To view the PDF file, sign up for a MySharenet subscription.

TONGAAT HULETT LIMITED - Interim Results for the six months ended 30 September 2017

Release Date: 13/11/2017 07:05
Code(s): TON     PDF:  
Wrap Text
Interim Results for the six months ended 30 September 2017

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


INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2017


- Revenue of R8,118 billion (2016: R8,503 billion)   - 4,5%
- Operating profit of R1,471 billion (2016: R1,350 billion)   +9,0%
- Headline earnings of R661 million (2016: R631 million)   +4,8%
- Operating cash flow (before working capital) of R2,447 billion
  (2016: R2,317 billion)
- Interim dividend of 100 cents per share (2016: 100 cents per share)


COMMENTARY

The results for the half-year ended 30 September 2017 show a 9% increase
in operating profit to R1,471 billion. The sugar operations have seen 
the beginning of the production volume recovery after the drought 
conditions of the previous two years. This benefit was offset by the 
impact of lower world sugar prices and a period of high imports into 
South Africa. The starch operations experienced the carry over effect, 
into the first half of the year, of maize costs at import parity as a 
result of the previous season’s drought, concurrently with lower 
co-product revenues. Tongaat Hulett benefitted from its portfolio 
approach, with land conversion and development activities showing a 
considerable increase compared to the prior period.

The various sugar operations generated total operating profit of 
R835 million (2016: R825 million), as follows. 

The Zimbabwe sugar operating profit increased to R358 million 
(2016: R251 million). Local market sugar sales increased, including 
volumes for refined white sugar. Sugar production is expected to be 
lower than last year due to the impact of low dam levels in 2016 that
led to restricted irrigation in the key growing period for this 
season’s crop. The current half-year results include the higher 
milling portion of the division of proceeds, which was adjusted late 
in the 2016/17 year as part of an ongoing process. 

The Mozambique sugar operating profit improved to R232 million 
(2016: R219 million). The business benefitted from the appropriate 
level of protection against imports in the local market, improved 
sugar distribution and availability in more remote areas, at the same 
time as there being pressure on local sales due to the tighter general 
economic conditions. The positive impact on cane valuations from price 
increases in the first half of last year was not repeated in the first 
half of this year. Production volumes have started recovering from a 
period of restricted irrigation levels as a result of low dam levels.

The South African sugar operations, including various downstream 
activities, produced operating profit of R211 million 
(2016: R306 million). The local market has seen a period of high 
imports into South Africa while there was a gap in duty protection, 
which has subsequently been resolved. Sugar production is recovering 
after the drought which impacted the past two years and Tongaat Hulett 
is expected to increase its share of total industry production to 
some 26% in 2017/18 (22% in the prior season). Export sales reflect 
an increase in volumes and are simultaneously being impacted by the 
lower world price. Voermol animal feeds continues to make an important 
contribution, with increased sales volumes. 

The starch and glucose operation recorded an operating profit of 
R240 million (2016: R306 million). Margins were negatively impacted 
in this half-year by maize costs which were at import parity levels 
following the drought of the previous season. The large current 
season maize crop has subsequently seen maize costs reduce 
significantly, close to export parity, with the benefit beginning 
to flow through in the latter part of the first six months. Co-product 
revenues have been under pressure. A recovery in local market sales 
volumes has started as a result of the replacement of customers’ 
imports with local production, together with ongoing market 
development for modified starches and powdered glucose.

Land development activities in this period led to the sale of 
35 developable hectares for integrated affordable neighbourhoods 
in the newly launched Umhlanga Hills and Marshall Dam in Cornubia, 
which will yield over 2 500 well-located affordable homes. Other 
sales concluded will unlock urban amenities in Umhlanga Hills and 
Bridge City (6 hectares), high intensity mixed use in Umhlanga 
Ridgeside and Umhlanga Ridge Town Centre (4 hectares), retirement 
in Ridgeside (17 hectares) and a new tertiary education campus at 
Sibaya (6 hectares). These sales, totaling 68 developable hectares 
(2016: 19 hectares), led to operating profit of R441 million 
(2016: R269 million) being recorded. Profitability per hectare is 
in line with anticipated ranges communicated previously.

