admintonnes in the previous year.
In a statement accompanying the financial results, Hippo Valley said the decrease in profit after tax resulted in the drop in earnings per share to US7,1 cents from the US10,9 cents achieved in the prior year.
Overall recoveries stood at 84,75 percent during the period under review from the previous year’s 83,48 percent following refurbishments on the mill.
Revenues for the year experienced a 35 percent increase from US$128,9 million to US$174,2 million mainly driven by an increase in sugar production and a resultant increased sales volumes.
Domestic market sales for the year totalled 258 000 tonnes from 247 000 tonnes in the comparable period while a total of 202 000 tonnes of raw sugar was exported to the European Union under preferential market arrangements.
EBITDA margins eased to 18,1 percent in the period under review from 19,3 percent due to pressure on the selling prices of sugar on the international market.
The situation was exacerbated by the weaker euro/US dollar exchange rate which negatively impacted on export proceeds.
Hippo Valley said an increase in export sugar stocks and debtors resulted in an increased working capital of US$12,2 million from US$3,7 million in the comparable year.
Debtors increased 74 percent to US$24,9 million with an average tenure of 51 days up from 36 days and cash flows remained solid with operating cash flow up 25 percent to US$31,9 million.
Net finance charges jumped 13 percent from US$5,9 million in the previous year to US$6,79 in 2013 as the company increased its debt which stood at US$37,9 million compared to US$32,8 million in the previous year.
The company’s cane deliveries from private farmers increased by 60 percent to stand at 852 915 tonnes compared to 531 990 tonnes delivered in the previous year.
Hippo Valley said it would continue to provide inputs and extension services to third party cane growers so as to enhance cane production and deliveries to the mill.
The target to restore sugar production to the installed milling capacity of 640 000 tonnes per annum is still ongoing.
However, the company said there had been a slowdown on account of water availability which had resulted in the reduction of irrigation.
Cane expansion and root replanting for both private growers and company estates were also curtailed and this is expected to negatively affect sugar production for 2013.
“The completion of the Tokwe-Mukosi Dam in the latter part of 2013 will enable the industry to sustain current levels of production,” the company said.
Online Reporter