| Wed 1 Aug 2001, 0:00 | | The Tongaat-hulett Group Limited - Interim Results |
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THE TONGAAT-HULETT GROUP LIMITED
Registration No. 1892/000610/06
INTERIM RESULTS
for the half-year ended 30 June 2001
- Revenue up 20% to R2,6 billion
- Operating earnings up 23% to R311 million
- Headline earnings down 4% in line with forecast
- Interim dividend maintained at 62 cents per share
The unaudited results of the Group for the half-year ended 30 June 2001 have
been prepared on a basis consistent with the prior year's interim report and
the audited annual financial statements at 31 December 2000 except for the
changes in accounting policy detailed below. As earnings from sugar
operations are seasonal, one half of the sugar division's current year
estimated results have, as in previous years, been included in the income
statement for the half-year.
The following accounting statements have been adopted with effect from 1
January 2001: AC 105 (Leases), AC 107 (Events After the Balance Sheet Date),
AC 116 (Employee Benefits) and AC 133 (Financial Instruments: a been
restated for the accounting policy changes, where applicable, other than for
AC 133 which requires prospective application. The implementation of AC 133
had a R3 million unfavourable effect on the current half-year's earnings
after tax.
INCOME STATEMENT
Half-year Half-year % change Year ended
30 June 30 June on prior 31 December
R million 2001 2000 2000
Revenue -
continuing operations 2 552 2 123 20,2 4 579
Continuing operations
Earnings before
interest and tax 311 253 22,9 568
Triangle dividend 22 21 62
Net interest (55) 20 9
Earnings from
continuing operations 278 294 (5,4) 639
Discontinuing
operations (5) (12) 15
Earnings before
exceptional items 273 282 (3,2) 654
Exceptional items (1) (2) (138)
Earnings before tax 272 280 (2,9) 516
Tax (55) (67) (145)
Earnings before
exceptional items (55) (50) (123)
STC (5) (18) (26)
Exceptional items 5 1 4
Earnings after tax 217 213 1,9 371
Share of associate
company's loss (10) (4) (15)
Minority shareholders 1 3 12
Total net earnings 208 212 (1,9) 368
Headline earnings 204 213 (4,2) 502
Earnings per share (cents)
Total net earnings
Basic 206,2 210,3 365,0
Diluted 205,0 209,3 363,3
Headline earnings 202,2 211,3 (4,3) 498,0
Dividend per share
(cents) 62,0 62,0 212,0
CASH FLOW STATEMENT
Half-year Half-year Year ended
30 June 30 June 31 December
Rmillion 2001 2000 2000
Earnings before
exceptional items 273 282 654
Depreciation 76 70 142
Change in working
capital (102) (141) (317)
Tax paid (9) (21) (38)
Cash flow from
operations 238 190 441
Property, plant and
equipment:
New project
expenditure (88) (186) (349)
Replacement
expenditure (42) (34) (44)
Net proceeds on
disposal of:
Property, plant and
Equipment 9 11 68
Non-core operations 83
Other capital items (28) (3) (8)
Dividends paid (151) (147) (209)
Net cash flow 21 (169) (101)
Borrowings -
movement in aggregate 136 40 (5)
AC 133 adjustment (73)
Net movement in cash
resources 84 (129) (106)
BALANCE SHEET
Half-year Half-year Year ended
30 June 30 June 31 December
Rmillion 2001 2000 2000
Assets
Property, plant and
Equipment 4 203 4 123 4 175
Financial instruments 257 210 210
Investments 34 24 22
Inventories 804 938 844
Accounts receivable 1 414 1 154 1 376
Cash resources 783 681 699
Total assets 7 495 7 130 7 326
Equity and liabilities
Shareholders' equity 4 125 3 971 4 073
Deferred tax 820 704 771
Borrowings -
long and short-term 1 558 1 467 1 422
Minority interests in
Subsidiaries 5 16 6
Provisions 154 146 154
Accounts payable 833 826 900
Total equity and
Liabilities 7 495 7 130 7 326
Number of shares (000)
- in issue 100 922 100 808 100 865
- weighted average 100 890 100 794 100 809
Net asset value per share
(cents) 4 087 3 939 4 038
SEGMENTAL ANALYSIS
Half-year Half-year % change Year ended
30 June 30 June on prior 31 December
Rmillion 2001 2000 half-year 2000
REVENUE
Sugar 1 402 1 232 13,8 2 528
Starch & glucose 475 412 15,3 899
Aluminium (50%) 620 443 40,0 1 015
Property 55 36 52,8 137
Continuing
Operations 2 552 2 123 20,2 4 579
Textiles 172 160 331
Building materials 183 229 455
Group total 2 907 2 512 15,7 5 365
EARNINGS BEFORE
INTEREST AND TAXATION
Sugar 195 164 18,9 319
Starch & glucose 58 32 81,3 100
Aluminium (50%) 58 47 23,4 102
Property 7 3 133,3 23
Triangle 22 21 4,8 62
Group administration (7) 7 24
Continuing
Operations 333 274 21,5 630
Textiles (1) (9) (5)
Building materials 2 5 35
Group total 334 270 23,7 660
CAPITAL EMPLOYED
Sugar 1 721 1 453 1 640
Starch & glucose 1 238 1 308 1 266
Aluminium (50%) 2 404 2 231 2 284
Property 341 281 315
Group
administration 812 634 514
Continuing
operations 6 516 5 907 6 019
Textiles 146 162 175
Building materials 235 232
Group total 6 662 6 304 6 426
OTHER SALIENT FEATURES
Half-year Half-year Year ended
30 June 30 June 31 December
Rmillion 2001 2000 2000
Net debt 775 786 723
Net interest (61) 12 (6)
Interest paid (161) (156) (315)
Financial structure
income 60 58 121
Interest capitalized 13 69 113
Interest received 27 41 75
Comprising: (61) 12 (6)
Continuing operations (55) 20 9
Discontinuing
operations (6) (8) (15)
Capital commitments 161 200 152
Contracted 86 83 46
Approved but not
contracted 75 117 106
Guarantees and
contingent liabilities 35 33 38
SUMMARISED STATEMENT OF CHANGES IN EQUITY
Half-year Half-year Year ended
30 June 30 June 31 December
Rmillion 2001 2000 2000
Balance at beginning
of period 3 916 3 793 3 793
Effect of change in
accounting policy
AC 102 - Income taxes (50) (50)
