The company said the recovery of cane growing and sugar milling operations was well under way and the return to more normal economic fundamentals relevant to a sugar business, including the restoration of domestic sales prices to regional levels.
“Operating profit and headline earnings totalled US$17 million and US$21 million respectively. Headline earnings per share totalled 0,11 cents,” said Hippo in a statement accompanying its financial results.
The tax charge in the income statement includes the benefit of a release from the deferred tax provision following the reduction of tax rate from 30% to 25% at the end of last year.
The company said the demand for locally produced sugar has remained reasonably firm, notwithstanding a general lack of liquidity and the presence of imported sugar on the market. The balance was exported to the European Union and the United States.
Sugar production in Zimbabwe in 2009 amounted to 258 713 compared to 297 865 during the same period in 2008 with the company’s share of production totaling 88 122 tonnes compared to 117 348 tonnes in 2008.
Hippo Valley said the macro-economic situation that prevailed in Zimbabwe in 2008 had a negative impact on the 2009 harvest and sugar production levels.
“Although a full allocation of water was available for the year 2009 crop, cane yields for the year at 91,5 tonnes per hectare were adversely affected by the limited and delayed application of fertilisers and herbicides in 2008,” the company said.