JSE-listed Illovo Sugar has revised its trading statement downwards for the year to March 2016 as the sugar producer decided to write off the undisclosed accumulated costs incurred in the development and registration of a furfural-based nematicide.
The company, which had difficulties in obtaining registration with the US Environmental Protection Agency for an application on food crops, stated on Friday that it now expected to post a 50% to 70% year-on-year decline on the 179.4c earnings per share (EPS) achieved in the prior year.
In the group’s 2015 year-end financial presentation in May, Illovo warned of a 25% to 45% year-on-year decrease in EPS and headline earnings per share (HEPS) owing to persistent difficult market and production conditions.
HEPS had declined 7.7% year-on-year from 194c in 2014 to 179c in 2015, while EPS contracted from 199c to 179.4c during the same period.
While EPS was expected to contract during the current financial year, HEPS for the period was expected to remain in line with the company’s forecast of between 98.4c and 134.2c, lower than the forecast for the 2015 financial year.
HEPS for the first half of the year to September was expected to decline on the back of challenging conditions and the seasonal phasing of production and sales, while the write off, which occurred during the six months ending September 30 would lower the EPS for the first half of the year.
Illovo expected to release its financial results for the six months to September on November 30.