Operating cash flow (before working capital movements) was 
R2,447 billion compared to R2,317 billion in the first six months 
of last year. The half-year reflects a R2,500 billion absorption 
of cash in working capital (2016: R1,256 billion), with a greater 
than normal mid-season increase in sugar stock levels. Sugar cane 
root planting has been accelerated following the end of the drought. 
Capex and root planting costs totaled R818 million 
(2016: R677 million). The land conversion and developments cash 
flow includes both proceeds being received and development 
expenditure related payments being made. The considerable positive 
net cash flow anticipated this year is expected to be in the second 
half of the year. In total, there has been a net cash outflow 
(before dividend payments) of R1,451 billion (2016: R207 million 
outflow). Tongaat Hulett’s net debt at the mid-year was R6,5 billion 
(2016: R5,5 billion). Finance costs of R413 million 
(2016: R408 million) were commensurate with the borrowings levels 
during the period and the prevailing interest rates.

Taking all of the aforementioned into account, headline earnings for 
the half-year amounted to R661 million (2016: R631 million). An 
interim dividend of 100 cents per share has been declared 
(2016: 100 cents per share).

LOOKING AHEAD

Tongaat Hulett is poised for a positive earnings and cash flow period
ahead with its well positioned asset base and benefitting from the 
multiple strategic actions completed to date and ongoing. 

Increasing Returns from the Sugar Asset Base – Recovering Cane 
Yields, Growing Sugar Production, Utilising Existing Capacity, 
with Low Incremental Costs

The decrease in costs achieved over the past four years was 
equivalent to some R1,45 billion in real terms. The ongoing cost 
reduction process is particularly focused on bought-in goods, 
services, transport, marketing, salaries and wages, from cane 
growing to the delivery of sugar to customers. The nature of sugar 
milling and cane growing is such that there is a high proportion 
of fixed costs. Unit costs of sugar production will reduce further 
with the benefit of future volume increases. Tongaat Hulett’s marginal 
cost of additional sugar production currently averages some US$101 per 
ton from own cane and US$247 per ton from third party cane. Average 
realisations, ex-mill, based on current regional and EU market 
dynamics, off a world market price of some 15 US cents per pound, 
are approximately US$341 per ton.

Weather and growing conditions over the previous two years 
(i.e. 2015/16 and 2016/17) masked the substantial progress that is 
being made with intensive agricultural improvement programmes, 
increased hectares under cane, irrigation efficiencies and power 
reliability. The existing sugar cane footprint, the agricultural 
improvement programmes and the completion of the few new planting 
partnership initiatives currently underway are likely to result in 
future production of more than 1 600 000 tons of sugar 
(2016/17: 1 056 000 tons), given regular growing conditions. 
Tongaat Hulett’s intention is to continue to initiate all cane 
related opportunities so as to fully utilise its installed milling 
capacity of more than 2 000 000 tons per annum. Some 25 000 hectares 
of new cane land have been planted, mainly in communal areas, in 
South Africa over the past five years.

Total sugar production for 2017/18 is expected to be between 
1 161 000 tons and 1 209 000 tons, compared to 1 056 000 tons in 
2016/17. The good rainfall of the 2016/17 summer in the coastal 
areas of KwaZulu-Natal was positive for the 2017/18 crop yield. 
The 2017/18 crop in Zimbabwe and Mozambique will continue to be 
impacted, to varying extents, by the reduced irrigation and limited 
replanting that was necessary during 2016. The current dam levels, 
following the good rains at the end of 2016 into 2017, are providing 
full irrigation during 2017/18 leading to a significant crop 
recovery by 2018/19. Total sugar production is expected to recover 
to between some 1 403 000 and 1 510 000 tons in 2018/19. 

