- Sugar production dropped 11% on prior year
- Sugar sales dipped by 14% on prior year
- Total industry sales in the local market decreased by 13%
Harare – Hippo Valley Estates Limited experienced low sugar production for the year ended 31 March 2020 and this has had a trickling effect on sugar sales for the period.
According to the company’s chief executive officer Aiden Mhere, sugar production for the year declined by 11% to 212 004 tonnes on prior period (2019: 238 965 tonnes) due to a decrease in both the volume and quality of cane resulting in a cane to sugar ratio of 8.0 compared to 7.8 in 2019.
Resultantly sugar sales dipped by 14% at 413 000 tonnes compared to 483 000 tonnes in the prior year.
Total industry sales in the local market decreased by 13% to 324 000 tonnes from 371 000 tonnes in prior year as a result of a decline in demand due to erosion of disposable incomes.
Meanwhile, infrastructural damage and other logistical challenges occasioned by Cyclone Idai which impacted exports via Beira resulted in a decrease in industry export volumes to 89 000 tonnes compared to 112 000 tons exported in prior year, representing 22% of total sales volumes (2019: 23%).
However, Mhere added that total revenue for the year surged by 48% to ZWL3, 7 billion compared to ZWL2, 5 billion registered in 2019, despite a 14% decrease in sales volumes.
This was attributed mainly to the industry successfully optimizing the market mix in the local market and better realisations from export markets.
Net operating cash flow after interest, tax and working capital changes increased to ZWL378 million compared to ZWL280 million in 2019 despite higher tax payments during the period under review.
Capital expenditure totaled ZWL47 million from ZWL110 million in 2019 of which ZWL40 million was spent on root replanting.
At 31 March 2020, the Company had cash on hand of ZWL119 million compared to ZWL151 million for the previous year.
Mhere added that, “The effective tax rate on the inflation adjusted accounts was 34.17% (2019: 27.72%), impacted by the net monetary loss of ZWL434 million (2019: ZWL74 million) that was treated as a permanent difference for income tax purposes.”
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