They say the best time to bow out is when you are on top. One gets that sense when reading the recent announcement from Zambia Sugar that the Chief Financial Officer Raphael Chipoma was exiting the boardroom.
At the end of their last financial year, Zambia Sugar recorded total revenue for the year ended 31 August 2022 of K5.111 billion, which represented a 2.4% increase from the prior year comparative, bolstered largely by a 5% growth in domestic sales volume.
But what was even more exciting was what was happening on the balance sheet relating to the company’s debt position. According to analysis conducted by African Financials, the sugar manufacturer achieved strong technical performance, in both factory and fields, and had focused working capital management resulting in strong cash generation which led to significantly reduced borrowings from K403 million at the beginning of the year to K42 million at year end. Consequently, the business achieved zero gearing and is well positioned for further investment and growth.
Few businesses can achieve zero gear post implementation of projects of the magnitude of Project PAAR, Zambia Sugar’s flag ship expansion project that has ultimately led to the economies of scale and scope that now allow the business to achieve product volumes that can service both local and international markets at significant quantum with variety of product offerings.
This is why the board has expressed gratitude for the work the Rapael has done for the company. “The Board wishes to thank Mr Chipoma for his valued contribution to the Company since joining in December 2019 and wishes him all the best in his future endeavours”, read the statement from Company Secretary Harriet Kapekele-Katongo issued on behalf of the Board on 4th April 2023.
At its last engagement in November 2023, the company indicated to the press and other key stakeholders that it would be pursing on balance sheet financing of its aspirations which include increasing its reach to domestic customers as well as seeking energy independence.
This can only be possible if the balance sheet is healthy which is what the outgoing CFO managed to achieve through the capital structure strategy that was deployed. The company is well positioned for growth and based on their strategic intent, dominating the local market is key.
Furthermore, having cemented their position in the Billion Kwacha Profit After Tax club, shareholders in the company can be rest assured that should the trajectory continue as is, the dividend policy currently in place will ensure they continue enjoying returns for sometime to come.
