Illovo sees increase in sugar output
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Johannesburg -- Illovo Sugar said it expects helpful weather conditions in South Africa to lead to an increase in production for the year ending March 2014 even as declining global prices put pressure on operating margins.
The company “should see a further increase in cane production from our own operations and from our growers, which should underpin a moderate increase in sugar production for 2013-14,” Mount Edgecombe, South Africa-based Illovo said in a statement today.
The company said production increased 14 percent to 1.746 million tons in the year through March, while operating profit advanced 41 percent to 1.9 billion rand ($200 million).
The full-year dividend was raised 44 percent to 95 cents a share.
“Operating margin will likely come under pressure during the coming year as global sugar prices ease further, and consequently cost control will remain vital to maintaining these margins,” the company said.
Illovo shares have gained 28 percent this year to 37.87 rand, valuing the company at 17.44 billion rand.
The FTSE/JSE Africa All Share index has increased 4.5 percent. - Bloomberg News