Zambia Sugar Plc has recorded a 50% increase in revenue as it’s annual sales grew to a record high of K4.989 billion up from K3.335 billion recorded last year.
Zambia Sugar Country Managing Director Oswald Magwenzi has attributed the increase to external factors including the positive foreign exchange impact during the course of the year. The local currency depreciated by over 48% compared to the last financial year. Zambia Sugar current year end is August 2021.
Magwenzi said the company’s supply chain was also hampered due to poor vessel availability, container shortages and border restrictions which negatively affected costs of some inputs as a result of COVID-19 while at the same time deterring sugar imports thus limiting competition from imported world sugar.
He said the growth in the financial year is a reflection of strong agricultural and factory performance as well as the continued execution of the commercial strategy including the route to consumer initiatives that enabled the company to leverage the market development and market penetration opportunities and the company will continue to consolidate its place in not only the domestic market but the export market too.
Magwenzi who has taken over from Rabecca Katowa noted that as a result of the implementation of the strict border controls, strong commercial strategy, good cost containment initiatives as well as strong yields in agriculture including the sustained delivery level attributable to the improved factory performance, operating profit grew to K1.615 billion up from prior year performance of K775 million.
He added that this ultimately resulted in a profit after tax for the year of K1.086 billion up from K235 million in 2020. Other major call outs include an improved product sales mix and a significant paying down of debt resulting in lower interest costs. This resulted in record earnings per share of 343 ngwee up from 74 ngwee.
Magwenzi mentioned that sucrose extraction for the year was 467 956 tonnes with an improved sucrose content that increased from 14.38% to 14.67% and domestic sales hit a record high of 263 000 tonnes up from 209 000 tonnes the previous year. Domestic sales were this time higher than export sales – another notable change in the sales mix.
The new Zambia Sugar CEO who has come in from Zimbabwe explained that his aspiration is to make Nakambala the best estate, which translates to creating an estate everyone can be proud of and the goal is to fully utilise the plant capacity of about 450, 000 tones by expanding production to 445, 000 tonnes of sugar production per annum in the next five years.
To achieve this aspiration, Zambia Sugar has come up with a five year strategic plan that will ensure improvement of cane yield per hectare to over 118 tonnes per hectare consistently. The company will also work on its factory efficiencies. He said the company will continue to focus on renewing its social license to operate not only in Mazabuka but also in all the areas where it operates.
He added that the company is optimistic about the new financial year and anticipates an appreciation of the kwacha which is likely to adversely impact export sales revenue noting that the company will continue with its commercial strategy and leverage projected growth in the domestic market.
