Mazabuka based Zambia Sugar, a LuSE listed subsidiary of Illovo of South Africa has advised that the company that the Earnings per Share – EPS for the half year ended 28 February 2019 is expected to be approximately 68% higher than that for the half year ended 28 February 2018.
In a security note made available to the Zambian Business Times – ZBT, the sugar company attributed the increase in earnings to predominantly due to increased sales in the domestic and regional markets which have benefitted from increased production of sugar achieved in the prior season.
The company note stated that, however significant volumes of world market sugar continue to find its way into the company’s primary regional markets putting pressure on margins.
To counter this, the company’s management has put in motion the cost reset project code named Project 400 which it stated continues to yield significant savings which also contributed positively to earnings.
Zambia Sugar Plc is the Illovo group’s second largest sugar producer following a major agricultural and factory expansion project completed in 2009, which increased and doubled total annual sugar production capacity from around 200 000 tons to 450 000 tons.
The company is listed on the Lusaka Securities Exchange – LuSE with 76% of shares held by the Illovo group and the balance by institutional and private investors. As Zambia’s leading sugar producer, located in the south-western region of the country alongside the Kafue River, it cultivates sugar cane and manufactures Vitamin A-enriched raw and refined sugar under the Whitespoon brand name for local consumer markets and industrial customers.
The local sugar market in Zambia is getting more and more competitive with new players coming on stream such as consolidated farming Limited with its Kafue Sugar which has a 9,000 hectare sugar estate and has an estimated 30% of the local market. Other sugar producers which all have room for further expansion and are more closer to the regional market of Democratic republic of Congo include Kasama Sugar and Mansa Sugar.
