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TONGAAT HULETT LIMITED - Interim Results for the six months ended 30 September 2015

Release Date: 16/11/2015 07:05
Code(s): TON     PDF:  
Wrap Text
Interim Results for the six months ended 30 September 2015

Tongaat Hulett Limited 
Registration No: 1892/000610/06
JSE share code: TON
ISIN: ZAE000096541

Interim Results for the six months ended 30 September 2015

- Revenue of R7,609 billion (2014: R8,073 billion) -5,7%
- Operating profit of R1,361 billion (2014: R1,510 billion) -9,9%
- Operating cash flow of R2,292 billion (2014: R2,413 billion) -5,0%
- Headline earnings of R673 million (2014: R773 million) -12,9%
- Interim dividend of 170 cents per share (2014: 170 cps)

COMMENTARY


The results for the half-year ended 30 September 2015 were attained
with strong performances from the land conversion activities and 
the starch operation being more than off-set by the impact of 
difficult conditions for the sugar industry. In total, for the six 
months, revenue amounted to R7,6 billion and operating profit of 
R1,4 billion was generated, which is 9,9% below last year.

Land conversion and development activities generated operating 
profit of R576 million from the sale of 65 developable hectares 
(2014: R435 million from 49 developable hectares). Sales in this 
period came from Cornubia (industrial and office), Sibaya 
(commencement of node 1 for high-end residential), Umhlanga Ridge 
Town Centre, Kindlewood, Izinga and Bridge City. The profit per 
developable hectare averaged R8,9 million in the half-year, 
ranging from R4 million to over R38 million per developable hectare,
in line with the expectations previously communicated. 

The starch and glucose operation increased operating profit to 
R281 million (2014: R264 million). Sales volumes of prime products 
reflected a 1% reduction in the half-year, with gains in the 
coffee/creamer sector and a slight increase in exports being off-set
by reductions in the confectionery, prepared foods, canning and 
paper making sectors. Maize costs were competitive and there were 
ongoing improvements in operating efficiencies, co-product recoveries
and cost control. 

The various sugar operations’ revenue totalled R5,0 billion for the 
six months, which was 14% below the previous half-year. Profit 
before the impact of cane valuations was R1,13 billion compared to 
R1,45 billion in the first half of last year. A reduction in sugar 
production is being driven by poor growing conditions, particularly 
in South Africa. In addition to lower volumes, export revenues are 
also being impacted by a lower international sugar price, with 
regional deficit markets and EU exports linked to that price. 
Export prices earned into the EU have reduced by some 5,3 US cents 
per pound, in line with the reduction in the world price, compared 
to the first half of last year, with a revenue impact of some 
R200 million in Zimbabwe and Mozambique. Cost reduction initiatives 
continue across all operations. There are multiple currency dynamics, 
with positive and negative effects compared to the same period last 
year. The negative cane valuation impact of R570 million at the 
half-year is to be expected with the harvesting that has taken place 
and is consistent overall with the movement seen last year. Operating 
profit after cane valuations, from all the sugar operations, totalled
R562 million compared to R864 million in the first half of last year.

The South African sugar operations, including the agriculture, 
milling, refining and various downstream activities have seen a 
reduction of operating profit to R154 million (2014: R259 million). 
Production volumes are substantially below last year as a result of 
the drought in KwaZulu-Natal (including the Darnall mill not being 
opened this season) and export sales volumes have consequently 
reduced by 88% compared to the same period last year. The overall 
reduction in volumes has been partly off-set by focused cost 
reductions and improved local market pricing, with a reduced 
impact of imports into the local market. Value added activities, 
including speciality sugars, branding, packing and distribution 
in Botswana, Namibia and South Africa, as well as Voermol (the 
specialist animal feeds business), continue to make a significant
contribution.

The Tambankulu Estate in Swaziland recorded operating profit of 
R32 million (2014: R35 million), which continues to reflect the 
impact of lower sugar cane prices. 

