor that Illovo could not have done anything about.
“Going forward, we are sure that the company will still maintain its resilient performance for the betterment of shareholders. In fact, they have already suspended an interim dividend that was supposed to be paid but we find it understandable to allow the company to navigate the current economic conditions,” Maere said.
