| Mon 15 Nov 2010, 7:05 | | TON - Tongaat Hulett Limited - Interim Results for the six months ended 30 |
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TON
THGL
TON - Tongaat Hulett Limited - Interim Results for the six months ended 30
September 2010
Tongaat Hulett Limited
Registration No: 1892/000610/06
JSE share code: TON
ISIN: ZAE000096541
Interim Results for the six months ended 30 September 2010
- Revenue of R4,724 billion (2009: R4,011 billion)
- Profit from operations of R963 million (2009: R873 million)
- Headline earnings of R507 million (2009: R452 million)
- Interim dividend of 110 cents per share
(2009: 100 cents per share)
COMMENTARY
The past six months have been characterised by counteractive factors. Tongaat
Hulett is starting to benefit from the targeted sugar production growth in
Mozambique and Zimbabwe. Sugar production in South Africa has been affected by
the severe drought in the current season. Sugar realisations in this period
have not yet reflected the benefits of the recent surge in world sugar prices
brought about by supply and demand dynamics. Exchange rates have been less
favourable than in the corresponding six months in 2009. In the current
economic climate, the sale of development land remained depressed. Tongaat
Hulett`s headline earnings increased by 12% to R507 million for the half-year
ended 30 September 2010, compared to the R452 million earned in the six months
to 30 September 2009. The profit from operations for the half-year grew by 10%
to R963 million from the R873 million earned in the same period in 2009.
Profit from the starch operations for the six months was R125 million,
compared to R117 million in the same period last year. A third consecutive
year of favourable agricultural conditions in South Africa yielded a large
maize crop in 2009/10 of 13 million tons (2008/9: 12 million tons) and
resulted in local maize prices trading close to world prices. The margin
benefit of lower maize costs was partially offset by lower co-product prices
and the effect of a firmer Rand. Starch and glucose sales volumes in the local
market were similar to the corresponding prior period. Volumes in the
alcoholic beverage, coffee creamer and confectionary sectors started
recovering while the canning and prepared food sectors reflected lower
volumes.
The profit from sugar operations in Zimbabwe was R303 million (US$ 41 million)
in the first half of the financial year, compared to R326 million (US$ 40
million) in the same period last year. Sales volumes in the first half of the
year were 3% higher than the same period last year. Sugar production commenced
later than normal at the Hippo Valley mill following the extensive
rehabilitation work undertaken during the off-season. The crush rate has since
increased closer to capacity as the refurbished second extraction line was
brought into production.
In Mozambique, profit from the sugar operations for the six months to
September 2010 increased to R163 million (Metical 739 million) from R79
million (Metical 263 million) in the same period last year, benefiting from
substantially higher volumes. The rapid depreciation of the Metical has
resulted in a situation where domestic sugar prices need to increase by more
than 50% to be in line with regional pricing.
The South African sugar milling, refining and agriculture operations
contributed R47 million to profit for the six months ended September 2010
(2009: R77 million). The drought conditions in KwaZulu-Natal have led to a
reduction in the current sugar crop and higher costs per ton of sugar
produced. Sales volumes in the first half of the year grew by 7% together with
higher local and export sales realisations. Almost all of Tongaat Hulett`s
sugar production is effectively sold in the local market under the Huletts
brand. In terms of the South African sugar industry legislated regulations,
79% of the sales in the current season are deemed to be local and 21% are
recognised and valued as exports. Raw sugar export volumes from South Africa
were sold at an effective world sugar price of 19,0 US c/lb (prior season:
16,5 US c/lb) at an average exchange rate of R7,67/US$ (prior season:
R8,16/US$).
The downstream sugar value added activities contributed R136 million to profit
(2009: R127 million). This includes Voermol animal feeds, South African
refined exports, regional marketing, sales, packing and distribution
activities.
In Swaziland, the Tambankulu sugar estate generated operating profit of R19
million for the half-year (2009: R29 million). The exchange rate of the Rand
against the Euro has negatively impacted export earnings. Production for the
full year is expected to be similar to the previous season.
Tongaat Hulett`s land and property development activity is currently focused
on value creation for all stakeholders in the growth corridor north of Durban,
including the new international air platform at King Shaka, targeting land
conversion at the appropriate time and value. In the current economic climate,
with the sale of development land across most sectors being depressed, few
hectares are being converted to development in the higher value prime
locations on the coastline and to the west of Durban. Tongaat Hulett owns 13
807 gross hectares for development in South Africa. Operating profit from land
conversion and development for the six months to September 2010 amounted to
R97 million (2009: R72 million) with a further R4 million in capital profits
(2009: R2 million) being realised. During this period, 39 developable hectares
(56 gross hectares) were sold in the area north of Durban. Revenue was
generated mainly from sales in the Umhlanga Ridgeside and Izinga areas,
together with a benefit and associated land sale for the golf course at
Zimbali Lakes, which is currently being constructed by Tongaat Hulett`s joint
venture partner. In the current economic climate there has been increased
attention on controlling development expenditure, with cost savings being
brought to account.
