Illovo Sugar Limited - Annual General Meeting - 17
Illovo Sugar Limited - Annual General Meeting - 17 July 2002
Chairman`s Address presented by Robbie Williams
I welcome the opportunity provided by this shareholders` meeting to give
you an update on the group`s operations.
The past year saw the group achieve excellent results. Headline
earnings increased by 53% to R340,3 million with headline earnings per
share rising by 52% to 102,8 cents. Record production of sugar, own
cane, ethyl alcohol, diacetyl, lactulose and acetoin was attained.
Factory operational performance improved and further progress was made
in enhancing the company`s position as a leading global low cost sugar
and downstream products producer.
Looking now at this year as at today, climatic conditions across the
group have been variable during recent months and it is still early in
the sugar milling season, but the overall performance of the group`s
operations so far has been positive with own cane production forecast to
be 5,5 million tons (last season 4,9 million tons) and sugar production
estimated to be approximately 2,16 million tons this year (last season
1,95 million tons).
In South Africa rainfall has been below long term average but rains
during June seem to have stabilised the cane crop. The sucrose percent
cane and milling conditions have been good. The current sugar
production estimate is 80 000 tons above last year. The furfural and
related products plant at Sezela and the distilleries and lactulose
plant at Merebank and Glendale are all performing well. Numerous field
trials on a variety of crops, required to progress the commercialisation
of furfural as an agricultural chemical, are in progress and the results
to-date are most pleasing.
In Swaziland the hot and dry conditions have had a marginally negative
impact on cane yields despite the good irrigation supplies. However the
situation is much improved compared to last year and the factory is
expected to produce 35 000 tons more sugar than in the previous year.
It has also been dry in Zambia but with irrigation and good sunshine
hours the crop is looking healthy and sugar production is expected to
increase by 8 000 tons.
In Malawi, sugar production is forecast to increase by 15 000 tons. The
focus this year is to achieve a stable production environment following
the capital expansions of prior years.
At Monitor in the United States beet plantings were delayed by wet
weather and production from beets is anticipated to be marginally less
than last year. However increased external molasses purchases for
processing through the de-sugarisation plant are expected to result in a
small increase in overall sugar production.
Production at Kilombero in Tanzania commenced at the beginning of June
with operations settling down well. Early indications are that sugar
production will increase by 30% this year.
At Maragra in Mozambique, the crushing season commenced in early May as
planned and factory performance has been most encouraging with sugar
recoveries exceeding expectations.
The plant is expected to produce 59 000 tons sugar in the current
season.
Sales of sugar and downstream products across the group have been in
line with expectations although the world sugar price has fallen to
disappointing levels. The South African industry has hedged more than
75% of anticipated sugar exports at prices which are at levels above
current market prices.
Based on the estimated increase in production and provided current
selling prices and currency levels are maintained, earnings are expected
to grow in real terms.
Date: 17/07/2002 03:53:00 PM Produced by the JSE SENS Department
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