Tongaat warns of a headline loss of up to R863m

JSE-listed sugar manufacturer Tongaat Hulett expects its earnings for the financial year ended March 31 to be substantially higher than the prior year, mostly owing to a R3.3-billion profit realised on the disposal of its Starch business.

Headline earnings, however, will be lower than the prior year owing to the impact of Covid-19 on the ability to conclude land sales in the property business and lower raw sugar production in South Africa, as the lockdown last year delayed both the season start-up and commissioning of a second milling line at the Maidstone sugar mill.

Tongaat says these factors, as well as foreign exchange losses and a higher cost to restructure its South African debt facilities, all negated the good operational progress and strong market gains in the company’s sugar operations during the reporting year.

The company expects to report a headline loss of between R839-million and R863-million for the year, which amounts to a headline loss a share of between 622c and 640c apiece, compared with headline earnings of R121-million posted in the prior financial year.

This while earnings for the year will be about R2.4-billion and around R18 apiece, compared with earnings of R120-million reported in the prior year