Chairman’s Statement

Dear Shareholders,

I am immensely proud of the resilience demonstrated by our team in the year that has passed. Despite numerous challenges in the operational and economic environment, our company has delivered yet another strong performance. We remain committed to our vision of “Zero Harm to employees,” pursuing this ethos with unyielding energy and commitment. The steps we have taken to create a safe, healthy, and respectful workplace are a testament to our dedication to our employees and the local community.

Amid the tumult of COVID-19, we successfully contained its impact on our business, achieving a remarkable vaccination rate of over 98% among our employees and their dependents. Concurrently, we have advanced our Environmental, Social, and Governance (ESG) agenda, with plans for translating this into tangible projects in the forthcoming years.

Our stellar financial performance in the last year is a testament to our strong operational activities in Agriculture, Factory, and Logistics operations. Notably, we recorded record domestic sales for the second consecutive year. These accomplishments, along with our firm alignment on three strategic objectives focused on customer-centricity, maximum capacity utilization, and achieving power self-sufficiency, have provided remarkable value for our shareholders.

In economic terms, the country saw single-digit inflation and an increase in Gross Domestic Product (GDP) of 3.2% relative to the previous year. This growth was driven by positive investor sentiment linked to the change in economic management by the new government, the approval of an IMF funded programme, and the potential of the energy and mining sectors.

As a company, we are fully committed to creating shared value by working alongside all our stakeholders. We understand the role we play in fostering the growth of local communities, which is why we focus on local sourcing and support schools across the country. Our emphasis on local supplier development has led to increased procurement of local packaging, further supporting local businesses.

Reflecting on the Company’s stock performance, Zambia Sugar has seen an impressive increase in share price from K 5.00 per share at the beginning of the year to K 18 per share, a remarkable 260% rise. As a result, we now hold the position of the fourth most valuable stock on the LuSE with a market capitalization of K 5.7 billion, accounting for 7.71% of the Lusaka Securities Exchange equity market.

Our commitment to our shareholders is unwavering, which is why we are pleased to announce a final dividend of 94.4 ngwee per share for the year ended 31 August 2022. This dividend, 12% higher than the previous year, represents a dividend pay-out ratio of 50% of free cash flow.

I extend a warm welcome to Mr. Andre Lubbe, the newest member of our Board and express our appreciation for Dr Nelis Saayman’s contributions during his tenure.

Looking forward, we remain optimistic. Zambia Sugar is well-positioned to take advantage of opportunities in the Zambian economy, leveraging our core competencies in Agriculture, Factory Operations, Sales and Marketing, and Logistics. Our out-grower business model continues to be a success story, and we remain hopeful that the proposed tax reforms in the agro-processing sector will support our efforts.

In conclusion, I extend my heartfelt gratitude to our shareholders, stakeholders, and customers for their unwavering loyalty and support. My sincerest thanks go out to our dedicated employees, contractors, and suppliers for their tireless efforts. Lastly, I would like to express our appreciation to the Illovo Sugar Africa Group and Associated British Foods (ABF) for their continued guidance and support.

Together, we look forward to continuing to take Zambia Sugar from strength to strength in the years to come.

Sincerely