We are a diversified international food, ingredients, and retail group with a strong global presence. With sales of £13.9 billion and operations in 53 countries across Europe, Africa, the Americas, Asia, and Australia, we strive to provide safe, nutritious, and affordable food and clothing that offers great value for money. Our reach extends to customers in over 100 countries, allowing us to cater to a diverse range of needs and preferences.

AB Sugar, a division within ABF, manages our extensive sugar interests worldwide. As one of the largest sugar producers globally, AB Sugar holds a prominent position in the industry. Illovo Sugar Africa, part of AB Sugar, stands as the largest cane sugar producer in Africa, while British Sugar serves as the sole processor of the UK sugar beet crop. Together, our sugar operations produce around 4.5 million tonnes of sugar annually, contributing significantly to the global sugar market.

Our portfolio encompasses a diverse range of products derived from sugar cane and beet processing. In addition to sugar, we produce ethanol, which is used as a blending component for petrol and alcoholic beverages. Our animal feed products benefit from molasses, betaine, raffinate, and vinasse, while our horticultural operations yield valuable ingredients for children’s medicine. As a responsible corporate citizen, AB Sugar is also actively involved in renewable power generation, selling surplus electricity to local grids.

At ABF, we pride ourselves on our commitment to sustainability and minimizing waste. We sell our products to various industry sectors, including food and drink, fuels, pharmaceuticals, agriculture, horticulture, power, and energy. We believe in leveraging our resources and expertise to deliver value to our stakeholders consistently.

To provide transparency and insights into our environmental, social, and governance (ESG) efforts, we have developed a series of “ESG Insights” downloads on our website. These resources highlight the importance of key issues to ABF and showcase the progress we are making in these areas.

Additionally, ABF’s horticulture business plays a significant role in producing a non-psychoactive variety of cannabis that is specifically cultivated for medical purposes. Each year, we harvest enough of this crop to aid in the treatment of thousands of children globally.

It is with great pleasure that I present to you outstanding results in a year that marks both the 60th anniversary of Zambia’s political independence and the 60th anniversary of Zambia Sugar PLC.

We were privileged to celebrate Zambia Sugar’s 60th anniversary at Nakambala Estate, graced by the President of the Republic of Zambia, Mr Hakainde Hichilema. The President took time to engage with various stakeholders including traditional leaders and the community before touring the operations where he commissioned the agricultural expansion programme designed to add another 3 500 hectares using the outgrower model. The President committed his support to the outgrower programme and implored the Company to share its successes with other economic sectors.

The Managing Director’s Statement provides a detailed overview of the Company’s operational, commercial, and financial performance during the period
under review. I invite you to join me in commending the Management team, employees, and staff for the exceptional performance, achieved despite the challenging economic environment and the devastating weather conditions that have affected the region.

Let me from the onset address the resignation of Mr. Norman Mbazima as Chairman of the Board effective 28 February 2024. Mr. Mbazima shared that he was scaling down his post- retirement activities to focus on a limited number of challenging assignments and spend more time with his family. We thank him for his immense contribution during the time he was Chairman of the Board. I am honoured to have been given the opportunity to replace him as Chairperson and I look forward to your continued support as we build upon the solid foundation Mr. Mbazima helped to build over the years.

Safety remains a top priority and a core value, encompassing the well being of all employees, contractors, visitors, and local communities. Whilst the business is encouraged by the significant strides made in embedding a safety culture, I am saddened to report that on 4 June 2024, Mr Morris Muchimba, an electrical contractor, suffered a fatal electrocution while working on a 33 kV high voltage line at Nakambala estate. Mr Muchimba was married with two children and had previously been an employee of Zambia Sugar. We sent our deepest condolences to his family.

While this devastating event adversely impacted our improving safety record, we remain committed to the goal of zero harm to employees and contractors. Following this tragic incident, the business has subsequently strengthened its safety protocols and processes through enhanced leadership visibility, increased supervisory oversight, comprehensive near-miss reporting, and implementation of expanded behavioural safety training.

