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

TONGAAT HULETT LIMITED - Audited Results for the year ended 31 March 2017

Release Date: 29/05/2017 07:05
Code(s): TON     PDF:  
Wrap Text
Audited Results for the year ended 31 March 2017

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


- Revenue of R17,915 billion (2016: R16,676 billion) +7,4%
- Operating profit of R2,333 billion (2016: R1,669 billion) +39,8%
- Headline earnings of R982 million (2016: R679 million) +44,6%
- Operating cash flow (after working capital) of R3,176 billion
   (2016: R1,863 billion) +70,5%
- Annual dividend of 300 cents per share (2016: 230 cps) +30,4%


The results for the year ended 31 March 2017 show a 39,8% increase in 
operating profit to R2,3 billion. This reflects an improvement in 
sugar revenue and operating profit under difficult conditions. The 
starch operations were negatively impacted by maize costs that traded 
at import parity levels as a result of the past season’s drought. 
Sales concluded in land conversion and developments in these twelve 
months were lower than the prior year. Operating cash flow, after 
working capital movements, has also advanced substantially.

The various sugar operations generated operating profit of R1,271 billion 
(2016: loss of R15 million). This is reflective of more effective import 
protection dynamics, improved local market prices and higher prices 
realised for exports, especially into regional African markets and the 
EU.Sugar production totaled 1 056 000 tons (2016: 1 023 000 tons), 
with volumes impacted by low cane yields due to the drought experienced 
in KwaZulu-Natal and poor growing conditions with low rainfall and 
restricted irrigation levels in Mozambique and Zimbabwe as a result 
of low dam levels. The momentum established to reduce costs has been 
maintained across all operations. 

The South African sugar operations, including various downstream 
activities, produced operating profit of R390 million 
(2016: loss of R85 million). Sugar production started to recover, 
amounting to 353 000 tons (2016: 323 000 tons), costs were well 
contained and Tongaat Hulett increased its share of total industry 
production to 22% (2016: 19,5%), leading to an increased proportion 
of local market sales. The local market saw significantly better 
pricing and sales mix dynamics. The higher value of standing cane 
is reflective of the yield recovering in the next crop following 
the good summer rainfall in the past six months. Voermol animal 
feeds has contributed well, with increased margins.

The Mozambique sugar operating profit improved to R308 million 
(2016: R25 million). Sugar production was 198 000 tons 
(2016: 232 000 tons). Domestic market sales of locally produced 
sugar increased by 21%, for the whole industry, as a result of 
better protection against imports and improved sugar distribution 
and availability in more remote areas. Local market price increases 
and higher export prices positively impacted revenue and cane 
valuations. The Metical weakened substantially against the Rand 
and the US dollar, benefitting the operations with sizeable 
Metical based costs and revenue linked to the US dollar. 

The Zimbabwe sugar operating profit increased to R504 million 
(2016: R9 million). Sugar production increased by 10% to 454 000 tons 
(2016: 412 000 tons). Local market sales volumes and mix improved 
due to there being lower imports into the market. Exports increased 
on the back of higher production and prices realised into the EU and 
regional markets were some 20% above the previous year. As part 
of an ongoing process, involving Government and farmers, to 
review the division of proceeds, an upward adjustment to the 
milling portion was made in the past year, with the commensurate 
recovery for sugar milling.

The starch and glucose operation recorded an operating profit 
of R510 million (2016: R658 million). Margins were negatively 
impacted in the second half of the year by maize costs which were 
at import parity levels following the drought of the past season 
and by lower co-product revenues.  An improved sales mix was achieved 
during the period due to the successful replacement of imported 
volumes with local production and ongoing market development for 
modified starches and powdered glucose. This was offset by lower 
volumes as the prevailing economic climate led to lower consumer 

Land conversion and development activities recorded operating profit 
of R641 million (2016: R1,115 billion). The major contributors were 
Sibaya (high-end residential, retirement and school – 57 developable 
hectares sold), the industrial area of Cornubia (6 hectares), high 
intensity mixed use areas of Umhlanga Ridgeside (2 hectares) and 
Umhlanga Ridge Town Centre (1 hectare), integrated affordable 
residential at Bridge City (3 hectares) and further high end 
residential at Izinga (4 hectares) and Kindlewood (2 hectares), 
totaling 75 developable hectares compared to 121 developable hectares 
sold in the prior year. Revenue, costs and profit recorded per 
developable hectare vary, reflective of the degree of enhancement 
through urban planning, land use integration and density, location 
and the intensity of infrastructure investment and are in line with 
the value ranges communicated previously. During the year, the 
remaining interests in the Zimbali properties were disposed of to 
IFA for a cash component and in exchange for their joint venture 
share of the Westbrook/Zimbali South Banks land, resulting in some 
R24 million being recognised in operating profit.

