- Revenue down 3% to R14 918 million (2020: R15 382 million)
- Headline loss per share of 822 cents (2020: loss of 211 cents)
- Continued negative impacts from hyperinflation in Zimbabwe
- A 42% reduction in group debt from disposals, as well as reduced costs, working capital improvements and operational efficiencies
Johannesburg – Hippo Valley Estates parent, Tongaat Hulett’s financial performance woes continued in the full-year ended 31 March 2021 as recovery continues to be hampered by the COVID-19 effects as well as the negative impacts from hyperinflation in Zimbabwe.
The JSE-listed sugar giant saw its headline loss for the year widen to R1.1 billion compared to a headline loss of R285 million recorded in the prior year.
This led to a loss per share of 822 cents (2020: loss of 211 cents).
“There were a few dominant causes for the reduction in headline earnings, with two thirds of the impact arising from hyperinflation in Zimbabwe and the reduction in property sales due to COVID-19, with the refinery loss and others making up the remaining third,” Tongaat Hulett noted in a statement.
Group revenue was down 3% to R14 918 million from R15 382 million recorded in the previous year while operating profit was down 44% to R1 818 million (2020: R3 257 million).
Hyperinflationary net monetary loss reduced to R626 million (2020: loss of R1 296 million).
With the Group still recovering from an accounting scandal involving former executives just over two years ago, it decided not to declare a dividend in the current year as it focuses on a turnaround plan centred around improving governance and control, debt reduction and repositioning the business as a sustainable entity.
Those efforts, quite significantly, are beginning to yield positive results, notwithstanding the economic backdrop and the COVID-19 pandemic.
The Group reported successful asset disposals and stringent cash flow management and cost reduction efforts, which supported a 42% reduction in debt levels during the year.
“The Mozambique sugar operations delivered solid results, almost doubling its operating profit,” the Group said.
“The Zimbabwean operations are significant and continued performing well despite ongoing hyperinflation effects. The South African operations made excellent progress, as evidenced by the financial results in the first half of the year.”
On the outlook, the Group said that it will continue to pursue the repatriation of dividends from Zimbabwe. R323 million in dividends was received from Zimbabwean sugar operations during the period under review.
“Cash generation, debt reduction to a sustainable level, liquidity management, the ongoing review of the Group’s capital structure, and conclusion of the South African debt refinance remain as priorities,” the Group added.
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