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ILV - Illovo Sugar Limited - Interim report for the six months ended 30

Release Date: 23/11/2011 07:06
Code(s): ILV
Wrap Text

ILV - Illovo Sugar Limited - Interim report for the six months ended 30 September 2011 ILLOVO SUGAR LIMITED (Incorporated in the Republic of South Africa) (Registration number 1906/000622/06) Share Code: ILV ISIN: ZAE000083846 ("Illovo" or "the company") INTERIM REPORT FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2011 Quote Graham Clark, Managing Director, commented: "It is pleasing to report increased profits on the back of favourable exchange rates, cost cutting and better market conditions. Nonetheless, group production levels continue to be impacted by the knock-on consequences of the severe drought in KwaZulu-Natal, South Africa in 2010. We are expecting modest production increases in our other operations, except in Zambia where the sucrose levels have been particularly low. We have made significant investments in our group production in recent years and are well placed to maximise the plant utilisation in the coming and future seasons. Additionally we are progressing other growth initiatives, including renewable energy as well as an investment in a new alcohol distillery in Tanzania." Enquiries: Illovo Sugar Limited 031 508 4300 Graham Clark, Managing Director Mohammed Abool-Samad, Financial Director Chris Fitz-Gerald, Public Affairs Manager College Hill 011 447 3030 Nicholas Williams 083 607 0761 Basis of preparation This report incorporates financial statements which reflect both actual results based on accounting policies and methods of computation which are based on International Financial Reporting Standards ("IFRS") and those determined on a sugar season basis which, in the directors` opinion, provide a better basis for evaluating the financial performance of the company. The sugar industry is a seasonal agricultural-based business and the payment processes are such that cash flows throughout the season, which runs from 1 April to 31 March, are derived from the expected tonnages and prices that will be achieved for the season as a whole. The effect of this is that product sales tonnages and prices received, and raw material prices paid are provisional in nature until the conclusion of the season. For this reason the directors consider that profit figures based on actual cash flows may not represent the best basis for evaluating the performance and the results for the period. In respect of the sugar season basis results, operational profits for cane growing and sugar production comprise the company`s view of the position at 30 September 2011 as it relates to the season as a whole. All other results are based on actual performance. The amounts disclosed in respect of cane growing and sugar production operations are based on a profit forecast for the year ending 31 March 2012 which has been examined by our auditors, Deloitte & Touche. Their unmodified accountants` report is available for inspection at the company`s registered office. The unaudited actual results for the six months ended 30 September 2011 have been prepared using accounting policies and methods of computation that comply with IFRS and are prepared in accordance with IAS34 (Interim financial reporting). The accounting policies adopted are consistent with those of the previous financial period. Review Actual operating profit for the six months ended 30 September 2011 reflected a moderate improvement of 5% compared to the corresponding period last year. This result was negatively impacted by the knock-on consequences of the 2010 drought in South Africa which severely retarded cane growth and caused cane quality to decline to very poor levels. This was offset by increased cane production elsewhere in the group, although the sucrose content in cane generally ran well below normal expectations. Profit after tax rose from R725.9 million to R747.2 million, resulting in a 5% improvement in headline earnings. On a seasonal basis, operating profit increased by 19% from R522.9 million to R620.2 million, reflecting the benefits