JSE-listed agriculture and property group Tongaat Hulett on Monday said it expected its headline earnings for the six months ended September 30, to increase by 1.2% to R663-million, compared with the R655-million earned during the prior comparative period.
Headline earnings a share for the half-year were expected to be 592c, compared with 605c in the six months ended September 2012, while total net profit per share for the six months under review was expected to be 632c, compared with 606c in the prior comparative period.
Meanwhile, the company expected its operating profit to increase 7% to R1.38-billion, from R1.29-billion a year earlier, with profit from the land conversion and development operations increasing to R512-million, profit from the starch operations rising to R232-million and profit from the various sugar operations totalling R684-million.
The sugar operations were experiencing pressure owing to significantly lower international sugar prices, particularly for exports into the European Union, as well as owing to increased sugar imports into the local Southern African markets, the company said.
Tongaat stated that this had affected the revenue earned and led to a reduction in the standing cane valuation.
“The pricing pressures have added impetus to the drive to reduce the cost of sugar production, with substantial reductions being achieved in the current season. Unit costs of production are also benefitting as volumes grow.
“Tongaat Hulett’s overall sugar production is continuing to increase this season and is expected to be at the highest level in the past ten years,” the company said.