SOUTH AFRICA: Tongaat hit by lower sugar prices and stronger Rand
Published: 05/17/2018, 5:20:39 PM
On Thursday, sugar producer Tongaat Hulett put flesh on the bones of its earlier trading update, saying its full-year headline earnings would drop more than one-third, as lower sugar prices, a stronger rand and higher imports weighed on the firm, according to South Africa's Business Day.
Sugar output increased marginally to 1.171-million tonnes in the year to end-March, from 1.056-million tonnes a year-earlier, with the company attributing the output to partial recovery from the drought.
Tongaat, which has operations in neighbouring countries including Zimbabwe, Mozambique and Swaziland, said operating profit from various sugar operations fell to ZAR837 million (US$66.5 million) from ZAR1.056 billion.
The starch and glucose operation realised an operating profit of ZAR572 million, which was slightly higher than the ZAR510 million in the matching period a year ago.
The KwaZulu-Natal-based company also generates income from land conversion and development activities. Operating profit in the segment dropped to ZAR2.27 billion from ZAR3.17 billion.
The share price was only marginally lower in late trade, suggesting that the statement was not materially different in substance to the one released late in April.