Hippo Valley Estates, the local unit of South African sugar processor Tongaat Hullet on Thursday reported a 74 percent fall in after tax profit to $2.3 million in the in the six months to September on declining production volumes.
The company said sugar production for the half year was down from 167 425 tonnes achieved during the same period last year to 157 877 tonnes due to low mill recovery ratios.
Revenue dropped 15 percent to $70 million. Total comprehensive income, however, declined nearly 76 percent to $2.1 million after a $117 000 exchange loss on foreign investment.
Private farms registered a four percent decrease in cane deliveries to 549 645 tonnes of cane over the six month period while the company’s own deliveries rose by a similar margin to 754 254 tonnes after an early start of the milling season.
Chief executive Sydney Mtsambiwa said sugar production levels in the 2016/17 financial year would largely depend on the extent of rainfall received in the catchment area of the industry’s supply dams.
“A return to regular growing conditions, together with the benefit of the intensive agricultural improvement plans that are well under way should lead to industry and company sugar production increasing to around 540 000 tonnes and 270 000 tonnes respectively by 2018/19,” said in a statement accompanying company results.
For 2015, the sugar industry is forecasting a decrease in sugar production to 410 000 tonnes from 445 000 tonnes in 2014.-The Source