Agriculture and agroprocessing business Tongaat Hulett has continued to make steady progress in the implementation of its turnaround strategy and in returning the group to a sustainable growth path.
During the six months ended September 30, the group experienced strong local demand across all sugar businesses and achieved good market share gains.
However, the company on December 6 said the interim period “presented several additional obstacles to navigate”, such as hyperinflationary effects and higher input costs in Zimbabwe, a disappointing milling performance in South Africa owing to Covid-related maintenance delays, as well as significant challenges and losses related to the civil riots in South Africa in July.
All of these challenges also weighed on the revenue and profits of the property business, though the obstacles were countered by “much lower finance charges” which Tongaat said contributed to the group generating profit before tax growth for the period of more than 20%.
However, during the period, the effective tax rate for the period was 97% owing to deferred tax assets not being provided for tax losses in South Africa and the non-deductible net monetary loss; and since the majority of the profits are generated in Zimbabwe, and the interest and tax are carried in South Africa, Tongaat’s share of the profits for the period is negative.
Taking all of this into account, Tongaat on Monday said it would be reporting a loss of R224-million for the period, equating to a loss a share of R1.66.
Its headline loss for the period will be about R175-million, or R1.30 a share.
The release of the interim results is scheduled for December 9.