The Board is satisfied that these measures, combined with individual safety accountability, will help to prevent similar incidents happening in the future. Sustainability remains a key area of focus, exemplified through various activities that align with Environmental, Social and Governance (ESG) principles. The business has maintained its unwavering commitment to sustainable practices across both agricultural and manufacturing operations.

ECONOMIC REVIEW

The devastating effects of the drought have significantly impacted the social and economic performance of the country. This has prompted the downward revision of Zambia’s Gross Domestic Product (GDP) growth rate for 2024 from 4.8% to 2.3%, with current estimates indicating that it will be lower. The drought has adversely impacted agricultural production as well as power generation leading to cost pressures that have driven inflation up from 12% in September 2023 to 15.5% in August 2024.
The continued depreciation of the Kwacha exerted pressure on the agriculture and manufacturing sectors, among others, due to the reliance on imported raw materials and inputs, including, power, diesel, fertilisers, and various chemicals used in the production process. This resulted in significant increases in cost of electricity, fuel, fertiliser, and maintenance.

SHARE PRICE

In 2023, the Company’s share price was K20 per share, reflecting a market capitalisation of K6.3 billion. I am pleased to report that the share price has since risen to K35, increasing the market capitalisation to over K11 billion. This rise in the Company’s share price continues to generate confidence in the market, with many shareholders choosing to hold their positions rather than cashing out for short-term profits. The Board appreciates the market’s confidence in the value of the Company’s stock and remains committed to pursue opportunities for growth and further value creation.

DIVIDEND

The dividend policy is based on paying up to 50% of free cash flow generated by the Company after meeting all obligations and capital requirements. Last year, the Company paid a record dividend in the history of the Lusaka Stock Exchange, totalling K1.1 billion. This included a special dividend of 158 ngwee per share, in addition to the base dividend of 191 ngwee per share. I am pleased to report that during a meeting held on 31 October 2024, the Board recommended a final
dividend for the year of 161 ngwee per share for FY24. This decision to pay a dividend reflects the Board’s confidence in the ability of the Company to continue creating value for shareholders.

DIRECTORATE

Mr. Norman Mbazima resigned from the Board effective 28 February 2024. Mr. Gavin Dalgleish resigned from the Board following his departure as Chief Executive Officer of Illovo Sugar Africa in August 2024. We thank him for his immense contribution to Zambia Sugar’s success and, in particular, for overseeing the factory expansions in 2009 and 2016 which made the Nakambala factory the biggest single site cane sugar factory on the African continent.

Ms. Amanda Venters was appointed to the Board as a Non-Executive Director on 28 February 2024. She is currently ABF Sugar Group Interim Chief Financial Officer, a role she has held since 20 September 2023. Mr. Hezron Musonda joined the Nakambala Leadership Team on 25 January 2024 following his appointment as Finance Director and was appointed to the Board as an Executive Director on 28 February 2024. Please join me in welcoming Ms. Venters and Mr. Musonda to the Board and wish them every success in their roles. Similarly, we wish Mr. Mbazima and Mr. Dalgleish success in their future endeavours.

OUTLOOK

The weather forecast continues to provide renewed hope, with indications that the country will experience a normal rainy season. Water security and power reliability have become major areas of focus for the Company, and initiatives are in place to address the risks associated with these critical resources.

I am particularly pleased with the innovations implemented in Agriculture, including efficient irrigation systems, new farming methods, and greater collaboration between water users and regulators. These initiatives are aimed at providing practical solutions that benefit the Company now and in the future. In the factory the focus on improving plant reliability, throughput, sugar quality and recoveries has continued with the outstanding results achieved during the period under review expected to continue in FY25. Consistent factory performance is critical to meeting customer demand in both the domestic and regional markets.