of favourable exchange rates, good cost control and better market conditions than in the previous year. Production, however, has been negatively affected by the drought conditions in South Africa which depressed sugar production and will result in a second year of lower year- on-year output. Elsewhere, cane production was higher than in the previous year, although significantly lower sucrose levels moderated increased sugar production which in total was insufficient to offset the decline in South Africa. The contributions to operating profit were sugar production 56%, cane growing 31%, downstream 11% and power co-generation 2%. By country, contributions were Malawi 45%, Zambia 33%, Tanzania 13%, Mozambique 4%, Swaziland 3% and South Africa 2%. In general, although cane quality has been poor, the group`s sugar factories have operated well. The expanded factory in Zambia has demonstrated its ability to run at design capacity and also achieved acceptable sugar recoveries. In Mozambique, the factory is now operating at its increased throughput level, whilst in Swaziland, despite early season expansion-related commissioning difficulties, the plant has achieved rated performance and is now stabilising. The power co-generation facility which was part of the expansion project at Ubombo in Swaziland was successfully commissioned in the period and has run very well. The export of electricity to the national grid in Swaziland has commenced and to-date volumes are already in excess of the annual minimum contractual commitment. In South Africa, the diversion of cane to the Sezela factory has ensured that the downstream products plant located at that site has operated consistently at capacity throughout the period. Both distilleries in South Africa have also operated well. Approval was granted by the Board to commence with the construction of a new potable alcohol distillery at Kilombero in Tanzania. This plant, with a capacity of 12 million litres of potable alcohol per annum, will utilise all of the molasses produced at Kilombero and supply high quality alcohol into the East African market. The plant is scheduled to be commissioned in mid-2013. Furfural and furfuryl alcohol prices climbed to record levels in the period as demand outpaced global supply and advantage was taken of pricing opportunities. Sales of the furfural-based nematicide now registered in the United States for use on golf courses and in turf farms has commenced and initial market reaction has been positive. Follow-up orders are now being supplied and effective promotion of the product should boost future sales. Sugar sales have been constrained by lower production volumes, but all markets have been adequately supplied. Domestic market growth continues in Zambia and Tanzania and prospects for increased sales are good. However, difficult economic circumstances have depressed demand in Malawi and Mozambique. In South Africa and Swaziland domestic sales volumes will be lower due to reduced market share in each country, caused by lower production relative to other producers. Regional exports have been strong from Malawi and Zambia and bulk raw sugar exports to the European Union (EU) have moved well, although price realisations have been negatively impacted by lower EU sugar prices early in the year and a weaker Euro. Prospects for improved EU prices are promising as raw sugar shortages in the EU continue. Net financing costs of R89.0 million were significantly higher than in the previous equivalent period, reflecting the full cost of servicing the group`s expansion-related debt in Zambia and Swaziland. In addition, working capital requirements were higher due to an adverse sales mix in the first six months of the year. The group tax charge increased from R149.1 million to R165.2 million as a result of expansionrelated adjustments to deferred taxation in Zambia and Swaziland. Headline earnings for the period rose by 12% compared to the same period last year. Financing for the construction of the integrated Markala sugar factory in Mali has been secured and is now subject to finalisation of loan documentation. Completion of the