ILLOVO/ TONGAAT HULETT Short-term windfall

Sugar companies Illovo and Tongaat Hulett rebounded from last season’s drought-depressed performance by posting better numbers for the six months to September, primarily driven by sugar production.

Illovo’s attributable profit for the six months was 29% higher than a year ago at R778m; Tongaat Hulett’s was 30% up at R655m.

Illovo’s revenue increased 25% to R5,1bn, benefiting from sugar sales volume growth of 10%, as well as improved selling prices.

Cane production increased 10% to 10,9 Mt following excellent rainfall in SA, and with improvement programmes in other African countries in the prior year now showing results.

Illovo MD Graham Clark says a record volume of cane production is expected for the full year to March.

Operations in Malawi (43%) and Zambia (23%) now account for two-thirds of the group’s profit and Clark says he expects this to continue for the foreseeable future. “The two countries are ideal for cane growing, with high efficiency and cane levels, and they are well positioned in relation to markets,” he says.

SA contributed just 12% to profit in the six months but Clark says it is still “very important” to the group. “We are working hard to grow cane supply in SA, converting land from timber and planting new cane in existing areas.”

The group’s mill in Umzimkulu near Port Shepstone, which was forced to close during the drought period, recommenced crushing this season.

Clark says the group’s four SA factories have “operated at high levels of efficiency”, with pleasing performances also from the two in Malawi. Expanded facilities in Zambia and Mozambique are