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Voluntary Trading Statement for the year ended 31 March 2015
Tongaat Hulett Limited
Registration number 1892/000610/06
Share code: TON
ISIN ZAE000096541
VOLUNTARY TRADING STATEMENT FOR THE YEAR ENDED 31
MARCH 2015
The following trading statement is issued for the year ended 31 March 2015.
Operating profit from the various sugar operations is expected to total approximately
R806 million for the year (2014: R908 million), a decrease of 11%. The benefit of
cost reductions over the past two years together with the negative cane valuation
effect recorded in the income statement last year not being repeated this year was
offset by a reduction in sugar production volumes and lower prices. Revenue was
particularly impacted by a substantial reduction in prices for exports into the EU as a
result of the changes to the EU agricultural markets. Tongaat Hulett’s sugar
production for the year has totalled 1,314 million tons compared to 1,424 million tons
in the prior year. Sugar production in South Africa was 541 000 tons (2014: 634 000
tons), Zimbabwe was 445 000 tons (2014: 488 000 tons), Mozambique was 271 000
tons (2014: 249 000 tons) and the raw sugar equivalent in Swaziland was 57 000 tons
(2014: 53 000 tons). This follows the dry conditions in South Africa and, in
Zimbabwe, production in the 2014/15 year that did not yet benefit from the new /
replanting of cane that commenced with the dam levels having recovered early in
2014. In Mozambique, the local market was impacted by substantial imports which
occurred prior to an increase in the reference price to protect against unfair import
competition, which is expected soon.
Operating profit from the starch and glucose operation is expected to increase by
some 16% to approximately R560 million (2014: R482 million), benefitting from
further improvements in the sales mix, co-product recoveries, capacity utilisation and
plant efficiencies.
Land development and conversion activities led to 108 developable hectares being
sold, with operating profit of R828 million expected to be reported, which is a 23%
reduction compared to the prior year (2014: 259 developable hectares were sold and
profit of R1,080 billion was earned). The momentum on larger land sales has
continued, with a single sale of 19 developable hectares in Izinga and a sale of 27
developable hectares in a new area of Cornubia. The sale of 42 developable hectares
of highly valued land in Umhlanga Ridgeside, precincts 1 and 2, which was
previously expected to be finalised by the end of March 2015, was not concluded in
this financial year. Negotiations with four parties are at various stages, all aimed
towards reaching an imminent conclusion. The development proposals received for
Ridgeside are confirming the value that has previously been attributed to the land.
Details of Tongaat Hulett’s extensive portfolio of some 8 100 developable hectares of
land for conversion in KwaZulu-Natal are available on the www.tongaat.com website.
Further detail, providing increased insight into the composition of the portfolio,
prospective usage, growing market momentum and development themes, possible
timing and values, will be released during the roadshow, at the end of May 2015,
following the release of Tongaat Hulett’s annual results.
Taking all of the aforementioned into account together with the centrally accounted
items, Tongaat Hulett’s operating profit is expected to decrease by some 12% from
the previous best of R2,374 billion earned last year to approximately R2,089 billion,
with strong cash flow from operations generated of approximately R2,5 billion.
Headline earnings are expected to be approximately R945 million for the year,
compared to the R1,106 billion earned in the previous year, a decrease of some
14,5%. Total net profit per share is expected to be approximately 865 cents per share
(2014: 1 034 cents per share) while headline earnings per share for the year are
expected to be approximately 826 cents per share (2014: 990 cents per share), both
reflecting a decrease of some 16,5%.
This trading statement is issued in accordance with the JSE Listings Requirements.
The above information has not been reported on by the auditors.
Tongaat
5 May 2015
Sponsor
Investec Bank Limited
Date: 05/05/2015 05:00:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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