financing of the agricultural component of the project is complex and requires bi-lateral concessional lenders to disburse funds via the Government of Mali. Good progress has been made towards securing this funding, which is expected to be finalised early in 2012. Project commencement also remains dependent upon the Government of Mali fulfilling certain undertakings which is in progress. Capital reduction distribution out of share premium in lieu of dividend Notice is hereby given that an interim capital reduction distribution out of share premium of 23.0 cents per share has been declared, in lieu of a dividend, on the ordinary shares of the company in respect of the six months ended 30 September 2011. The directors have determined that the capital reduction distribution shall be paid out of qualifying contributed tax capital as contemplated in the definition of "contributed tax capital" in section 1 of the Income Tax Act, 1962. In accordance with the settlement procedures of Strate, the company has determined the following salient dates for the payment of the capital distribution: Last day to trade cum the capital distribution Thursday,29 December 2011 Shares commence trading ex the capital distribution Friday, 30 December 2011 Record date Friday, 6 January 2012 Payment of interim capital distribution Monday, 9 January 2012 Share certificates may not be dematerialised / rematerialised between Friday, 30 December 2011 and Friday, 6 January 2012, both days inclusive. Prospects Group sugar production for the full year is likely to fall by up to 10% compared to the tonnages produced in the previous year. This is due to the severe impact of the 2010 drought in South Africa where, as a consequence, sugar production will fall for a second year in succession and is likely to be more than 25% lower in 2011/12 than in 2010/11. The severity of this fall is greater than was previously anticipated and will not be fully mitigated by increased production elsewhere in the group. Modest sugar production increases are likely in Malawi, Mozambique, Swaziland and Tanzania. Reduced sucrose in cane at Nchalo in Malawi limited production growth at that operation, and a record low sucrose content in Zambia will cause sugar production to be below the output of the previous year. Looking forward, rainfall has returned to normal in South Africa and a marked recovery is anticipated in 2012/13. Elsewhere, better growing conditions have been experienced and this, along with improved cane varieties and upgraded irrigation and drainage will result in an increase in cane yields in 2012/13. Sucrose levels across the group are anticipated to return to more normal levels in 2012/13. The lower sugar production will result in reduced sales volumes for the full year, but better market conditions and favourable exchange rates will have a positive impact on revenue. A programme to enhance revenue and reduce costs is anticipated to improve operating margins. Net financing costs will however increase due to a higher interest charge in Zambia, whilst the effective tax rate is expected to normalise at around 30%. Cash generation remains strong and gearing is anticipated to remain low. Investment to increase the group`s production has been significant over the past three to four years, and the operations are well placed to maximise plant utilisation in the coming and future seasons. Growth in cane supply will continue from the group`s own operations and from outgrowers in order to utilise the increased factory capacity. The group continues to progress its initiatives for growth, including its objective to utilise renewable resources to move towards self-sufficiency in electricity, and to export into the national grid where a surplus of electricity is produced. The Ubombo facility is a case in point and provides the model for the future. In addition, and in order to leverage its intention to maximise the value from every stick of cane crushed, the group continues to progress initiatives to utilise molasses for the production of ethanol for both potable use and fuel blending. In addition to the approved potable alcohol