Hippo Valley Reports 15% Rise in Cane Supply Despi...

Hippo Valley Reports 15% Rise in Cane Supply Despite Economic Headwinds

By Nyashadzashe Ndoro - Chief Reporter

Listed sugar producer Hippo Valley Estates Limited says its first quarter ended 30 June 2025 recorded improved production performance, supported by higher cane supply and operational efficiencies, despite a challenging macroeconomic environment.

In its quarterly trading update, the company reported a 15% increase in cane supply from its plantations compared to the same period last year, while cane quality improved from an estimated recoverable crystal (ERC) of 11.30% to 11.46%. Sugar production rose 12% year-on-year to 129,990 tonnes.

Management attributed the growth to higher milling crushing rates and a shorter crushing season, now at 26 weeks versus 33 weeks last year. The company also invested in retooling its agricultural operations, introducing one-haulage equipment to boost efficiency.

However, deliveries from private farmers were marginally lower due to diversions to Triangle mill for start-up challenges.

Market Performance

Total sugar sales volumes rose 6% to 85,001 tonnes, with the local market accounting for 81,617 tonnes and exports contributing 3,385 tonnes. Local demand grew 4% year-on-year, but imports weighed on overall performance, with local sales share falling to 52.32% from 64.68% in the prior year. Export volumes improved on the back of stronger opening stock positions, with management expecting more exports in the remainder of the year.

Financial Results

Revenue for the first quarter increased 16% year-on-year, largely driven by higher sales volumes and improved local market share. Operating costs, however, also rose, underpinned by inflationary pressures and supply chain disruptions in sourcing fertilizers, chemicals, and spares.

Safety and Environment

The company recorded no significant work-related injuries during the quarter. Its Lost Time Injury Frequency Rate (LTIFR) improved from 0.024 to 0.020.

Outlook

Looking ahead, Hippo Valley said it remains optimistic that stability in the local currency will persist, allowing access to foreign currency through formal banking channels for the procurement of inputs. The company also reported that the long-running DOP court case remains unresolved after being referred back to the High Court.

With adequate irrigation water available, the group expects to meet its agricultural and milling targets for the current and next season. Management reaffirmed its commitment to cost control initiatives and operational efficiencies under Project Zambuko to sustain positive cashflows.