South African sugar producer Illovo Sugar lifted full-year headline earnings by 46% to R515,3-million and headline earnings a share by 43% to 149,1c a share on the back of higher sugar prices, which helped offset the impact of lower production in South Africa and Tanzania. The group, which released its results for the year to March 31, 2007, on May 22, said that earnings were further underpinned by higher downstream product export prices, strong domestic market sales, and cost savings initiatives.
Sugar production contributed 59% to operating profit, with cane growing and downstream exports contributing 33% and 8%, respectively. Malawi (39%), and Zambia (22%), accounted for most of the group’s operating profit, followed by South Africa (21%), Tanzania (9%), Swaziland (7%), and Mozambique (2%).
“As reported in April, our overall sugar production was impacted by adverse weather conditions in South Africa and Tanzania, but we achieved record production in Malawi,” managing director Don MacLeod said.
He added that Illovo's R1,4-billion expansion in Zambia to almost double the production in that country over the next two years had kicked off. The expansion involved developing 10,500 ha of irrigated cane and its growers, representing a 50% increase in area, and the expansion of the factory at Nakambala to produce 440,000 ton per year, compared with the current capacity of around 200 000 t/y. “This is the first major step towards further expansion into Africa as part of our strategy of being the leading, lowest-cost sugar producer on the continent,” MacLeod said.
Illovo said there was significant growth potential in its factory and field operations and that it was continuing its search for further investments in Africa. “We expect to report further growth in earnings in the year ahead,” MacLeod added.
Illovo expects to achieve higher levels of cane, sugar and downstream production in the year ahead, but the company stated that declining world prices would impact on revenues.
Engineering News
To ease your site search, article categories are at bottom of page.
May 25, 2007
Illovo's South African, Tanzania cane production down
Categories commercial farming, South Africa, sugar cane, Tanzania