project in Tanzania, investigations in this regard are being progressed in Zambia and Malawi. On behalf of the Board D G MacLeod G J Clark Mount Edgecombe Chairman Managing Director 22 November 2011 Directors: D G MacLeod (Chairman)*, G J Clark (Managing Director) (Australian), M H Abdool- Samad, M I Carr#*, G B Dalgleish, M J Hankinson*, D Konar*, P A Lister#*, P M Madi*, C W N Molope*, A R Mpungwe (Tanzanian)*, T S Munday*, R N Pike #*, L W Riddle, B M Stuart # British * Non-executive Registered office: Illovo Sugar Park, 1 Montgomery Drive, Mount Edgecombe, KwaZulu-Natal, South Africa Postal address: P O Box 194, Durban, 4000 Telephone: +27 31 508 4300 Telefax: +27 31 508 4535 Website: www.illovosugar.com Transfer Secretaries: Link Market Services South Africa (Proprietary) Limited Rennie House, 13th Floor, 19 Ameshoff Street, Braamfontein, 2001 P O Box 4844, Johannesburg, 2000 Auditors: Deloitte & Touche Sponsor: J.P. Morgan Equities Limited ABRIDGED GROUP INCOME STATEMENT Actual Sugar season Actual
basis Unaudited Unaudited Audited Six months ended Six months ended Year ended
30 September 30 September 31 March 2011 2010 2011 2010 Change 2011 Notes Rm Rm Rm Rm % Rm
Revenue 4 094.4 3 968.5 4 556.7 4 257.3 7 8 107.9 Operating 1 080.4 1 025.8 620.2 522.9 19 1 029.3 profit Dividend - - - - 2.1 income Net financing 1 89.0 35.5 89.0 35.5 95.5 costs Profit before 991.4 990.3 531.2 487.4 935.9 non-trading items Share of 1.0 ( 2.2) 1.0 ( 2.2) ( 3.6) profit/(loss) from associates Material 2 4.3 19.8 4.3 19.8 30.2 items
Profit before 996.7 1 007.9 536.5 505.0 962.5 taxation Taxation 249.5 282.0 165.2 149.1 248.6
Profit for 747.2 725.9 371.3 355.9 713.9 the period Attributable to: Shareholders 604.1 594.0 289.2 278.4 4 546.2 of Illovo Sugar Limited Non- 143.1 131.9 82.1 77.5 167.7 controlling interest
747.2 725.9 371.3 355.9 713.9 Determination of headline earnings: Profit 604.1 594.0 289.2 278.4 4 546.2 attributable to shareholders Adjusted for: - Profit on 2 - (19.8) - (19.8) (19.8) disposal of business - Profit on 2 (4.3) - (4.3) - (10.4) disposal of property - Loss/(profit) on disposal of plant and equipment 4.4 - 4.4 - (0.9) Total tax - - - - 1.0 effect of adjustments Total non- controlling interest effect of - - - - - adjustments Headline 604.2 574.2 289.3 258.6 12 516.1 earnings Number of 459.8 459.4 459.8 459.4 459.8 shares in issue (millions)
Weighted average number of shares on which headline 459.8 460.0 459.8 460.0 459.8 earnings per share are based (millions) Headline 131.4 124.8 62.9 56.2 12 112.2 earnings per share (cents)
Diluted 131.2 124.6 62.9 56.2 112.1 headline earnings per share (cents) Basic 131.4 129.1 62.9 60.5 118.8 earnings per share (cents) Diluted 131.2 128.9 62.8 60.5 118.6 basic earnings per share (cents)
Distribution 3 23.0 22.0 23.0 22.0 5 56.0 per share (cents) ABRIDGED GROUP STATEMENT OF FINANCIAL POSITION Actual Sugar season basis Actual Unaudited Unaudited Audited 30 September 30 September 31 March
2011 2010 2011 2010 2011 Rm Rm Rm Rm Rm ASSETS Non-current 6 795.2 5 676.7 6 795.2 5 676.7 6 409.4 assets
Property, plant 5 199.5 4 246.7 5 199.5 4 246.7 4 984.5 and equipment Cane roots 1 164.7 1 080.3 1 164.7 1 080.3 1 087.9 Intangible assets 181.4 174.4 181.4 174.4 174.0 Investments 249.6 175.3 249.6 175.3 163.0 Current assets 5 629.2 5 002.5 5 629.2 5 002.5 3 396.3
Inventories 2 196.2 2 506.5 2 196.2 2 506.5 739.1 Growing cane 1 216.7 1 032.8 1 216.7 1 032.8 1 155.8 Trade and other 1 245.5 902.4 1 245.5 902.4 768.5 receivables Financial 33.9 3.0 33.9 3.0 15.1 instruments Cash and cash 936.9 557.8 936.9 557.8 717.8 equivalents Total assets 12 10 12 424.4 10 679.2 9 805.7 424.4 679.2
EQUITY AND LIABILITIES Total equity 6 818.0 6 343.6 6 442.1 5 973.6 5 975.3
Equity holders` 5 921.5 5 493.4 5 606.6 5 177.8 5 interest 191.2 Non-controlling 896.5 850.2 835.5 795.8 784.1 interest Non-current 2 724.7 914.9 2 724.7 914.9 960.2 liabilities
Long-term 1 865.5 318.9 1 865.5 318.9 235.3 borrowings Deferred taxation 723.6 596.0 723.6 596.0 687.6 Other liabilities 135.6 - 135.6 - 37.3 Current 2 881.7 3 420.7 3 257.6 3 790.7 2 liabilities 870.2
