Tongaat Hulett posts wider headline loss of R1.1bn

Sugar producer and land developer Tongaat Hulett posted a wider headline loss of just over R1.1 billion on Tuesday for its financial year ending March 31, 2021, compared to a headline loss of R285 million for the prior full-year.

This saw the KwaZulu-Natal based group, which was rocked by an accounting scandal involving former executives just over two years ago, reporting a FY21 headline loss per share of 822 cents (2020: loss of 211 cents).

Tongaat Hulett could not declare a dividend yet again as it is still navigating a turnaround strategy and a significant debt burden.

South Africa’s broader Covid-19 economic fallout last year and continued hyperinflation in Zimbabwe did not help the group’s turnaround efforts.

The company’s full-year revenue from continuing operations (excluding its disposed starch operations) fell 3% to R14.9 million, compared to R15.4 billion in 2020.

Its operating profit for the period saw a 44% plunge, to R1.8 billion from R3.25 billion in 2020.

Cash generated from operations came in at just over R1.8 billion compared to R2.3 billion for the prior year.

“There were a few dominant causes for the reduction in headline earnings, with two thirds of the impact arising from hyperinflation in Zimbabwe and the reduction in property sales, with the refinery loss and others making up the remaining third,” Tongaat Hulett noted in a statement.

However, the group maintained that its turnaround remains on track as it managed to slash its debt by almost half during the financial year.

Commenting on the latest financial performance, Tongaat Hulett CEO Gavin Hudson said despite headwinds such as Covid-19, the group’s turnaround efforts continue to yield positive results.

“The results are presented against a backdrop of unprecedented and challenging times triggered by the Covid-19 pandemic. Our focus has been on continuing operations and the safety of our people,” he noted.

“Although tangible progress has been made, we continue repairing and rebuilding what was a fragile organisation, with remnants of substantial debt, constrained cash flows, and a legacy of poor operational and cultural practises which has been challenging to navigate,” added Hudson.

“We remain confident that the ongoing execution of our strategy will enable the achievement of our business objectives. We are proud of the progress we have made in the past two years in fixing the fundaments of the business and positioning Tongaat Hulett for a sustainable future,” he said, while paying tribute to staff for their efforts in progressing the turnaround strategy even amid the global pandemic.