ESA REVENUES CONTRACT BY 5.57%

MBABANE – The year 2021 was challenging for the business sector as revenues and performances declined exponentially, and the sugar industry was not spared.

Companies that have released their interim financial statements have cited that the COVID-19 pandemic and unrest played a pivotal role in the decline of their performances. The Eswatini Sugar Association (ESA) business revenues were reported to have contracted by 5.57 per cent in the current reporting period. This was mentioned in the group’s consolidated and separate financial statements for the year ended March 2022. The group recorded revenue of E5.76 billion from E6.10 billion in 2021.

Decrease

It said the decrease in revenue was mainly attributable to a decrease in sales volumes and foreign exchange rates, even though the selling prices were better compared with the previous year. The cost of sales also decreased from E5.92 billion to E5.66 billion, in line with the decrease in distributable proceeds. The group attested that profits that were made by the association were distributed in full to the millers and growers, and form part of the cost of sales. Distribution costs incurred during the year totalled E17.2 million compared to E13.8 million in 2021, increasing marginally compared with the previous year. Foreign exchange gains of E64.1 million were realised compared to a gain of E26.3 million in the previous year.

Mainly

The ESA said this was mainly because of the cover with a better rate that was taken in the previous year. Worth noting, ESA has three subsidiary companies: Eswatini Sugar Assets Limited, Sugar Assets (Mhlume) Limited and Sugar Assets (Simunye) Limited. ESA reported that interest paid decreased from E87.2 million to E75.3 million due to the decreased production levels, as well as good working capital management compared with the previous year. It said total overheads decreased from E109.04 million to E88 million, mainly because some costs were deferred to the following year due to COVID-19 restrictions. Inventories also decreased from E291.5 million to E105.6 million, due to lower closing stock quantities when compared to the previous year. The association said the trade receivables decreased by E22.3 million, as a result of the lower level of production against the high demand of sugar experienced during the current financial year.

Payables

It said trade payables decreased by E106.2 million mainly because invoices from their creditors were received earlier and paid before year end. ESA’s Chairman Tom Dlamini said the sugar industry was not spared as over 1 100 hactares of cane was burnt prematurely, leading to cumulative losses across the sugar cane supply chain. He said the sugar industry collectively contributed E1.25 million towards the Reconstruction Fund, to help government cover the losses suffered by businesses. “Furthermore, the industry donated E250 000 to Business Eswatini to capacitate the roll-out of its COVID-19 vaccination programme. “Both financial gestures demonstrate the sugar industry’s commitment to stimulate economic growth in the country,” he added.

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