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Tongaat Hulett Limited  -  THL   

Audited Results for the year ended 31 March 2017

Released 07:00 30-May-2017

RNS Number : 4681G
Tongaat Hulett Limited
29 May 2017
 

Tongaat Hulett Limited

 

Registration No: 1892/000610/06

JSE share code: TON

ISIN: ZAE000096541

 

AUDITED RESULTS FOR THE YEAR ENDED 31 MARCH 2017

 

· 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 cents per share)  +30,4%

 

 

COMMENTARY

 

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 demand.

 

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).

 

 

LOOKING AHEAD

 

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 www.tongaat.com 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

 

Amanzimnyama

Tongaat, KwaZulu-Natal

 

25 May 2017

 

 

DIVIDEND DECLARATION

 

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

 

Amanzimnyama

Tongaat, KwaZulu-Natal

 

25 May 2017

 

 

Income Statement






Summarised consolidated


Audited


Audited



2017


2016





(restated -

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

 

 

Segmental Analysis






Summarised consolidated


Audited


Audited



2017


2016





(restated -

Rmillion




note 10)






REVENUE










Sugar





    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











OPERATING PROFIT










Sugar





    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











FURTHER ANALYSIS OF SUGAR OPERATING PROFIT








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)






 

 

Statement of Other Comprehensive Income





Summarised consolidated


Audited


Audited



2017


2016





(restated -

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

 

 

Statement of Financial Position






Summarised consolidated


Audited


Audited



2017


2016





(restated -

Rmillion




note 10)






ASSETS










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











EQUITY AND LIABILITIES










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

 

 

Statement of Changes in Equity






Summarised consolidated


Audited


Audited



2017


2016





(restated -

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

 

 

Statement of Cash Flows






Summarised consolidated


Audited


Audited



2017


2016





(restated -

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 costs


(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

 

 

Notes






Summarised consolidated


Audited


Audited



2017


2016





(restated -

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 value.






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 Hulett.






12. Subsequent events





There were no material events between 31 March 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:

South Africa:

Computershare Investor Services (Pty) Limited

Telephone: +27 11 370 7700

 

United Kingdom:

Capita Registrars

Telephone: +44 20 8639 2406

 

Sponsor: Investec Bank Limited

Telephone: +27 11 286 7000

 

www.tongaat.com

 

e-mail: info@tongaat.com

 

 


This information is provided by RNS
The company news service from the London Stock Exchange
 
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Audited Results for the year ended 31 March 2017 - RNS