The stronger Rand exchange rate at the year-end against the US dollar 
in respect of Zimbabwe and the Metical in respect of Mozambique has 
led to a reduction in the foreign currency translation reserve on 
consolidation into Rands of these operations’ balance sheets, which 
is reflected in the statement of changes in equity and other 
comprehensive income.

Operating cash flow (after working capital movements) was R3,176 billion 
which is a R1,3 billion increase over the R1,863 billion of last year. 
Sugar cash flows improved as a result of higher revenue and operating 
profits, as well as lower root planting costs and capital expenditure 
during the past drought. The land conversion and development activities 
generated stronger operating cash flow, with significant proceeds being 
received and after development expenditure related payments being made. 
In total, after taking into account capex and root planting costs which 
totaled R1,2 billion (2016: R1,9 billion), there was a net cash inflow 
(after dividend payments) of R544 million, compared to a net cash 
outflow of R1,278 billion last year. Tongaat Hulett’s net debt at 
31 March 2017 was R4,780 billion, compared to R5,101 billion 
at March 2016. Finance costs of R810 million (2016: R680 million) 
were commensurate with the borrowing levels during the period and the 
higher interest rates.

Taking all of the aforementioned into account, headline earnings for 
the year increased by 44,6% to R982 million (2016: R679 million). 

A final dividend of 200 cents per share (2016: 60 cents per share) 
has been declared bringing the annual dividend to 300 cents per 
share (2016: 230 cents per share). 


Tongaat Hulett will continue to enhance its strategic positioning, 
focusing on multiple strategic thrusts, with a positive impact on 
earnings and cash flow.

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

Weather and growing conditions over the past two years have masked the 
substantial progress that is being made with intensive agricultural 
improvement programmes, increased hectares under cane, irrigation efficiency 
and power reliability. The estimated impact is some 500 000 tons of 
annual sugar production. The existing sugar cane footprint, with regular 
growing conditions, the agricultural improvement programmes and the 
completion of the few new planting partnership initiatives underway 
should produce some 1 650 000 tons of sugar. Tongaat Hulett’s objective 
is to continue with these actions until it fully utilises its installed 
milling capacity of more than 2 000 000 tons per annum. The recent 
completion in Zimbabwe of the Tokwe-Mukorsi dam and, in Mozambique 
(Xinavane), the raising of the Corumana dam wall and the construction 
of the new Moamba dam on the Incomati river, will diversify the water 
catchment area and provide increased stability in future water supply. 

An early season estimate for total sugar production in 2017/18 is 
between 1 176 000 tons and 1 278 000 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 is positive for the 2017/18 crop yield and more hectares 
are to be harvested. The 2017/18 crop in Zimbabwe and Mozambique will be 
impacted to some extent 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 will provide full irrigation 
during 2017/18 leading to a significant crop recovery by 2018/19. Total 
sugar production is expected to recover over 2 years, to between some 
1 485 000 and 1 588 000 tons in 2018/19. Tongaat Hulett’s marginal cost 
of additional sugar production is currently some US$100 per ton from own 
cane (40%) and US$280 per ton from third party cane (60%). Realisations, 
ex-mill, based on current regional and EU market dynamics are 
approximately US$390 per ton.

The decrease in costs achieved over the past four years (equivalent to 
some R1,45 billion in real terms) provides good momentum for the ongoing 
cost reduction process. The objective is to further reduce the cost of 
sugar production, from cane growing to the delivery of sugar to the 
customer. The nature of sugar milling and cane growing is such that 
there is a high proportion of fixed costs and a low variable or 
incremental portion. Unit costs of sugar production will reduce further 
with the benefit of future volume increases. The ongoing cost reduction 
process is focused on bought-in goods, services, transport, marketing, 
salaries and wages. 

