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South Africa's Tongaat posts fall in H1 profit on drought, softer prices
November 16, 2015 / 6:08 AM / 2 years ago

South Africa's Tongaat posts fall in H1 profit on drought, softer prices

JOHANNESBURG, Nov 16 (Reuters) - South Africa’s Tongaat Hulett said its first-half profit fell 14 percent due to weaker sugar prices and drought, leading the company to flag lower production for the year.

The sugar producer and land converter said headline earnings per share - which strips off certain one-off items - totalled 584.8 cents from 677.2 cents in the previous half year.

Southern Africa, where Tongaat has its mills, is going through a severe drought last seen decades ago and this has cut production of crops from maize to sugar.

“A reduction in sugar production is being driven by poor growing conditions, particularly in South Africa,” the company said in a statement.

Tongaat said sugar production for the 2015/16 season is expected to be between 1.005 million tonnes and 1.093 million tonnes from last year’s 1.314 million tonnes.

The decline in the first-half sugar profit was offset by the sale of 65 developable hectares of land in the coastal province of KwaZulu Natal.

The company posted a profit of 576 million rand ($40 million) for the six months ended September, up 32 percent from the same period last year.

Tongaat declared an interim dividend of 170 cents, the same as a year earlier.

$1 = 14.3815 rand Reporting by Zandi Shabalala; Editing by Anupama Dwivedi

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