The Mozambique sugar operating profit reduced to R142 million 
(2014: R226 million) due to lower export sales prices and sales 
volumes in the half-year. The lower sales volumes are as a result of
lower production levels at this stage in the season. The effect of 
lower export revenues, including the reduction in export prices into 
the EU, was partially off-set by increased local market revenues. 

The Zimbabwe sugar operations’ operating profit for the half-year 
amounted to R234 million (US$19 million) compared to the R344 million
(US$32 million) in the same period last year. Domestic market sales 
volume levels have been maintained despite the challenging local 
economic conditions. This was more than off-set by lower export 
volumes, due to the timing of shipments between the first and second
halves of the year, and lower export prices into the EU. The strength
of the US dollar is exerting pressure, particularly in respect of 
US dollar based costs (such as wages and salaries) and Euro based 
revenues. The movement in the exchange rate has benefitted the 
conversion of the US dollar earnings into Rands on consolidation.

Finance costs of R314 million (2014: R297 million) were commensurate
with the borrowing levels and prevailing interest rates.

Operating cash flow generated for the six months was R2,3 billion 
(2014: R2,4 billion), before working capital movements. The 
absorption of cash in working capital at the half-year was some 
R2,4 billion, being the middle of the sugar season when sugar stocks 
and debtor levels are usually substantially higher than at the end 
of the financial year. The increased level of land conversion sales 
and profits has led to a higher level of accounts receivable. 
Capital expenditure for the half-year has increased with high return 
initiatives being undertaken, for example the coffee/creamer 
production facility expansion in the starch and glucose operation. 
After taking all of the aforementioned into account, net debt at 
the half-year was R5,27 billion (2014: R4,90 billion).

Headline earnings for the half-year amounted to R673 million 
(2014: R773 million). An interim dividend of 170 cents per share 
has been declared (2014: 170 cents per share).

OUTLOOK

Tongaat Hulett has substantially enhanced its strategic positioning 
over the past few years and will continue to do so, focusing on 
multiple strategic thrusts, all with a positive impact on earnings 
and cash flow, through the various cycles that the business 
experiences. The financial results for the current full year 
continue to be influenced by a number of substantial and varying 
dynamics, both negative and positive, and the full impact is 
difficult to predict at this stage.

Tongaat Hulett’s Sugar Production and its Markets

Tongaat Hulett’s sugar production in 2015/16 has been heavily 
impacted by the drought in KwaZulu-Natal and the lower water and 
dam levels for irrigation have had an impact in Mozambique, Zimbabwe
and Swaziland. Sugar production in total for the 2015/16 season is 
expected to be between 1 005 000 and 1 093 000 tons 
(2014/15: 1 314 000 tons), with South Africa between 310 000 and 
325 000 tons (2014/15: 541 000 tons), Zimbabwe between 410 000 and 
450 000 tons (2014/15: 445 000 tons), Mozambique between 230 000 and
260 000 tons (2014/15: 271 000 tons) and the raw sugar equivalent in
Swaziland between 55 000 and 58 000 tons (2014/15: 57 000 tons).
Production levels in 2016/17 will largely depend on the extent of 
rainfall over the next 7 months. The drought has already had an 
impact, particularly in South Africa. In Zimbabwe, Mozambique and 
Swaziland the quantum of irrigation is being reduced as a mitigation
measure against potential poor rainfall in the coming months. 
Electricity availability has, at times, impacted on irrigation. 
A return to regular growing conditions, together with the benefit of
the intensive agricultural improvement plans that are well under way,
should lead to sugar production increasing to above 1,6 million tons
by 2018/19.

