Hippo Valley suffers 53pc export sales decline

LEADING sugar producer, Hippo Valley Estate Limited, recorded a 53 percent decline in export sales to 32 003 tonnes in the third quarter ended December 31, 2024 as the firm prioritised the domestic market.

In a trading update for the quarter under review, the sugar producer indicated that during the corresponding period in 2023, sugar exports were 67 527 tonnes.

As at the third quarter under review, local sales improved by 22 percent to 279 112 tonnes compared to 227 855 tonnes in the corresponding period in 2023.

Hippo Valley said local sales volume increased following the repeal of Statutory Instrument 180 at the end of January last year, triggering demand for the Hullets ‘Sunsweet’ brand.

“Low margin export sales volumes went down by 53 percent after deliberate prioritisation of the local market demand.

“The company has adequate sugar stocks to satisfy, firstly the local market and critical export markets.

“Unfortunately, unfortified sugar brands illegally imported are still visible in the local market and relevant authorities have been alerted,” said Hippo Valley.

It said the harvesting season closed with good performances following an increase in cane deliveries from the firm’s plantations (miller-cum-planter) driven by a seven percent improvement in yields and a more constant rate of delivery of sugar cane.

Private farmers recorded a marginal drop in cane deliveries despite a 4 percent increase in yield, resulting from reduced area under cane by 124 hectares.

“Resultantly, the crushing period ended with increased sugar production, supported by improved mill uptime after a successful off crop (annual) maintenance programme prior to commencement of the 2024/25 season.

“Focus remains on the current off crop maintenance programme, which commenced in December 2024, and is progressing well with the anticipation to commence the 2025/26 season in April this year.”

At the beginning of the current year, Hippo Valley said, it adopted the United States dollar as the reporting currency and users are being cautioned over reliance on translated hyperinflation adjusted financial statements to determine United States dollar equivalent opening balances and comparative financial statements.

“Revenue realised at the end of the third quarter increased 16 percent from prior year’s same period, driven by a strong recovery of local market sales volumes where higher price realisations are generated and the deliberate prioritisation of the local market in place of the lower priced exports, which saw a 53 percent volume decrease.

“However, the increase in the cost of doing business which largely relate to cane purchases and manpower costs, squeezed profit margins resulting in the need for the business to refine its operational strategies and implement sustainable cost containment plans,” said Hippo Valley.

In the outlook, the sugar producer assures the market of product availability up until the commencement of the next season — and the company’s strategic focus remains on ensuring the business has adequate cash resources to successfully start the next season while ensuring cost optimisation efforts remain aligned to overall sustainability goals.-ebsinessweekl

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