(Incorporated in Malawi on 31 May 1965 under registration number 839)
EXTRACTS FROM THE UNAUDITED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED 28 FEBRUARY 2023
(COMPARATIVES ARE FOR THE SIX MONTHS ENDED 28 FEBRUARY 2022)
GROUP | |||
Unaudited | Unaudited | Audited | |
6 month period | 6 month period | Year ended | |
ended | ended | ||
FINANCIAL PERFORMANCE | 28-Feb-2023 | 28-Feb-2022 | 31-Aug-2022 |
COMPANY
Unaudited | Unaudited | Audited |
6 month period | 6 month period | Year ended |
ended | ended | |
28-Feb-2023 | 28-Feb-2022 | 31-Aug-2022 |
GROUP | ||
Unaudited | Unaudited | Audited |
6 month period | 6 month period | Year ended |
ended | ended | |
28-Feb-2023 | 28-Feb-2022 | 31-Aug-2022 |
COMPANY
Unaudited | Unaudited | Audited |
6 month period | 6 month period | Year ended |
ended | ended | |
28-Feb-2023 | 28-Feb-2022 | 31-Aug-2022 |
initiatives aimed at curbing the spread of cholera through impactful donations. All staff were also provided with appropriate health and preventative training and were encouraged to take cholera vaccines to ensure that they and their families and surrounding communities remained safe.
Condensed consolidated and separate statements of comprehensive income
Revenue
Gross Profit
Fair value change (growing cane)
Other Administrative Expenses
Operating profit
Dividend income
Net finance cost
Profit before taxation
Taxation
Net profit for the period
Other comprehensive income
Total comprehensive income
Adjusted for:
Other comprehensive (income)
Headline earnings
Number of shares in issue ('000) Weighted average number of shares on which net profit per share is based ('000)
Net profit per share (tambala)
Headline earnings per share (tambala)
Dividend per share (tambala)
Quality of earnings statement
Operating profit Adjust for:
Change in fair value of growing cane Operating profit excluding fair value changes
Business segmental analysis
Revenue
Sugar production
Cane growing
Operating profit
Sugar production
Cane growing
K'm | K'm | K'm |
116,734 | 92,031 | 186,642 |
39,433 | 17,210 | 57,018 |
30,186 | 9,923 | 8,298 |
(20,519) | (12,956) | (25,811) |
49,100 | 14,177 | 39,505 |
- | - | 60 |
(463) | (816) | (1,087) |
48,637 | 13,361 | 38,478 |
(14,909) | (4,143) | (11,848) |
33,728 | 9,218 | 26,630 |
18 | 9 | 89 |
33,746 | 9,227 | 26,719 |
(18) | (9) | (89) |
33,728 | 9,218 | 26,630 |
713,444 | 713,444 | 713,444 |
713,444 | 713,444 | 713,444 |
4,727 | 1,292 | 3,733 |
4,727 | 1,292 | 3,733 |
1,000 | 1,000 | 1,956 |
49,100 | 14,177 | 39,505 |
(30,186) | (9,923) | (8,298) |
18,914 | 4,254 | 31,207 |
34,815 | 56,184 | 109,089 |
81,919 | 35,847 | 77,553 |
116,734 | 92,031 | 186,642 |
16,510 | 12,361 | 29,434 |
32,590 | 1,816 | 10,071 |
K'm | K'm | K'm |
64,027 | 50,366 | 102,480 |
12,725 | 3,911 | 25,870 |
16,464 | 4,098 | 4,676 |
(11,490) | (8,102) | (14,050) |
17,699 | (93) | 16,496 |
30,000 | - | - |
(32) | (395) | (292) |
47,667 | (488) | 16,204 |
(5,300) | - | (5,079) |
42,367 | (488) | 11,125 |
18 | 9 | (23) |
42,385 | (479) | 11,102 |
(18) | (9) | 23 |
42,367 | (488) | 11,125 |
Condensed consolidated and separate statements | K'm | K'm | K'm | |
of cash flows | ||||
Cash generated from operations before working | ||||
capital changes | 53,955 | 19,016 | 40,707 | |
Working capital requirements | (31,414) | 4,089 | 14,006 | |
Finance costs and taxation | (7,893) | (14,347) | (9,261) | |
Net cash flows from operating activities | 14,648 | 8,758 | 45,452 | |
Net cash flows used in investing activities | (8,635) | (3,958) | (16,479) | |
Net cash flows before financing activities | 6,013 | 4,800 | 28,973 | |
Net cash flows used in financing activities | (2,009) | (1,169) | (14,235) | |
Increase in cash and cash equivalents | 4,004 | 3,632 | 14,738 | |
Condensed consolidated and separate statements of | ||||
changes in equity | ||||
Share capital and premium | ||||
Balance at beginning and end of the period | 782 | 782 | 782 | |
Retained earnings | ||||
Balance at beginning of the period | 99,710 | 87,035 | 87,035 | |
Net profit for the period | 33,728 | 9,218 | 26,630 | |
Dividends | (11,016) | (9,988) | (13,955) | |
Balance at end of the period | 122,422 | 86,265 | 99,710 | |
Non-distributable reserve | ||||
Balance at beginning of the period | 443 | 354 | 354 | |
Cash flow hedges | 18 | 9 | (23) | |
Fair value loss on revaluation of investment | - | 112 | ||
Balance at end of period | 461 | 363 | 443 | |
Shareholders' equity | 123,665 | 87,411 | 100,935 |
K'm | K'm | K'm |
21,083 | 3,464 | 18,835 |
(31,998) | 17,086 | 25,728 |
22,533 | (13,932) | (4,729) |
11,618 | 6,618 | 39,834 |
(6,204) | (2,222) | (11,754) |
5,414 | 4,396 | 28,080 |
(1,411) | (764) | (13,343) |
4,003 | 3,632 | 14,737 |
782 | 782 | 782 |
18,213 | 21,042 | 21,043 |
42,367 | (488) | 11,125 |
(11,016) | (9,988) | (13,955) |
49,564 | 10,566 | 18,213 |
- | 23 | 23 |
18 | 47 | (23) |
- | - | - |
18 | 70 | |
50,364 | 11,418 | 18,995 |
Tropical Cyclone Freddy impacted the southern region of the country immediately after the half year closure and caused significant loss of lives and property. The damage to the Nchalo Estate was not as severe as it was when Cyclone Ana affected Malawi in January 2022. Repair and maintenance works are underway to ready the estate for the March 2023 crushing season. In keeping with its commitment to contribute to a Thriving Malawian community, Illovo Sugar Malawi donated sugar and various commodities to Cyclone affected communities in Blantyre and Chikwawa to assist them during this recovery time. It is hoped that the recovery efforts currently being pursued will ensure an early return to reasonably normal lives for those affected.
