Hippo Valley Estates’ half year profit down 76%

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THE local unit of South Africa’s Tongaat Hulett says its profit for the half year ending September fell to US$2,2 million from US$9 million reported in prior comparative period weighed down by declining revenue.

At US$70,2 million, Hippo Valley Estates’ revenue was 15% lower compared to the same period last year, reflecting weak consumer spending.

“The results for the half year ended 30 September 2015 were attained in an environment
characterised by difficult trading conditions,” the company said.

“The lower consumer spending as a consequence of low disposable incomes, compounded by tighter liquidity challenges and higher unemployment levels, coupled with the depressed sugar prices in the export markets, negatively impacted the half year results.

“Government interventions aimed at protecting the sugar industry from illegal imports of sugar at dumped world market prices, together with the company’s continued cost reduction drive, helped in mitigating the full impact of these negative factors.”

Private farmers, the company said, registered a 4% decrease in cane deliveries, collectively delivering 549 645 tons of cane over the six month period to 30 September 2015 (2014: 569 925 tons).

“The Company’s cane deliveries over the same period amounted to 754 254 tons (2014: 723 158 tons), an increase of 4% due to an early start to the milling season compared to the previous season, the company said.

“Total cane deliveries to the mill amounted to 1 303 899 tons compared to 1 293 083 tons delivered in the same period last year, an increase of 1%. Sugar production for the period to 30 September 2015 amounted to 157 877 tons compared to 167 425 tons for the same period last year, a decrease of 6%.” Staff Writer