A number of factors are in play in the markets where Tongaat Hulett 
operates. The key markets are the domestic markets in countries where 
it produces sugar, all of which have the potential to grow Tongaat 
Hulett’s supply. Progress is being made with the effectiveness of 
various import protection measures. In Zimbabwe and Mozambique, 
sugar refining matters are being addressed, which should lead to 
the replacement of imported industrial white sugar. Growth is 
expected in consumption per capita, off a low base, particularly 
in Mozambique and partly in Zimbabwe, together with increased 
distribution and marketing initiatives. In South Africa, with its 
current low sugar production level, Tongaat Hulett is having to 
procure other producers’ raw sugar for refining to supply its local 
market white sugar position and plans to replace this with its own 
production in future. Tongaat Hulett has the leading sugar brands in 
South Africa, Zimbabwe, Botswana and Namibia. Total local market 
sales in Tongaat Hulett’s domestic markets could increase from some 
850 000 tons in 2014/15 to some 1 090 000 tons by 2018/19.

Tongaat Hulett’s additional sugar is sold mainly into regional and 
EU markets, where a premium is earned above the volatile world sugar
price. Coming out of 5 years of global surplus production, high stock 
levels and a low world price, the expectations for the current year 
are that global supply will fall short of global demand. Current 
weather conditions, together with farmer behaviour driven by low 
prices and input cost pressures, are exerting downward pressure on 
global sugar production levels. Global sugar consumption is 
predicted to continue to grow at a rate of some 1,5% to 2% per 
annum, with most of this growth coming from low per capita 
consumption developing countries.

Tongaat Hulett has key market positions and experience in both the 
EU and the region (southern and eastern Africa). The EU reforms are 
leading to a shift for Tongaat Hulett away from the EU to regional 
deficit markets, replacing deep sea imports and benefitting from 
trade-bloc advantages. By 2018/19, regional exports could increase 
from 100 000 tons in 2014/15 to some 275 000 tons and EU exports 
are likely to reduce from 327 000 tons to some 130 000 tons.  

Cost Reductions

The sustainable cost reductions achieved over the past two years
(equivalent to some R950 million in real terms), while having to 
absorb input price increases, provided a good base for the next 
steps in the concerted cost reduction process in the sugar operations. 
An overall reduction in goods, services, transport, marketing, 
salaries and wages costs in real terms is expected this year. 

Growing Starch and Glucose

The starch and glucose operation is well positioned strategically and
is focused on growing its sales volume, with an enhanced product mix 
and customer growth prospects into Africa. This is underpinned by 
improving use of its available capacity and the efficiency of its 
operations. The R135 million expansion project for the coffee/creamer
sector is currently in its commissioning phase. For the second half 
of this year, 85% of maize requirements have been priced, back to 
back with customers, with margins slightly below the same time last 
year. The current prevailing dry weather conditions have resulted in 
planting delays for the forthcoming maize season. Rain is required 
during the next three to six months to allow the crop to be planted 
and established. The margins earned on approximately 55% of the 
starch operation’s sales volumes for the next financial year will 
be influenced by the extent to which local maize prices trade closer 
to import parity levels. 

Momentum in Land Conversion and Development

The momentum in Tongaat Hulett’s land conversion and development 
activities continues, with good progress on numerous value unlocking 
activities spanning the portfolio of 8 026 developable hectares in 
KZN earmarked for development. These activities include strengthening
demand drivers, unlocking infrastructure at key points, securing 
release from agriculture and other development approvals, while 
executing optimal sales strategies for the various parcels of land. 
The value achieved per hectare of land sold is increasingly 
reflecting this steadily improving land conversion platform and 
varies based on usage and location. Tongaat Hulett continues to work 
together with Government, related organisations and key stakeholders 
in the property industry to capture the synergy of each other’s unique 
capabilities and to create and unlock value for all stakeholders. An 
increasing number of significant black economic empowerment related 
land development transactions are taking place. This all has a 
positive impact on economic development, including industrial, 
commercial, tourism and all levels of residential development in the 
Durban/KZN North Coast area, complementing the simultaneous rural 
development taking place around new agricultural cane developments. 

