| Fri 2 Mar 2001, 0:00 | | The Tongaat-hulett Group Limited - Audited Results |
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The Tongaat-Hulett Group Limited
Registration No. 1892/000610/06
AUDITED RESULTS AND FINAL DIVIDEND
for the year ended 31 December 2000
* Operational earnings up 26% to R660 million
* Headline earnings per share up 4,4% to 507,9 cents
* Earnings before tax up 30% to R516 million
* Total dividends per share up 2,4% to 212,0 cents
* Hulett Aluminium R2,4 billion rolled products project commissioned
Divisions are on track in the process of completing a major phase of
investment. Earnings for the year to 31 December 2000 were in line with
expectations and slightly better than last year.
The official opening in November 2000 by President Mbeki of the R2,4 billion
rolled products expansion project at Hulett Aluminium's plant in
Pietermaritzburg marked the successful completion of one of the largest capital
investment programmes undertaken in the manufacturing sector in recent times.
This project, together with the starch & glucose division's R700 million starch
processing plant and various developments in the sugar division, brought to
fruition the Group's strategy of creating a core of three large,
internationally competitive businesses growing through exports.
With its focus on its three internationally competitive businesses, sugar,
starch & glucose and aluminium, the Board has agreed to exit from the Group's
building materials and textiles operations. These operations are therefore
treated as discontinuing operations in the financial statements. Subsequent to
the year end, negotiations commenced for the disposal of the building materials
division and actions have been implemented to facilitate the sale of the
textiles division.
Revenue from continuing operations improved to R4,6 billion (R3,6 billion) and
operating earnings from continuing operations rose to R568 million from R442
million. Earnings before exceptional items were R654 million (R584 million).
Increased financing costs of major capital projects have partially offset the
increase in operational earnings and headline earnings were R512 million
compared to R438 million last year, before including the one off tax rate
adjustment of R51 million. Headline earnings per share of 507,9 cents are 4,4
percent up on last year.
A final dividend of 150 cents per share has been declared, making a total
dividend for the year of 212 cents per share, covered 2,4 times, compared with
207 cents in 1999, covered 2,4 times.
Divisional reviews
The sugar division increased earnings before interest by 5,6 percent to R319
million despite difficult cane growing and milling conditions in both Swaziland
and Mozambique. Its domestic production rose by 15,9 percent to 969 000 tons.
Direct exports of refined sugar and the division's share of the SA Sugar
Association's exports of raw sugar were boosted by a recovery of the
international price in US dollar terms coupled with a weaker rand.
International US dollar sugar prices are holding firm and the average rand
export price is likely to exceed the average achieved by the industry in
respect of its exports in 2000.
Operating earnings of the starch and glucose division increased by 5,3 percent
despite tight trading
conditions in local and international markets and a significant increase in
depreciation. Domestic volumes increased by two percent. Good performance in
the paper making and alcoholic fruit beverage sectors, together with new
product development, helped offset the adverse effects of reduced demand from
the confectionery, paper converting and brewing sectors. Export sales increased
by eight percent, mainly in the higher-value areas of modified starches and
dried glucose syrups.
Sales volumes of the rolled products plant of Hulett Aluminium increased by 70
percent and total turnover exceeded R2 billion for the first time, largely as a
result of increased export revenues. Operating earnings increased by 127
percent. Export sales increased by 215 percent during the year and for the
first time the export value of rolled products exceeded the value of domestic
sales. Exports are planned to increase fourfold from present levels and good
progress has been made in penetrating niche markets.
The property division performed significantly better in a stronger market
environment where interest rates have declined. The Umhlanga/Mount Edgecombe
region is emerging as one of the country's strongest property investment nodes
with attractive developments and high sales volumes in the commercial and
residential sectors. Moreland has entered into a public-private partnership
with the Durban Unicity Council to jointly develop and sell some 150 hectares
of business estate land in the Effingham area in North West Durban. Moreland
has also entered into an agreement with the city to direct the waterfront
development on the city's land south of Addington Beach, incorporating a Marine
Theme Park.
Prospects
The Group expects strong growth in revenue and operating earnings in the year
ahead. As in the previous year operating earnings will be offset by higher
financing costs and depreciation and consequently attributable earnings are
expected to be similar to those achieved in 2000. From early 2002 attributable
earnings are expected to rise rapidly driven by growth in revenue, operating
earnings and strong cash flows reducing borrowings.
