Harare - Cheap sugar imports and weak export prices saw
Tongaat Hulett’s Zimbabwean unit Hippo Valley report reduced revenues and
profits for the half-year ended 30 September 2013.
In a statement accompanying Hippo Valley’s results, chairperson
Herbert Munro said the business had experienced severe pressure from
significantly lower international sugar prices and from a surge in sugar
imports into the Zimbabwean market, which significantly reduced sales volume.
“The price levels that the business is achieving for sales
into the EU this season averaged 6 cents per pound lower than the levels in the
last two years,” said Munro.
Munro said sales volumes amounted to 84 990 tons (2012: 117
532), a 27.7% reduction as a result of lower local market sales and timing
difference on export shipments.
Revenue for the period under review amounted to US$52m (2012:
$90.7m), a 43% drop.
Operating profit and profit for the period totalled $11m
(2012: 17.4m) and $5.8m (2012: $11.1m) respectively.
Commenting on the operating environment, Munro said the sugar
industry in Zimbabwe is in a receptive engagement with government to restrict
imports.
“Local market sales are being lost to imports as a result of
the current low world price, leading to increased export volumes at lower
prices,” said Munro.
Hippo is however expecting to produce between 226 000 and 235,000 tons this season, against 228 000 last season.
- Fin24