The centrally accounted and consolidation items included a gain of R130
million (2009: R82 million) on the recognition of an unconditional entitlement
to an employer surplus account allocation in the Tongaat Hulett pension fund.
The tax charge in the income statement includes the attractive Mozambique tax
rate for agricultural operations and a lower tax rate in Zimbabwe compared to
the first half of the previous financial year.
Finance costs for the first half of the 2010/11 year increased to R231 million
from R142 million in the first half of the 2009/10 year. The capitalisation of
interest on the Mozambique expansion project ended in the 2009/10 year, with
the commissioning having been completed.
Cash inflow from operations, before working capital, was R929 million for the
six months to September 2010 (2009: R867 million). Cash flow was adversely
impacted by full production of sugar commencing later than expected due to
unseasonal rain in Mozambique and the extensive rehabilitation work in
Zimbabwe. The September half-year coincides with a peak working capital
absorption point in the year. Tongaat Hulett`s net debt at the end of
September 2010 was R3,741 billion. This compares to R3,245 billion at
September 2009. The last two years have seen significant capital expenditure
on the Mozambique expansion and cash being absorbed in the establishment of
the expanded cane crops, the replanting of sugar cane and mill refurbishment
in Zimbabwe.
The Board has declared an interim dividend of 110 cents per share (2009: 100
cents per share).
Outlook
Regional sugar prices are now starting to rise in response to the higher world
prices. The demand for raw sugar into the European Union is intensifying.
Sugar available for export from the current season`s production is limited.
The drought experienced in South Africa has brought forward the closure of the
sugar mills for the 2010/11 season. The mills in Zimbabwe and Mozambique are
likely to close in December for start-up in April and May for the 2011/12
season.
Tongaat Hulett expects to make further progress in growing sugar production
towards the target of doubling the 2009/10 production, utilising the available
milling capacity, with a simultaneous reduction in unit costs.
Zimbabwe sugar production in the 2010/11 season is expected to be between 330
000 and 350 000 tons (2009/10: 259 000 tons). In the 2011/12 season,
production is expected to increase to between 380 000 and 400 000 tons of
sugar, with better cane age and yields on a similar number of hectares being
harvested, as well as improved sugar extraction in the mills.
In Mozambique, sugar production in the 2010/11 season is expected to be
between 185 000 and 205 000 tons (2009/10: 134 000 tons). In order to improve
the ongoing profile and age of the crop, some sugar cane originally targeted
for milling in the 2010/11 season will now be milled early in the 2011/12
season. Production in the 2011/12 season is projected to be between 270 000
and 290 000 tons of sugar, with an increase in hectares harvested, higher cane
yields and improved sugar extraction in the mills.
The drought in KwaZulu-Natal has resulted in the current season`s South
African sugar production being more than 100 000 tons below the 564 000 tons
produced in the 2009/10 season, notwithstanding the additional 2 000 hectares
under cane supplying Tongaat Hulett`s mills. An additional 6 000 hectares of
new cane land is currently being planted.
The South African Department of Energy`s Integrated Resource Plan for
Electricity now includes bagasse as one of the preferred options for
electricity generation. Tongaat Hulett has the potential to generate 189
megawatts, excluding tops and trash, in South Africa.
Agricultural land conversion and development activity is currently focused on
development and bulk sale opportunities in the growth corridor north of
Durban, including industrial and business park land adjacent to the new
international airport and at Cornubia. Industrial land in Durban/eThekwini
remains in short supply.
The large South African maize harvest in 2010 and the high maize stock levels
from the previous two seasons should maintain local maize prices close to
world prices and contribute to the competitiveness of the starch operation.
Higher international starch prices are countering the impact of the exchange
rate.
Tongaat Hulett`s financial results remain sensitive to movements in the Rand,
US dollar, Euro and Mozambique Metical. These impact on the revenue streams,
costs incurred and the conversion of profits into Rands.
For and on behalf of the Board
J B Magwaza Peter Staude
Chairman Chief Executive Officer
Amanzimnyama
Tongaat, KwaZulu-Natal
12 November 2010
DIVIDEND DECLARATION
Notice is hereby given that the Board has declared an interim dividend
(number 166) of 110 cents per share for the half-year ended 30 September 2010
to shareholders recorded in the register at the close of business on Friday,
14 January 2011.
The salient dates of the declaration and payment of this interim dividend are
as follows:
Last date to trade ordinary shares
"CUM" dividend Friday 7 January 2011
Ordinary shares trade
"EX" dividend Monday 10 January 2011
Record date Friday 14 January 2011
Payment date Thursday 20 January 2011
Share certificates may not be dematerialised or re-materialised, nor may
transfers between registers take place between Monday 10 January 2011 and
Friday 14 January 2011, both days inclusive.
The dividend is declared in the currency of the Republic of South Africa.
Dividends paid by the United Kingdom transfer secretaries will be paid in
British currency at the rate of exchange ruling at the close of business on
Friday, 7 January 2011.