The domestic markets in countries where Tongaat Hulett produces 
sugar remain a key focus area. In Mozambique, a 90 000 ton sugar 
refinery is under construction at the Xinavane sugar mill, for 
commissioning in the second half of 2018, the production from which 
will replace imported industrial white sugar. In Zimbabwe, 
operational optimisation at the Triangle refinery has increased 
production of refined sugar suitable for domestic industrial markets. 
Growth is expected in consumption per capita, off a low base, 
particularly in Mozambique, supported by distribution, industrialisation 
and marketing initiatives. Tongaat Hulett has the leading sugar brands 
in South Africa, Zimbabwe, Botswana and Namibia. There has been 
significant success in Zimbabwe and Mozambique with the required 
protection from imports, with Government support, given the high 
rural job impact of these industries and being in line with 
international norms. In South Africa, the current import tariff 
level is the lowest in the region. The proposed tax in South Africa 
on sugar sweetened beverages, its timing and its potential 
socio-economic impact are being assessed. Dialogue between 
the sugar industry, Government and organised labour has led to the 
formation of a Task Team with a mandate to work on avenues of 
Government support for the sugar industry, such as strengthening 
the tariff mechanism, grower support schemes and a fuel ethanol 
programme. 

Tongaat Hulett has key market positions in both the region 
(southern and eastern Africa) and the EU. It is developing and 
expanding its positions in regional deficit markets, where a 
premium is earned over world market prices as well as broadening 
its footprint in key value-add markets in the EU where it continues 
to enjoy preferential access.

The price of raw sugar in the world market, having traded in a wide 
range of some 14,0 to 23,8 US cents per pound in the 12 months to 
March 2017, has come under pressure over the past six months from 
emerging forecasts for a global supply surplus in the 12 months to 
September 2018. Of late, it is trading around 14,8 US cents per pound. 
In the medium term, there continue to be concerns of the ability of 
global supply to match demand at prevailing price levels. Global 
sugar consumption is predicted to continue to grow at a rate of 
some 1,8% per annum, with most of this growth coming from low per 
capita consumption developing countries. 

Tongaat Hulett is focused on unlocking opportunities to grow its 
animal feeds offering, ethanol production and electricity 
generation to extract maximum value from sugar cane in all 
countries of operation.

Starch and Glucose – More Competitive Maize and Better Local 
Volume Prospects

The starch and glucose operation is well positioned and focused on 
growing its sales volume, as it consolidates gains from replacement 
of imports in the coffee/creamer and other sectors, with continued 
enhancement of its product mix and developing opportunities which 
have been identified and targeted for growth through exports. 
Working together with customers, further opportunities are being 
targeted for growth through customer exports. Market development to 
increase the production of value-added modified starches is 
progressing. This is all underpinned by further improving the use 
of the available capacity and the efficiency of operations.

The second six months of 2017/18 will see an improvement in 
operating margins as the starch operation benefits from maize 
prices closer to export parity levels following the record maize 
harvest of 16,7 million tons in the 2017/18 season 
(2016/17: 7,8 million tons).  The growth in sales volumes experienced 
in the first half of the year is expected to accelerate in the second 
half of the year, supported by the replacement of imported contracts 
with local production, improving local market demand, new market 
development and export market growth, all of which are benefitting 
from the lower maize prices. The combination of the improved volume 
and margin outlook with the ongoing focus on costs and operating 
efficiencies is expected to see a considerable improvement in 
operating profit for the second six months.

Increasing the Impetus of Land Development from a Solid Platform

Collaboration with many stakeholders continues to yield progress, 
consolidating the platform for increased momentum in the broad-based 
value to be created through land development. A detailed update of 
the land portfolio is available on the www.tongaat.com website.

