HARARE, June 8 (The Source) – Hippo Valley Estates, the local unit of South African sugar processor Tongaat Hulett, on Thursday reported a net income of $7,7 million for the full-year to March 31 from a loss of $6,5 million previously, driven by increased revenue and lower cost of capital.
Earnings per share improved to four cents relative to a loss of 4,6 cents per share recorded in the prior period. Operating profit grew to $13,4 million from an operating loss of $6,5 million previously.
Revenue increased by 27 percent to $148,5 million from $116, 8 million last year with prices averaging $578 per tonne from $550 per tonne previously.
Sugar production increased by 12,25 percent to 229,000 tonnes from 204,000 tonnes.
“The marked improvement in performance was a direct result of the significant increase in sugar production volumes by some 25,000 tons from the prior year due to increased cane deliveries from private farmers and improved cane quality across the board,” company secretary Bigboy Shava said in a statement of the financial results.
The company said a total of 301,000 tonnes was sold in the local market compared to 289,000 tonnes in the previous year.
Cash generated from operations increased to $38 million from $16,7 million recorded in the previous year on increased revenue and operating profit.
Hippo Valley’s net debt position improved by 77 percent to $7,9 million from $35,4 million in the previous year.
Finance costs incurred declined to $4,4 million relative to $6,4 million in the previous year.
Shava said the recently completed Tokwe-Mukorsi dam will provide stable irrigation water and will fuel the future growth of the industry.
Sugar production is expected to grow to between 535,000 tonnes and 570,000 tonnes by 2018/2019.
The company did not declare a dividend, citing the need to retain cash for its expansion programme.