Illovo Sugar Malawi Plc has disclosed that in the 2023/2024 fiscal year, it experienced a significant decline in net profit, plummeting from MK57 billion to MK23 billion.
The company cited the newly introduced cooperative tax as a major factor contributing to this decline.
Illovo Sugar Malawi Plc’s Interim Managing Director, Kondwani Msimuko, made this announcement on Friday at the Mount Soche Hotel in Blantyre during the 2023/2024 financial results and business updates presentation to the Malawi Investors Forum.
According to Msimuko, the new cooperative tax has resulted in a substantial decrease in net profit.
Companies with profits exceeding MK10 billion are now taxed at 40%, significantly increasing their tax liability and reducing their net profit.
“The significant decrease in this year’s net profit will have a substantial impact on our company’s financial performance and overall operations, potentially affecting our ability to invest in growth initiatives and maintain a competitive position in the market,” Msimuko said.
He highlighted the importance of the meeting with key stakeholders, stating that the aim was to inform investors about the factors behind the decline in profits and provide strategic future plans and direction for the company.
“Our intention was to meet with these investors and make them understand the reason behind the decrease,” Msimuko added.
Frank Harawa, Secretary for the Minority Shareholders Association for Listed Companies (MISALICO), expressed concern over the decline in earnings, stating that shareholders are not satisfied with the slump in profits.
“This substantial decrease has a considerable impact on our financials. To address this long-standing issue, we need to diversify our products, such as switching to alternative products like cotton, which is less dependent on heavy rainfall,” Harawa said..
Illovo Sugar Malawi Plc is a leading sugar producer in Malawi, operating as a subsidiary of Illovo Sugar Africa.
The company produces sugar from sugarcane grown by both smallholder and estate farmers, and its operations contribute significantly to Malawi’s economy.
