| Fri 8 Mar 2002, 0:00 | | The Tongaat Hulett Group Limited - Audited Results |
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THE TONGAAT-HULETT GROUP LIMITED
Registration No. 1892/000610/06
Share code : TOJK
ISIN : ZAE000007449
AUDITED RESULTS AND FINAL DIVIDEND for the year ended 31 December 2001
* Revenue up 12% to R5,1 billion
* Operating earnings up 14% to R584 million
* Headline earnings per share up 20% to 598,4 cents
* Total dividends per share up 27% to 270 cents
The audited results of the Group for the year ended 31 December 2001 have
been prepared on a basis consistent with the prior year except for the
changes in accounting policies detailed below.
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), AC 133 (Financial Instruments: Recognition and
Measurement) and AC 135 (Investment Property). Comparative figures have 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 R21 million favourable effect on the current year's earnings after tax
and resulted in borrowings increasing by R266 million, working capital by
R235 million with reductions in deferred tax of R20 million and equity of
R11 million.
INCOME STATEMENT
Rmillion 2001 2000
Restated
Revenue - continuing operations 5 121 4 579
Earnings from continuing operations
Operating earnings 584 514
Triangle dividend 76 62
Net interest (75) 9
Exchange rate translation gain 255 54
Earnings from continuing operations 840 639
Discontinuing operations (11) 15
Earnings before exceptional items 829 654
Exceptional items (5) (138)
Earnings before tax 824 516
Tax (196) (145)
Earnings before exceptional items (206) (149)
Exceptional items 10 4
Earnings after tax 628 371
Share of associate company's loss (20) (15)
Minority shareholders' share of loss 1 12
Total net earnings 609 368
Headline earnings 604 502
Earnings per share (cents)
Total net earnings 603,4 365,0
Headline earnings 598,4 498,0
Dividends per share (cents) 270,0 212,0
Interim 62,0 62,0
Final 208,0 150,0
BALANCE SHEET
Rmillion 2001 2000
Restated
Assets
Property, plant and equipment 4 281 4 163
Long-term receivable 210 210
Investments 56 22
Inventories 859 844
Accounts receivable 1 715 1 376
Cash resources and deposits 1 125 699
Total assets 8 246 7 314
Equity and liabilities
Equity 4 389 4 038
Minority interests in subsidiaries 5 6
Deferred tax 923 762
Borrowings - long and short-term 1 502 1 422
Provisions 225 185
Accounts payable 1 202 901
Total equity and liabilities 8 246 7 314
Number of shares (000)
- in issue 101 125 100 865
- weighted average 100 934 100 809
Net asset value per share (cents) 4 340 4 003
CASH FLOW STATEMENT
Rmillion 2001 2000
Restated
Earnings before exceptional items 829 654
Depreciation 159 142
Exchange rate translation gain (255) (54)
Other non-cash items 9 1
Tax payments (19) (38)
Change in working capital 44 (325)
Dividends paid (214) (209)
Cash flow from operating activities 553 171
Property, plant and equipment:
New project expenditure (232) (349)
Replacement expenditure (46) (44)
Net proceeds on disposal of:
Property, plant and equipment 33 68
Non-core operations 111
Investments (60) (7)
Net cash flow 359 (161)
Borrowings repaid (242) (5)
Shares issued 9 1
Net movement in cash resources 126 (165)
Cash resources at beginning of year 699 810
Exchange rate translation gain 255 54
AC 133 adjustment 45
Cash resources at end of year 1 125 699
SEGMENTAL ANALYSIS
Rmillion Revenue EBIT Capital Capex Depreciation
Employe
For the year ended 31 December 2001
Sugar 2 631 320 1 800 116 56
Starch & glucose 1 085 148 1 208 52 65
Aluminium (50%) 1 270 134 2 580 107 28
Property 135 28 351 1
Triangle dividend 76
Group (46) 1 105 2 1
Exchange rate
translation gain 255
Continuing operations 5 121 915 7 044 278 150
Discontinuing
operations 472 (4) 9
Group total 5 593 911 7 044 278 159
For the year ended 31 December 2000
Sugar 2 528 319 1 630 81 57
Starch & glucose 899 100 1 266 45 58
Aluminium (50%) 1 015 102 2 284 261 10
Property 137 23 315
Triangle dividend 62
Group (30) 788 1 1
Exchange rate
translation gain 54
Continuing operations 4 579 630 6 283 388 126
Discontinuing
Operations 786 30 130 5 16
Group total 5 365 660 6 413 393 142
Comment on Results
The Group's strategy of creating three internationally competitive
businesses growing through exports, supported by the substantial investment
of some R4 billion over the past few years, has proved to be well timed in
the light of recent events. The substantially enhanced capacity has
provided a platform for growth driven by exports which now account for some
35 percent of total revenue.