For and on behalf of the Board
M A C Mahlari
Company Secretary
Amanzimnyama
Tongaat, KwaZulu-Natal
12 November 2010
INCOME STATEMENT
Condensed consolidated Unaudited Pro forma Pro forma Audited
6 months 6 months 12 months 15 months
30 Sept 30 Sept 31 March 31 March
Rmillion 2010 2009 2010 2010
Revenue 4 724 4 011 8 789 11 136
Profit from operations 963 873 1 500 1 691
Capital profit on land 4 2 52 52
Capital profit on
insurance claim 12 13 13
BEE IFRS 2 charge and
transaction costs (18) (16) (26) (35)
Zimbabwe consolidation
take-on gain 1 969
Valuation adjustments (3) (4) (3)
Operating profit 949 868 1 535 3 687
Share of associate
company`s profit 1
Net financing costs (note 1) (231) (142) (365) (452)
Profit before tax 718 726 1 170 3 236
Tax (note 2) (166) (214) (158) (208)
Net profit for the period 552 512 1 012 3 028
Profit attributable to:
Shareholders of
Tongaat Hulett 511 462 885 2 898
Minority (non-controlling)
interest 41 50 127 130
552 512 1 012 3 028
Headline earnings attributable
to Tongaat Hulett
shareholders (note 3) 507 452 815 858
Earnings per share (cents)
Net profit per share
Basic 485,5 447,3 856,2 2 791,6
Diluted 472,6 440,1 839,1 2 736,0
Headline earnings
per share
Basic 481,7 437,6 788,5 826,5
Diluted 468,9 430,6 772,7 810,0
Dividend per share (cents) 110,0 100,0 275,0 275,0
Currency conversion
Rand/US dollar closing 6,99 7,42 7,39 7,39
Rand/US dollar average 7,39 8,13 7,81 8,23
Rand/Metical average 0,22 0,30 0,27 0,29
Rand/Euro average 9,58 11,33 11,03 11,40
SEGMENTAL ANALYSIS
Condensed consolidated Unaudited Pro forma Pro forma Audited
6 months 6 months 12 months 15 months
30 Sept 30 Sept 31 March 31 March
Rmillion 2010 2009 2010 2010
REVENUE
Starch operations 1 185 1 110 2 243 2 778
Land Conversion and
Developments 99 82 260 274
Sugar
Zimbabwe operations 734 665 1 325 1 636
Swaziland operations 108 113 133 134
Mozambique operations 489 138 447 463
SA agriculture, milling
and refining 1 267 1 139 3 148 4 285
Downstream value added
activities 842 764 1 233 1 566
Consolidated total 4 724 4 011 8 789 11 136
PROFIT FROM OPERATIONS
Starch operations 125 117 251 301
Land Conversion and
Developments 97 72 194 187
Sugar
Zimbabwe operations 303 326 518 576
Swaziland operations 19 29 51 63
Mozambique operations 163 79 141 192
SA agriculture, milling
and refining 47 77 136 158
Downstream value added
activities 136 127 200 226
Centrally accounted and
consolidation items 73 46 9 (12)
Consolidated total 963 873 1 500 1 691
STATEMENT OF FINANCIAL POSITION
Condensed consolidated Unaudited Pro forma Audited
30 Sept 30 Sept 31 March
Rmillion 2010 2009 2010
ASSETS
Non-current assets
Property, plant and equipment 7 230 7 716 7 710
Growing crops 2 019 1 425 2 041
Long-term receivable 135 196
Goodwill 223 249 240
Intangible assets 13 6 9
Investments 4 5 10
9 624 9 597 10 010
Current assets 4 972 4 347 3 358
Inventories 2 426 2 206 1 373
Trade and other receivables 1 966 1 858 1 836
Derivative instruments 18 22 9
Cash and cash equivalents 562 261 140
TOTAL ASSETS 14 596 13 944 13 368
EQUITY AND LIABILITIES
Capital and reserves
Share capital 139 138 139
Share premium 1 521 1 514 1 519
BEE held consolidation shares (907) (1 004) (935)
Retained income 5 116 4 284 4 691
Other reserves (1 616) (452) (841)
Shareholders` interest 4 253 4 480 4 573
Minority interest in subsidiaries 838 862 870
Equity 5 091 5 342 5 443
Non-current liabilities 3 509 4 021 3 708
Deferred tax 1 296 1 463 1 272
Long-term borrowings 942 1 273 1 103
Non-recourse equity-settled
BEE borrowings 774 800 787
Provisions 497 485 546
Current liabilities 5 996 4 581 4 217
Trade and other payables
(note 4) 2 574 2 198 2 131
Short-term borrowings 3 361 2 233 2 077
Derivative instruments 9 3
Tax 61 141 6
TOTAL EQUITY AND LIABILITIES 14 596 13 944 13 368
Number of shares (000)
- in issue 104 812 103 432 103 677
- weighted average (basic) 105 246 103 295 103 811
- weighted average (diluted) 108 131 104 971 105 922
STATEMENT OF CASH FLOWS
Condensed consolidated Unaudited Pro forma Audited
6 months 6 months 15 months
30 Sept 30 Sept 31 March
Rmillion 2010 2009 2010
Operating profit 949 868 3 687
Profit on disposal of property,
plant and equipment (7) (15) (87)
Depreciation 225 234 521
Zimbabwe consolidation
take-on gain (1 969)
Growing crops and other
non-cash items (196) (110) (729)
Tax payments (42) (110) (257)
929 867 1 166
Change in working capital (956) (762) 789
