Illovo ups revenue, warns on output
Fin24 - Nov 23rd 2011, 08:39
Johannesburg - Illovo Sugar [JSE:ILV] posted a 12% rise in first-half earnings on Wednesday helped by currency weakness and cost cutting but said output was still struggling to recover from a 2010 drought in KwaZulu-Natal province.
Illovo, a unit of Associated British Foods, said diluted headline earnings per share for the six months to end-September totalled 62.9 cents compared with 56.2c in last year's sugar season.
It said revenue rose 7% to around R4.55bn.
“It is pleasing to report increased profits on the back of favourable exchange rates, cost cutting and better market conditions,” managing director Graham Clark said in a statement.
Regional currencies generally lost ground in the period including the rand which skidded sharply weaker in September. Such trends boost exporters who earn foreign exchange and pay most costs in local currencies.
Overall output remains a concern though modest increases for the year are seen in Malawi, Mozambique, Swaziland and Tanzania.
“Group production levels continue to be impacted by the knock-on consequences of the severe drought in KwaZulu-Natal, South Africa in 2010,” Clark said.
The group said it expected full-year production to be down 10%.
Illovo is Africa's biggest producer of the sweetener and has operations in South Africa, Malawi, Zambia, Swaziland, Tanzania and Mozambique.
In lieu of a dividend, the company declared an interim capital reduction distribution out of share premium of 23.0c per share.
Illovo shares have fallen 7% so far this year, compared with a 2.3% fall in JSE's All Share [JSE:J203] Index.
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