Tongaat Hulett HEPS seen up 10% to 839c

Releasing a trading statement on Wednesday (16 May 2012), the group noted that its revenue increased by 24.8% to R12.08 billion for the year mainly as a result of increased sugar production together with improved regional and European Union sugar prices.

Its profit from operations, after the centrally accounted items, is expected to increase by 43.6% to R1.92 billion, while total net profit before minority interests is expected to be R1.021 billion from R871 million in 2011.

Headline earnings are expected to be R891 million for the year, compared to the R806 million earned last year.

Tongaat Hulett's total sugar production for the 2011/12 year increased by 14% to 1.150 million tons. The cane supplied to its sugar mills grew to some 9.6 million tons, as the business progresses towards its objective of facilitating increased cane supply (including hectares under cane, cane yields and cane quality) so as to fully utilise its existing milling capacity of some 2 million tons of sugar production per annum.

Sugar production grew by 42% in Mozambique, by 12% in Zimbabwe, by 7% in South Africa and the increase in raw sugar equivalent in Swaziland was 9%.

For the first time, the total profit from all the operating areas is expected to have exceeded R2 billion, growing by 53%.

The profit from operations includes profit from the Mozambique sugar operations of R402 million compared with R135 million in 2011, the Zimbabwe sugar operations of R621 million from R454 million, Swaziland of R51 million versus R17 million, the South African agriculture, milling and refining operations of R93 million, after a loss in 2011 of R7 million and the sugar downstream value added activities of R261 million compared with R241 million a year ago.

Profit from the starch operation amounts to R363 million compared with R303 million, and profit from the land conversion and development operation is R215 million versus R166 million. A net charge of R85 million is reflected in the centrally accounted and consolidation items (2011: a net gain of R29 million, after taking into account a pension fund employer surplus account allocation).