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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
---|---|---|---|---|---|
Tongaat Hulett Limited | LSE:THL | London | Ordinary Share | ZAE000096541 | ORD R1 |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 917.9903 | 0.00 | 01:00:00 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
---|---|---|---|---|---|
0 | 0 | N/A | 0 |
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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