Cane processor Hippo Valley Estates has reported a 79 percent increase in profit after tax to US$24.1 million for the year ended 31 March 2026, buoyed by stronger local sugar sales, improved factory performance and the release of carry-over sugar stocks accumulated in the previous financial year.
Revenue for the period rose 15 percent to US$220.8 million, while operating profit surged from US$7.7 million to US$33.6 million.
Sugar production edged up 1 percent to 221 017 tonnes despite lower cane deliveries from the company’s own estates.
Chairman Cannan Dube said the company had managed to maintain growth despite operating in a challenging environment.
“Our business sustained momentum, successfully maintaining growth in revenue and operational velocity without losing steam,” Dube said.
“The board and management will continue to foster employee empowerment to drive resilience, trust and sustainable long-term business success.”
Chief executive Tendai Masawi credited the performance to operational improvements across the business.
“After successfully achieving our operational goals in Agriculture, Manufacturing, Commercial and other support services, the business celebrates its 70th anniversary with a positive outturn,” Masawi said.
Local sugar sales remained the main earnings driver, with industry domestic sales increasing 12 percent while export volumes more than doubled. However, the company cautioned that much of the export business remained unprofitable because fixed cane costs exceeded export selling prices.
Management warned that the current financial performance benefited from selling sugar stocks carried over from the previous year, a gain that is unlikely to be repeated in FY2027.
“The significant portion of the year-on-year improvement in revenue and cash generation was supported by the release of carry-over sugar stocks,” the company said.
“The benefit of which will not recur at the same level in FY27.”
Hippo Valley also flagged rising production costs as a major concern.
The company said cane purchased from private farmers at US$71 per tonne, coupled with high wage costs, continued to squeeze profitability despite operational gains.
A pending court case over the industry’s Division of Proceeds formula also remains a significant uncertainty.
Tongaat Hulett Limited owns a controlling 50.3 percent majority stake in Hippo Valley Estates.