HIPPO Valley Estates Limited (Hippo) has recorded a 79% increase in profit after tax to US$24,05 million for its year ended March 31, 2026, driven by strong local demand and the release of carry-over sugar stocks.
The increase is from a comparative period of US$13,44 million, underpinned by a 24% rise in sugar sales volumes during the year.
The higher sales volumes lifted revenue 15% to US$220,81 million, while Hippo maintained sugar production at 221 017 tonnes, up marginally from 219 112 tonnes in the previous year.
Industry sugar sales increased 24% to 471 837 tonnes during the year, with Hippo accounting for 49,8% of national sugar production.
“Profit for the year increased by 79% to US$24,1 million (2025: US$13,4 million), reflecting the benefit in sales growth, including the contribution of carry-over stocks released during the year, with costs increasing to the extent of variable expenditure in line with positive operational performances,” Hippo said in a statement attached to its financial year results for the period ended March 31, 2026.
The business achieved robust sales, reflected by the rise in sugar volumes from the prior year, which stemmed from strong local market demand growth and the release of carry-over stocks.
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“Despite a 6% drop in the average industry price, revenue growth was supported by maintaining strong presence of our Huletts sugar brand in the local market, among other marketing initiatives,” Hippo said.
“Additionally, the company continues to deliberately prioritise the local market over lower-priced export markets, driving stronger average price realisations, with the increase in export volumes reflecting the availability of surplus stocks carried over from the prior year rather than a deliberate change in sales strategy.”
The stronger trading performance also boosted operating cash flows, which more than tripled to US$29,7 million during the review period, driven by higher local sugar sales and the monetisation of carry-over sugar stocks.
However, the company warned that this inventory-related cash boost is unlikely to be repeated in the current financial year.
“Capital expenditure for the year totalled US$7 million (2025: US$4,8 million), including US$2,6 million (2025: US$1,7 million) spent on replanting cane roots,” Hippo said.
In light of the improvements in working capital, the company re-invested by retooling the business with equipment for the agriculture operations and critical manufacturing requirements, reducing reliance on outsourced services.
“At March 31, 2026, the company stood at a net cash position of US$13,4 million recording a significant US$22,3 million improvement from a net debt position of US$8,9 million in the prior year,” Hippo said.
“This reflects the positive outturn in sales which helped in the repayment of borrowings in full before the funds were called back by the lenders.”
Hippo said it intends to maintain appropriate borrowing facilities going forward and to optimise the use of available headroom to finance capital reinvestment requirements, including deferred capital asset replacement, while maintaining optimal cash balances for working capital requirements.
This will be consistent with the cyclical nature of the business and mindful of the uncertainties in the operating environment, including commodity price volatility, input cost pressures in the coming season, and the resolution of outstanding legal matters.
Hippo also disclosed capital expenditure commitments of US$1,72 million as it continues reinvesting in its operations.
“The business holds sugar stock levels considered sufficient to meet near-term local and committed export market requirements.
“Having drawn down the significant portion of the carry-over inventory during FY26, FY27 revenue will depend more on operational performance and local market demand rather than stock release.
“FY27 season commenced per targets after successfully completing the annual off crop maintenance programme, with focus on agriculture equipment and the manufacturing plant.”
The company is well positioned to compete effectively in the local market, supported by continued policy interventions to adequately protect the domestic market against cheap and unfortified sugar imports.