As a customer led business, I am pleased with the progress we have made in our Route to Consumer with the launch of the Last Mile Reseller initiative and the continued expansion of our product portfolio to meet the needs of all categories of customers. Consequently, the Company is well positioned to continue being the supplier of choice for our customers and consumers.

CONCLUSION

In closing, I would like to extend my sincere gratitude to my fellow Directors for their diligence and unwavering support throughout the year. I offer my heartfelt congratulations to the Managing Director, Mr Oswald Magwenzi, the Leadership Team and our dedicated employees. Their resilience and commitment have been instrumental in enabling the Company to deliver yet another stellar performance, despite the challenging economic environment and adverse weather conditions.

I would also like to express the Company’s deep appreciation to our valued customers and consumers for their continued loyalty and support. This is what drives
the Company’s success. On behalf of the Board, I want to thank you all for the confidence you have placed in our stewardship. We pledge our steadfast support and guidance to the Management team, to ensure we fulfil the Company’s mission of feeding the nation and the region.

Roseta Chabala
Chairperson

Despite challenges presented by the COVID-19 pandemic and global supply chain disruptions, the company delivered robust health, safety, operational, logistics, and financial performance this year. These results were achieved through the resilience of our committed workforce and diligent management strategies.

Notable Achievements:

– The company saw improvements in health and safety measures with the safety vision of “zero harm to employees.” An increase in the Total Injury Frequency Rate was attributed to rising medical treatment cases, which have been identified as a focal point for improvement.
–  Over 98% of our employees have been vaccinated against COVID-19, marking us as a leader in employee vaccination within the Illovo Sugar Africa Group.
–  Despite the appreciation of the Kwacha leading to increased illegal imports of sugar and a reduction in export proceeds, our financial performance was consistent with the previous year, enabling us to pay dividends to our shareholders.

Revenue rose by 3% compared to 2021, hitting a peak of K 5.1 billion, with domestic sales volume at a record 276,071 tonnes. This reflects the successful implementation of our commercial strategy and logistics optimization.

Moving Forward:

Our goals for the future involve continuous improvements in cane production and sugar yield. We also plan to maintain our commitment to a robust environment, social, and governance (ESG) agenda. In the upcoming financial year, we will continue to leverage the resilience we have developed, aiming to extend the success of the last four years of successive earnings growth. While we anticipate challenges, we remain confident in our ability to deliver strong performance. Our sincere gratitude goes to the board, employees, and management for their dedication, resilience, and commitment that has allowed the company to create value for shareholders and stakeholders.

COVID -19 infection rates remained low during the period. Community and employee vaccinations together with sensitisation on both preventative measures and vaccine uptake continued. There were no severe cases, hospitalisation or deaths recorded during the year. With the consistently good trends and in line with the national COVID-19 management guidelines, most COVID-19 restrictions have since been lifted with no negative effects observed as a result of this decision. Zambia Sugar remains committed to the eradication of Malaria. The Company continues to support all stakeholders fighting to end Malaria. The Company does this by sharing best practices in Malaria control and eradication with fellow members in the End Malaria Council (EMC) of which it is a member. The EMC is committed to ending Malaria not only in Zambia but the world over.

Environmental Management continued to be a key area of focus during the period under review. There were no penalties from the regulators due to non- compliance. The Company endeavours to move from compliance to performance based on the firm conviction that it is the right thing to do, and the Company is able to set internal standards of its own, with support from Illovo Sugar Africa Group and ABF Group, and continue to benchmark against these standards.

Environmental performance indicators were within specification on wastewater discharged to the aquatic environment and potable water distributed within the networks. Boiler and incinerator emissions were also compliant. The Company continues to focus on improved measures to manage dust emissions. An action plan which includes both short and long-term plans is being implemented to install new filters on the boilers.

The Company’s Safety Programme will continue to enhance safety awareness by including refresher courses for leaders on the fundamentals of SHERQ through the Illovo Safe Academy