SUGAR producer, Tongaat Hulett says the total restatement for its financial year ended March 31, 2018 amounted to 11,88 billion rands (ZAR) owing to impairments and the de-recognition of confiscated land in Zimbabwe.
BY MISHMA CHAKANYUKA
In May, the company announced that it was going to delay the publication of its financial statements for the year ended March 31, 2019 pending a forensic probe on the previous year results. The sugar producer is headquartered in South Africa and operates in Botswana, Namibia, Swaziland, Mozambique and Zimbabwe.
“The total restatement amounts to ZAR11,886 billion. Tongaat Hulett highlighted to shareholders in May 2019 that the group’s audited consolidated financial statements for the year ended March 31, 2018 would need to be restated. At the time of the announcement it was estimated that the impact on equity would be a reduction of between ZAR3,5 and ZAR4,5 billion,” said the sugar producer, in its financial report for the year ended March 31, 2019 released yesterday.
“The difference between this range and the ZAR11,886 billion is mainly due to impairments and the derecognition of expropriated land in Zimbabwe of ZAR4 billion and some ZAR3 billion of deferred tax assets that have not been recognised.”
As a result, revenue was restated to ZAR17,505 billion from ZAR16,982 billion and operating profit to ZAR142 million from ZAR1,956 billion.
Total assets were restated from ZAR29,115 billion to ZAR18,686 billion, equity to ZAR62 million from ZAR12,009 billion and borrowings from ZAR9,125 billion to ZAR11,303 billion.
Tongaat Hulett said despite the restatements, the core business remained strong with positive cashflows from operating activities and strong margins at an operational profit level.
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In the year ended March 31, 2019, Tongaat Hulett’s revenue was down 2% to ZAR17,069 billion from ZAR17,505 billion in the previous year.
Gross profit increased by 48% to ZAR4,622 billion from a comparative ZAR3,114 billion in 2018.
“An increase in the group’s fair value of biological assets of ZAR470 million is largely attributable to currency fluctuations in Zimbabwe. A net impairments reversal contributed ZAR65 million, relative to an impairment of ZAR258 million in the prior year,” Tongaat Hulett said.
“Finance costs of ZAR1,361 billion have been significant and have placed severe constraints on liquidity, again underlining the imperative to substantially reduce debt and improve cashflow as part of the turnaround plan.”
The group concluded an agreement with its lenders to waive their rights arising from any breach of financial covenants contained in the facilities agreements for the measurement date falling on March 31, 2019. The waiver and undertaking agreement is in relation to existing South African short- and long-term facilities.
“Tongaat Hulett has restructured its debt in South Africa and has entered into new facilities which will come into effect once certain outstanding administrative conditions are met. The group has agreed with the South African lenders that they will execute a plan to reduce the level of debt by a minimum of ZAR8,1 billion by 30 September 2021,” reads part of the statement.