Following the sales of the last 18 months, which total 173 developable 
hectares, the remainder of this financial year could see muted sales 
activity. Significant early sales momentum (40 developable hectares 
sold) has been achieved in opening up both the western expansion of 
Umhlanga Ridge Town Centre into Cornubia and a new development area 
in node 1 of Sibaya at eMdloti, with a further 58 developable 
hectares to come in these areas following a consolidation around 
these early catalyst sales. Good progress has been made, after 
a 2-year comprehensive process, in understanding how to unlock 
optimal value from the prime 42 developable hectares in precincts 1 
and 2 of Umhlanga Ridgeside. A single sale of these 42 hectares, 
with the current commercial and residential mix, is not likely to be 
the optimum route and a multiple sales approach will now be embarked 
upon, benefitting from the significant interest created to date. 

An update of the land portfolio document (including prospective usage, 
market momentum, demand drivers, possible timing and values) is 
available on the www.tongaat.com website. It includes an update of 
the possible 5-year sales outcomes, indicating total sales of at 
least 639 developable hectares with a profit range of R2 million 
to R39 million per developable hectare. It also details those areas 
where commercial negotiations have commenced or are likely to 
commence over the next 24 months. 

Tongaat Hulett continues to focus on value creation for all 
stakeholders through an all-inclusive approach to growth and 
development, with its footprint in six SADC countries, its ability 
to process both sugar cane and maize, animal feeds thrust, electricity 
generation and ethanol opportunities, increased momentum in land 
conversion and its socio-economic positioning and constructive 
interfaces with Governments and society.

For and on behalf of the Board

Bahle Sibisi                 Peter Staude
Chairman                     Chief Executive Officer  

Amanzimnyama
Tongaat, KwaZulu-Natal

12 November 2015


DIVIDEND DECLARATION

Notice is hereby given that the Board has declared an interim
gross cash dividend (number 176) of 170 cents per share for the 
half-year ended 30 September 2015 to shareholders recorded in the
register at the close of business on Friday 29 January 2016.

The salient dates of the declaration and payment of this interim
dividend are as follows:

  Last date to trade ordinary shares
   “CUM” dividend                           Friday 22 January 2016
  Ordinary shares trade “EX” dividend       Monday 25 January 2016
  Record date                               Friday 29 January 2016
  Payment date                            Thursday 4 February 2016

Share certificates may not be dematerialised or re-materialised,
nor may transfers between registers take place between Monday
25 January 2016 and Friday 29 January 2016, both days inclusive.

The dividend is declared in the currency of the Republic of South
Africa. Dividends paid by the United Kingdom transfer secretaries
will be paid in British currency at the rate of exchange ruling at
the close of business on Friday 22 January 2016. 

The dividend has been declared from income reserves. A net
dividend of 144,5 cents per share will apply to shareholders liable
for the local 15% dividend withholding tax and 170 cents per share
to shareholders exempt from paying the dividend tax. The issued
ordinary share capital as at 12 November 2015 is 135 112 506
shares. The company’s income tax reference number is
9306/101/20/6.

For and on behalf of the Board

M A C Mahlari
Company Secretary

Amanzimnyama
Tongaat, KwaZulu-Natal

12 November 2015


INCOME STATEMENT

Condensed consolidated         Unaudited   Unaudited       Audited
                                6 months    6 months  12 months to
                              to 30 Sept  to 30 Sept      31 March
Rmillion                            2015        2014          2015

Revenue                           7 609       8 073        16 155

Operating profit                  1 361       1 510         2 089
Net financing costs (note 1)       (314)       (297)         (617)

Profit before tax                 1 047       1 213         1 472

Tax (note 2)                       (305)       (336)         (425)

Net profit for the period           742         877         1 047

Profit attributable to:
  Shareholders of Tongaat Hulett    701         800           989
  Minority (non-controlling)
    interest                         41          77            58
                                    742         877         1 047

Headline earnings attributable
  to Tongaat Hulett shareholders
  (note 3)                          673         773           945

Earnings per share (cents)

  Net profit per share
   Basic                          609,1       700,9         864,6
   Diluted                        609,1       700,9         864,6

