Malawi Stock Exchange listed sugar manufacturer, Illovo Sugar Malawi, has said it sees its profit for the financial year ended August 31, 2020 shrinking by 65 percent.
This will be a second year in a roll that the company will post a decline in profit after another drop in earnings last year.
In 2019, the firm saw its profitability dropping to K10.083 billion from K16.4 billion in 2018.
In a profit warning on Monday, Illovo Company Secretary, Maureen Kachingwe, cited declining sales on the local market.
“This is mainly due to a decrease in domestic sugar sales revenues caused by an influx of illegally imported sugar and the resultant domestic price reset effected in December 2019 as well as the challenges experienced in the export logistics arising from the effects of lockdown in some of our customers’ countries due to the Covid 19 pandemic,” Kachingwe said.
Early this year Illovo Malawi Chairman, Galvin Dalgleish and Managing Director, Lekani Katundula, said the firm’s drop in profitability was due to declining sugar prices on the local and international markets.
“Domestic sugar sales have been on a downward trend against a background of the on-going influx of both formal and informal sugar imports from neighbouring countries notably Zambia and Mozambique.
This was driven by the impact of currency devaluation in the bordering countries.
“Sugar exports into regional and deep water markets remain very challenging and have been compounded by the logistical problems brought about by the Covid-19 pandemic,” the directors said in a statement.
In a normal season, Illovo grows two million tonnes of sugarcane on its Nchalo and Dwanga estates which, combined with 400 000 tonnes of cane grown by Malawian growers, enables the production of over 250 000 tonnes of sugar.
- Vehicle imports decline by 47% - March 1, 2024
- Inflation to average 27.1 percent in 2024 – The Times Group - March 1, 2024
- Airtel Africa, Cisco in digital drive deal – The Times Group - March 1, 2024