The domestic markets in countries where Tongaat Hulett produces sugar 
remain a key focus area. There has been some progress in South Africa and 
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, discussions are underway between the South African Sugar 
Association and the relevant SA government departments, to increase the 
level of the reference price used for the import tariff determination. The 
current import tariff level is the lowest in the region and with the 
volatility of the Rand against the US dollar, a risk exists of increased 
imports from overseas sources into the SACU market. 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, supported by distribution, industrialisation and 
marketing initiatives. Tongaat Hulett has the leading sugar brands in 
South Africa, Zimbabwe, Botswana and Namibia. The proposed sugar sweetened 
beverage tax in South Africa and its socio impact is being assessed and 
debated. It is likely to have a limited effect on total local sugar 
demand and the financial impact would inter alia depend on the level of 
the prevailing world sugar price.

Tongaat Hulett has key market positions and experience in both the region 
(southern and eastern Africa) and the EU for the sale of its additional 
sugar. 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 
enjoys 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 
(13,2 to 16,7 US cents per pound in the prior year), 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 in the region of 
16,5 US cents per pound. The price of raw sugar is currently expected in 
the coming year to trade in a broad range of 14 to 18 US cents per pound, 
impacted by supply prospects over the coming 15 months in the major sugar 
producing countries. The sugar/ethanol mix in Brazil is expected to 
increasingly impact on world sugar prices. 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 1,5% per annum, with most of this growth coming 
from low per capita consumption developing countries. 

Starch and Glucose – More Competitive Maize and Better Volume Prospects

The starch and glucose operation is well positioned strategically and is 
focused on growing its sales volume, as it consolidates its gains from 
replacement of imports in the coffee/creamer and other sectors, 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 
improving the use of the available capacity and the efficiency of operations.

Following the drought of the past year, high maize prices led to a 
significant increase in maize plantings and combined with good summer 
rainfall conditions are expected to yield a crop of 14,5 million tons 
(2016/17: 7,5 million tons).  New season maize prices have moved close to 
export parity levels and will benefit operating margins in the second half 
of the new financial year. Co-product revenues are expected to remain under 
significant pressure in the first half of the year. A recovery in sales 
volumes is anticipated during the coming year as customers’ import contracts 
expire and are replaced with local production.  Further volume growth is 
expected to be supported by some recovery in consumer demand and increased 
export sales as the benefits of lower maize prices materialise. 

Value Creation from Land Conversion and Development

Tongaat Hulett is focused on creating stakeholder value through converting 
prime land near Durban and Ballito to enable investors, developers and end 
users to access bankable, shovel-ready real estate investment projects that 
yield the best possible urban use. Over the past three years 304 developable 
hectares, from the portfolio of some 7 709 developable hectares, have been 
converted to such projects. Simultaneously, Tongaat Hulett drives rural 
development in the cane catchment area of its sugar mills and over the past 
five years 24 560 hectares of new cane land have been planted, mainly in 
communal areas. The value creating capability of the land conversion 
activities continues to increase, with good progress in the important 
value drivers. These include nurturing sound relationships with key 
stakeholders; growing demand in selected usage areas; increasing the 
supply of shovel-ready land through planning processes and unlocking 
infrastructure; and transferring land to others through sales that include 
structuring selected transactions that are appropriate to unlock targeted 
demand drivers and that deliver specific progress in transformation of 
ownership and participation in the real estate value chain. Further 
Act 70 of 1970 approvals were received in the period, taking the total to 
some 3 582 developable hectares. These approvals are being consolidated 
through further planning. A total of 962 developable hectares achieved 
EIA approval in the period, bringing the total of land with EIA 
approvals in the portfolio to 1 314 developable hectares, with a 
further 1 100 developable hectares being well advanced in EIA processes. 

Negotiations on some 233 developable hectares are currently underway, 
representing profit potential of around R1,58 billion. These reflect 
diverse current demand, covering affordable residential, mid-to-upper 
market residential, retirement, offices, warehousing and logistics, 
resort/hotel, a range of urban amenities, and educational uses. The 
nature of the transactions being negotiated is selected to suit the 
demand sector, optimise value created and achieve transformation 
objectives and accelerated investment into the region. Geographically, 
these negotiations include Umhlanga Ridge Town Centre (Commercial and 
Residential), Ridgeside Precincts 1 and 2, Sibaya Nodes 1, 5 and 4, 
Kindlewood, Bridge City, various Precincts in Cornubia (Cornubia Town 
Centre, Marshall Dam Residential, Umhlanga Hills and Blackburn Extension) 
and Tinley Manor. In addition, increasing enquiries are being received 
at Ntshongweni, west of Durban, and in the airport region. A detailed 
update on the portfolio and the process and progress of creating value 
through land conversion in KwaZulu-Natal is available on 
the website.

