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ESA PAYROLL COSTS RISE BY 11.8% TO E43.5M

By Kwanele Dhladhla | 2021-09-21

Eswatini Sugar Association’s annual payroll costs have increased by 11.8 per cent to stand at 43.5 million. In the annual report for the 2020/21 financial year, it has been disclosed that payroll costs stood at E38 892 000 in the 2020 before spiking to E43 498 000 in 2021, which effectively meant it increased by 11.8 per cent, according to independent calculations by Eswatini Observer Business Desk. ESA, whose revenue get is derived from the sale of sugar to regional and international markets, explained that during the year under review, the remuneration committee reviewed and approved the incentive bonus for the year ended March 31, 2020. The Remuneration Committee is chaired by Royal Eswatini Sugar Corporation (RES) Managing Director (MD), Nick Jackson, in his capacity as ESA President.

The former CEO of the Guyana Sugar Corporation in the Caribbean, with 20 years’ experience mostly in the sugar industry, was appointed president of ESA from April 1, 2021, having been nominated by the Eswatini Sugar Millers Association (ESMA).

During the year under review, he served as Vice President, in line with the Constitution of ESA.

In the committee, he sits together with four other members who are leaders in the own organisations and possess the necessary skills and experience to discharge their duties.

In the report, it was disclosed that the committee led by Jackson, who has been a member of ESA council member for 12 years, also reviewed the cost-of-living adjustments for staff and chairman’s remuneration for the year. It also reportedly considered the succession planning for management and chairpersons of council and other subcommittees.

The committee further “approved allowances payable to all members of ESA Committees and management of ESA.” Under the pillar on remuneration of employees, ESA, which is led by Dr. Phil Mnisi as CEO, explained that its remuneration philosophy was aimed at attracting and retaining appropriately skilled employees at all levels to positively influence the achievement of ESA’s strategic objectives.

It was emphasised that the philosophy also ensures that ESA remains competitive in the labour market. ``It must be mentioned that ESA recorded revenue of E6.10 billion (2020: E5.94 billion).

The increase in revenue was mainly attributable to better selling prices and foreign exchange rates compared with the previous year, even though sales volumes were lower. The cost of sales increased from E5.66 billion to E5.92 billion in line with increased distributable proceeds.

Profits made by the association get distributed in full to the millers and growers and form part of the cost of sales. Distribution costs incurred during the year were E13.8 million (2020: E13,6 million), increasing marginally compared with the previous year, signifying that the sales terms for export sales were relatively the same compared with the previous year. Foreign exchange gains of E26.3 million were realised compared to a foreign exchange loss of E4.29 million in the previous year.

This was primarily a result of high favourable volatility of the Lilangeni against export currencies during the year. Interest paid decreased from E182.42 million to E87.20 million, a result of a better optimal funding, decreased prime lending rate, as well as good sales performance compared with the previous year.

Administration expenses increased from E83.05 million to E109.04 million, as a result of costs incurred for moving sugarcane from the Ubombo mill to the Simunye mill for purposes of crushing, costs incurred for the development of the ESA corporate and marketing strategy as well as costs for developing the concept of the agri-business park.

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