HomeBusinessTongaat earnings up 6%

Tongaat earnings up 6%

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JOHANNESBURG — South African sugar producer Tongaat Hulett reported a 6% increase in full-year earnings yesterday, after softer global sugar prices and weak domestic demand weighed.

The company said diluted headline earnings for the year to end-March totalled 1 022,3 cents a share from 961c the previous year.

Local producers such as Tongaat say the world price of sugar is lower than the cost of their production resulting in money-losing sales.

Chief executive Peter Staude said import tariffs introduced in Zimbabwe and South Africa in April would benefit sales and prices in the next financial year.

“There is an underlying trend of volatility in the world sugar price,” he said.

“But imports dropped dramatically in April and May after some protection came in.”

Total sugar output rose 13,5% to 1,424 million tonnes and is expected to rise 1 800 million tonnes over the next four years.

The company said it expects international sugar prices to stabilise and import protection to help sales volumes.

Tongaat Hulett has interests in land management and property development, but its main business is sugar production and milling.

The Durban-based company lauded the Zimbabwean authorities for acting swiftly to remove illegal settlers off its sugar plantations last week.

Shares of the company were down 0,4% at R121,99 at 8:38am, slightly underperforming Johannesburg’s All-Share index, which was flat.
Last week bout 600 families settled uninvited on farms owned by Tongaat Hulett in Chiredzi.

But Rural Resettlement minister Douglas Mombeshora (pictured) said the Zanu PF supporters would be evicted.

“We don’t allow any invaders on any piece of land, so any invader must be pulled out immediately,” Mombeshora said.

The families have been given letters to occupy “virgin land” that isn’t owned by the agricultural company.

The families took over land this month at Hippo Valley Estates Ltd and Triangle Estates in Chiredzi district, sites belonging to Durban-based Tongaat Hulett, South Africa’s second-biggest sugar producer.

“The matter is being dealt with appropriately by the authorities and operations are continuing as normal,” Adelaide Chikunguru-Musvovi, a Tongaat Hulett spokesperson, said in an e-mailed statement from Chiredzi.

Supporters of President Robert Mugabe’s Zanu PF party began occupying mainly white-owned farms in 2000, displacing about 300 000 agricultural employees and 3 000 white farmers.

The Commercial Farmers’ Union, which represents most white farmers, said yesterday that the industry continues to be disrupted.

– Reuters/Bloomberg

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