Financial Performance Review In the six months to 28th February 2026, total revenue declined by 10% to K3.56 billion, compared to K3.97 billion in the prior comparative period. The decrease was primarily driven by lower domestic sales volumes, which had an adverse impact of K451 million. This was partially offset by improved revenue realisation across both domestic and export markets, contributing a positive K66 million.
Domestic sales revenue fell by 10%, reflecting a 20% reduction in volumes relative to the previous corresponding period. Export revenues benefited from a 24% increase in sales volumes; however, this was outweighed by a 25% adverse movement in price realisation, resulting in a 6% net decline in overall export sales revenue.
Operating expenditure increased by 6% year-on-year, reflecting sustained cost pressures, notably from continued reliance on premium-priced imported electricity, as well as targeted manpower investments to support a successful start-up of the 2026/27 harvesting season. Additionally, activity-based costs such as chemicals, consumables and cane haulage were higher due to increased production that resulted in 14% increase in sugar produced. Operating profit for the six-month period ended 28 February 2026 decreased to K437 million, compared to K907 million in the prior comparative period, representing a 52% decline. The reduction in profitability was primarily attributable to lower domestic sales volumes which adversely impacted domestic sales revenue. This was further compounded by sustained input cost pressures amid higher production levels, as well as the appreciation of the Kwacha, which negatively affected export sales realisation.
The combined effect of lower revenue and elevated capital expenditure resulted in increased utilisation of working capital facilities, driving finance costs up to K79.6 million from K20.1 million in the prior comparative period.
Profit after tax for the period was K273 million, compared to K790 million in the corresponding period in 2025. This translated to a 65% decline in Earnings Per Share (EPS), from 249.6 ngwee to 86.3 ngwee per share .
Operational Performance Cane supply during the period under review increased by 7%, supported by a 17% improvement in yields from own estate. This was partially offset by a 12% decline in out‑grower yields, reflecting the lingering effects of the 2023/24 drought on out-growers who were unable to access premium-priced imported electricity.
As a result, sugar production increased by 14% compared to the prior comparative period. The improved output was driven by higher cane throughput, supported by a 2% improvement in overall recovery.
Cane supply for the 2026/27 season is expected to improve, supported by more favourable weather conditions and the anticipated stabilisation of electricity supply from ZESCO, following improved rainfall patterns. Enhanced factory technical reliability, following extensive maintenance undertaken during the off-crop period, is also expected to support gains in production efficiency.
Market demand is projected to recover from the subdued first-half performance, with sustained momentum anticipated across both domestic and regional markets. However, input costs are expected to remain elevated, largely dependent on the duration of the Middle East crisis, which may exert pressure on the domestic currency and drive inflation upwards, particularly for imported production and agricultural inputs. In response, the Company has heightened its focus on a business‑wide cost efficiency drive, undertaking comprehensive reviews of its cost structure. This initiative is aligned with the strategic goal of building a sustainably low‑cost business, ensuring resilience against external shocks while supporting steady profitability and long‑term competitiveness.
The K1.72 billion Twazabuka Project, comprising a modern packing plant and warehouse facility at the Nakambala mill, is progressing well and remains largely on schedule. This strategically significant and transformational investment, aimed at enabling year-round packing capability, enhancing food safety standards, and improving product availability and flexibility to meet evolving customer demand, is central to the Company’s long-term growth strategy. In addition, the Company has commenced the 13.5MW co-generation renewable energy project and is in the process of contracting for the development of a 15MW solar plant. Collectively, these initiatives are expected to deliver significant returns for the business through increased revenue and costs savings in addition to broader socio-economic benefits, including job creation, increased participation of local suppliers, reduced reliance on the national electricity grid, and a stronger contribution to Zambia’s economy through enhanced productivity and tax revenues.
