JSE-listed agriculture and agroprocessing group Tongaat Hulett on Friday warned that its operating profit for the six months ended September 30, is expected to be at least 40% below the R1.4-billion earned in the prior comparable period.
The company attributed the decrease to land conversion and development activities, as well as to its sugar operations in South Africa and Mozambique.
In South Africa, the negative impact of imported sugar on the local market volume and pricing experienced during the second half of 2017/18 continued into the first half of the current financial year, it said.
The upward adjustment to the import duty in August was followed by an increase in local prices in September.
Meanwhile, in Mozambique, both local and export revenues were affected by a stronger metical and lower global sugar prices.
Headline earnings for the six months are, meanwhile, expected to reflect a decrease of at least 60% compared with the R661-million reported for the comparable period.
Consequently, headline earnings per share (HEPS) and earnings per share (EPS) for the six months are expected to be below 230c and 252c, respectively.
This is a reduction of at least 60% when compared to HEPS of 574c and EPS of 629c reported for the comparable period, the company noted.