AC 107 - Events after
the balance sheet date 157 162 162
Restated balance 4 073 3 905 3 905
Share capital issued 2 1 1
AC 133 adjustment (7)
Total net earnings for
the period 208 212 368
Dividends paid (151) (147) (209)
Currency exchange rate
changes 8
Balance at end of period 4 125 3 971 4 073
HEADLINE EARNINGS
Half-year Half-year Year ended
30 June 30 June 31 December
Rmillion 2001 2000 2000
Total net earnings 208 212 368
Impairment of assets 147
Add/(less) after tax
effect of:
Surplus on sale of
property held as
fixed assets (7) (3) (19)
Loss on disposal/
closure of operations 2 3 9
Goodwill amortised 1 1 2
Other (5)
Headline earnings 204 213 502
COMMENT ON RESULTS
Strong growth in revenue and operating earnings from the Group's three
internationally competitive businesses in sugar, starch & glucose and
aluminium was in line with expectations and earnings for the half-year ended
30 June 2001 have met the Group's forecast.
Revenue from continuing operations increased by 20 percent to R2,6 billion,
while operating earnings rose by 23 percent to R311 million. The Group
incurred a net interest charge in respect of continuing operations of R55
million for the half-year, compared to net interest received of R20 million
for the same period last year, primarily due to financing costs of the
Hulett Aluminium expansion project commissioned in November 2000. This
resulted in a five percent decline in earnings before tax from continuing
operations and headline earnings for the half-year were R204 million against
R213 million for the same period last year. Headline earnings per share for
the half-year were 202,2 cents and the Board has declared an unchanged
interim dividend of 62 cents for the period.
The sugar division performed well in the six months to 30 June 2001.
Production from South African operations in the current year is expected to
be approximately 865 000 tons of sugar. The reduction in forecast production
against last year, due to a lower rainfall pattern, has been more than
offset by an improvement in export proceeds as a result of increased world
sugar prices and favourable exchange rates. This, together with an increased
contribution from the division's operations in Swaziland and Mozambique, has
resulted in a 19 percent increase in operating income for the six months
under review.
The claim of US$74 million against Tongaat-Hulett Sugar Limited, referred to
in the Annual Report 2000, has been withdrawn by the claimant following a
number of court hearings with costs awarded in favour of the Group.
Triangle, the Group's sugar operation in Zimbabwe, continues to operate
satisfactorily in a difficult economic and business environment and is
expected to produce a crop similar to last year of around 280 000 tons of
sugar. Dividends received to date of R22 million are five percent up on the
corresponding period last year.
Excellent results were achieved by the starch & glucose division, enhanced
by a good performance from the new Kliprivier mill. Earnings before interest
and tax rose by 81 percent to R58 million. There was strong growth in
exports of both value-added and commodity products, supported by modest
growth in the domestic market, mainly through the development of new
business opportunities.
It is pleasing to report that Hulett Aluminium is continuing to grow on its
planned path and new records have been achieved in turnover and operating
profit. The business has responded quickly to changing world market
conditions and has timeously adjusted both its product range and geographic
sales mix to optimise its competitive position. The Group's share
(50 percent) of operating income for the half-year increased by 36 percent
before depreciation and after taking depreciation into account increased by
23 percent to R58 million before interest and tax.
The property division achieved higher sales in its residential and
commercial portfolios and improved on its performance compared to the first
half of last year.
Disposal of non-core operations since December 2000 include the building
materials division, which became unconditional at the end of May, and the
textiles division which is still subject to certain preconditions being met,
including the approval of the Competition Commission.
Prospects
The Group is on track to record solid growth in turnover and operating
earnings, but is unlikely to escape fully the effects of the slowing world
economy. As stated in the Annual Report 2000, higher financing costs will
offset the increase in operational earnings and as a result headline
earnings for the year are expected to be slightly lower than last year.
Dividend declaration
Notice is hereby given that the Board has declared an interim dividend
(number 148) of 62 cents per share in respect of the financial year ending
31 December 2001. Cheques in respect of this dividend will be posted on or
about 3 September 2001 to shareholders registered at the close of business
on Friday, 17 August 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
17 August 2001. Non-resident shareholders' tax will be deducted where
applicable.
The transfer books and register of shareholders will be closed from 18
August 2001 to 24 August 2001, both days inclusive, and all trading in the
shares on or after 20 August 2001 will be ex dividend.
For and on behalf of the Board
C M L Savage D G Aitken
Executive Chairman Group Financial Director
Amanzimnyama, Tongaat, KwaZulu-Natal
1 August 2001
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