Rise in Hippo Valley output

Zimbabwe Stock Exchange-listed sugar producer, Hippo Valley Estates Limited, posted a $13,7 million after-tax profit for the interim to September 30, as output rose 80% on improved milling performance.

In its unaudited financial results for the last six months, Hippo Valley said after-tax profit increased 139 percent from $7,7 million last year. The company had seen revenues for the period jumping a massive 79,5% to $70 million, lifting it to a $21,2 million operating profit. Unavoidably, earnings per share rose 30 percent to 7,1c.

Hippo Valley had seen output registering a 79,8% increase to 118 654 tonnes compared with the same period last year after extensive mill maintenance. The company said sugar recovery for the period was 85,58%.

The company noted that export prices for sugar to the European Union had remained at levels reflective of the fact that demand for the product exceeded supply. Cashflow from operating activities, before changes in working capital and net interest paid was $26,4 million against $7,2 million last year. This resulted in the company's net debt position at the end of the first six months to September (loans less cash and cash equivalent) dropping to $25,5 million, compared with $33,2 million in the corresponding period.

Co-operation between the Government, the southern Lowveld communities and Tongaat Hulett is expected to boost rural sugar farming. Already, some 15 000 hectares have been allocated to some 870 indigenous farmers who are expected to deliver 488 000 tonnes of cane this year. Focus is on lifting rural farmer sugar output to 1,4 million tonnes of cane, which would increase revenue from $29 million to $86 million.

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