Illovo Sugar Malawi Plc has reported a decline in net profit for the first half of the financial year ending 28 February 2024.

The company realized a net profit of K22 billion, down 35.29% from K34 billion in the same period of the previous year.

Operating profit also saw a significant drop of 48.82%, with the company recording K29 billion compared to K49 billion in the same period in 2023.

However, revenue grew by K22 billion, reaching K139 billion, attributed to the sale of 107,000 tons of sugar, of which 91,000 tons were sold domestically, contributing K124 billion to the total revenue.

Kondwani Msimuko, the company's Director of Finance, attributed the decline in profit to foreign exchange shortages and the 44% devaluation of the kwacha.

He also pointed out the impact of the new corporate tax bracket on business operations.

Msimuko explained, “We had limited stocks due to production issues resulting from cyclones, which affected yield recovery."

"This has had a long-term impact, but we are implementing measures to recover those yields.”

He highlighted environmental adversities that particularly affected operations at the Nchalo estate, disrupting crucial irrigation efforts essential for maintaining agricultural yields.

Additionally, rampant theft incidents on the Nchalo estate posed significant operational challenges and security risks.

“Our primary focus is on improving yields to maximize our operational capacity, allowing us to supply both domestic and export markets." - He added.

"We are also addressing operational inefficiencies from a factory perspective to increase capacity.”

Joe Maele, a shareholder of Illovo Sugar Malawi, acknowledged the challenges the company is facing due to the harsh economic environment. However, he expressed optimism that the company will bounce back.