Over the past three years 322 developable hectares have been sold 
through land development projects, generating substantial social 
and economic benefits in the area north of Durban. Sales expected 
over the next five years are in the range of some 630 to 
1 179 hectares, coming from 3 315 hectares of prime developable 
land near Durban and Ballito out of the portfolio of some 
7 641 developable hectares. Some 3 593 hectares have been approved 
for release from agriculture (Act 70 of 1970 approvals) and 
1 246 hectares have EIA approval for development. Significant 
progress has been made in consolidating and formalising collaboration 
with key stakeholders including clients, communities near current 
and proposed developments and local and provincial authorities. 
Planning processes are expected to open up new development areas 
around King Shaka International Airport, around Ballito and at 
Ntshongweni west of Durban. The focus on unlocking demand drivers
is achieving a step up in momentum in targeted market sectors and 
with key clients. A number of large-scale infrastructural projects 
in the region are progressing well and approaching completion. 
Transactions are being pursued that are structured to unlock 
particular demand drivers and deliver transformation of ownership 
and participation in the real estate value chain. 

Negotiations with prospective buyers are ongoing and currently 
involve some 135 developable hectares with profit potential in 
excess of R1,5 billion over time.  These include diverse demand 
drivers, primarily in the growth corridor north of Durban. 
Increasing interest is also being expressed in the areas of 
Ntshongweni to the west of Durban and the airport region.

Conclusion

Tongaat Hulett is a proactive and resilient organisation working 
in collaboration with all its stakeholders in a focused, 
constructive, mutual value-adding and developmental manner. It 
has operations in six countries in SADC, significant sugar cane 
and maize processing facilities, a unique land conversion platform, 
a sizeable animal feeds thrust and possibilities to further grow 
ethanol and electricity generation. 

Overall, there is a positive outlook for the 2017/18 full year and 
into 2018/19, with earnings growth and cash flow momentum expected.


For and on behalf of the Board

Bahle Sibisi                 Peter Staude
Chairman                     Chief Executive Officer  

Amanzimnyama
Tongaat, KwaZulu-Natal

9 November 2017


DIVIDEND DECLARATION

Notice is hereby given that the Board has declared an interim gross 
cash dividend (number 180) of 100 cents per share for the half-year 
ended 30 September 2017 to shareholders recorded in the register 
at the close of business on Friday 2 February 2018.

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

Last date to trade ordinary shares
 “CUM” dividend                        Tuesday     30 January 2018
Ordinary shares trade “EX” dividend    Wednesday   31 January 2018
Record date                            Friday      2 February 2018
Payment date                           Thursday    8 February 2018

Share certificates may not be dematerialised or re-materialised,
nor may transfers between registers take place between Wednesday 
31 January 2018 and Friday 2 February 2018, 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 Tuesday 30 January 2018.

The dividend has been declared from income reserves. A net dividend 
of 80 cents per share will apply to shareholders liable for the 
local 20% dividend withholding tax and 100 cents per share to 
shareholders exempt from paying the dividend tax.

The issued ordinary share capital as at 9 November 2017 
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

9 November 2017


INCOME STATEMENT

Condensed consolidated          Unaudited   Unaudited      Audited
                                 6 months    6 months    12 months
                               to 30 Sept  to 30 Sept  to 31 March
                                     2017        2016         2017
Rmillion

Revenue                            8 118       8 503       17 915

Operating profit                   1 471       1 350        2 333
Net financing costs (note 1)        (413)       (408)        (810)

Profit before tax                  1 058         942        1 523

Tax (note 2)                        (267)       (255)        (428)

Profit for the period                791         687        1 095

Profit attributable to:
  Shareholders of Tongaat Hulett     724         639          983
  Minority (non-controlling)
   interest                           67          48          112
                                     791         687        1 095

Earnings per share (cents)
  Basic                            628,5       553,7        853,6
  Diluted                          628,5       553,7        853,6


