adminthe interim to September 30, as output rose 80 percent on improved milling performance.
This comes as the company projects sugar production in this financial year to increase by 32 tonnes to 365 000 tonnes against 333 000 tonnes last year. Hippo Valley also expects private farmers to deliver 61 000 tonnes.
In its unaudited financial results for the last six months, Hippo Valley said after-tax profit increased 139 percent from US$7,7 million last year.
The company had seen revenues for the period jumping a massive 79,5 percent to US$70 million, lifting it to a US$21,2 million operating profit. Unavoidably, earnings per share rose 30 percent to US7,1c.
Hippo Valley had seen output registering a 79,8 percent 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 percent. “The industry’s domestic and export sales volumes in the first half of the year totalled 215 117 tonnes, compared with 157 553 tonnes
for the same period last year. The demand for locally produced sugar has remained reasonably firm at prices similar to last year,” said Hippo Valley.
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 US$26,4 million against US$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 US$25,5 million, compared with US$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 US$29 million to US$86 million.
“The pace of planting new root is targeted at some 4 000 hectares per annum with 3 174 hectares having been planted by end of October,” said Hippo.
This, together with Tongaat Hulett’s improvement in its own agricultural yields, would be key to increasing production to local milling capacity of 600 000 tonnes.
Funding for further development of rural sugar farming would be available through the SusCo Project under a US$30 million four-year revolving facility.
As part of efforts to enhance efficiencies, Hippo Valley said it would continue to invest in refurbishment of the mill, replacement of agricultural equipment and in replanting and re-establishing of the cane crops.
Tongaat, an agriculture-focused SA-listed firm is the largest shareholder in Hippo, at 50 percent, through its 100 percent-owned unit Triangle.
Online Reporter