Tongaat Huletts Zimbabwean listed unit Hippo Valley has had to divert domestic market volumes to the export market owing to decreasing local sales due to unfriendly fiscal conditions that drove up the cost of doing business during the year to end-March.
Hippo Valley and non-listed Triangle Sugar Corporation make up the Zimbabwe operations for troubled Tongaat Hulett. The company opted to skip a dividend for the year under review.
Hippo Valley reported on Wednesday that volatile Zimbabwean exchange rates and high inflation disrupted liquidity flows for the company during the period under review.
This had created cash-flow gaps which the company plugged with utilisation of short-term loans with financial institutions. In any case, these financial institutions battling a liquidity crunch struggled to satisfy working capital requirements.
The operating environment for the period remained challenging, characterised by hyperinflation, local currency depreciation, and liquidity constraints which created cash-flow gaps for the company, said analysts at IH Securities.
