Some setbacks but overall good times for Illovo Sugar

Output projections for Zambia Sugar’s year to March 2010 have been cut from 420,000 tonnes to 350,000 tonnes. This is attributed to ‘off-season rains in the early part of the growing period’. However, production of 350,000 tonnes will still be a record for the company. In the current season the company reports that ‘export demand from regional markets has been buoyant, with good realisations being achieved as a result of increased world sugar prices, whilst preferential quotas into the European Union have been supplied in full’. The company expects lower prices for EU sugar from October 2009 to be ‘offset by increased market access’. Meanwhile, Illovo, the owner of Zambia Sugar, reported an 18% rise in first-half profits on its operations in Malawi. This has contributed to an increase in headline earnings across the Illovo Group of between 25% and 30% compared to the previous year.

In parallel to Illovo’s performance, British Sugar’s owner, Associated British Foods (which also has a 51% share in Illovo) has announced an increase in pre-tax profits, taking them to £655 million in the latest financial year. ‘Overall ABF group revenue was up 12% ... and adjusted operating profit [was] up 8%’. This improved performance follows on from the finalisation of the 2010 beet contract, ‘which meant that the price paid to growers would remain unchanged next season’.