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RES CORPORATION INCOME UP TO E299.6M

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MBABANE – A surge in sugar prices has helped RES Corporation to record a notable increase in its total comprehensive income.


The Royal Eswatini Sugar Corporation Limited (RES Corporation), located in the north-eastern Lowveld is one of the largest companies in Eswatini. The company employs over 3 500 people and produces two-thirds of the country’s sugar and 35.3 million litres of ethanol a year. RES manages its own sugar cane on two estates and also some farms on behalf of third parties.


comprehensive


The company, which was previously known as Royal Swaziland Sugar Corporation (RSSC), reported that total comprehensive income attributable to the owners of the company was E299.6 million.  This was 38 per cent higher than the results achieved in 2019. This is as per the consolidated financial statement for the year ended March 31, 2020.


“This improvement in profitability is mainly due to the sugar price that was significantly higher than the previous year owing to price improvements in some of the markets that had been depressed,” reported RES Corporation.
The consolidated statement of financial position for the group further showed a healthy balance sheet with total assets at E3.5 billion.


“Further improvements to the Mhlume Mill as well as cane land developments, was substantially completed in the current financial year.
“The Group consequently assumed new debt of E200 million. The closing cash position at March 31, 2020 was healthy at E187.4 million,” reads the report. Lease liabilities and lease assets valued at E7.8 million were recognised at April 1, 2019.
“New leases valued at E5.6 million for both asset and liability was entered into during the current financial year,” reads the report.


improved


The company further realised an improved profit before tax of over E407 million, which was an improvement as compared to the past year. In the previous financial year, over E282 million had been recorded.
Ethanol production, on the other hand, surged to 35.7 million litres. The 20 per cent increase in production was attributed to higher molasses processed through the distillery


Meanwhile, cane crushed was at E3.5 million tonnes, which was 6 per cent lower than in the previous year.
“Severe storms experienced in the early part of the year resulted in the lodging of sugar cane in some areas, and this combined with adverse climatic conditions, has had a negative impact on the crop of the current financial year.


Sugar production at 460 659 tonnes (96 degrees polarising) was consequently 9 per cent lower than that of the previous year. Low sugar polarising 96 degrees contains 96 per cent sugar.


When it comes to dividend declaration, a third and final dividend for the year ended March 31, 2020 of 68.71 cents was declared on March 27, 2020 and was paid in the past month to shareholders registered in the books of the company at the close of business on May 8, 2020.


distribution


When it comes to shares distribution, Tibiyo TakaNgwane owns 53.1 per shares at RES Corporation. RCL Foods, Nigerian and Eswatini Governments (10 and 6.5 per cent, respectively), as well as individuals are the rest of the shareholders. 
Despite the generally impressive figures, the company reported that sugar markets were continuing to present a number of challenges, more so in the Southern African Customs Union and world markets due to COVID-19. Eswatini is a SACU member alongside Botswana, Lesotho, Namibia and South Africa.


“Management actively monitors and responds to the constant changes with determined effort to ensure that the group emerges as a going concern post the COVID-19 era,” reads the report.

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