Annual Report Harel Frère Ltd 2006 - Investing In Africa

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managing director’s
review of operations (cont'd)
650,000 tonne crop yielding some 71,500 tonnes of sugar is
now expected for the Belle Vue factory area.
Côte d'Ivoire
Political situation
The Presidential elections did not take place in October
2006 as planned and were once again postponed. Then,
in April 2007 and rather unexpectedly, a peace agreement
was brokered between the Ivorian Government and the
rebel forces by the President of neighbouring Burkina
Faso, in terms of which the leader of the rebel forces was
appointed as Prime Minister and new dates set for elections.
A new government has been sworn in and French and UN
troops have withdrawn from the "zone de confiance". This
augurs well for the future and is giving rise to cautious
optimism in the country. In the meantime, and although the
Northern part of the country still remains under the rebel
forces control, the situation is peaceful on the ground, with
virtually normal trade exchanges between the two parts of
the country.
Operations
With improved peace and order on the Ivorian territory,
Sucrivoire managed to operate in a quasi-normal manner,
achieving a sugar production of some 73,000 tonnes for
the 2006 – 2007 crop, compared to 57,000 tonnes for the
previous year. Some 2,840 hectares, representing 27% of
area under cane, were replanted. The objective is to attain
a production of at least 80,000 tonnes of sugar for the
next crop. Rehabilitation of the mills and estates continued,
and some FCFA 2.9 Billion (Euro 4.4 M) were invested in
machinery and equipment during 2006.
year. Quotas to the EU and USA were not supplied on account
of non remunerative prices. Overall turnover amounted to
FCFA 24.2 Billion (Euro 36.9 M), up 18% on the previous year.
The official ban on sugar imports into Côte d'Ivoire expired
in December 2006 but is in the process of being renewed
for a further two years. However, thanks to the strenuous
efforts of the Customs Department and the high world
market prices presently ruling, fraudulent imports have
largely been mitigated.
Results
Sucrivoire S.A. posted a modest operating profit of FCFA
408 M (Euro 0.6 M) for the year, compared to a loss of FCFA
1.0 Billion (Euro 1.5 M) in 2005.
In addition, the company recorded an exceptional profit
of FCFA 9.7 Billion (Euro 14.8 M) as a result of the Ivorian
state recognizing that the company had suffered a prejudice
from the political events of the last few years and agreeing
to compensate it therefor. Accordingly, an amount of FCFA
4.0 Billion (Euro 6.1 M) which was owed to the State has
been annulled in the books of Sucrivoire at December 2006,
Government bonds of FCFA 2.8 Billion (Euro 4.3 M) are
being issued in favour of the company and a further FCFA
2.8 Billion (Euro 4.3 M) is recognized by the State as a debt,
but with no fixed terms of repayment. These measures have
brought about a significant improvement in the financial
position of the company.
Commercial
Sales also improved in 2006, with 64,355 tonnes of sugar
being sold on the local market compared to 49,700 tonnes last
Harel Frères Limited Annual Report ‘06