Headline earnings attributable
 to Tongaat Hulett shareholders
 (note 3)                            661         631          982

Headline earnings per
 share (cents)
  Basic                            573,8       546,7        852,7
  Diluted                          573,8       546,7        852,7

Dividend per share (cents)         100,0       100,0        300,0

Currency conversion
  Rand/US dollar closing           13,46       13,96        13,38
  Rand/US dollar average           13,21       14,60        14,09
  Rand/Metical average              0,21        0,25         0,22
  Rand/Euro average                15,03       16,29        15,45
  US dollar/Euro average            1,14        1,12         1,10


SEGMENTAL ANALYSIS

Condensed consolidated          Unaudited   Unaudited      Audited
                                 6 months    6 months    12 months
                               to 30 Sept  to 30 Sept  to 31 March
                                     2017        2016         2017
Rmillion

REVENUE

Sugar
  Zimbabwe                         2 063       2 371        4 399
  Swaziland                          162         124          236
  Mozambique                       1 191       1 325        1 723
  South Africa                     2 004       2 197        6 405
Sugar operations – total           5 420       6 017       12 763
Starch operations                  1 993       2 114        4 172
Land Conversion and Developments     705         372          980

Consolidated total                 8 118       8 503       17 915

OPERATING PROFIT

Sugar
  Zimbabwe                           358         251          504
  Swaziland                           34          49           69
  Mozambique                         232         219          308
  South Africa                       211         306          390
Sugar operations – total             835         825        1 271
Starch operations                    240         306          510
Land Conversion and Developments     441         269          641
Centrally accounted and
 consolidation items                 (39)        (42)         (74)
BEE IFRS 2 charge and
 transaction costs                    (6)         (8)         (15)

Consolidated total                 1 471       1 350        2 333

FURTHER ANALYSIS OF SUGAR OPERATING PROFIT

Sugar operations – before
 cane valuations                   1 308       1 184        1 128
  Zimbabwe                           580         557          748
  Swaziland                           61          47           67
  Mozambique                         394         288          168
  South Africa                       273         292          145

Cane valuations – income
 statement effect                   (473)       (359)         143
  Zimbabwe                          (222)       (306)        (244)
  Swaziland                          (27)          2            2
  Mozambique                        (162)        (69)         140
  South Africa                       (62)         14          245

Sugar operations – after
 cane valuations                     835         825        1 271
  Zimbabwe                           358         251          504
  Swaziland                           34          49           69
  Mozambique                         232         219          308
  South Africa                       211         306          390


STATEMENT OF OTHER COMPREHENSIVE INCOME

Condensed consolidated          Unaudited   Unaudited      Audited
                                 6 months    6 months    12 months
                               to 30 Sept  to 30 Sept  to 31 March
                                     2017        2016         2017
Rmillion

Profit for the period                791         687        1 095

Other comprehensive income           463      (3 654)      (3 600)

 Items that will not be
  reclassified to profit or loss:
   Foreign currency translation      469      (3 648)      (3 624)
   Actuarial gain on post-
    retirement benefits                                        40
   Tax on actuarial gain                                      (11)

 Items that may be reclassified
  subsequently to profit or loss:
   Hedge reserve                      (8)         (8)          (7)
   Tax on movement in hedge reserve    2           2            2

Total comprehensive income
 for the period                    1 254      (2 967)      (2 505)

Total comprehensive income
 attributable to:
  Shareholders of Tongaat Hulett   1 161      (2 787)      (2 324)
  Minority (non-controlling)
   interest                           93        (180)        (181)
                                   1 254      (2 967)      (2 505)


STATEMENT OF FINANCIAL POSITION

Condensed consolidated           Unaudited    Unaudited    Audited
                                   30 Sept      30 Sept   31 March
                                      2017         2016       2017
Rmillion