The Year Ahead

Tongaat Hulett’s profit for the 2017/18 year will continue to be 
influenced by a number of substantial and varying dynamics, both 
positive and negative. Overall, there is a positive outlook for the 
full year with earnings growth expected to continue and the cash flow 
momentum expected to be maintained.

Tongaat Hulett strives to be 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. 

For and on behalf of the Board

Bahle Sibisi                 Peter Staude
Chairman                     Chief Executive Officer

Tongaat, KwaZulu-Natal

25 May 2017


Notice is hereby given that the Board has declared a final gross
cash dividend (number 179) of 200 cents per share for the year ended
31 March 2017 to shareholders recorded in the register at the
close of business on Friday 23 June 2017.

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

Last date to trade ordinary shares
“CUM” dividend                             Tuesday    20 June 2017
Ordinary shares trade “EX” dividend      Wednesday    21 June 2017
Record date                                 Friday    23 June 2017
Payment date                              Thursday    29 June 2017

Share certificates may not be dematerialised or re-materialised,
nor may transfers between registers take place between Wednesday
21 June 2017 and Friday 23 June 2017, 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 20 June 2017.

The dividend has been declared from income reserves. A net
dividend of 160 cents per share will apply to shareholders liable
for the local 20% dividend withholding tax and 200 cents per share
to shareholders exempt from paying the dividend tax.

The issued ordinary share capital as at 25 May 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

Tongaat, KwaZulu-Natal

25 May 2017



Summarised consolidated                        Audited     Audited
                                                  2017        2016
Rmillion                                                  note 10)

Revenue                                        17 915      16 676

Operating profit                                2 333       1 669
Net financing costs (note 1)                     (810)       (680)

Profit before tax                               1 523         989
Tax (note 2)                                     (428)       (326)

Profit for the year                             1 095         663

Profit attributable to:
  Shareholders of Tongaat Hulett                  983         716
  Minority (non-controlling) interest             112         (53)

                                                1 095         663

Earnings per share (cents)
  Basic                                         853,6       620,1
  Diluted                                       853,6       620,1

Headline earnings attributable to
  Tongaat Hulett shareholders (note 3)            982         679

Headline earnings per share (cents)
  Basic                                         852,7       588,0
  Diluted                                       852,7       588,0

Dividend per share (cents)                      300,0       230,0

Currency conversion
  Rand/US dollar closing                        13,38       14,84
  Rand/US dollar average                        14,09       13,81
  Rand/Metical average                           0,22        0,35
  Rand/Euro average                             15,45       15,20
  US dollar/Euro average                         1,10        1,10


Summarised consolidated                        Audited     Audited
                                                  2017        2016
Rmillion                                                  note 10)


  Zimbabwe                                      4 399       3 549
  Swaziland                                       236         205
  Mozambique                                    1 723       1 664
  South Africa                                  6 405       5 964

Sugar operations – total                       12 763      11 382
Starch operations                               4 172       3 640
Land Conversion and Developments                  980       1 654

Consolidated total                             17 915      16 676


  Zimbabwe                                        504           9
  Swaziland                                        69          36
  Mozambique                                      308          25
  South Africa                                    390         (85)

Sugar operations – total                        1 271         (15)
Starch operations                                 510         658
Land Conversion and Developments                  641       1 115
Centrally accounted and consolidation items       (74)        (70)
BEE IFRS 2 charge and transaction costs           (15)        (19)

Consolidated total                              2 333       1 669


Summarised consolidated                        Audited     Audited
                                                  2017        2016
Rmillion                                                  note 10)

Sugar operations - before cane valuations       1 128        (156)
  Zimbabwe                                        748         138
  Swaziland                                        67          26
  Mozambique                                      168         (94)
  South Africa                                    145        (226)

Cane valuations - income statement effect         143         141
  Zimbabwe                                       (244)       (129)
  Swaziland                                         2          10
  Mozambique                                      140         119
  South Africa                                    245         141

Sugar operations - after cane valuations        1 271         (15)
  Zimbabwe                                        504           9
  Swaziland                                        69          36
  Mozambique                                      308          25
  South Africa                                    390         (85)