Cash flow from operations (27) 105 1 955
Net financing costs (231) (142) (452)
Cash flow from operating
activities (258) (37) 1 503
Expenditure on property,
plant and equipment:
New (138) (433) (1 416)
Replacement (109) (147) (280)
Major plant overhaul costs (131) (13) (291)
Other capital items (5) (18) 35
Net cash flow before dividends
and financing activities (641) (648) (449)
Dividends paid (83) (116) (283)
Net cash flow before financing
activities (724) (764) (732)
Borrowings raised 1 175 671 652
Non-recourse equity-settled
BEE borrowings (13) (12) (4)
Shares issued 3 4 14
Settlement of share-based
payment awards (18) (11) (22)
Net increase/(decrease) in cash
and cash equivalents 423 (112) (92)
Balance at beginning of period 140 422 229
Foreign exchange adjustment (1) (46) (61)
Exchange rate translation loss (3) (5)
Subsidiaries consolidated 69
Cash and cash equivalents at
end of period 562 261 140
STATEMENT OF CHANGES IN EQUITY
Condensed consolidated Unaudited Pro forma Audited
6 months 6 months 15 months
30 Sept 30 Sept 31 March
Rmillion 2010 2009 2010
Balance at beginning of period 4 573 4 992 3 059
Total comprehensive income
for the period (272) (413) 1 689
Retained earnings 511 462 2 898
Movement in hedge reserve 5 26 17
Foreign currency translation (788) (901) (1 226)
Dividends paid (73) (106) (264)
Allocation of BEE amount (12) 29
Share capital issued - ordinary 3 4 14
BEE held consolidation shares 15 11 29
Share-based payment charge 25 15 39
Settlement of share-based
payment awards (18) (11) (22)
Shareholders` interest 4 253 4 480 4 573
Minority interest in subsidiaries 838 862 870
Balance at beginning of period 870 1 037 276
Total comprehensive income
for the period (23) (151) (106)
Retained earnings 41 50 130
Foreign currency translation (64) (201) (236)
Dividends paid to minorities (10) (10) (19)
Allocation of BEE amount 12 (29)
Change of interest in subsidiary (7) (7)
Consolidation of subsidiaries 1 (19) 755
Equity 5 091 5 342 5 443
STATEMENT OF OTHER COMPREHENSIVE INCOME
Condensed consolidated Unaudited Pro forma Audited
6 months 6 months 15 months
30 Sept 30 Sept 31 March
Rmillion 2010 2009 2010
Profit for the period 552 512 3 028
Other comprehensive income (847) (1 076) (1 445)
Movement in non-distributable
reserves:
Foreign currency translation (852) (1 102) (1 462)
Hedge reserve 7 36 23
Tax on movement in hedge reserve (2) (10) (6)
Total comprehensive income
for the period (295) (564) 1 583
Total comprehensive income
attributable to:
Shareholders of Tongaat Hulett (272) (413) 1 689
Minority (non-controlling)
interest (23) (151) (106)
(295) (564) 1 583
NOTES
Condensed consolidated Unaudited Pro forma Audited
6 months 6 months 15 months
30 Sept 30 Sept 31 March
Rmillion 2010 2009 2010
1. Net financing costs
Interest paid (237) (227) (577)
Interest capitalized 1 66 88
Interest received 5 19 37
(231) (142) (452)
2. Tax
Normal (88) (149) (309)
Deferred (66) (49) (14)
Rate change adjustment
- deferred 154
Secondary tax on companies (12) (16) (39)
(166) (214) (208)
3. Headline earnings
Profit attributable to
shareholders 511 462 2 898
Less Zimbabwe consolidation
take-on gain (1 969)
Less after tax effect of:
Capital profit on disposal
of land (4) (2) (52)
Capital profit on insurance claim (9) (11)
Fixed assets and other disposals 1 (8)
507 452 858
4. Trade and other payables
Included in trade and other payables is the maize obligation
(interest bearing) of R354 million (30 September 2009: R477
million and 31 March 2010: R381 million).
5. Capital expenditure commitments
Contracted 101 395 234
Approved 65 120 118
166 515 352
6. Operating lease commitments 43 44 31
7. Guarantees and contingent
liabilities 145 145 148
8. Basis of preparation
The condensed consolidated unaudited results for the half-year
ended 30 September 2010 have been prepared in accordance with
International Accounting Standard 34 Interim Financial
Reporting, the AC 500 standards as issued by the Accounting
Practices Board and the JSE Listings Requirements. The
accounting policies are consistent with those used for the
audited 2010 annual financial statements which fully comply
with International Financial Reporting Standards.
9. Pro forma results
The pro forma results for the prior period are presented for
comparative purposes. The pro forma detail and the requisite
reporting accountants` report form part of this SENS
announcement of results.