  Headline earnings per share
   Basic                          584,8       677,2         826,1
   Diluted                        584,8       677,2         826,1

Dividend per share (cents)        170,0       170,0         380,0

Currency conversion
  Rand/US dollar closing          13,85       11,26         12,17
  Rand/US dollar average          12,57       10,64         11,05
  Rand/Metical average             0,35        0,35          0,35
  Rand/Euro average               13,95       14,35         13,96
  US dollar/Euro average           1,11        1,35          1,26



SEGMENTAL ANALYSIS

Condensed consolidated         Unaudited   Unaudited       Audited
                                6 months    6 months  12 months to
                              to 30 Sept  to 30 Sept      31 March
Rmillion                            2015        2014          2015

REVENUE

Sugar
   Zimbabwe                       1 863       1 824         3 471
   Swaziland                        148         146           203
   Mozambique                     1 394       1 482         1 804
   South Africa                   1 603       2 365         6 143
Sugar operations – total          5 008       5 817        11 621
Starch operations                 1 750       1 740         3 447
Land Conversion and Developments    851         516         1 087

Consolidated total                7 609       8 073        16 155

OPERATING PROFIT

Sugar
   Zimbabwe                         234         344           386
   Swaziland                         32          35            29
   Mozambique                       142         226           130
   South Africa                     154         259           261
Sugar operations – total            562         864           806
Starch operations                   281         264           561
Land Conversion and Developments    576         435           829
Centrally accounted and
  consolidation items               (49)        (42)          (86)
BEE IFRS 2 charge and transaction
  costs                              (9)        (11)          (21)

Consolidated total                1 361       1 510         2 089

FURTHER ANALYSIS OF SUGAR OPERATING PROFIT

Sugar operations - before cane
  valuations                      1 132       1 454           710
   Zimbabwe                         533         609           320
   Swaziland                         58          64            40
   Mozambique                       411         556           215
   South Africa                     130         225           135

Cane valuations – income
  statement effect                 (570)       (590)           96
   Zimbabwe                        (299)       (265)           66
   Swaziland                        (26)        (29)          (11)
   Mozambique                      (269)       (330)          (85)
   South Africa                      24          34           126

Sugar operations - after cane
  valuations                        562         864           806
   Zimbabwe                         234         344           386
   Swaziland                         32          35            29
   Mozambique                       142         226           130
   South Africa                     154         259           261


STATEMENT OF FINANCIAL POSITION

Condensed consolidated           Unaudited    Unaudited    Audited
                                   30 Sept      30 Sept   31 March
Rmillion                              2015         2014       2015

ASSETS

Non-current assets
Property, plant and equipment      12 870       11 737     12 059
Growing crops (note 4)              5 168        4 623      5 473
Long-term receivable                  541          502        518
Goodwill                              416          358        376
Intangible assets                      59           65         64
Investments                            28           20         27
                                   19 082       17 305     18 517

Current assets                     11 782       10 176      8 026
  Inventories                       4 721        4 503      2 472
  Trade and other receivables       5 094        3 935      3 886
  Cash and cash equivalents         1 967        1 738      1 668

TOTAL ASSETS                       30 864       27 481     26 543

EQUITY AND LIABILITIES

Capital and reserves
Share capital                         135          135        135
Share premium                       1 544        1 544      1 544
BEE held consolidation shares        (642)        (695)      (674)
Retained income                     8 397        7 983      7 959
Other reserves                      3 731        2 764      2 925
Shareholders' interest             13 165       11 731     11 889

Minority interest in subsidiaries   2 143        1 808      1 887
Equity                             15 308       13 539     13 776

Non-current liabilities             7 882        7 098      7 944
  Deferred tax                      2 685        2 289      2 491
  Long-term borrowings              3 795        3 449      4 056
  Non-recourse equity-settled
   BEE borrowings                     622          667        654
  Provisions                          780          693        743

