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Zambia Sugar PLC’s total revenue for the six-month period ending February 28, grew by five percent to K2.35 billion, largely driven by strong domestic and export sales performance.
This saw an improvement in export proceeds, attributable to depreciation of the Kwacha during the period December 2022 to February 2023.
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This is according to the half year financial results posted on the Lusaka Securities Exchange (LuSE) Tuesday.
It stated that sales to the export market increased by 26 percent due to the availability of stocks following the slowdown in the domestic demand.
Compared to the same period the previous year, the report showed that domestic sales volume was negatively impacted by the influx of illegal imports.
It further stated that the company responded by implementing promotions and non-price tactical measures and recovered some of the lost market share in the later part of the period under review.
“Operating profit for the six-month period was K655 million compared to K644 million for the comparative period the previous year.
“The two percent increase in operating profit is mainly driven by improved price realisation and cost management despite significant increases in the cost of key inputs (fertilisers, chemicals, electricity, employee costs, packaging and fuel). Overall, costs increased by 11 percent,” the report indicated.
The report also showed that finance costs increased by four percent from the previous year from K29 million in the six months to February 2022 to K30 million in the period under review.
This was because of higher facility utilization to cover off-crops costs.
“In line with recent trends, gearing improved from 15 percent to 13 percent as at February 28. 2023.
“Headline earnings for the six-month period ended February 28, 2023 increased to K510 million from K439 million for the 6 months to February 29, 2022. Earnings per share grew by 16 percent from 138.8 ngwee per share to 161.4 ngwee per share,” it stated.
On the supply side, the report indicated that cane supply for the period under review increased 18 percent compared to the previous period due to an improvement in cane yields for the estate and outgrowers.
“The upside in yields is mainly attributable to better climatic conditions experienced during the summer growing months and availability of power for irrigation,” it stated.
It indicated that total cane supplied for the 2022/23 season was 3.359 million tonnes compared to 3.158 million tonnes in the 2021/22 season.
The increase in cane supply resulted in a corresponding 11 percent increase in sugar production for the six-month period which was 15,200 tonnes higher than the comparative period last year.
For the 2022/23 season 400,431 tonnes of sugar was produced compared to 390,206 tonnes in the 2021/22 season.
“Domestic market sales were under pressure from illegal imports but recovered strongly towards the end of the period following the institution of promotions and other non-price interventions. Sales in the regional export market increased due to better stock availability and strong demand,” the report stated.
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