http://www.engineeringnews.co.za
  SEARCH
Login
R/€ = 14.15Change: 0.05
R/$ = 11.55Change: 0.01
Au 1179.93 $/ozChange: -16.99
Pt 1185.50 $/ozChange: -12.00
 
 
Note: Search is limited to the most recent 250 articles. Set date range to access earlier articles.
Where? With... When?








Start
 
End
 
 
And must exclude these words...
Close Main Search
Close Main Login
My Profile News Alerts Newsletters Logout Close Main Profile
 
Agriculture   Automotive   Chemicals   Competition Policy   Construction   Defence   Economy   Electricity   Energy   Environment   ICT   Metals   Mining   Science and Technology   Services   Trade   Transport & Logistics   Water  
What's On Press Office Tenders Suppliers Directory Research Jobs Announcements Contact Us
 
 
 
RSS Feed
Article   Comments   Other News   Research   Magazine  
 
 
Nov 18, 2010

Illovo says drought and strong rand impacting on output and earnings

Back
Natal|Cogeneration|Crushing|Design|Illovo|PROJECT|Tongaat-Hulett|Malawi|Mozambique|Swaziland|Ubombo Factory|Umzimkulu Factory|Cogeneration|Crushing|Sugar Producer|Cogeneration|Graham Clark|Operations
|Cogeneration|Crushing|Design|PROJECT||||Cogeneration|Crushing||Cogeneration||Operations
natal|cogeneration|crushing-company|design|illovo|project|tongaathulett|malawi|mozambique|swaziland|ubombo-factory|umzimkulu-factory|cogeneration-industry-term|crushing|sugar-producer|cogeneration-person|graham-clark|operations
© Reuse this



JSE-listed sugar producer Illovo expects its sugar output for the 2011 financial year to be similar to the 1,7-million tons of sugar produced in the year ended March 31, 2010, but warned that its earnings would be lower, owing to foreign exchange impacts.

Sugar output at its South African operations has, in the first half of the 2011 financial year, been negatively impacted on by drought in KwaZulu-Natal, while unseasonal rain in Swaziland has also led to lower production in that country.

Illovo, led by MD Graham Clark, on Thursday highlighted the strong rand and the drought in KwaZulu-Natal as two of its biggest challenges.

Fellow South African sugar producer Tongaat-Hulett on Monday also reported that its full-year sugar output would be impacted on by the drought, while export revenues were being impacted on by foreign exchange translations.

Illovo reported drastically reduced cane yields and cane availability at its South African operations, which resulted in the early closure of its Umzimkulu and Eston factories.

For the full-year, the local operations were expected to produce about 90 000 t less sugar than the 663 000 t produced in the 2010 financial year.

The company indicated that, even with a good summer rainfall, cane production on the south coast of KwaZulu-Natal in the 2011 calendar year would likely remain lower than that of the current year.

Illovo has, therefore, decided not to operate its Umzimkulu factory in the 2011/12 financial year, and will instead divert cane supplies to its other factories to enable these to run closer to their capacity.

Meanwhile, unseasonal rain in Malawi, Mozambique and Swaziland impacted on the cane quality in these three countries during the first half of the current financial year.

Nevertheless, the company has continued to make progress with regard to the expansion programme at the Ubombo factory, in Swaziland, with the upgraded facilities, capable of producing 300 000 t/y of sugar, to be commissioned in time for the start of the next season.

The R1,5-billion project would be completed by April next year.

Ubombo produced about 210 000 t/y of sugar in the 2010 financial year.

Additional cane development was being completed, while bagasse and biomass cogeneration facilities, which would allow the plant to be self-sufficient, would start up once the expansion project was complete.

Further, Illovo also reported a favourable season for its Zambian and Tanzanian operations.

Its Zambian operation, which was regularly exceeding its design capacity, crushing more than 100 000 t a week of cane, was expected to produce “significantly” higher volumes in the 2011 financial year.

About 315 000 t of sugar was produced at this operation in the 2010 financial year.

The Tanzanian operation was also expected to increase its output marginally on the 121 000 t produced in the previous financial year.

EXPORT EARNINGS AND SALES

Despite improved world sugar prices, the local industry has been unable to take full advantage of the opportunity, owing to the lower local sugar production, Illovo stated.

Therefore, its world market sugar exports were not expected to exceed 355 000 t this year, compared with the 742 281 t exported in the previous financial year.

Further, the weaker euro and lower-than-expected European sugar price realisations has also impacted negatively on downstream revenue and sugar export earnings from sales to the European Union during the first half of the financial year.

In addition, the continued strength of the rand and the weakness of the dollar were expected to further negatively impact on the company’s export earnings, as well as on the conversion of foreign subsidiary profits for the full-year

This would likely result in headline earnings a share (HEPS) for the full-year falling by between 30% and 40% on the HEPS of 171,2c a share recorded in the 2010 financial year.

Earnings a share (EPS) were also expected to be between 35% and 45% lower than the EPS of 161,4c a share recorded in the previous financial year.

Illovo’s headline earnings of R574,2-million for the six months ended September 30, 2010, was already down 14% on the headline earnings of R668,1-million reported for the six months ended September 2009.