Current liabilities                 7 674        6 844      4 823
  Trade and other payables
   (note 5)                         3 969        3 454      3 173
  Short-term borrowings             3 446        3 193      1 604
  Tax                                 259          197         46

TOTAL EQUITY AND LIABILITIES       30 864       27 481     26 543

Number of shares (000)
– in issue                        135 113      135 113    135 113
– weighted average (basic)        115 083      114 139    114 388
– weighted average (diluted)      115 083      114 139    114 388


STATEMENT OF CHANGES IN EQUITY

Condensed consolidated          Unaudited    Unaudited      Audited
                                 6 months     6 months 12 months to
                               to 30 Sept   to 30 Sept     31 March
Rmillion                             2015         2014         2015

Balance at beginning of period     11 889       10 562     10 562

Total comprehensive income
  for the period                    1 492        1 492      1 815
   Retained income                    701          800        973
   Movement in hedge reserve           (2)          (9)        (2)
   Foreign currency translation       793          701        844

Dividends paid                       (231)        (231)      (417)
Share capital issued – ordinary                      1          1
BEE held consolidation shares           8            8         18
Share-based payment charge             40           48         85
Settlement of share-based
  payment awards                      (33)        (149)      (175)

Shareholders' interest             13 165       11 731     11 889

Minority interest in subsidiaries   2 143        1 808      1 887
  Balance at beginning of period    1 887        1 628      1 628
  Total comprehensive income for
   the period                         260          186        271
    Retained income                    41           77         58
    Foreign currency translation      219          109        213
  Dividends paid to minorities         (4)          (6)       (12)

Equity                             15 308       13 539     13 776


STATEMENT OF OTHER COMPREHENSIVE INCOME

Condensed consolidated         Unaudited   Unaudited       Audited
                                6 months    6 months  12 months to
                              to 30 Sept  to 30 Sept      31 March
Rmillion                            2015        2014          2015

Net profit for the period           742         877         1 047

Other comprehensive income        1 010         801         1 039

  Items that will not be
   reclassified  to profit
   or loss:
    Foreign currency translation  1 012         810         1 057
    Actuarial loss                                            (23)
    Tax on actuarial loss                                       7

Items that may be reclassified
  subsequently to profit or
  loss:
    Hedge reserve                    (3)        (13)           (3)
    Tax on movement in hedge
     reserve                          1           4             1

Total comprehensive income
  for the period                  1 752       1 678         2 086

Total comprehensive income
  attributable to:
   Shareholders of
    Tongaat Hulett                1 492       1 492         1 815
   Minority (non-controlling)
    interest                        260         186           271
                                  1 752       1 678         2 086


STATEMENT OF CASH FLOWS

Condensed consolidated         Unaudited   Unaudited       Audited
                                6 months    6 months  12 months to
                              to 30 Sept  to 30 Sept      31 March
Rmillion                            2015        2014          2015

Operating profit                  1 361       1 510         2 089
Surplus on disposal of property,
  plant and equipment               (34)        (29)          (77)
Depreciation                        314         309           564
Growing crops and other 
  non-cash items                    651         623             1

Operating cash flow               2 292       2 413         2 577

Change in working capital        (2 389)     (1 837)          (44)

Cash flow from operations           (97)        576         2 533

Tax payments                       (109)       (214)         (353)
Net financing costs                (314)       (297)         (617)

Cash flow from operating
  activities                       (520)         65         1 563

Expenditure on property, plant
  and equipment:
   New                             (268)        (75)         (203)
   Replacement                     (296)       (143)         (509)
   Major plant overhaul cost
    changes                         (57)        (38)          (20)
Capital expenditure on growing
  crops                             (18)        (10)          (76)
Other capital items                  45          30            93

Net cash flow before dividends
  and financing activities       (1 114)       (171)          848

Dividends paid                     (235)       (237)         (429)

Net cash flow before financing
  activities                     (1 349)       (408)          419

