SOUTH AFRICA: Tongaat seen rebounding on sugar production recovery
Published: 05/19/2017, 3:01:30 PM
Tongaat Hulett expects its full-year headline earnings to rise by up to 45%, helped by the rebound in the performance of its sugar operations, which compensated for a weak performance in the starch operations and the land management and development arm, according to South Africa's Business Day.
The sugar producer, which has operations in neighbouring countries, including Zimbabwe, Mozambique and Swaziland, said on Friday that headline earnings in the year to end-March would rise to about ZAR982 million (US$74 million) from ZAR679 million in the year-earlier period.
The various sugar operations realised ZAR1.27 billion in operating profit, staging a turnaround from a loss of ZAR15 million in the previous period and reflecting high sugar prices and effective import duties in the jurisdictions in which the company operates.
Sugar production crept to 1.056-million tonnes, from 1.023-million tonnes, as the drought in Kwazulu-Natal and poor growing conditions in Zimbabwe and Mozambique affected volumes.
Operating profit in the start and glucose operation dropped to ZAR510 million, from ZAR658 million, as a result of high maize costs that resulted from the drought.
Tongaat also generates income from land conversion and development activities. In this regard, operating profit dropped to ZAR641 million from ZAR1.11 billion.
The share price has dropped 13% to ZAR113.60 on the JSE so far in 2017, valuing the company ZAR15.8 billion.