ESTHER MSETEKA, Lusaka
ZAMBIA Sugar Plc says earnings per share for the year ending March 31, 2017 are expected to register a drop due to a fall in domestic sales volumes caused by declining disposable income levels and illegal sugar imports.
According to a trading statement posted on the Lusaka Securities Exchange (LuSE) website, the decline in earnings is predominantly due to a 20 percent drop in local sales, driven mainly by declining disposable income levels.
It further says that competitive pressure in the domestic market from illegal sugar imports has also impacted the sales volumes.
“In accordance with LuSE listings requirements, the board of directors of Zambia Sugar hereby advises the shareholders of the company that the earnings per share for the year ended March 31 ,2017 is expected to be between 135 percent and 155 percent  lower than that for the year ended  March 31,2016,” LuSE says.
It, however, says that while the increase in finance costs arising from the new refinery funding is expected, the persistent high interest rate environment has further impacted finance costs negatively.
It stated that the projected strength of the currency during the new season has significantly reduced the value of standing cane, adversely impacting earnings further.
“Sugar production for the full year is six percent lower than the previous year due to lower than expected sugar cane yields and sucrose levels. This is attributable to drought conditions experienced between November 2015 and January 2016, and associated power interruptions which restricted irrigation,” it stated.