Trading statement for the half-year to 30 June 2009 and withdrawal of cautionary announcement
Tongaat Hulett issues this Trading Statement on the expected results for the half-year to 30 June 2009, based on the consolidation of the Zimbabwe operations as explained in the cautionary announcement of 18 June 2009.
Tongaat Hulett’s profit from operations for the six months to 30 June 2009 is expected to increase to R864 million (2008: R443 million). This includes profit from the starch operations of R112 million (2008: R103 million) and profit from land and property development of R64 million (2008: R115 million). The profit from the sugar operations totals R644 million, of which Zimbabwe constitutes R305 million (compared to the dividend received of R35 million in 2008) and the various other sugar operations constitute R339 million (2008: R218 million). A net gain of R44 million is reflected in centrally accounted items (2008: R28 million cost), which includes a gain of R82 million on the recognition of Tongaat Hulett’s unconditional entitlement, in 2009, to a pension fund surplus in respect of a 2007 surplus apportionment.
The consolidation of the Zimbabwe operations follows the macroeconomic changes that essentially occurred when Zimbabwe moved to a US dollar and Rand based economy and, in so doing, restored key relevant fundamentals to the economy. This removed many of the distortions that existed in the Zimbabwean economy, which included unrealistic local market sugar price realisations, not receiving the full benefit of export proceeds, exchange rate uncertainty and foreign currency restrictions, shortage of inputs and the effects of extreme hyperinflation. Previously, in terms of the relevant international accounting standard, these operations were not consolidated and were accounted for on a dividend received basis. As a result of the changes at the beginning of 2009, Tongaat Hulett meets the requirement for consolidating its Zimbabwean operations in terms of the relevant international financial reporting standards (IFRS). The accounting treatment in terms of IFRS on the commencement of consolidation of the Zimbabwe operations gives rise to a balance sheet take-on gain of R1,969 billion, which is recognised in the income statement. This gain is excluded from the profit from operations detailed above, excluded from headline earnings and included in total net profit.
Headline earnings for the first half of 2009 are expected to be R440 million (2008: R252 million). Headline earnings per share are expected to be 426 cents per share (2008: 245 cents per share). Total net profit for the six months is expected to be R2,419 billion with net profit per share being 2343 cents per share (2008: total net profit was R266 million and net profit per share was 258 cents per share).
This trading statement is issued in compliance with the JSE Listings Requirements. The above information has not been reviewed and reported on by the auditors.
The cautionary announcement of 18 June 2009 is hereby withdrawn.
The interim results for the half-year ended 30 June 2009 are scheduled for release on Monday, 3 August 2009.
22 July 2009