Earnings releases

Interim Results for the half-year ended 30 June 2003

The Group is unlocking substantial value from its recent major investments with strong operating earnings growth from both African Products and Hulett Aluminium in the half-year to 30 June 2002.

Revenue from continuing operations increased by 17 percent to R3 billion. Earnings from continuing operations of R350 million, after dividends received from Triangle and net interest paid, were 28 percent up on those of the corresponding period last year. The strengthening of the rand to 30 June 2002 compared to prior year-end levels resulted in a pre-tax loss of R57 million arising on translation of underlying reserves of 41 million pertaining to strategic cash resources held abroad. Headline earnings per share were seven percent up on last year and excluding the translation loss were 34 percent up. A feature of the period was the strong cash flow that enabled the Group to reduce net borrowings from R377 million to R161 million. The board has declared an increased interim dividend of 80 cents per share (2001: 62 cents) which incorporates a ratio adjustment between the interim and final dividends.

African Products benefited from strong local market growth of 11 percent, partially driven by customers' exports and by import substitution. The contribution from exports, boosted by the weaker rand, doubled relative to last year. Average maize input costs are being managed at levels well below prevailing market prices, substantially reducing the impact on customers of the extremely high maize prices experienced in South Africa recently. These factors resulted in African Products achieving growth of 43 percent in revenue and 83 percent in operating earnings. 

Tongaat-Hulett Sugar's production in South Africa, Zimbabwe, Mozambique and Swaziland is forecast to rise to 1,25 million tons in 2002, up 13 percent on last year. Production from South African operations in the current year is expected to be approximately 840 000 tons of sugar, compared to last year's actual of 756 000 tons. Realisations in both the local and export markets have increased compared to last year. Higher cane and sugar production as well as restructuring in Swaziland and Mozambique are contributing towards improved earnings. The operation in Zimbabwe has performed as well as can be expected in a deteriorating socio-economic environment and should produce 280 000 tons of sugar this year, six percent above last year's production. The difficult economic and business environment in Zimbabwe may impact on dividend receipts in the second half of the year with R31 million having been received to date. 

Moreland's signature developments continue to be market leaders and have established the Umhlanga Ridge as one of the leading property investment areas in South Africa. 

Hulett Aluminium increased revenue by 20 percent to a record R1,5 billion for the half-year. Earnings before interest and tax for the six-month period at R176 million were 52 percent ahead of the corresponding period in 2001. This was achieved under difficult market conditions with international demand and margins in dollar terms being at their lowest level for many years. The business is steadily improving its sales mix as it moves up the product profitability curve, growing its capability to produce products with more challenging and stringent quality requirements. It continues to improve its market share in key targeted product groupings and geographic locations. The Group proportionately consolidates 50 percent of Hulett Aluminium's revenue and earnings.

The Group remains on track to deliver strong growth in volumes, revenue and operating earnings. Headline earnings for the year will be significantly influenced by the relative value of the rand for the remainder of the year. 

For and on behalf of the board
C M L Savage
P H Staude
Chief Executive Officer
Tongaat, KwaZulu-Natal 
31 July 2002