CORPORATE INFORMATION
Directorate: J B Magwaza (Chairman), P H Staude (Chief Executive Officer)*, B
G Dunlop*, F Jakoet, J John, R P Kupara, A A Maleiane+, T V Maphai, T N
Mgoduso, M Mia, N Mjoli-Mncube, M H Munro*, C B Sibisi, R H J Stevens.
* Executive directors Zimbabwean + Mozambican
Registered office: Amanzimnyama Hill Road, Tongaat, KwaZulu-Natal
P O Box 3, Tongaat 4400
Telephone: +27 32 439 4019, Facsimile: +27 31 570 1055
Transfer secretaries: Computershare Investor Services (Pty) Limited
Telephone: +27 11 370 7700
Sponsor: Investec Bank Limited
Telephone: +27 11 286 7000
www.tongaat.co.za
email: info@tongaat.co.za
INDEPENDENT REPORTING ACCOUNTANTS` ASSURANCE REPORT
10 November 2010
The Directors
Tongaat Hulett Limited
P O Box 3
TONGAAT
4400
Dear Sirs
Independent Reporting Accountants` Assurance Report on the Pro Forma Financial
Information of Tongaat Hulett Limited
We have performed our limited assurance engagement in respect of the unaudited
comparative pro forma income statement and segmental result information for
both the 6 month period ended 30 September 2009 and the 12 month period ended
31 March 2010. In addition, our limited assurance engagement includes the
comparative statement of financial position at 30 September 2009 and the
statements of changes in equity and cash flows for the 6 months ended 30
September 2009. This comparative information is to be included in Tongaat
Hulett Limited`s SENS announcement of interim results for the 6 month period
to 30 September 2010. The unaudited pro forma financial information as set
out in the enclosed Annexure 1 has been prepared in accordance with the
requirements of the JSE Limited ("JSE") Listings Requirements, for disclosure
purposes only, to provide certain comparative financial information as a
consequence of the change in Tongaat Hulett Limited`s reporting period in the
prior year to a 31 March financial year end.
Directors` responsibility
The directors are responsible for the compilation, contents and presentation
of the pro forma financial information to be contained in the company`s SENS
announcement of results and annual financial statements and the financial
information from which it has been prepared. Their responsibility includes
determining that: the pro forma financial information has been properly
compiled on the basis stated; the basis is consistent with the accounting
policies of Tongaat Hulett Limited; and the pro forma adjustments are
appropriate for the purposes of the pro forma financial information disclosed
in terms of the JSE Listings Requirements.
Reporting accountants` responsibility
Our responsibility is to express our limited assurance conclusion on the
comparative pro forma financial information included in the SENS announcement
of interim results for the 6 month period to 30 September 2010. We conducted
our assurance engagement in accordance with the International Standard on
Assurance Engagements applicable to Assurance Engagements Other Than Audits or
Reviews of Historical Financial Information and the Guide on Pro Forma
Financial Information issued by SAICA.
This standard requires us to obtain sufficient appropriate evidence on which
to base our conclusion.
We do not accept any responsibility for any reports previously given by us on
any financial information used in the compilation of the pro forma financial
information beyond that owed to those to whom those reports were addressed by
us at the dates of their issue.
Sources of information and work performed
Our procedures consisted primarily of comparing the unadjusted financial
information with the source documents, considering the pro forma adjustments
in light of the accounting policies of Tongaat Hulett Limited, considering the
evidence supporting the pro forma adjustments and discussing the adjusted pro
forma financial information with the directors of the company in relation to
the prior year change in the company`s reporting period to a 31 March
financial year end.
In arriving at our conclusion, we have relied upon financial information
prepared by the directors of Tongaat Hulett Limited and other information from
various public, financial and industry sources.
While our work performed has involved an analysis of the historical published
audited financial information and other information provided to us, our
assurance engagement does not constitute an audit or review of any of the
underlying financial information conducted in accordance with International
Standards on Auditing or International Standards on Review Engagements and
accordingly, we do not express an audit or review opinion.
In a limited assurance engagement, the evidence-gathering procedures are more
limited than for a reasonable assurance engagement and therefore less
assurance is obtained than in a reasonable assurance engagement. We believe
our evidence obtained is sufficient and appropriate to provide a basis for our
conclusion.
Conclusion
Based on our examination of the evidence obtained, nothing has come to our
attention, which causes us to believe that, in terms of the section 8.17 and
8.30 of the JSE Listings Requirements:
- the pro forma financial information has not been properly
compiled on the basis stated,
- such basis is inconsistent with the accounting policies of the
issuer, and
- the adjustments are not appropriate for the purposes of the pro
forma financial information as disclosed.
Consent
We consent to the inclusion of this report, which will form part of the SENS
announcement of results, to be issued on or about 15 November 2010, in the
form and context in which it will appear.
