Bloomberg Anywhere Login

Bloomberg

Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.

Company

Financial Products

Enterprise Products

Media

Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000

Communications

Industry Products

Media Services

Follow Us

Illovo Hits Record as Sugar Crop Recovers: Johannesburg Mover

May 15 (Bloomberg) -- Illovo Sugar Ltd., Africa’s largest sugar producer, rose to a record as investors anticipate a recovery in output after a drought.

The shares jumped as much as 5.4 percent, the most since April 23 on an intraday basis, traded 2.9 percent higher at 38.60 rand by the close in Johannesburg. About 1.2 million shares were traded, or 2.5 times the daily average over the last three months. Illovo, which has units in Malawi and Zambia, has gained 11 percent over the last five trading days, making it the second best-performer on the FTSE/JSE Africa All-Share Index.

“You’re paying up for African exposure, plus a recovery story where earnings will see 30 percent growth as well as strong exposure to a depreciating rand,” Brendan Grundlingh, an analyst at Standard Bank Group Ltd.’s SBG Securities (Pty) Ltd. unit, said by phone from Johannesburg today. “There are not many food companies or industrials that can give you that.”

Profit for the year through March 31 at Illovo’s Malawian unit jumped to 20.9 billion kwacha ($58 million) from 8 billion kwacha a year earlier, the company said on May 10. The Zambian division saw an 8.5 percent increase in profit to 141 million kwacha ($26 million) in the same period. The rand has weakened 8.6 percent since the start of the year, the worst-performer among 24 emerging-market currencies tracked by Bloomberg.

A 10 percent weakening of the rand against the dollar relates to a gain in net income of about 5 percent for Illovo, Grundlingh said. The company said in its annual report for the year ending March 2012 that 88 percent of operating profit is “derived from non-rand-based countries.”

Sugar production at Illovo, 51 percent-owned by London-based Associated British Foods Plc, is rising after drought in Malawi and Zambia eased, Grundlingh said.

The company’s 14-day relative strength index is above 70 for a 14th day. A reading above 70 signals that a stock may be overvalued and poised to decline. Illovo is expected to release results for fiscal year through March on May 27.

To contact the reporter on this story: Jaco Visser in Johannesburg at avisser3@bloomberg.net

To contact the editor responsible for this story: Vernon Wessels at vwessels@bloomberg.net

Please upgrade your Browser

Your browser is out-of-date. Please download one of these excellent browsers:

Chrome, Firefox, Safari, Opera or Internet Explorer.