Hippo Valley hails progressive Monetary Policy Stance

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By Alois Vinga

LISTED sugar processor, Hippo Valley Estates has commended authorities for implementing a tight Monetary Policy Stance which has gone a long way to ease inflationary pressures.

Presenting performance for the half-year period that ended September 30 2023, Hippo Valley said in part, the year’s operating environment was quite difficult due to a series of economic challenges which eased off as the year progressed.

“On a positive note, there has been some stability in exchange rates and a slowdown of inflationary pressures, following progressive monetary policy measures implemented by the Reserve Bank of Zimbabwe that allow the foreign currency to be traded more freely at market-determined exchange rates through financial institutions,” the group said in a statement.

The sugar processor said the multi-currency regime continued within the domestic economy, spurred by the constrained liquidity of the Zimbabwe Dollar whilst the cost of key inputs was impacted by geo-political events in Eastern Europe.

Despite a 4% decrease in industry sales volumes, the company’s revenue increased in ZWL terms by 76% to ZWL452,2 billion in line with local inflation and higher net realisations from exports.

Operating profit increased by 244% to ZWL170.0 billion as a result of higher revenue and a favourable movement in the fair value of biological assets.

Adjusted EBITDA, which excludes the distortion from non-cash movements in the fair value of biological assets, increased by 51% to ZWL.135.7 billion.

The effective tax rate was 23.3% (2022: 50.1%) and was impacted by the net monetary gain of ZWL24.4 billion (2022: loss of ZWL4.2 billion) which is a permanent difference for income tax purposes. Overall, profit for the period increased to ZWL140.0 billion (2022: ZWL19.9 billion).

“The Company remains focused on improving both cane yields and quality on its plantations, whilst providing support to private farmers to improve their productivity.

“The co-management framework, whereby the company farms land on behalf of willing farmers, continues to deliver positive results, with improved yields being realised for the benefit of the farmers,” added Hippo Valley Estates.