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Illovo H1 profit hits K8.1 billion

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By Chimwemwe Mangazi:

Illovo Sugar Malawi has recorded K8.1 billion profit in the first half of the current financial year, the firm said Monday.

The amount is higher than the K6.9 billion profit the company made during the same period last year, representing a 15.7 percent increase.

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The figure is also half the K16.4 billion net profit the company made in the 2017/18 financial year.

The Malawi Stock Exchange-listed company showed in an extract from its unaudited financial statement for the six months ended February 28 2019 that the company achieved a 14 percent increase in cane harvested and crushed during the period under review.

In the statement, signed by the company’s chairperson Gavin Dalgleish and Managing Director Mark Bainbridge, Illovo says the profits remain a subject of the interplay of inflation, exchange and interest rates movement and its debt levels.

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The firm says its business was partly affected by a rise in illegal sugar imports during the period under review.

“Challenging market conditions continued to be experienced in the commercial sphere with illegal sugar imports continuing in the domestic market which consequently had a negative impact on domestic sales and the group’s cash flows.

“In terms of the commercial environment, increased local competition and the influx of illegal imports is expected to put pressure on domestic sales over the next six months. However, the business will continue to focus on route to consumer initiatives with the roll out of direct delivery strategies to the wider consumer markets,” reads the statement in part.

Going forward, the firm says, in the medium to longer term, it would focus on the Nchalo agricultural and factory recovery and use of efficient irrigation systems and factory energy efficient improvements together with a focus on plant performance.

Meanwhile, Illovo Sugar has said it would not pay any interim dividends to its shareholders due to capital expenditure requirements and after taking into account the overall business cash generation and resultant cash flow constraints.

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