Notwithstanding the slowing world economy and tough domestic trading
conditions, the divisions did well to increase revenue from continuing
operations by 12 percent to R5,1 billion and operating earnings by 14
percent to R584 million. The results were boosted by exchange rate gains of
R255 million on translation of strategic cash resources offset by net
interest payable of R75 million. Total net earnings for the year amount to
R609 million compared to R368 million last year and headline earnings per
share increased by 20 percent from 498,0 cents to 598,4 cents.
The Group's balance sheet remains strong. Shareholders' equity has
increased to R4 389 million and net asset value per share to R43,40. Net
borrowings have reduced from R723 million to R377 million, which represents
a net debt to equity ratio of 7,1 percent.
A final dividend of 208 cents per share has been declared, which, together
with the interim dividend of 62 cents amounts to a total dividend of 270
cents per share compared with 212 cents per share for last year.
The decision taken to exit from the remaining non-core activities culminated
in the disposal of the building materials division, effective 31 May 2001,
and the textiles division effective 30 September 2001.
DIVISIONAL REVIEWS
Even though its South African sugar production reduced to 756 000 tons, the
sugar division maintained earnings before interest at R320 million, largely
as a result of a recovery in world raw sugar prices and the weak rand. In
addition, the white sugar premium in US dollar terms improved in the second
half of the year and the division's other Southern African operations also
performed well.
The performance of the starch & glucose division improved substantially,
supplemented by increased exports, resulting in total revenue exceeding R1
billion for the first time, and earnings before interest growing 48 percent
to R148 million. The R800 million investment at Kliprivier some three years
ago has been justified and the major cost impact of this investment has been
absorbed, placing the division firmly into a growth phase. The emphasis on
the export of value added products, which grew by more than 80 percent,
resulted in export revenue doubling.
The aluminium division achieved an important benchmark by generating a
substantial positive cash flow against a background of difficult and
turbulent market conditions. Total revenue of Hulett Aluminium increased by
25 percent to R2,5 billion, and operational earnings grew by 31 percent to
R267 million, 50 percent of which accrues to the Group. These results were
achieved against a decline in the US dollar margins of a range of products.
The division has demonstrated its ability to adapt quickly to changing
market conditions by developing new higher value added products and has
shifted its targeted sales and geographic mix in line with market dynamics.
During the period, it concentrated on establishing and maintaining its
growing international presence through increased sales and market share in
more than 45 countries. Its drive to stimulate domestic downstream aluminium
production is producing gratifying results.
The property division's earnings before interest increased by 22 percent to
R28 million. The year was characterised by firmer demand in commercial,
residential and resort portfolios.
Substantial investments were undertaken in the Umhlanga Ridge New Town
Centre and La Lucia Ridge areas. The division's private/public partnership
with the eThekwini Municipality (Durban) will progress further in the
current year with the commencement of the uShaka Island Marine Theme Park
and the Effingham-Avoca developments.
PROSPECTS
In the year ahead, the Group expects strong growth in volumes, revenue and
operating earnings from its divisions. The attainment of the prime objective
of real growth in earnings per share in 2002, taking into consideration last
year's currency translation boost, will depend mainly on the relative
strength of the rand. Cash flows will however remain positive and the Group
is well placed to deliver increased shareholder value.
For and on behalf of the board
C M L Savage D G Aitken
Executive Chairman Group Financial Director
Amanzimnyama, Tongaat, KwaZulu-Natal
8 March 2002
DIVIDEND DECLARATION
Notice is hereby given that the board has declared a final dividend (number
149) of 208 cents per share for the financial year ended 31 December 2001 to
shareholders recorded in the register at the close of business on Friday 5
April 2002.
The salient dates of the declaration and payment of this final dividend are
as follows:
Last date to trade
ordinary shares "CUM" dividend Wednesday 27 March 2002
Ordinary shares trade
"EX" dividend Thursday 28 March 2002
Record date Friday 5 April 2002
Payment date Monday 15 April 2002
No dematerialisation or rematerialisation of share certificates may take
place between Wednesday 20 March 2002 and Friday 5 April 2002, 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
Wednesday 27 March 2002.
For and on behalf of the board
M A Kennedy
Group Secretary
Amanzimnyama, Tongaat, KwaZulu-Natal
8 March 2002
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