Short-term 698.5 1 156.1 698.5 1 156.1 994.7 borrowings Trade and other 2 170.6 2 246.9 2 546.5 2 616.9 1 payables 871.5 Financial 12.6 17.7 12.6 17.7 4.0 instruments
Total equity and 12 424.4 10 12 424.4 10 679.2 9 liabilities 679.2 805.7 OTHER SALIENT FEATURES Note
Operating margin 26.4 25.8 13.6 12.3 12.7 (%) Interest cover 12.1 28.9 7.0 14.7 10.8 (times) Effective tax 25.2 28.5 31.1 30.6 26.6 rate (%) Net debt:equity 4 23.9 14.5 25.3 15.4 8.6 ratio Net asset value 1 1 1 1 1 per share (cents) 482.8 380.8 401.1 300.2 299.6 Depreciation 141.6 188.6 141.6 188.6 188.1 Capital 137.4 483.1 137.4 483.1 1 expenditure 474.3 - Expansion 48.3 373.4 48.3 373.4 1 capital 262.9 - Replacement 87.0 107.9 87.0 107.9 199.8 capital 135.3 481.3 135.3 481.3 1
462.7 - Expansion of - - - - 8.2 area under cane - Product 2.1 1.8 2.1 1.8 3.4 registration costs Capital 2 3 2 3 2 commitments 692.3 639.1 692.3 639.1 606.4 - Contracted 121.3 559.1 121.3 559.1 63.2 - Approved but 2 3 2 3 2 not contracted 571.0 080.0 571.0 080.0 543.2 Anno Lease commitments 371.4 248.8 371.4 248.8 300.3 Contingent 155.9 49.2 155.9 49.2 175.0 liabilities ABRIDGED GROUP STATEMENT OF CASH FLOWS Actual Sugar season basis Actual Unaudited Unaudited Audited
Six months ended Six months ended Year ended 30 September 30 September 31 March 2011 2010 2011 2010 2011
Rm Rm Rm Rm Rm Cash flows from operating and investing activities Cash operating 1 168.2 1 316.4 708.0 813.5 1 132.9 profit Working capital (1 (1 (1 (1 146.3 requirements 620.9) 582.8) 160.7) 079.9)
Cash (utilised (452.7) (266.4) (452.7) (266.4) 1 279.2 by)/generated from operations Replacement capital (87.0) (107.9) (87.0) (107.9) ( 199.8) expenditure Financing costs, (433.8) (507.9) (433.8) (507.9) ( 735.7) taxation and distributions Net investment in (50.4) (375.2) (50.4) (375.2) (1 future operations 274.5) Other movements 49.9 35.0 49.9 35.0 92.3 Net cash outflows ( (1 ( (1 ( 838.5) before financing 974.0) 222.4) 974.0) 222.4) activities Borrowings raised 1 146.8 481.1 1 146.8 481.1 263.0 Other financing 0.3 ( 29.0) 0.3 ( 29.0) ( 26.7) activities
Net 173.1 ( 173.1 ( ( 602.2) increase/(decrease) 770.3) 770.3) in cash and cash equivalents STATEMENT OF OTHER COMPREHENSIVE INCOME Profit for the 747.2 725.9 371.3 355.9 713.9 period Other comprehensive income Foreign currency 310.9 (168.6) 310.9 (168.6) (482.7) translation differences Adjustments in 15.6 (13.1) 15.6 (13.1) 10.1 respect of cash flow hedges, net of tax Actuarial gains - - - - 3.2 on post- retirement obligations, net of tax Hedge of net (9.8) ( 37.7) (9.8) ( 37.7) ( 2.1) investment in foreign subsidiaries Total 1 063.9 506.5 688.0 136.5 242.4 comprehensive income for the period Attributable to: Shareholders of 886.3 356.9 571.4 41.3 155.0 Illovo Sugar Limited Non-controlling 177.6 149.6 116.6 95.2 87.4 interest 1 063.9 506.5 688.0 136.5 242.4 ABRIDGED STATEMENT OF CHANGES IN EQUITY Actual Sugar season basis Actual
Unaudited Unaudited Audited Six months ended Six months ended Year ended 30 September 30 September 31 March
2011 2010 2011 2010 2011 Rm Rm Rm Rm Rm Share capital and share premium Balance at 2 791.5 3 075.7 2 791.5 3 075.7 3 075.7 beginning of the period Issue/(repurchase) 0.3 ( 29.0) 0.3 ( 29.0) ( 26.7) of share capital Transfer to ( 106.9) ( 101.2) ( 106.9) ( 101.2) ( 257.5) distribution reserve Balance at end of 2 684.9 2 945.5 2 684.9 2 945.5 2 791.5 the period Share-based payments reserve Balance at 13.1 13.1 13.1 13.1 13.1 beginning and end of the period Non-distributable reserves
Balance at 154.0 224.7 154.0 224.7 224.7 beginning of the period Realised profit on - - - - 9.9 disposal of property Transfer of ( 271.9) 187.1 ( 271.9) 187.1 403.8 foreign currency translation reserve Transactions with - ( 88.5) - ( 88.5) ( 90.0) non-controlling shareholders Total comprehensive income: - Foreign currency 281.7 (187.1) 281.7 ( 187.1) (401.7) translation - Cash flow hedges 10.3 (12.3) 10.3 ( 12.3) 9.4 - Hedge of net ( 9.8) ( 37.7) ( 9.8) ( 37.7) ( 2.1) investment in foreign subsidiaries