Deloitte & Touche
Registered Auditors
Durban
Per JAR Welch
Partner
Deloitte & Touche
2 Pencarrow Park
Pencarrow Crescent
La Lucia Ridge Office Estate
La Lucia, 4051
National Executive: GG Gelink Chief Executive AE Swiegers Chief Operating
Officer GM Pinnock Audit DL Kennedy Tax, Legal and Risk Advisory L Geeringh
Consulting L Bam Corporate Finance
CR Beukman Finance TJ Brown Clients & Markets NT Mtoba Chairman of the Board
MJ Comber Deputy Chairman of the Board. A full list of partners and directors
is available on request
TONGAAT HULETT LIMITED Annexure 1
PRO FORMA INCOME STATEMENT AND SEGMENTAL RESULTS FOR THE 12 MONTHS ENDED 31
MARCH 2010 AND FOR THE 6 MONTHS ENDED 30 SEPTEMBER 2009.
(1) (2) (3)
Unadjusted Actual (1) - (2)
Audited 3 months Pro forma
15 months to 1 January 2009 12 months to
R million 31 March 2010 to 31 March 31 March
2009 2010
INCOME STATEMENT
Revenue 11 136 2 347 8 789
Profit from operations 1 691 191 1 500
Capital profit on land 52 52
Capital profit on
insurance claim 13 13
BEE IFRS 2 charge and
transaction costs (35) (9) (26)
Zimbabwe consolidation
take-on gain 1 969 1 969
Valuation adjustments (3) 1 (4)
Operating profit 3 687 2 152 1 535
Share of associate
company`s profit 1 1
Net financing costs (452) (87) (365)
Profit before tax 3 236 2 066 1 170
Tax (208) (50) (158)
Net profit for the period 3 028 2 016 1 012
Profit attributable to:
Shareholders of Tongaat
Hulett 2 898 2 013 885
Minority (non-controlling) 130 3 127
interest
3 028 2 016 1 012
Headline earnings
attributable to Tongaat
Hulett shareholders 858 43 815
Earnings per share (cents)
Net profit per share
Basic 2 791.6 1 952.4 856.2
Diluted 2 736.0 1 912.4 839.1
Headline earnings per
share
Basic 826.5 41.7 788.5
Diluted 810.0 40.9 772.7
Dividend per share (cents)
275.0 - 275.0
SEGMENTAL ANALYSIS
REVENUE
Starch operations 2 778 535 2 243
Land Conversion and
Development 274 14 260
Sugar
Zimbabwe operations 1 636 311 1 325
Swaziland operations 134 1 133
Mozambique operations 463 16 447
SA agriculture, milling
and refining 4 285 1 137 3 148
Downstream value added
activities 1 566 333 1 233
Consolidated total 11 136 2 347 8 789
PROFIT FROM OPERATIONS
Starch operations 301 50 251
Land Conversion and
Development 187 (7) 194
Sugar
Zimbabwe operations 576 58 518
Swaziland operations 63 12 51
Mozambique operations 192 51 141
SA agriculture, milling
and refining 158 22 136
Downstream value added
activities 226 26 200
Centrally accounted and
consolidation items (12) (21) 9
Consolidated total 1 691 191 1 500
(4) (5)
Unaudited Pro forma
6 months 6 months
1 October to 1 April to
R million 31 March 2010 30 September 2009
INCOME STATEMENT
Revenue 4 778 4 011
Profit from operations 627 873
Capital profit on land 50 2
Capital profit on insurance claim 1 12
BEE IFRS 2 charge and transaction
costs (10) (16)
Zimbabwe consolidation take-on gain
Valuation adjustments (1) (3)
Operating profit 667 868
Share of associate company`s profit
Net financing costs (223) (142)
Profit before tax 444 726
Tax 56 (214)
Net profit for the period 500 512
Profit attributable to:
Shareholders of Tongaat Hulett 423 462
Minority (non-controlling) interest 77 50
500 512
Headline earnings attributable to
Tongaat Hulett shareholders 363 452
Earnings per share (cents)
Net profit per share
Basic 409.0 447.3
Diluted 402.4 440.1
Headline earnings per share
Basic 351.0 437.6
Diluted 345.4 430.6
Dividend per share (cents) 175.0 100.0
SEGMENTAL ANALYSIS
REVENUE
Starch operations 1 133 1 110
Land Conversion and Development 178 82
Sugar
Zimbabwe operations 660 665
Swaziland operations 20 113
Mozambique operations 309 138
SA agriculture, milling and refining
2 009 1 139
Downstream value added activities 469 764
Consolidated total 4 778 4 011
PROFIT FROM OPERATIONS
Starch operations 134 117
Land Conversion and Development 122 72
Sugar
Zimbabwe operations 192 326
Swaziland operations 22 29
Mozambique operations 62 79
SA agriculture, milling and refining
59 77
Downstream value added activities 73 127
Centrally accounted and
consolidation items (37) 46
Consolidated total 627 873
Notes
1) Unadjusted audited results for the 15 months ended 31 March
2010.
2) Unaudited results for the 3 months from 1 January 2009 to
31 March 2009 and incorporating the following:
- Complete management account information for the 3 months,
including 31 March 2009 reporting cut-off, prepared in terms
of IFRS.
