Illovo Sugar Malawi profits for the year 2020-21 year rocketed to a record K20.4 billion on the back of favourable weather conditions and improved power supply, a financial statement published by the company has shown.
The profit represents a 647 percent rise when compared to the K2.7 billion profit recorded in the previous year.
The statement, signed by the company’s Chairperson Gavin Dalgleish and managing director Lekani Katandula says cane crushing commenced in April 2021 at its estates, registering significant factory throughput for the rest of the year resulting from an excellent off crop maintenance programme.
It says Dwangwa estate, however, experienced frequent plant operational stoppages and downtimes mostly between July and August 2021, offsetting the gains that had been made earlier in the season.
The mill had recorded excellent crush rates in the 2020 crushing season straddling the first three months of the 2021 financial year.
“In the financial year, other sales activation initiatives and the successful implementation of the Route to Consumer Programme for direct sugar deliveries to customers.
The depreciation of the Malawi Kwacha against major trading currencies significantly reduced price arbitrage and, combined with interventions by the Malawi Revenue Authority, stemmed illegal sugar imports at the country’s borders with neighbouring countries.
“Sales to Europe and USA (deep water markets) were affected by frequent rescheduling of vessels at Nacala and Beira.
Border closures and other restrictions due to the Covid pandemic also had a negative impact on such export sales; however, this resulted in improved intra-Africa (regional) export sales as most of the deep water consignments were redirected to those markets,” the statement reads.
The development has resulted in the company proposing an 800 percent jump in dividends for its shareholders to K18 per share from K2 per share the preceding year.
In an interview Alliance Stockbrokers Limited Operations Manager Thokozani Saulosi said they expected shares for the company to be on demand which should drive prices up.
“Mostly when listed companies portray such a performance, fund managers want to put money there and we should expect share prices for Illovo to rise significantly because of its performance in the just-ended year,” Saulosi said.
General Secretary of the Minority Shareholders Association of Listed Companies Frank Harawa said it was exciting that the company was returning to its old ways of being profitable.