Dividend declaration
Notice is hereby given that the Board has declared a final dividend (number
147) of 150 cents per share for the financial year ending 31 December 2000.
Dividend cheques will be posted on or about 2 April 2001 to shareholders
registered at the close of business on Friday, 16 March 2001.
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 16
March 2001. Non-resident shareholders' tax will be deducted where applicable.
The transfer books and register of shareholders will be closed from 17 March
2001 to 23 March 2001 both days inclusive.
For and behalf of the Board
C M L Savage D G Aitken
Executive Chairman Group Financial Director
Amanzimnyama
Tongaat
KwaZulu-Natal
1 March 2001
Income Statement (Rmillion)
2000 1999
Revenue - continuing operations 4 579 3 631
Earnings for the year
Operating earnings from continuing operations 568 442
Dividends received 62 51
Net interest 9 86
Earnings from continuing operations 639 579
Earnings from discontinuing operations 15 5
Earnings before exceptional items 654 584
Exceptional items (138) (189)
Earnings before taxation 516 395
Taxation
Earnings before exceptional items (139) (135)
Exceptional items 4 13
Tax rate change adjustment 51
Earnings after taxation 381 324
Share of associate company's loss (15) (11)
Minority shareholders 12
Total net earnings 378 313
Headline earnings
Total net earnings 378 313
Impairment of discontinuing operations 147 130
Add/(less) after tax effect of:
Surplus on sale of property held as fixed
assets (19)
Loss on disposal/closure of operations 9 43
Goodwill amortised 2 2
Other (5) 1
Headline earnings 512 489
EARNINGS PER SHARE - (cents)
Total net earnings
Basic 375,0 312,0
Diluted 373,2 309,6
Headline earnings 507,9 486,7
DIVIDENDS PER SHARE - (cents) 212,0 207,0
Interim 62,0 62,0
Final 150,0 145,0
Cash Flow Statement (Rmillion)
Earnings before exceptional items 654 584
Depreciation 142 117
Change in working capital (317) (23)
Taxation paid (38) (44)
Cash flow from operations 441 634
Expenditure on fixed assets
- expansion (349) (431)
- replacement (44) (69)
Disposal of fixed assets 68 25
Other capital items (13) (81)
Dividends paid (209) (223)
Net cash flow (106) (145)
Borrowings (5) 31
Decrease in cash resources (111) (114)
Balance Sheet (Rmillion)
2000 1999
Property, plant, equipment and investments 4 197 4 009
Long-term receivable 210 210
Inventories and accounts receivable 2 220 2 070
Cash resources 699 810
Total assets 7 326 7 099
Current liabilities 1 057 1 102
Total capital employed 6 269 5 997
Equity and liabilities
Equity 3 916 3 743
Deferred taxation 771 662
Borrowings - short and long-term 1 422 1 427
Provisions 154 146
Minority interests in subsidiaries 6 19
6 269 5 997
Number of shares (000)
- in issue 100 865 100 777
- weighted average 100 809 100 575
Net asset value per share (cents) 3 882 3 714
Segmental Analysis (Rmillion)
REVENUE EARNINGS
BEFORE INTEREST,
TAX AND DEPRECIATION
2000 1999 2000 1999
Sugar 2 528 2 099 376 349
Starch & glucose 899 847 158 136
Aluminium (50%) 1 015 652 112 54
Property 137 33 23 (5)
Triangle 62 51
Group administration 25 7
Continuing operations 4 579 3 631 756 592
Building materials 455 413 42 24
Textiles 331 355 4 24
Group total 5 365 4 399 802 640
EARNINGS CAPITAL
BEFORE INTEREST EMPLOYED
AND TAXATION
2000 1999 2000 1999
Sugar 319 302 1 640 1 545
Starch & glucose 100 95 1 266 1 270
Aluminium (50%) 102 45 2 284 1 988
Property 23 (6) 315 252
Triangle 62 51
Group administration 24 6 357 550
Continuing operations 630 493 5 862 5 605
Building materials 35 17 232 225
Textiles (5) 13 175 167
Group total 660 523 6 269 5 997
Additional information about the Group is available at our
website: http://www.tongaat.co.za
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