- Inclusion of the Zimbabwe operations from the commencement
of consolidation to 31 March 2009. The commencement of
consolidation gave rise to an audited balance sheet take-on
gain of R1,969 billion as determined in accordance with
IFRS 3 (Revised).
3) Pro forma results for the 12 months to 31 March 2010, being
column 1 minus column 2.
4) Unaudited results for the 6 months from 1 October 2009 to
31 March 2010 comprising complete management account
information for the 6 months, including reporting cut-off,
prepared in terms of IFRS.
5) Unaudited results for the 6 months from 1 March 2009 to
30 September 2009, comprising column 3 minus column 4.
6) The table above sets out the unaudited pro forma comparative
income statement for the 12 months to 31 March 2010 and for
the 6 months to 30 September 2009. This pro forma statement is
the responsibility of the Tongaat Hulett directors, who are
satisfied with its quality, and has been prepared for
comparative purposes only.
7) The reporting accountants` report from Deloitte & Touche on
this pro forma information is available for inspection at the
registered office of the company and forms part of the SENS
announcement of results.
OTHER COMPREHENSIVE INCOME
(1) (2) (3)
Unadjusted Actual (1) - (2)
Audited 3 months Pro forma
15 months to 1 January 2009 12 months to
R million 31 March 2010 to 31 March 31 March
2009 2010
Profit for the period 3 028 2 016 1 012
Other comprehensive income
(1 445) 70 (1 515)
Movement in non-
distributable reserves:
Foreign currency
translation (1 462) 67 (1 529)
Hedge reserve 23 4 19
Tax on movement in hedge
reserve (6) (1) (5)
Total comprehensive income
for the period 1 583 2 086 (503)
Total comprehensive income
attributable to:
Shareholders of Tongaat
Hulett 1 689 2 081 (392)
Minority (non-controlling)
interest (106) 5 (111)
1 583 2 086 (503)
(4) (5)
Unaudited Pro forma
6 months 6 months
1 October to 1 April to
R million 31 March 2010 30 September 2009
Profit for the period 500 512
Other comprehensive income (439) (1 076)
Movement in non-distributable
reserves:
Foreign currency translation (427) (1 102)
Hedge reserve (17) 36
Tax on movement in hedge reserve 5 (10)
Total comprehensive income for the
period 61 (564)
Total comprehensive income
attributable to:
Shareholders of Tongaat Hulett 21 (413)
Minority (non-controlling) interest 40 (151)
61 (564)
Notes
1) Unadjusted audited results for the 15 months ended 31 March
2010.
2) Unaudited results for the 3 months from 1 January 2009 to
31 March 2009 and incorporating the following:
- Complete management account information for the 3 months,
including 31 March 2009 reporting cut-off, prepared in terms
of IFRS.
- Inclusion of the Zimbabwe operations from the commencement
of consolidation to 31 March 2009. The commencement of
consolidation gave rise to an audited balance sheet take-on
gain of R1,969 billion as determined in accordance with
IFRS 3 (Revised).
3) Pro forma results for the 12 months to 31 March 2010, being
column 1 minus column 2.
4) Unaudited results for the 6 months from 1 October 2009 to
31 March 2010 comprising complete management account
information for the 6 months, including reporting cut-off,
prepared in terms of IFRS.
5) Unaudited results for the 6 months from 1 March 2009 to
30 September 2009, comprising column 3 minus column 4.
6) The table above sets out the unaudited pro forma comparative
income statement for the 12 months to 31 March 2010 and for
the 6 months to 30 September 2009. This pro forma statement is
the responsibility of the Tongaat Hulett directors, who are
satisfied with its quality, and has been prepared for
comparative purposes only.
7) The reporting accountants` report from Deloitte & Touche on
this pro forma information is available for inspection at the
registered office of the company and forms part of the SENS
announcement of results.
STATEMENT OF FINANCIAL POSITION
Condensed consolidated Pro forma
30 September
Rmillion 2009
ASSETS
Non-current assets
Property, plant and equipment 7 716
Growing crops 1 425
Long-term receivable 196
Goodwill 249
Intangible assets 6
Investments 5
9 597
Current assets 4 347
Inventories 2 206
Trade and other receivables 1 858
Derivative instruments 22
Cash and cash equivalents 261
TOTAL ASSETS 13 944
EQUITY AND LIABILITIES
Capital and reserves
Share capital 138
Share premium 1 514
BEE held consolidation shares (1 004)
Retained income 4 284
Other reserves (452)
Shareholders` interest 4 480
Minority interest in subsidiaries 862
Equity 5 342
Non-current liabilities 4 021
Deferred tax 1 463
Long-term borrowings 1 273
Non-recourse equity-settled BEE borrowings 800
Provisions 485
Current liabilities 4 581
Trade and other payables 2 198
Short-term borrowings 2 233
Derivative instruments 9
Tax 141
TOTAL EQUITY AND LIABILITIES 13 944
Number of shares (000)
- in issue 103 432
- weighted average (basic) 103 295
- weighted average (diluted) 104 971
Notes
(1) The Statement of Financial Position set out above comprises
the complete management account information at 30 September
2009, prepared in terms of IRFS.
