Johannesburg Stock Exchange listed sugar producer Tongaat Hulett has recorded a 43% growth in operating profit buoyed by a strong performance from Mozambique and Zimbabwe operations during the 12 months ended March 31 2012.
The group revenue grew 24% to R12 billion during the period under review, driven by exports from regional units. Tongaat Hulet’s sugar production climbed 14% to 1,150 million tonnes underpinned by a sharp increase in Mozambique.
Revenue was also driven by improved realisations in the European Union sugar markets. Headline earnings rose to R891 million from R806 million posted during the previous year.
Profit from sugar operations in Mozambique grew by 198% to R402 million, with sugar production having grown by 42% to 233 000 tonnes.
“Both the Mozambique and Zimbabwe operations benefited from higher export realisations and domestic prices in line with regional pricing levels. The Zimbabwe sugar operations generated profit of R621 million ($84 million) compared to the previous year of R454 million ($63 million),” read a statement accompanying the financial results.
“Sugar production in Zimbabwe increased by 12% to 372 000 tonnes (2011: 333 000 tonnes), with the majority of the increase coming from Hippo Valley. Operating profit from the South African sugar operations including the downstream sugar value added activities, increased by 51% to R354 million.”
Minority shareholders’ interests, according to the statement, increased to R132 million from R38 million during the previous year as a result of higher profits at the sugar milling operations in Mozambique and at Hippo Valley in Zimbabwe.
“Co-operation between the Zimbabwe government, the eastern lowveld communities and Tongaat Hulett is focused on the ‘Successful Rural SugarCane Farming Community’ project. Some
15 900 hectares have been allocated to approximately 870 indigenous farmers. In this past season, these farmers delivered 532 000 tonnes of cane (equivalent to 65 000 tonnes of sugar) from some 9 000 hectares,” the statement added.
“The target is to uplift this to over 1,4 million tonnes of cane (equivalent to 180 000 tonnes of sugar) from the available hectares, with the pace of planting new roots being targeted to average some 4 000 hectares per annum. It is thus pleasing that some 6 000 hectares were planted in the 2011 — 2012 year. This, together with Tongaat Hulett’s improvement of its own agricultural yields, is key to achieve the target of increasing sugar production in Zimbabwe to full milling capacity of some
640 000 tonnes per annum.”