TIDMTHL
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 YEARED 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
DIVID 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
-
note
Rmillion 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
-
note
Rmillion 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
-
note
Rmillion 10)
--------------------------------------- -------- ----------
Profit for the year 1 095 663
(3
Other comprehensive income 600) 1 384
Items that will not be reclassified
to profit or loss:
(3
Foreign currency translation 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 (2
for the year 505) 2 047
-------- ----------
Total comprehensive income
attributable to:
(2
Shareholders of Tongaat Hulett 324) 1 763
Minority (non-controlling)
interest (181) 284
(2
505) 2 047
-------- ----------
Statement of Financial Position
Summarised consolidated Audited Audited
2017 2016
(restated
-
note
Rmillion 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)
135 135
- in issue 113 113
115 115
- weighted average (basic) 158 471
115 115
- weighted average (diluted) 158 471
Statement of Changes in Equity
Summarised consolidated Audited Audited
2017 2016
(restated
-
note
Rmillion 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
-
note
Rmillion 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
-
note
Rmillion 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
END
FR BSGDUGGDBGRC
(END) Dow Jones Newswires
May 30, 2017 02:01 ET (06:01 GMT)
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