Summarised consolidated                        Audited     Audited
                                                  2017        2016
Rmillion                                                  note 10)

Profit for the year                             1 095         663

Other comprehensive income                     (3 600)      1 384

  Items that will not be reclassified to
   profit or loss:
    Foreign currency translation               (3 624)      1 395
    Actuarial gain/(loss) on post-
     retirement benefits                           40         (24)
    Tax on actuarial gain/(loss)                  (11)          6

  Items that may be reclassified
   subsequently to profit or loss:
    Hedge reserve                                  (7)         10
    Tax on movement in hedge reserve                2          (3)

Total comprehensive income for the year        (2 505)      2 047

Total comprehensive income attributable to:
  Shareholders of Tongaat Hulett               (2 324)      1 763
  Minority (non-controlling) interest            (181)        284
                                               (2 505)      2 047


Summarised consolidated                        Audited     Audited
                                                  2017        2016
Rmillion                                                  note 10)


Non-current assets
Property, plant and equipment                  13 688      16 415
Long-term receivable                              619         564
Goodwill                                          382         438
Intangible assets                                 366         212
Investments                                        28          26
                                               15 083      17 655

Current assets                                 12 871      13 037
  Inventories                                   2 949       2 866
  Growing crops                                 2 549       2 914
  Trade and other receivables                   4 070       4 738
  Major plant overhaul costs                      562         642
  Cash and cash equivalents                     2 741       1 877

TOTAL ASSETS                                   27 954      30 692


Capital and reserves
Share capital                                     135         135
Share premium                                   1 544       1 544
BEE held consolidation shares                    (642)       (625)
Retained income                                 9 044       8 191
Other reserves                                    700       4 028
Shareholders' interest                         10 781      13 273

Minority (non-controlling) interest             1 957       2 152

Equity                                         12 738      15 425

Non-current liabilities                         8 296       8 086
  Deferred tax                                  2 537       2 864
  Long-term borrowings                          4 975       3 791
  Non-recourse equity-settled BEE borrowings                  605
  Provisions                                      784         826

Current liabilities                             6 920       7 181
  Trade and other payables (note 5)             3 598       3 897
  Short-term borrowings                         2 546       3 187
  Non-recourse equity-settled BEE borrowings      623
  Tax                                             153          97

TOTAL EQUITY AND LIABILITIES                   27 954      30 692

Number of shares (000)

– in issue                                    135 113     135 113
– weighted average (basic)                    115 158     115 471
– weighted average (diluted)                  115 158     115 471


Summarised consolidated                        Audited     Audited
                                                  2017        2016
Rmillion                                                  note 10)

Balance at beginning of year                   13 273      11 889

Total comprehensive income for the year        (2 324)      1 763

  Retained earnings                             1 012         698
  Movement in hedge reserve                        (5)          7
  Foreign currency translation                 (3 331)      1 058

Dividends paid                                   (176)       (417)
BEE share-based payment charge                     13          17
Share-based payment charge                         60          60
Settlement of share-based payment awards          (65)        (39)

Shareholders' interest                         10 781      13 273

Minority (non-controlling) interest             1 957       2 152
  Balance at beginning of year                  2 152       1 887
  Total comprehensive income for the year        (181)        284
    Retained earnings                             112         (53)
    Foreign currency translation                 (293)        337
  Dividends paid to minorities                    (14)        (19)

Equity                                         12 738      15 425


Summarised consolidated                        Audited     Audited
                                                  2017        2016
Rmillion                                                  note 10)

Operating profit                                2 333       1 669
Surplus on disposal of property,
 plant and equipment                              (42)        (84)
Depreciation                                    1 027       1 231
Growing crops valuation and other
 non-cash items                                   (38)         36

Operating cash flow                             3 280       2 852

Change in working capital                        (104)       (989)

Cash flow from operations                       3 176       1 863

Tax payments                                     (482)       (221)
Net financing costs                              (810)       (680)

Cash flow from operating activities             1 884         962

Expenditure on property, plant and equipment:
  New                                            (423)       (488)
  Replacement and plant overhaul                 (202)       (634)
  Root planting                                  (418)       (668)
Intangible assets                                (166)       (123)
Other capital items                                59         109

Net cash flow before dividends and
 financing activities                             734        (842)