(2) The table above sets out the unaudited pro forma comparative
Statement of Financial Position as at 30 September 2009. This
pro forma statement is the responsibility of the Tongaat
Hulett directors, who are satisfied with its quality, and has
been prepared for comparative purposes only.
(3) The reporting accountants` report from Deloitte and Touche on
this pro forma information is available for inspection at the
registered office of the company and forms part of the SENS
announcement of results.
STATEMENT OF CASH FLOWS
Condensed consolidated Pro forma
6 months to
30 September
Rmillion 2009
Operating profit 868
Profit on disposal of property, plant and equipment (15)
Depreciation 234
Growing crops and other non-cash items (110)
Tax payments (110)
867
Change in working capital (762)
Cash flow from operations 105
Net financing costs (142)
Cash flow from operating activities (37)
Expenditure on property, plant and equipment:
New (433)
Replacement (147)
Major plant overhaul costs (13)
Other capital items (18)
Net cash flow before dividends and financing activities (648)
Dividends paid (116)
Net cash flow before financing activities (764)
Borrowings raised 671
Non-recourse equity-settled BEE borrowings (12)
Shares issued 4
Settlement of share-based payment awards (11)
Net decrease in cash and cash equivalents (112)
Balance at beginning of period 422
Foreign exchange adjustment (46)
Exchange rate translation loss (3)
Cash and cash equivalents at end of period 261
Notes
(1) The Statement of Cash Flows set out above comprises the
complete management account information for the 6 months
from 1 April 2009 to 30 September 2009, prepared in terms of
IFRS.
(2) The table above sets out the unaudited pro forma comparative
Statement of Cash Flows for the 6 months to 30 September
2009. This pro forma statement is the responsibility of the
Tongaat Hulett directors, who are satisfied with its quality
and has been prepared for comparative purposes only.
(3) The reporting accountants` report from Deloitte & Touche on
this pro forma information is available for inspection at the
registered office of the company and forms part of the SENS
announcement of results.
STATEMENT OF CHANGES IN EQUITY
Condensed consolidated Pro forma
6 months to
30 September
Rmillion 2009
Balance at beginning of period 4 992
Total comprehensive income for the period (413)
Retained earnings 462
Movement in hedge reserve 26
Foreign currency translation (901)
Dividends paid (106)
Allocation of BEE amount (12)
Share capital issued - ordinary 4
BEE held consolidation shares 11
Share-based payment charge 15
Settlement of share-based payment awards (11)
Shareholders` interest 4 480
Minority interest in subsidiaries 862
Balance at beginning of period 1 037
Total comprehensive income for the period (151)
Retained earnings 50
Foreign currency translation (201)
Dividends paid to minorities (10)
Allocation of BEE amount 12
Change of interest in subsidiary (7)
Consolidation of subsidiaries (19)
Equity 5 342
Notes
(1) The Statement of Changes in Equity set out above comprises
the complete management account information for the 6 months
from 1 April 2009 to 30 September 2009, prepared in terms of
IFRS.
(2) The table above sets out the unaudited pro forma comparative
Statement of Changes in Equity for the 6 months to 30
September 2009. This pro forma statement is the responsibility
of the Tongaat Hulett directors, who are satisfied with its
quality, and has been prepared for comparative purposes only.
(3) The reporting accountants` report from Deloitte & Touche on
this pro forma information is available for inspection at the
registered office of the company and forms part of the SENS
announcement of results.
NOTES TO THE FINANCIAL STATEMENTS
Condensed consolidated Pro forma
6 months to
30 September
Rmillion 2009
1. Net financing costs
Interest paid (227)
Interest capitalized 66
Interest received 19
(142)
2. Tax
Normal (149)
Deferred (49)
Secondary tax on companies (16)
(214)
3. Headline earnings
Profit attributable to shareholders 462
Less after tax effect of:
Capital profit on disposal of land (2)
Capital profit on insurance claim (9)
Fixed assets and other disposals 1
452
4. Trade and other payables
Included in trade and other payables is the maize obligation
(interest bearing) of R477 million.
5. Capital expenditure commitments
Contracted 395
Approved 120
515
6. Operating lease commitments 44
7. Guarantees and contingent liabilities 145
Notes
(1) The Notes to the Financial Statements set out above comprises
management account information for the 6 months from 1 April
2009 to 30 September 2009, prepared in terms of IFRS.
(2) The table above sets out the unaudited pro forma comparative
Notes to the Financial Statements for the 6 months to 30
September 2009. This pro forma statement is the responsibility
of the Tongaat Hulett directors, who are satisfied with its
quality, and has been prepared for comparative purposes only.
(3) The reporting accountants` report from Deloitte & Touche on
this pro forma information is available for inspection at the
registered office of the company and forms part of the SENS
announcement of results.
15 November 2010
Sponsor: Investec Bank Limited
Date: 15/11/2010 07:05:01 Produced by the JSE SENS Department.
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