By Nomfanelo Maziya | 2024-11-01

Royal Eswatini Sugar (RES) Corporation has recorded profit of E642 million for the financial year 2023/24.

This significant achievement surpasses the previous record of E508 million and marks a substantial increase from the E179 million profit reported in 2023.

The company's profit before tax surged to E777 million which is a 221.49 per cent increase from E242 million in 2023 and E403 million in 2022.

The corporation further recorded revenue soaring to E4.75 billion, an approximate 14.46 per cent from E4.15 billion in the previous year and E3.63 billion in 2022.

The cane growing margin reached E552 million, while the sugar milling margin stood at E603 million.

The corporation’s ethanol margin, though slightly lower than the previous year, remained healthy at E104 million, compared to E127 million in 2023 and E64 million in 2022.

This exceptional performance, contained in the corporation’s annual integrated report 2024, could be attributed to several factors.

According to managing Director Nick Jackson, RES Corporation benefitted from a buoyant world sugar price, the Lilangeni being weaker against both the US Dollar and the Euro, and also from the delinking of SACU price increases from RSA general CPI.

“A corrective SACU price increase of 14 per cent was, therefore, affected mid-way through the financial year,” said Jackson.

A primary challenge for RES was the impact of climate change.

The 2022/2023 season was heavily affected by rain, leading to lower yields and increased operational costs.

The company's efforts to mitigate these challenges included a strategy to harvest a portion of the cane crop later in the year, but unfavourable weather conditions disrupted this plan.

Additionally, RES faced significant cost pressures from rising fuel prices, fertilisers and agrochemicals.

The company also encountered labour challenges, including negotiations with unions regarding wage increases.

Despite these challenges, RES remains committed to its long-term strategy, which focuses on cost optimisation, new product development and organisational culture. The company is exploring opportunities in renewable energy, particularly solar, wind and biomass thermal generation.

A key initiative is the development of a new alcohol brand, with a focus on rum.

RES plans to enter the South African rum market through a cautious, phased approach, starting with brand development, manufacturing and distribution.

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