Illovo Sugar flags lower FY earnings
IOL Business - Apr 16th 2015, 08:33
Johannesburg - Illovo Sugar, Africa's biggest producer of the sweetener, said on Wednesday its full-year profits would fall due to depressed global prices and drought that has ravaged some of its crops in South Africa.
Headline earnings per share for the year to end-March will decrease by up to 12 percent to 170.7 cents, Illovo said in a statement, denting the firm's stock.
Shares in Illovo, which also operates in Malawi, Swaziland, Mozambique, Zambia, and Tanzania, fell as much as 7 percent.
The company said it was forced to close its Umzikulu mill for the current season due to lower production after severe drought and frost in South Africa's sugar belt in the KwaZulu-Natal province slashed sugar cane output.
Illovo said the economic downturn in the European Union zone, including a sharp weakening in the euro, had affected one of its key markets, while a softer Brazilian real drove the sugar price lower.
Banks including Goldman Sachs and Citi have slashed their forecasts for coffee and sugar prices by as much as 31 percent in the past month as the value of Brazil currency slumped to its lowest in 12 years.
The firm however said it expected some relief from a rise in demand in its African market, and a favourable rand exchange, which may positively influence export revenue. From © Independent On-line 2015. All rights reserved.
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