PROSPECTS
It is expected that the repair and rehabilitation efforts that have been undertaken on the EGENCO infrastructure will yield positive results in terms of generation of sufficient power to the entire country. The Group intends to leverage the same to ensure that both agricultural and factory operations achieve excellent output, coupled with preventive plant maintenance programs. It is hoped that agricultural improvement initiatives will continue to further improve agricultural performance for the benefit of the entire business and hopefully, conducive weather patterns will further support the agricultural activities.
The business commits to continue supplying its valued customers with sugar in various affordable pack sizes and formats both on the domestic and export front. Various commercial initiatives and promotions will be undertaken to support the Route to Consumer efforts and ensure revenue and profit growth into the foreseeable future.
Scarcity of foreign currency, rising inflation, high interest rates and volatile exchange rates will continue to have a notable impact on the profitability of the business. The Group intends to continue applying significant efforts to ensure that cost management and efficient
Condensed consolidated and separate statements of financial position
ASSETS
Property, plant and equipment
Investment
Non-current assets
Current assets
Total Assets
SHAREHOLDERS' EQUITY AND LIABILITIES Shareholders' equity
Taxation Non-current liabilities Current liabilities
Total shareholders' Equity and Liabilities
Depreciation
Capital expenditure
49,100 | 14,177 | 39,505 |
82,731 | 66,837 | 76,980 |
740 | 604 | 740 |
83,471 | 67,441 | 77,720 |
161,376 | 83,977 | 119,670 |
244,847 | 151,418 | 197,390 |
123,665 | 87,411 | 100,935 |
41,642 | 25,748 | 26,792 |
9,682 | 8,933 | 7,094 |
69,859 | 29,326 | 62,569 |
244,847 | 151,418 | 197,390 |
4,855 | 4,839 | 9,586 |
8,635 | 3,958 | 16,618 |
56,024 | 44,362 | 51,346 |
324 | 324 | 324 |
56,348 | 44,686 | 51,670 |
115,977 | 57,635 | 56,867 |
172,325 | 102,321 | 108,537 |
50,364 | 11,418 | 18,995 |
41,651 | 15,009 | 18,484 |
5,212 | 4,975 | 3,301 |
75,098 | 70,919 | 67,757 |
172,325 | 102,321 | 108,537 |
OVERVIEW
In the first six months of this financial year ended 28th February 2023, the Group registered turnover of K116.7 billion compared to K92 billion over the same period in prior year and a profit before tax of K48.6 billion compared to K13 billion over the same period in prior year.
Agricultural operations progressed well in the final months of the March 2023 cane crushing season at both estates producing good quality sugarcane, even though frequent power outages affected irrigation especially at Nchalo, prior to the onset of the rainy season. Deliveries of cane from growers also supported the milling operations to be within expectation. Plant mechanical challenges delayed production at certain times during the period. Fuel shortages in the country hampered agricultural, factory and sales logistical operations, resulting in additional costs for doing business. The crushing season was extended to close on 16th December 2022 for Dwangwa and 19th December 2022 for Nchalo against the backdrop of a late start of the rainy season. The country started registering significant rainfall towards the end of December 2022 and this contributed
significantly to cane growth; the Group recognized that the extended crushing season might impact cane age especially at Nchalo in the coming March 24 crushing season.
Off-crop maintenance works were embarked upon immediately after the crushing season closure to prepare the mills for the March 24 crushing season. Capital project works progressed according to plan. Adequate sugar inventory had been accumulated to avoid stock-outs and lost sales during the off-crop maintenance period. Sugar sales therefore continued normally, mostly focused on the domestic market, with additional assurances being made to all customers on sustainable supply. The Route to Consumer initiative for delivery of sugar to the last mile customer continued to deliver increased sales growth and coupled with reduced arbitrage at the borders with Mozambique and Zambia, ensured achievement of volume and revenue targets and successful pursuit of commercial imperatives.
The country experienced the spread of cholera mostly in the urban areas in January and February 2023 and this negatively impacted on livelihoods in the surrounding communities. Illovo Sugar Malawi stepped in to support government
operations remain focus areas for the benefit of the ultimate consumers and shareholders.
DIVIDENDS
Notice is hereby given that an interim dividend of 1,080 tambala (2022: 556 tambala) per share has been declared in respect of the six-month period ended 28th February 2023.
Jimmy Lipunga | Lekani Katandula |
Board Chairman | Managing Director |
11 May 2023 |
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Illovo Sugar Malawi Limited published this content on 17 May 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 17 May 2023 10:10:19 UTC.