Walter Mswazie in Masvingo
SUGAR manufacturing giant Tongaat Hulett’s Hippo Valley Estates has reported an eight percent revenue decrease to $137 million in the full-year period to 31 March 2018 compared to $148,5 million in the same period last year.

The drop in revenue has been attributed to a 14 percent decrease in sugar production as a result of low dam levels during the peak growing periods, which limited irrigation activity and affected cane yields.

The company, however, posted an operating profit of $17 million from the $13 million achieved in 2017.

In its abridged audited results for the period under review, Tongaat reported that profit for the year stood at $11 million compared to $7,7 million in the prior year.

The surge in profit was attributed to growth in local market sales. This positive trend has been anchored by the continued availability of sugar largely due to uninterrupted water supply from the recently completed and commissioned Tugwi-Mukosi Dam in Masvingo and Chivi districts. During the period, a total of 1 534 000 tonnes of cane was crushed of which 875 000 tonnes were company cane while 659 000 tonnes were from private farmers. This saw production of 197 000 tonnes of sugar, depicting a 14 percent reduction as compared to 229 000 tonnes produced in 2017.

There was also an increase in the total industry volume of local market sugar sales arising from favourable sales mix on the back of low imports and an increased off-take by one major industrial customer, said Tongaat.

“This was mainly due to the continued growth in local market refined sugar for the industrial market,” it said.

The firm said higher level cane valuations at year end reflected the improvement in the cane crop to be harvested, which benefited optimum irrigation following the satisfactory 2017/18 rainy season.

It said the improvement was noticeable after Government completed and commissioned the 1,8 billion cubic metre- Tugwi-Mukosi Dam.

The dam, now 78 percent full, has seen a total of 28 421 hectares replanted by end of March, as compared to 866 hectares replanted the previous year.

“Replanting of cane roots was accelerated following the completion of the dam and this further enhanced the standing cane valuation. The challenging economic conditions, which persisted during the period under review, were counter balanced by the transition in the leadership of Government towards the end of 2017,” said Tongaat.

“The new dispensation creates more positive local and international sentiments towards the country.”

The firm paid tribute to the intervention by Government to protect the industry against competition from cheap imports saying the move has continued to yield positive results in addition to providing job security in the industry.

@walterbmswazie2