Dividends paid                                   (190)       (436)

Net cash flow before financing activities         544      (1 278)

Borrowings raised                                 680       1 273
Non-recourse equity-settled BEE borrowings         18         (49)
Settlement of share-based payment awards          (65)        (39)

Net increase/(decrease) in cash and
 cash equivalents                               1 177         (93)

Balance at beginning of year                    1 877       1 668
Currency alignment                               (313)        302
Cash and cash equivalents at end of year        2 741       1 877


Summarised consolidated                        Audited     Audited
                                                  2017        2016
Rmillion                                                  note 10)

1.  Net financing costs
    Interest paid                                (973)       (778)
    Interest capitalised                           34          28
    Interest received                             129          70
                                                 (810)       (680)

2.  Tax
    Normal                                       (549)       (277)
    Deferred                                      121         (49)
                                                 (428)       (326)

3.  Headline earnings
    Profit attributable to shareholders           983         716
    Adjusted for:
      Capital profit on disposal of land
       and buildings                              (12)        (42)
      (Surplus)/loss on other capital items        (4)          4
      Minority (non-controlling) interest           1          (1)
      Tax on the above items                       14           2
                                                  982         679

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 76 tons cane per hectare (2016: 73 tons per hectare) would
    result in a R35 million (2016: R37 million) change in fair
    value while a change of one percent in the cane price would
    result in a R32 million (2016: R33 million) change in fair

5.  Trade and other payables 
    Included in trade and other payables is the maize obligation
    (interest bearing) of R509 million (2016: R376 million).

6.  Capital expenditure commitments
    Contracted                                    104         196
    Approved                                      250         213
                                                  354         409

7.  Operating lease commitments                    60          75

8.  Guarantees and contingent liabilities          96         101

9.  Basis of preparation
    The summarised consolidated financial statements for the year
    ended 31 March 2017 have been prepared in accordance with the
    JSE Limited Listings Requirements for provisional reports, the
    framework concepts and the measurement and recognition
    requirements of International Financial Reporting Standards
    (IFRS), the SAICA Financial Reporting Guides as issued by the
    Accounting Practices Committee, Financial Reporting
    Pronouncements as issued by the Financial Reporting Standards
    Council, and as a minimum, contains the information as
    required by International Accounting Standard 34: Interim
    Financial Reporting 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 
    and upon request. Except as described below, the summarised 
    financial statements have been prepared using accounting 
    policies that comply with IFRS which are consistent with 
    those applied in the consolidated annual financial statements 
    for the year ended 31 March 2016 and were prepared under the
    supervision of the Chief Financial Officer, M H Munro CA (SA).

10. Adoption of new or revised accounting standards
    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 2016. The adoption of these
    standards had no recognition and measurement impact on the
    financial results, other than for the compulsory adoption of
    the revised 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. The effect of the
    adoption of the revised IAS 16 and IAS 41 on profit or loss
    for the year ended 31 March 2016 was a decrease in operating
    profit of R139 million, deferred tax relief of R32 million and
    a decrease in net profit for the year of R107 million.  The
    effect on earnings per share and headline earnings per share
    (basic and diluted) was a decrease of 90,1 cents per share. 
    There was a R2 million decrease in other comprehensive income 
    (foreign currency translation). The effect on the statement of
    financial position was the reclassification of cane roots of
    R3 234 million from growing crops to property, plant and
    equipment, a decrease of R137 million in the carrying value
    of cane roots, and decreases in equity and deferred tax of
    R105 million and R32 million respectively.

11. Audited results
    These summarised consolidated financial statements, which have
    been derived from the audited consolidated financial statements 
    for the year ended 31 March 2017 and with which they are 
    consistent in all material respects, have been audited by 
    Deloitte & Touche. Their unmodified audit opinions on the 
    consolidated financial statements and on the summarised 
    consolidated financial statements are available for
    inspection at the registered office of the company. The
    auditor’s report does not necessarily report on all of the
    information contained in this announcement and any reference
    to future financial performance included in this announcement
    has not been audited or reported on. Shareholders are
    therefore advised that in order to obtain a full understanding
    of the nature of the auditor’s engagement they should obtain a
    copy of the auditor’s report together with the accompanying
    financial information from the registered office of Tongaat

12. Subsequent events
    There were no material events between 31 March 2017 and the
    date of this report.

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


Date: 29/05/2017 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