Economic headwinds weigh down Tongaat Hulett’s performance widening its headline loss to US$75m

SOUTH AFRICA – Sugar producer Tongaat Hulett, has posted a wider headline loss of R1.1 billion (US$75m) for its financial year ending March 31, 2021, compared to a headline loss of R285 million (US$19.5m) for the prior full-year. This saw the South Africa headquartered group, which was rocked by an accounting scandal involving former executives just over two years ago, reporting a headline loss per share of 822 cents, a dip from 211 cents of 2020. The company attributes the decline in performance to South Africa’s broader Covid-19 economic fallout…

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South African sugar manufacturing giants RCL Foods, Tongaat Hulett expect rise in full year earnings

SOUTH AFRICA – RCL Foods, South African consumer goods and milling company expects its profit for the year ended June 2021, to exponentially rise by as much as 592%, boosted in part by strong recovery in sugar and baking segment. The owner of Selati sugar, Ouma rusks and Rainbow Chickens brands, indicated in a trading update that it expects its headline earnings per share to be at least 90 cents compared to 13 cents a year ago on a recovery in sugar and baking. Meanwhile, its earnings per share would…

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Zimbabwe sugar cane farmers get backing from commercial bank CABS, avails US$2m financing facility

ZIMBABWE – Zimbabwean commercial bank, CABS has availed a US$2 million financing facility to support sugar cane farmers in the country increase production. According to reports by The Herald, the war-chest is ample to rehabilitate over 1 000 hectares of cane fields to push up yields. Working capital constraints have been one of the key stumbling blocks to efforts by commercial cane farmers to increase yields resulting in depressed output. Zimbabwe earns more than US$70 million annually from sugar exports and increasing yields and the area under cane will boost…

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Tongaat’s turn around strategy yields results reporting 38% rise in half year revenue

SOUTH AFRICA – Sugar producer Tongaat Hulett has delivered significantly improved financial results in a period of substantial volatility and disruption reflecting progress in its turnaround strategy. According to the company its gross revenue from continuing operations for the six months ended 30 September 2020 increased by 38% to R8.248 billion (US$548.96m) from the previous year’s R5.984 billion (US$398.27m). Its operating profit on the other hand rose by 96% to R1.910 billion (US$127.1m) from R973 million (US$64.7m) generated in the prior comparable period and reflects strong improvements in its sugar…

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Tongaat Hulett’s starch business sale to KKL Group has been rid off Material Adverse Change claims

SOUTH AFRICA – The proposed acquisition transaction of Tongaat Hulett’s starch business by Barloworld subsidiary, KKL Group has reached another significant milestone. In February, Tongaat announced that it was offloading its 100-year-old starch business to KKL Group for R5.35billion (US$342.6m) in an effort to reduce its debt and cover on-going operations. With the occurrence of the COVID-19 pandemic, dispute arose between the two JSE-listed groups, with Barloworld trying to get out of the deal claiming that the pandemic had affected its commercial merits. Tongaat Hulett, which is battling a R13…

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South African financial watchdog FSCA fines Tongaat Hulett US$1.1m for accounting irregularities

SOUTH AFRICA – JSE-listed sugar and property firm Tongaat Hulett, which was rocked by an accounting scandal last year, has been handed down a reduced fine of R20 million (US$1.1m) by the Financial Sector Conduct Authority (FSCA). The country’s top capital markets regulator, had initially slapped the sugar producer with a R118.3m (US$7.05m) fine for publishing deceitful financial information, but the watchdog slashed the sum to R20m (US$1.1m), acknowledging the company’s co-operation during the investigation and seeking to limit harm on investors. In a statement, the financial watchdog said the…

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Tongaat Hulett’s turnaround strategy pays off resulting to18% rise in full-year revenue

SOUTH AFRICA – Tongaat Hulett has made substantial progress in the execution of its turnaround strategy, evident by its report of an 18% increase in revenue to R15.4 billion (US$892.4m) for the year to end March 2020 from R13.1 billion (US$759m) recorded the previous year. The turnaround strategy aims to stabilise and restructure the business to become more profitable and sustainable as it recovers from its accounting scandal. The sugar processor has emerged from the scandal in better shape than it was 12 months ago after it reduced its headline…

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Hippo Valley Estates appointments four directors to the board boosting its governance

ZIMBABWE – Hippo Valley Estates Limited, subsidiary of Tongaat Hulett has announced the appointment of four new directors to its board to boost its corporate governance following the firm’s financial scandal that led to several executives at both Hippo Valley and Tongaat Hulett resign. PwC’s audit on the company in November 2019 found that certain Tongaat senior executives overstated profits and certain assets by using “undesirable accounting practices.” The sugar firm has appointed John Gavin Hudson, the Chief Executive Officer of the parent company, to the board as part of…

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Competition Tribunal of South Africa gives nod to sale of Tongaat Hulett’s starch business

SOUTH AFRICA – The Competition Tribunal of South Africa has approved the acquisition of Tongaat Hulett’s Starch business by Barloworld subsidiary, KKL Group for R5.35billion (US$342.6m). The agriculture and agri-processing company Tongaat Hulett stated that the decision was the third approval in the jurisdictions relevant to the transaction, with the Botswana Competition Commission and the Common Market for Eastern and Southern Africa (Comesa) Competition Commission having already approved the transaction without conditions. The final approval is awaited from the Indonesian Competition Commission, probably in the first week of August, reports…

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Tongaat Hullet subsidiary Hippo Valley seeks alternative funding for the US$40m sugar cane project

ZIMBABWE – Hippo Valley Estates Limited, subsidiary of Tongaat Hulett is considering alternative sources of funding for the US$40 million Kilimanjaro Sugar Cane Project, seeking to develop virgin land into sugar cane plantations at Triangle and Hippo Valley estates in Chiredzi. This is part of the firm’s drive to increase aggregate sugar output, while also empowering indigenous out-grower farmers who will be allocated plots on the nearly 3 300 hectares being developed, on a cost recovery basis. When completed, Project Kilimanjaro is expected to contribute significantly to the industry target…

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