ASSETS

Non-current assets                 15 660       14 778     15 083
  Property, plant and equipment    14 184       13 478     13 688
  Long-term receivable                649          592        619
  Goodwill                            388          393        382
  Intangible assets                   409          290        366
  Investments                          30           25         28
                                 
Current assets                     17 002       14 590     12 871
  Inventories                       6 139        4 889      2 949
  Growing crops (note 4)            2 137        2 083      2 549
  Trade and other receivables       5 137        5 059      4 632
  Cash and cash equivalents         3 589        2 559      2 741

TOTAL ASSETS                       32 662       29 368     27 954

EQUITY AND LIABILITIES

Capital and reserves
Share capital                         135          135        135
Share premium                       1 544        1 544      1 544
BEE held consolidation shares        (621)        (640)      (642)
Retained income                     9 525        8 779      9 044
Other reserves                      1 095          587        700

Shareholders' interest             11 678       10 405     10 781

Minority (non-controlling)
 interest                           2 038        1 968      1 957

Equity                             13 716       12 373     12 738

Non-current liabilities             8 408        7 973      8 296
  Deferred tax                      2 483        2 606      2 537
  Long-term borrowings              5 127        4 547      4 975
  Provisions                          798          820        784

Current liabilities                10 538        9 022      6 920
  Trade and other (note 5)          4 682        4 605      3 598
  Short-term borrowings             4 976        3 542      2 546
  Non-recourse equity-settled
   BEE borrowings                     602          620        623
  Tax                                 278          255        153

TOTAL EQUITY AND LIABILITIES       32 662       29 368     27 954


Number of shares (000)
– in issue                        135 113      135 113    135 113
– weighted average (basic)        115 189      115 414    115 158
– weighted average (diluted)      115 189      115 414    115 158


STATEMENT OF CHANGES IN EQUITY

Condensed consolidated          Unaudited   Unaudited      Audited
                                 6 months    6 months    12 months
                               to 30 Sept  to 30 Sept  to 31 March
                                     2017        2016         2017
Rmillion

Balance at beginning of period     10 781       13 273     13 273

Total comprehensive income for
 the period                         1 161       (2 787)    (2 324)
  Retained income                     724          639      1 012
  Movement in hedge reserve            (6)          (6)        (5)
  Foreign currency translation        443       (3 420)    (3 331)

Dividends paid                       (220)         (66)      (176)
BEE share-based payment charge          5            7         13
Share-based payment charge              8           25         60
Settlement of share-based
 payment awards                       (57)         (47)       (65)

Shareholders' interest             11 678       10 405     10 781

Minority (non-controlling)
 interest                           2 038        1 968      1 957
  Balance at beginning of period    1 957        2 152      2 152
  Total comprehensive income
   for the period                      93         (180)      (181)
    Retained income                    67           48        112
    Foreign currency translation       26         (228)      (293)
Dividends paid to minorities          (12)          (4)       (14)

Equity                             13 716        12 373    12 738


STATEMENT OF CASH FLOWS

Condensed consolidated          Unaudited   Unaudited      Audited
                                 6 months    6 months    12 months
                               to 30 Sept  to 30 Sept  to 31 March
                                     2017        2016         2017
Rmillion

Operating profit                   1 471       1 350        2 333
Surplus on disposal of
 property, plant and equipment       (51)        (11)         (42)
Depreciation                         517         589        1 027
Growing crops valuation and
 other non-cash items                510         389          (38)

Operating cash flow                2 447       2 317        3 280

Change in working capital         (2 500)     (1 256)        (104)

Cash flow from operations            (53)      1 061        3 176

Tax payments                        (218)       (190)        (482)
Net financing costs                 (413)       (408)        (810)

Cash flow from operating
 activities                         (684)        463        1 884

Expenditure on property,
 plant and equipment:
  New                               (109)        (95)        (423)
  Replacement                       (218)       (228)        (228)
  Cane roots                        (348)       (133)        (418)
Major plant overhaul cost changes    (90)       (139)          26
Intangible assets                    (53)        (82)        (166)
Other capital items                   51           7           59

