Illovo Sugar Malawi Plc has disclosed that within the 2023/2024 fiscal 12 months, it skilled a big decline in internet revenue, plummeting from MK57 billion to MK23 billion.
The firm cited the newly launched cooperative tax as a significant factor contributing to this decline.
Illovo Sugar Malawi Plc’s Interim Managing Director, Kondwani Msimuko, made this announcement on Friday on the Mount Soche Hotel in Blantyre throughout the 2023/2024 monetary outcomes and enterprise updates presentation to the Malawi Investors Forum.
According to Msimuko, the brand new cooperative tax has resulted in a considerable lower in internet revenue.
Companies with income exceeding MK10 billion at the moment are taxed at 40%, considerably rising their tax legal responsibility and decreasing their internet revenue.
“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 mentioned.
He highlighted the significance of the assembly with key stakeholders, stating that the purpose was to tell buyers in regards to the components behind the decline in income and supply strategic future plans and course for the corporate.
“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 usually not glad with the stoop in income.
“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 mentioned..
Illovo Sugar Malawi Plc is a number one sugar producer in Malawi, working as a subsidiary of Illovo Sugar Africa.
The firm produces sugar from sugarcane grown by each smallholder and property farmers, and its operations contribute considerably to Malawi’s economic system.