Edited by: Mariaan Webb
© Reuse this Comment Guidelines (150 word limit)
 
 
 
 
 
 
 
 
Other Agriculture News
SARUSHEN PILLAY Sasol has proven the viability of composting to remediate its industrial sludges over the course of two years of testing
Petrochemicals giant Sasol’s industrial sludge bioremediation project aims to move into full commercial scale over the next two years to treat 200 000 t/y of industrial sludge. The project uses aerobic composting to convert the sludge from its Bioworks water...
Eastern Cape Rural Development Agency CEO Thozamile Gwanya
Rural development financier the Eastern Cape Rural Development Agency (ECRDA) CEO Thozamile Gwanya on Tuesday launched a three-year R100-million agroprocessing programme aimed at benefiting 996 landowners in the rural towns of Bizana and Lady Frere, in the Eastern Cape.
Announcing the Eastern Cape Rural Development Agency (ECRDA’S) 2013/14 financial year performance results, ECRDA CEO Thozamile Gwanya said on Monday that a second consecutive unqualified audit opinion was the result of ECRDA’s “determined resolve” to practice...
More
 
 
Latest News
Updated 6 hours ago Goldman Sachs Group has sold its controversial metals warehousing business to Swiss private equity group Reuben Brothers, the Wall Street bank said on Monday. The deal for Metro International Trade Services comes months after Goldman formally put the business on the...
Updated 6 hours ago Greenhouse gas emissions by the world's top 500 companies rose 3.1% from 2010 to 2013, far off the cuts urged by the United Nations to limit global warming, a study showed on Monday. The top 500 firms by capitalisation accounted for 13.8% of world greenhouse gas...
The cost of copper theft decreased to R13-million in November from R13.2-million in October, according to the SA Chamber of Commerce and Industry's (Sacci) Copper Theft Barometer. "The November figure is 1.51% lower than a month ago and 36.8% higher than a year...
More
 
 
Recent Research Reports
Liquid Fuels 2014 - A review of South Africa's Liquid Fuels sector (PDF Report)
Creamer Media’s Liquid Fuels 2014 Report examines these issues, focusing on the business environment, oil and gas exploration, the country’s feedstock supplies, the development of South Africa’s biofuels industry, fuel pricing, competition in the sector, the...
Water 2014: A review of South Africa's water sector (PDF Report)
Creamer Media’s Water 2014 report considers the aforementioned issues, not only in the South African context, but also in the African and global context, and examines the issues of water and sanitation, water quality and the demand for water, among others.
Defence 2014: A review of South Africa's defence industry (PDF Report)
Creamer Media’s Defence 2014 report examines South Africa’s defence industry, with particular focus on the key participants in the sector, the innovations that have come out of the sector, local and export demand, South Africa’s controversial multibillion-rand...
Road and Rail 2014: A review of South Africa's road and rail infrastructure (PDF report)
Creamer Media’s Road and Rail 2014 report examines South Africa’s road and rail transport system, with particular focus on the size and state of the country’s road and rail network, the funding and maintenance of these respective networks, and the push to move road...
Real Economy Year Book 2014 (PDF Report)
This edition drills down into the performance and outlook for a variety of sectors, including automotive, construction, electricity, transport, steel, water, coal, gold, iron-ore and platinum.
Real Economy Insight: Automotive 2014 (PDF Report)
This four-page brief covers key developments in the automotive industry over the past 12 months, including an overview of South Africa’s automotive market, trade figures, production and the policies influencing the sector.
 
 
 
 
 
This Week's Magazine
South Africa remains an important manufacturing and export platform for Ford Motor Company, says executive chairperson Bill Ford. However, he adds that other countries on the continent are “becoming interesting”, and that the US carmaker is casting its net wider for...
TO BE PHASED INTO SERVICE The first MeerKAT dish, with another 63 to come
Germany’s Max-Planck-Society (MPG) and the Max-Planck-Institute for Radio Astronomy (MPlfR) are investing €11-million (about R150-million) into South Africa’s MeerKAT radio telescope array programme. The money will be used to design, build and install S-band radio...
Infrastructure spend in sub-Saharan Africa will grow from $70-billion in 2013 to $180-billion by 2025, says PwC capital projects and infrastructure Africa leader Jonathan Cawood. This is one of the findings of PwC’s Capital Projects & Infrastructure report on East...
Private-owned defence and aerospace manufacturer Paramount Group and the Ichikowitz Family Foundation unveiled its Anti-Poaching Skills and K9 Training Academy in Magaliesburg last month.
MATT BARKER Wireless networks should enable users to engage and must provide relevant information to them based on their activity and location
The inclusion of Bluetooth to provide sub-three meter accuracy and heightened functionality for users is one of the ways to change existing wireless networks into engagement networks. An engagement network differs from common wireless networks in that it enables the...
 
 
 
 
 
 
 
 
 
Alert Close
Embed Code Close
content
Research Reports Close
Research Reports are a product of the
Research Channel Africa. Reports can be bought individually or you can gain full access to all reports as part of a Research Channel Africa subscription.
Find Out More Buy Report
 
 
Close
Engineering News
Completely Re-Engineered
Experience it now. Click here
*website to launch in a few weeks