SUGARCANE miller Hippo Valley Estates Limited reported a 10% rise in revenue to US$174 million for the nine months ended December 31, 2025, driven by increased export volumes.
Revenue grew from US$157 million in the prior year, underpinned by strong production, product quality, and effective sales strategies.
Hippo had indicated in its half-year report ending September 30, 2025, that it would prioritise exports in the second half of the 2025/26 financial year.
“Revenue for the nine months increased by 10% to US$174 million (2024: US$157 million), supported by a 14% uplift in total sales volumes,” Hippo said in its trading update for its third quarter ended December 31, 2025.
“However, higher exposure to Comesa markets, where 22 016 tonnes were sold versus 3 001 tonnes last year at 7% lower pricing, moderated the impact of the volume growth.”
Hippo said the growth in revenues remained underpinned by positive production performances, good product quality, and excellence in its sales and marketing efforts, which guaranteed product availability.
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“The business had good production performances in the last two seasons, resulting in excess sugar above domestic market demand. In light of this, more sugar was being made available to the export market,” it said.
“Export sales grew by 53%, with increased volumes supplied into Burundi, Rwanda, Botswana and the USA. A 36 000-tonne industry shipment to the European market departed shortly after the quarter end.”
Despite these gains, cane supply from Hippo’s plantations fell 5% to 969 186 tonnes, due to a 4% reduction in harvest area and a 1% drop in yield per hectare to 94,79 tonnes. Deliveries from private farmers rose 8% to 801 864 tonnes, supported by improved yields and a slight expansion in planting area.
Cost pressures persisted in manpower, private farmer cane purchases, and imported spares, mostly USD-denominated, constraining margins. As a result, adjusted earnings before interest, taxes, depreciation, and amortisation rose modestly by 4%, while free cash flow remained under pressure due to sales timing.
Hippo continues to implement Project Zambuko, a margin-improvement initiative focused on revenue growth and cost optimisation. It said operational efforts have shifted to the annual off-crop maintenance programme ahead of the 2026 crushing season starting late April.
“We expect current production and stocks to be sufficient to meet both domestic and export requirements ahead of the next season. The company continues to discourage the importation of unfortified and non-compliant sugar,” it said.
“The company is pleased with the good rains received to date after severe droughts in the recent prior seasons and our supplying dams have adequate irrigation water. Favourable rainfall to date, together with strong dam levels, underpin a positive agricultural outlook.”