AFRICAN HARVEST LIMITED
("Afharv")
PROFIT WARNING ANNOUNCEMENT
Shareholders are advised that earnings for the year ending 30 September 2001
are expected to be approximately 50% lower than those achieved in FY2000 (48
cents per share attributable).
The main reasons for the anticipated decline in earnings relative to the
previous year are:
- lower earnings from strategic investments and trading;
- lower interest income as a result of the R1.4billion decapitalisation of the
Company which took place in December 1999;
- the continuing focus on building operating businesses with a long-term cash-
generating capacity, which has meant that substantial operating costs have
been, and will continue to be, incurred up-front, with increasing revenues only
expected in the future.
The strategy of Afharv over the past eighteen months has been to eliminate
passive holdings, repay excess cash and build strong businesses with
sustainable annuity income. While this strategy has had a negative impact on
earnings in the short term, we are pleased with the development of the
underlying businesses, and with the positioning of African Harvest as a new
South Africa company. The benefits of this strategy are likely to flow through
to improved earnings and return on equity in the medium term.
While the results for the full year should show an increase in earnings for our
operating businesses - African Harvest Capital and African Harvest Fund
Managers - the increase will not be sufficient to offset the factors mentioned
above.
For the first six months of the year, earnings performance for Afharv is
expected to be slower than that expected in the second half of the financial
year.
Cape Town
6 March 2001
African Harvest Limited
Sponsor
Deutsche Securities (SA)(Pty) Ltd
Reg 1995/011798/07
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