Wrap Text
Voluntary Trading Statement for the half year ended 30 September 2016
Tongaat Hulett Limited
Registration number 1892/000610/06
Share code: TON
ISIN ZAE000096541
VOLUNTARY TRADING STATEMENT FOR THE HALF YEAR ENDED 30
SEPTEMBER 2016
The following trading statement is issued for the six months ended 30 September
2016.
Tongaat Hulett’s operating profit for the half year is expected to be R1,350 billion
(2015: R1,276 billion), an increase of some 5,8%. Headline earnings are expected to
be approximately R631 million, compared to the R607 million earned in the previous
year, an increase of some 4,0%. The results for the six months include an
improvement in sugar revenue and operating profit. The starch operations delivered a
strong performance. Sales concluded in land conversion and developments in these
six months were lower than in recent periods. Operating cash flow, after working
capital movements, has increased substantially.
Operating profit for the half year from the various sugar operations is expected to total
approximately R825 million (2015: R477 million). This is reflective of improved
local market prices, more effective import protection dynamics in the countries where
Tongaat Hulett produces sugar and higher international prices. Overall volumes are
still being impacted by lower cane yields due to the severe drought in KwaZulu-Natal
and poor growing conditions with low rainfall and restricted irrigation levels in
Mozambique and Zimbabwe as a result of low water and dam levels. The nature of
sugar milling and cane growing is such that there is a high proportion of fixed costs.
The drive to reduce costs continues across all operations. Sugar production started
later in the current season than last year and is expected to reflect higher production
levels in the second half of the year compared to the prior year.
Operating profit from the starch and glucose operation is expected to increase to
approximately R306 million (2015: R281 million). The business benefitted from a
better sales mix and from own production for the coffee/creamer sector replacing
imported product. Overall volumes remained flat as a result of muted domestic
consumer demand. Higher maize costs during the period were partially offset by
higher co-product revenues and ongoing cost control.
Advancements in the land conversion and development activities are encouraging and
bode well for near term future sales. The number of substantial transaction
opportunities in various demand areas are increasing. The opening up of the Sibaya
node has created new interest and opportunities. Various interfaces with the public
sector have been constructive and productive. For the first six months of the financial
year, land conversion and development activities are expected to reflect an operating
profit of R269 million (2015: R576 million). The contributors are Sibaya (high-end
residential and retirement – 7 developable hectares sold), the industrial area of
Cornubia (6 hectares), high intensity mixed use areas of Umhlanga Ridgeside (1
hectare) and Umhlanga Ridge Town Centre (1 hectare), integrated affordable
residential at Bridge City (2 hectares) and further high end residential at Izinga (1
hectare) and Kindlewood (1 hectare), totalling 19 developable hectares sold.
Taking all of the aforementioned into account together with the centrally accounted
items, Tongaat Hulett’s operating profit for the half year is expected to total R1,350
billion (2015: R1,276 billion).
Operating cash flow, after working capital movements, is expected to be some R1,061
billion, which is a R795 million improvement on the first half of last year. Net debt at
30 September 2016 of R5,5 billion is expected to be reported, compared to R5,3
billion last year.
Total net profit per share is expected to be approximately 554 cents per share (2015:
552 cents per share) while headline earnings per share for the year are expected to be
approximately 547 cents per share (2015: 527 cents per share), which is an increase of
3,7%.
Tongaat Hulett has adopted the revised international accounting standards IAS 16 and
IAS 41 which has resulted in cane roots being reclassified from growing crops to
property, plant and equipment in the statement of financial position, root planting
costs being capitalised to the cost of the roots and thereafter the roots depreciated over
their estimated useful lives. Standing cane is now disclosed as a current asset.
Comparative figures have been restated, with the effect of the adoption of the revised
IAS 16 and IAS 41 on profit or loss for the 6 months ended 30 September 2015 (with
the full year ended 31 March 2016 in brackets) being a decrease in operating profit of
R85 million (2016: R139 million), deferred tax relief of R17 million (2016: R32
million) and a decrease in net profit for the period of R68 million (2016: R107
million). The effect on earnings per share and headline earnings per share (basic and
diluted) was a decrease of 57,4 cents per share (2016: 90,1 cents per share).
This trading statement is issued in accordance with the JSE Listings Requirements.
The above information has not been reported on by the auditors.
The interim results for the half year ended 30 September 2016 are scheduled for
release on Monday, 14 November 2016.
Tongaat
4 November 2016
Sponsor
Investec Bank Limited
Date: 04/11/2016 08:05:00 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.
Sharenet Sites 
