Zambia Sugar Plc has disclosed that its operating profit has increased to K768 million compared to K235 million in the previous year for the half-year financial performance for the year 2021. However, the revenue and profit increase in Kwacha terms has largely bee attributed to exchange gains from export sales.
Zambia Sugar Country Managing Director Rebecca Katowa thanked the management team for executing the company strategy that was beginning to bear fruit and assured stakeholders that the company would continue to reduce debt levels in the business and pursue meaningful investment opportunities.
At a function held in Lusaka attended by the Zambian Business Times – ZBT, Katowa who was addressing shareholders, analysts and the media said that the company will continue to focus on attaining the right gearing for the business, which ensures that the company begins to look at further meaningful investment opportunities.
Katowa commended employees, management and government for the performance of the company inspite of the impact the COVID-19 pandemic had created on the environment.
Speaking at the same event, Company Finance Director, Raphael Chipoma commended the stakeholders and the employees for the 52% growth in revenue moving to K2.121 billion compared to the prior period.
Chipoma stressed that the growth in revenue was largely driven by a 28% growth in domestic sales volume and a higher realisation of export sales amounting to 51% (foreign exchange effect).
He also commended the hard working staff and management for the focus on cost containment initiatives introduced over the years, which was now yielding fruit. The Finance Director emphasized that part of the growth in operating profit was attributed to 230% increase in non-cash fair value of growing cane, which was because of good yields following good rain season and good supply of power from ZESCO.
He mentioned that although finance costs were at K102 million, this was a 37% decrease compared to 2019 period, largely as a result of repayments of long term loans echoing the Country Managing Directors’ comments that the company would continue to de-gear the business which was now sitting at 32% compared to 40% in prior period.
Chipoma further said the company observed that COVID-19 pandemic would continue to have an adverse effect on the business in the input side including the area of employee productivity and especially that major inputs such as fertilizers, pesticides, process chemicals and factory spares continue to be imported and border restrictions continue in neighbouring countries.
