Tongaat Hulett says sugar production at its Zimbabwean unit increased by 9,2 percent to 306 000 tonnes in the six months period ended September 30, 2018, compared to 280 000 tonnes in the same period in 2017 driven by increased water availability and accelerated sugarcane root replanting.
The South African sugar giant’s operations in Zimbabwe comprise the wholly owned Triangle Sugar operation and the 50,3 percent holding in Hippo Valley Estates.
“As a result, the Zimbabwe sugar operations generated operating profit of R537 million which was lower than R580 million in 2017, before cane valuations,” the company said.
The firm noted that liquidity constrains in the local market have resulted in considerable cost-push inflationary pressure. After adjusting for cane valuations, the group added, operating profit was R319 million, lower than R358 million during the previous year.
The sugar producer believes that in Zimbabwe, the Tugwi–Mukorsi Dam has secured the availability of bulk water for irrigation for the next two years.
“The additional production will support higher export sales into regional deficit markets at premium prices,” the group said.
It added that recently a favourable outcome was reached with the Zimbabwe government providing the listed company with security of tenure over its assets and the operations remains positive.
The group’s operations in South Africa and Mozambique experienced difficult conditions during the period, with a resultant negative impact on both revenue and cane valuations. DailyNews