Borrowings raised                 1 550       1 210           218
Non-recourse equity-settled
  BEE borrowings                    (32)        (24)          (37)
Shares issued                                     1             1
Settlement of share-based payment
  awards                            (33)       (149)         (175)

Net increase in cash and cash
  equivalents                       136         630           426

Balance at beginning of period    1 668       1 067         1 067
Foreign currency translation        163          41           175
Cash and cash equivalents at
  end of period                   1 967       1 738         1 668


NOTES

Condensed consolidated         Unaudited   Unaudited       Audited
                                6 months    6 months  12 months to
                              to 30 Sept  to 30 Sept      31 March
Rmillion                            2015        2014          2015

1. Net financing costs
   Interest paid                     (350)        (331)      (685)
   Interest capitalized                 3                       1
   Interest received                   33           34         67
                                     (314)        (297)      (617)

2. Tax
   Normal                            (316)        (267)      (261)
   Deferred                            11          (69)      (164)
                                     (305)        (336)      (425)

3. Headline earnings
   Profit attributable to
     shareholders                     701          800        989
   Adjusted for:
    Capital profit on disposal of
     land and buildings               (26)         (21)       (48)
    Capital profit on other items                   (2)        (2)
    (Surplus)/loss on disposal of
     property, plant and equipment     (4)          (6)         4
    Tax on the above items              2            2          2
                                      673          773        945

4. Growing crops
   Growing crops, comprising roots and standing cane, are measured
   at fair value; which is determined using an estimate of cane
   yields and prices. Changes in fair value are recognised in
   profit or loss.  A change in yield of one ton per hectare on the
   estimated yield of 83 tons cane per hectare (30 September 2014:
   86 tons per hectare and 31 March 2015: 83 tons per hectare)
   would result in a R25 million (30 September 2014: R22 million
   and 31 March 2015: R25 million) change in fair value, while a
   change of one percent in the cane price would result in a
   R26 million (30 September 2014: R20 million and 31 March 2015:
   R26 million) change in fair value.

5. Trade and other payables
   Included in trade and other payables is the maize obligation
   (interest bearing) of R573 million  (30 September 2014:
   R494 million and 31 March 2015: R246 million).

6. Capital expenditure commitments
   Contracted                         261          192        163
   Approved                           338          238        478
                                      599          430        641

7. Operating lease commitments         94           88         82

8. Guarantees and contingent
    liabilities                        68           42         33

9. Basis of preparation and accounting policies
   The condensed consolidated unaudited results for the half
   year ended  30 September 2015 have been prepared in accordance
   with the International Financial Reporting Standard (IFRS) IAS
   34 Interim Financial Reporting, the SAICA Financial Reporting
   Guides as issued by the Accounting Practices Committee,
   Financial Reporting Pronouncements as issued by the Financial
   Reporting Standards Council and the requirements of the
   Companies Act of South Africa. The report has been prepared
   using accounting policies that comply with IFRS, which are
   consistent with those applied in the financial statements for
   the year ended 31 March 2015 and were prepared under the
   supervision of the Chief Financial Officer, M H Munro CA (SA).

   Tongaat Hulett has adopted all the new or revised accounting
   pronouncements as issued by the IASB, which were effective for
   Tongaat Hulett from 1 January 2015. The adoption of these
   standards had no recognition and measurement impact on the
   financial results.


CORPORATE INFORMATION

Directorate: C B Sibisi (Chairman), P H Staude (Chief Executive
Officer)*, S M Beesley, F Jakoet, J John, R P Kupara^, 
T N Mgoduso, N Mjoli-Mncube, M H Munro*, S G Pretorius,
T A Salomão +
* Executive directors    + Mozambican       ^ Zimbabwean

Registered office:
Amanzimnyama Hill Road, Tongaat, KwaZulu-Natal
P O Box 3, Tongaat 4400
Telephone: +27 32 439 4019 
Facsimile: +27 31 570 1055

Transfer secretaries: Computershare Investor Services (Pty) Limited
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