Zambia Sugar PLC expects to report a stronger earnings per share for the 2019 financial year, in comparison to 2018, when it publishes its audited financial statements on 7th November 2019.
“In accordance with the Lusaka Securities Exchange (“LuSE”) Listings Requirements, the Board of Directors of Zambia Sugar PLC (the “Company”) hereby advises the Shareholders of the Company that the Earnings per Share (EPS) for the financial year ended 31 August 2019 is expected to exceed that of the financial year ended 31 August 2018 by 73%”, according to a statement issued by the Company on SENS on 30th October 2019.
In a year that has been fraught with accelerating inflation, increasing cost of finance, draught and electricity challenges, the forecast 73% comes at a time the company has been implementing prudent operational and financial management. “The performance for the financial year ended 31 August 2019 has been driven by increased cane supply and sugar production, strong regional market demand and improved export revenue realization due to the depreciation of the Zambian Kwacha”.
Against all odds, the company which has a foothold in the food value chain is witnessing a payback on its bet on Project PAAR which it implemented over 2 years ago. Domestic market demand has been firm, according to the company, which has complemented its continued focus on efficiencies and cost management across the business contributed to cost containment offset by increasing inflation and a weaker local currency.
The Rebecca Katowa led management team is not without threats to its value creation. Domestic credit saw an increase in the last two financial quarters of the ZamSugar financial year. “High debt levels and the increasing cost of finance remain a challenge to the Company”. Further analysis will be done on the company once it publishes its detailed financials next month. Furthermore, shareholders should expect an announcement from the Company Secretary on when they will be meeting with the management team at the next annual general meeting of which Financial Insight will be in attendance to further probe the company’s performance.