Zambia Sugar profits up

ZAMBIA – Zambia Sugar Plc has recorded a five per cent increase in revenue in the last six months ended September this year.

This has been attributed substantially to growth in the domestic and export markets, company secretary Mwansa Mutimushi said.

Ms Mutimushi said in a statement yesterday that the company’s revenue increased by five per cent translating into K966 million, while profits from operations increased by three per cent to K149million.

“Profit from operations increased and this is despite pressure on margins from declining prices on exports to the region, associated with the present sugar surplus on the world market, and the European Union (EU),” Ms Mutimushi said.

She said conversely, finance costs increased by 12 per cent to K75million in line with the relatively high local interest rates, with the result that profit after taxation attributable to shareholders of Zambia Sugar declined by six per cent to K62 million.

She said headline earnings declined from K0.21 to K0.20 per share.

In the period under review, sugar cane yields improved appreciably across the entire cane area, compared to the corresponding period last year which reflected a return to normal conditions.

“In addition, various continuous improvement initiatives in agriculture are beginning to yield results.

Factory performance in the first six months of the season was solid, with total sugar production of 314 000 tonnes as management continues to improve plant reliability and optimise factory time efficiencies,” she said.

She said domestic market sugar sales for the half year increased by six per cent to 75,000 tonnes, of which 26,000 tonnes was supplied to industrial customers.

Exports to regional markets and to the EU in particular were lower than the corresponding period in the previous year but the situation was expected to improve in the six months ahead.

Prices in export markets remained depressed but that the impact on export earnings had to an extent been ameliorated by favourable exchange rate movements.

Regarding the prospects for the financial period ahead, Ms Mutimushi said sugar production for the full year was expected to exceed the previous record, dependent on late season weather conditions.

“Sugar cane yields are holding up well and latest estimates indicate that the balance of the crop will be sufficient to fully supply the factory with the potential of some carry-over area into the 2015/16 season,” she said.

“Conditions for domestic market sales are expected to remain favourable, with strong growth year-on-year, and demand in the region is expected to intensify as opportunities in these markets are exploited”.

Zambia Sugar has since declared an interim dividend of K0.08 per share in respect of the six months ended September, this year, payable to ordinary shareholders registered at the close of business on November 21.

The dividend would be paid on or before November 24.

November 8, 2014; http://www.times.co.zm/?p=41597

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