Balance at end of 164.3 86.2 164.3 86.2 154.0 the period Retained earnings Balance at 2 076.3 1 940.6 2 076.3 1 940.6 1 940.6 beginning of the period Realised profit on - - - - ( 9.9) disposal of property Transfer of 271.9 ( 187.1) 271.9 ( 187.1) ( 403.8) foreign currency translation reserve Total comprehensive income: - Profit for the 604.1 594.0 289.2 278.4 546.2 period - Actuarial gains - - - - 3.2 on post-retirement obligations
Balance at end of 2 952.3 2 347.5 2 637.4 2 031.9 2 076.3 the period Distribution reserve Balance at 156.3 248.5 156.3 248.5 248.5 beginning of the period Transfer from 106.9 101.2 106.9 101.2 257.5 share premium Distributions paid ( 156.3) (248.6) ( 156.3) (248.6) (349.7) Balance at end of 106.9 101.1 106.9 101.1 156.3 the period
Equity holders` 5 921.5 5 493.4 5 606.6 5 177.8 5 191.2 interest
Non-controlling interest
Balance at 784.1 812.1 784.1 812.1 812.1 beginning of the period Distributions paid ( 65.2) (103.9) ( 65.2) (103.9) (106.2) Change in - ( 7.6) - ( 7.6) (9.2) shareholding Total comprehensive income: - Foreign currency 29.2 18.5 29.2 18.5 (81.0) translation - Cash flow hedges 5.3 ( 0.8) 5.3 ( 0.8) 0.7 - Profit for the 143.1 131.9 82.1 77.5 167.7 period Balance at end of 896.5 850.2 835.5 795.8 784.1 the period Total equity 6 818.0 6 343.6 6 442.1 5 973.6 5 975.3 SEGMENTAL ANALYSIS Actual Sugar season basis Actual Unaudited Unaudited Audited Six months ended Six months ended Year
ended 30 September 30 September 31 March 2011 2010 2011 2010 2011
Rm Rm Rm % Rm % Rm BUSINESS SEGMENTS Revenue
Sugar 2 162.1 2 266.8 2 949.8 65 2 69 5 543.9 production 948.4 Cane growing 1 510.6 1 337.5 1 159.4 25 946.1 22 1 779.3 Downstream 405.3 364.2 435.4 10 362.8 9 784.7 Co-generation 16.4 - 12.1 - - - - ` 4 094.4 3 968.5 4 556.7 4 8 107.9 257.3
Operating profit
Sugar 490.1 638.2 347.3 56 371.8 71 742.8 production Cane growing 513.5 321.3 191.4 31 116.9 22 193.9 Downstream 62.4 66.3 69.1 11 34.2 7 92.6 Co-generation 14.4 - 12.4 2 - - - 1 080.4 1 025.8 620.2 522.9 1 029.3
Total assets Sugar 6 852.3 6 334.7 6 852.3 60 6 63 4 595.7 production 334.7 Cane growing 3 697.4 3 371.4 3 697.4 32 3 33 3 708.1 371.4 Downstream 477.1 412.3 477.1 4 412.3 4 360.8 Co-generation 426.8 - 426.8 4 - - 408.2 11 10 11 10 9 072.8 453.6 118.4 453.6 118.4
Note: Total assets excludes cash and cash equivalents and financial instruments GEOGRAPHICAL SEGMENTS Revenue Malawi 719.8 809.3 815.8 18 788.7 19 1 447.8 Zambia 1,036.2 859.2 1,135.7 25 998.2 23 1 829.9 South Africa 1 158.3 1 336.2 1 575.4 35 1 644.1 39 3 219.2 Tanzania 303.8 249.8 338.0 7 314.5 7 626.1 Swaziland 573.4 519.5 469.2 10 356.9 8 738.0 Mozambique 302.9 194.5 222.6 5 154.9 4 246.9 4 094.4 3 968.5 4 556.7 4 257.3 8 107.9
Operating profit Malawi 469.2 381.2 282.4 45 245.6 47 430.1 Zambia 306.1 235.3 201.7 33 147.0 28 242.4 South Africa 97.6 233.0 10.4 2 38.3 7 148.0 Tanzania 66.4 57.6 83.6 13 63.7 12 128.0 Swaziland 56.3 99.3 18.8 3 20.0 4 78.2 Mozambique 84.8 19.4 23.3 4 8.3 2 2.6 1 080.4 1 025.8 620.2 522.9 1 029.3
NOTES TO THE FINANCIAL STATEMENTS Unaudited Audited Six months ended Year ended
30 September 31 March 2011 2010 2011 Rm Rm Rm
1. Net financing costs Interest paid 124.4 79.0 144.0 Less: capitalised - ( 8.4) ( 26.1)
124.4 70.6 117.9 Interest received ( 8.8) ( 35.2) ( 25.0) Foreign exchange (gains)/losses ( 26.6) 0.1 2.6 89.0 35.5 95.5 2. Material items Profit on disposal of business - 19.8 19.8 Profit on disposal of property 4.3 - 10.4 Material profit before taxation 4.3 19.8 30.2 Taxation - - ( 0.7) Material profit attributable to shareholders of Illovo Sugar Limited 4.3 19.8 29.5 3. Distribution per share The distribution per share of 23.0 cents represents an interim capital distribution declared out of share premium (2010: interim distribution of 22.0 cents). 4. Net debt: equity ratio The net debt:equity ratio is calculated as interest-bearing liabilities, net of cash and cash equivalents, divided by total equity. Date: 23/11/2011 07:06:01 Supplied by www.sharenet.co.za Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited (`JSE`). The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct, indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on, information disseminated through SENS.

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