Hippo Valley Estates Limited, a major player in Zimbabwe's sugar industry, released its annual report for the financial year ending March 31, 2025, highlighting significant strides in production and financial performance despite facing export market challenges and the unfortunate occurrence of one fatality at the workplace.

The company's export sales volumes declined by 60% compared to the prior year, a setback primarily attributed to logistical disruptions related to post-election unrest in Mozambique and the Democratic Republic of Congo.

Additionally, the United States Tariff-Rate Quota (USTRQ) allocation for Hippo Valley was reduced by nearly 8,000 tons, and exports to the United Kingdom also fell as the company strategically prioritised the local market, which offered stronger returns amid depressed global sugar prices.

Despite this decline in exports, local market sales grew by 19%, supported by government policy reforms that reinstated import duties on sugar, helping Hippo Valley regain significant market share from cheaper unfortified imports. Overall industry sales volumes dropped slightly by 3%, with Hippo Valley accounting for nearly 50% of industry exports in 2024, down from 52.5% the previous year.

Hippo Valley registered a 7% increase in revenue to approximately USD 191.6 million, driven by better sales mix emphasizing the local market with higher prices, even though total sales volumes slightly dropped 3%. The cost of sales decreased by 2%, aided by cost-control measures under Project Zambuko, which focused on operational efficiencies and margin improvements.

The company improved its adjusted EBITDA by 18% to USD 13.7 million, moving from a prior year negative USD 19.5 million (underlying performance excluding hyperinflation adjustments), reflecting enhanced production and sales performance. Profit for the year declined by 45% to USD 13.7 million, impacted by non-recurring gains in the prior year and ongoing high production costs, particularly from expensive cane purchases under current agreements and elevated wage bills well above regional benchmarks.

Sugar cane production increased by 13%, supported by record yields from company-owned estates, but the cost of production remains high due to above-market wages and costly cane from private farmers. Challenges persist with water availability for irrigation due to illegal abstractions and infrastructure constraints, and power instability affecting operations. The company has initiated cost containment and labor rationalization efforts under Project Zambuko, including ongoing retrenchments.

Despite capital constraints, the company maintained adequate sugar stocks to cover local market demand and operational continuity.

The report also disclosed the occurrence of one fatality during the year at Hippo Valley Estates, underscoring the company's ongoing commitment to health and safety. While details were limited, the company continues to prioritize safe work practices and employs a comprehensive ethics and governance framework to safeguard employee welfare.

Hippo Valley Estates remains focused on enhancing operational efficiency, expanding local market presence, and managing cost pressures amid macroeconomic uncertainties. The company anticipates stable sugar availability supported by adequate stock levels and improved plant operations for the upcoming season.