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Sugar producer Tongaat Hulett's profit helped by higher prices
May 29, 2017 / 8:19 AM / 6 months ago

Sugar producer Tongaat Hulett's profit helped by higher prices

JOHANNESBURG, May 29 (Reuters) - South Africa’s Tongaat Hulett reported a 45 percent rise in full-year earnings on Monday, helped by higher export prices and improved local prices.

The sugar producer said basic headline earnings per share, which strips out certain one-off items and is the main profit measure in South Africa, for the year ended March 31 rose to 852.7 cents from 588 cents in the previous year.

Group operating profit increased 39.8 percent to 2.3 billion rand ($178 million) due to an improvement in sugar revenue and operating profit.

“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,” the company said in a statement.

Tongaat, which also produces starch, said sugar production totalled 1.06 million tonnes, up from 1.02 million tonnes in 2016 but held back by low cane yields due to poor growing conditions.

Southern Africa, where Tongaat has its mills, is recovering from a severe drought that has cut production of crops ranging from maize to sugar, with the El Nino weather pattern, which faded in May 2016, forecast to reform again around September.

The South African sugar operations, including various downstream activities, produced operating profit of 390 million rand, with sugar production recovering to 353,000 tonnes from 323,000 tonnes in 2016.

The company, which also operates in Mozambique and Zimbabwe, declared a final dividend of 200 cents per share, up from 60 cents in 2016, bringing the annual dividend to 300 cents per share.

Tongaat said its early season estimate for total sugar production in 2017/18 was 1.176-1.278 million tonnes.

Its shares were up 0.87 percent to 116.51 rand by 0748 GMT.

$1 = 12.9212 rand Reporting by Nqobile Dludla; Editing by Mark Potter

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