Sugar producers, Hippo Valley Estates Limited revenue for the half year ended 31 March 2018 tumbled eight percent down to $137,0 million compared to $148,5 million recorded during the same period last year mainly due to a 14% decrease in sugar production.
According to the group financial results, operating profit increased to 27% due to improved margins on the back of the favorable sales.
“Operating profit increased to $17,0 million (2017: $13,4 million), a 27% increase due to improved margins on the back of the favorable sales mix, combined with a positive swing in standing cane valuation arising from an improvement in the cane age and expected yield of the sugar cane crop to be harvested in the 2018/19 year,” reads the report.
Hippo Valley further reported that operating cash flow (after working capital movements) also decreased in line with the reduction in revenue.
“Operating cash flow (after working capital movements) was $32,3 million (2017: $37,9 million), a decrease of $5,6 million in line with the reduction in revenue.
“Cash generated from operations amounted to $23,5 million (2017: $38,0 million), while working capital increased by $12,9 million compared to a $3,1 million decrease in the prior year. Overall, after taking into account capital expenditure and root replanting costs totaling $22,6 million.
“The Company’s net debt at 31 March 2018 amounted to $3,1 million which was a 61% improvement on the prior year level of $7,9 million. A total of $3,0 million (2017: $4,4 million) was incurred in finance costs commensurate with the level of borrowings, all of which were unsecured, at an average interest rate of 7,97% (2017: 7,57%).
“An attributable profit of 5,72 US cents per share was achieved for the year compared to 3,98 US cents per share realised in the prior year,” read the report.