• Significant progress achieved on the business turnaround
• All critical indicators moving in the right direction
• Revenue up 37%
• Operating profit up 95%
• Adjusted EBITDA up 127%
• Cash flow improvement of R1.9 billion

Tongaat Hulett today released its results for the six months to end September 2020, growing revenue by 37% to R8.2 billion and operating profit by 95% to R1.9 billion. Total headline earnings recorded a sharp turnaround, increasing 156% to a profit of R175 million from a loss of R315 million previously,  while cash flow from operating activities improved by R1.9 billion.

The group posted an improved headline loss of R6 million against a previous loss of R517 million.

Tongaat made good progress in achieving its debt reduction milestones, with transactions totaling R6.4 billion concluded to date, of which R5.76 billion was applied towards the group’s debt reduction target of R8.1 billion by 30 September 2021. This includes the sale of the starch business to Barloworld in October 2020.

Tongaat CEO Gavin Hudson said the group had made excellent progress and delivered in tough economic conditions, further impacted by the sudden onset of COVID-19.

“The critical indicators continue moving in the right direction, and I am so proud of how the team has risen to meet the exceptionally challenging conditions. The sugar operations delivered solid results, driven by a strong turnaround in South Africa and good operational performance in Mozambique and Zimbabwe.

Hudson said the Board and Tongaat team were fully focused on the turnaround of the group by delivering on its strategic plan. This included driving efficiencies, building capability in people and processes and continuing to fix the fundamentals to create a platform for sustainable, profitable growth.

“Tongaat is a solid business with significant assets. Now is the time to pivot and look towards future growth. We are well placed to do so, given that our sugar business is a leading agri-business in SADC and our property business has one of the largest portfolios of premier commercial land in KwaZulu-Natal and indeed SA.”

Hudson said, “More remains to be done, but we are happy with the progress to date. Tongaat Hulett’s focus is to continue to position the group favorably and build on both existing opportunities and future diversification prospects.

“We are rebuilding trust in Tongaat Hulett and that is testament to a great team and incredible hard work over the last two years.”