TIBIYO TAKANGWANE REVENUE UP BY 26%

MBABANE – Tibiyo TakaNgwane revenue increased from E239 million in 2016 to E300 million in 2017.

The main contributing factor of the 26 per cent growth was an increase in dividends received from investee companies.
The company’s annual report for the year 2017 reflected that dividends from investments were E162 million, an increase from the E118.5 million recorded in 2016. 

Tibiyo said some of the investee companies, especially in the sugar industry, who adopted new strategies to counter the prolonged drought effects, were able to reap positive spinoffs, which saw them achieving budgeted profits, which was commendable.

The company’s investee companies in the sugar industry are: Royal Swaziland Sugar Corporation (RSSC) where they hold 50 per cent shares and Ubombo Sugar Limited where the entity owns a 40 per cent stake.

investments

Other Tibiyo investments include: Eswatini Development Finance Corporation (20 per cent shares), Tibiyo Properties, Swaziland Beverages Limited (40 per cent), Parmalat Swaziland (26 per cent), Swazi Spa Holdings Limited (36.69 per cent), Eswatini Empowerment Limited (5.41 per cent) and Simunye Plaza.    
Managing Director Themba Dlamini reported that net income achieved increased from E145 million to E250 million, a 72 per cent increase. Total assets grew from E1.8 billion to E2 billion, signifying growth of nine per cent.

The MD noted that during 2017, the Eswatini economy was on the recovery path, following the severe drought suffered by the entire country in 2016 where Tibiyo TakaNgwane investee companies and subsidiaries were also affected.

monitor

“As sugar accounts for a major portion of Tibiyo’s revenues, it is of paramount importance to monitor the performance of this industry and developments thereof,” said Dlamini.

According to the Eswatini Sugar Association (SSA), in the reporting period, sugar production increased by 10.9 per cent from 586 085 tonnes to 650 126 tonnes, while sales revenue declined by 8.8 per cent from E4.6 billion to E4.2 billion in 2017. The decrease in revenues was mainly attributed to depressed market prices and lower sales volumes.

decreased

It was reported that actual sales decreased by 11 per cent from 621 024 tonnes to 552 135 tonnes. Sales to the Southern African Customs Union (SACU) market decreased by 13.5 per cent while sales to the European Union (EU) decreased by 36 per cent.

Molasses production increased by 1.5 per cent from 239 337 tonnes to 242 889 tonnes. Yields (tonnes sucrose per hectare) increased from 13.97 to 14.01.
Dlamini said in terms of the short-term outlook for the industry, the evolving world market conditions, together with the erosion of value in what were historically preferential markets would remain a challenge.

“While the country, as a signatory of the SADC-EU EPA, benefits from duty-free quota-free access into that market, there is very little value obtained from sales to that market due to the decrease in value attainable.

requiring

‘‘The EU has become a surplus producer and exporter of sugar, requiring less volumes of imported sugar. Alternative markets in the East and Southern African region are being actively pursued to divert sales from the EU market.

‘‘The restoration and maintenance of a significant level of protection of the SACU market through the tariff mechanism in place, was pertinent to enable the movement of sales into the SACU market.’’

Dlamini mentioned that the deficit regional market (SADC, COMESA and EAC) continues to present an opportunity for sales into this region.
He stated that ongoing expansions in the sugar producing countries in the region translated into a resistance in opening their markets for regional sugar imports.

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