Net cash flow before dividends
 and financing activities         (1 451)       (207)         734

Dividends paid                      (232)        (70)        (190)

Net cash flow before
 financing activities             (1 683)       (277)         544

Borrowings raised                  2 568       1 267          680
Non-recourse equity-settled
  BEE borrowings                     (21)         15           18
Settlement of share-based
 payment awards                      (57)        (47)         (65)

Net increase in cash and
 cash equivalents                    807         958        1 177

Balance at beginning of period     2 741       1 877        1 877
Currency alignment                    41        (276)        (313)
Cash and cash equivalents at
 end of period                     3 589       2 559        2 741


NOTES

Condensed consolidated          Unaudited   Unaudited      Audited
                                 6 months    6 months    12 months
                               to 30 Sept  to 30 Sept  to 31 March
                                     2017        2016         2017
Rmillion

1. Net financing costs
   Interest paid                     (497)         (472)     (973)
   Interest capitalised                21            16        34
   Interest received                   63            48       129
                                     (413)         (408)     (810)

2. Tax
   Normal                            (396)         (355)     (549)
   Deferred                           129           100       121
                                     (267)         (255)     (428)

3. Headline earnings
   Profit attributable to
    shareholders                      724           639       983
   Adjusted for:
     Capital profit on disposal of
      land and buildings              (52)           (8)      (12)
     Surplus on other capital items                            (4)
     Surplus on disposal of property,
      plant and and equipment                        (3)
     Minority (non-controlling)
      interest                                        1         1
     Tax on the above items           (11)            2        14
                                      661           631       982

4. Growing crops
   Growing crops, comprising standing cane, is measured at fair
   value which is determined using an estimate of cane yields
   and prices which are unobservable inputs and, in accordance
   with IFRS, categorised as level 3 under the fair value
   hierarchy. Changes in fair value are recognised in profit
   or loss. A change in yield of one ton per hectare on the
   estimated yield of 75 tons cane per hectare (30 September 2016:
   73 tons per hectare and 31 March 2017: 76 tons per hectare)
   would result in a R28 million (30 September 2016: R31 million
   and 31 March 2017: R35 million) change in fair value while
   a change of one percent in the cane price would result in a
   R25 million (30 September 2016: R23 million and 31 March 2017:
   R32 million) change in fair value.

5. Trade and other payables
   Included in trade and other payables is the maize obligation
   (interest bearing) of R687 million (30 September 2016: R712
   million and 31 March 2017: R509 million).

6. Capital expenditure commitments
   Contracted                         282            94       104
   Approved                           708           152       250
                                      990           246       354

7. Operating lease commitments         82            70        60

8. Guarantees and contingent
    liabilities                        79           129        96

9. Basis of preparation and accounting policies
   The condensed consolidated unaudited results for the half-year
   ended 30 September 2017 have been prepared in accordance with
   and containing the information required by 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. This announcement does not include the
   information required pursuant to paragraph 16A(j) of IAS 34
   which is available on the website, at the registered office or
   on request. The report has been prepared using accounting
   policies that comply with IFRS which are consistent with those
   applied in the consolidated financial statements for the year
   ended 31 March 2017 and were prepared under the supervision of
   the Chief Financial Officer, M H Munro CA (SA). Any reference
   to future financial performance that may be included in this
   announcement has not been reviewed and reported on by the
   company’s auditor. 

   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 2017. The adoption of these
   standards had no recognition and measurement impact on the
   financial results.

10. Subsequent events
    There were no material events between 30 September 2017 and
    the date of this report.


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
Telephone: +27 11 370 7700

Sponsor: 
Investec Bank Limited
Telephone: +27 11 286 7000

www.tongaat.com

e-mail: info@tongaat.com

Date: 13/11/2017 07:05:00 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.

Share This Story