Hippo Valley anticipates growth despite drought ch...

Hippo Valley anticipates growth despite drought challenges

Philemon Jambaya

Assistant Editor

Hippo Valley Estates Limited, a major sugarcane producer in Zimbabwe, is forecasting a 4% increase in sugarcane harvest for the upcoming 2024/25 season. This projection comes even as the company grapples with the effects of an El Niño-induced drought impacting the region.

The company's strategic focus on yield improvement aims to deliver a 4% rise in both their own harvest (to 945,471 tonnes) and cane deliveries from private farmers (to 739,329 tonnes). Additionally, Hippo Valley expects improved milling efficiencies due to better cane quality and successful maintenance work. This translates to a projected sugar output of 202,860 tonnes for the season.

While water scarcity remains a concern, with key dams experiencing low levels, Hippo reports sufficient reserves in their major irrigation dams. They acknowledge potential water rationing measures but express confidence in mitigating impacts on crops.

Hippo's previous financial year (ended March 31, 2024) presented challenges. Revenue growth, driven by a rise from ZWL$4.28 trillion to ZWL$7.5 trillion, was offset by a significant increase in cost of sales (ZWL$3.46 trillion). Unscheduled mill stoppages, declining yields, rising input costs, and global inflationary pressures all contributed to negative impacts on the company's finances.

Despite an operating loss, a substantial net monetary gain (ZWL$2.6 trillion) turned the tide, resulting in an overall inflation-adjusted profit of ZWL$0.5 trillion. This highlights the distortive effects of currency fluctuations on financial reporting.