Africa’s largest sugar producer, Illovo Sugar Ltd. (ILV), announced a fiscal first-half profit rise of 29%, attributing higher rainfall to its boosted output and increased sales.
Unlike last year when a drought reduced output, this year brought heavy rains that resulted in improved harvest from several provinces of South Africa.
According to the report released by the company, actual operating profit for the six months ended 30 September 2012 reflected an improvement of 39% compared to the corresponding period last year. This result was primarily driven by increased sugar production, which was 17% higher than in the half year period ended 30 September 2011, and sugar sales volumes that were nearly 10% higher. Average prices improved reflecting better market conditions. Cost control was also effective in the period and operating margins improved. Profit after tax rose from R747.2 million to R972.7 million, resulting in a 29% improvement in headline earnings.
“This pleasing performance is on the back of an anticipated group cane-production record for the season with a notable recovery in South Africa following excellent rainfall,” Managing Director, Graham Clark.
“The 2012/2013 sugar season has begun well, with our production at the half year up 17% and our half year operating profit on a seasonal basis increasing to R854m. This pleasing performance is on the back of an anticipated group cane production record for the season with a notable recovery in South Africa following excellent rainfall after the prior drought. We have continued to focus on enhancing efficiencies across our operations and have benefited from better market conditions for sugar. We expect this positive momentum to continue for the full year”, Mr Clark said.