Tongaat Hulett reported a 45 percent rise in full-year earnings on Monday, as higher export prices and improved local prices gave the South African sugar producer a jab in the arm.
"Local market sales volumes and mix improved due to there being lower imports into the market," said CEO Peter Staude.
"This is reflective of more effective import protection dynamics, improved local market prices and higher prices realised for exports, especially into regional African markets and the EU."
Tongaat Hulett is an agri-processing business which includes integrated components of land management, property development and agriculture, listed on the JSE in 1952, and has a secondary listing on the London Stock Exchange (LSE), which dates back to 1939. It employs some 42 000 people, working in about 27 locations in six countries, South Africa, Botswana, Namibia, Swaziland, Mozambique and Zimbabwe. Murray Munro, a 26-year veteran of the company, serves at the CFO and an executive director.
Tongaat Hulett announced that basic headline earnings per share for the year ended March 31 rose to 852.7 cents from 588 cents in the previous year. Group operating profit increased 39.8 percent to R2.3 billion. The company declared a final dividend of 200 cents per share, up from 60 cents in 2016, bringing the annual dividend to 300 cents per share.
The company has been badly affected by a severe drought that has impacted a wide range of crops and with the El Nino weather phenomenon expected to reform once more in September, analysts expect Tongaat Hulett to take three years to recover fully from environmental ravages. Sugar production amounted to 1.06 million tonnes, up from 1.02 million tonnes in 2016, with the poor conditions holding back larger yields.
To offset the impact of circumstances beyond its control, Tongaat Hulett announced that it would hone its strategic positioning to improve earnings and cash flow.
"Weather and growing conditions over the past two years have masked the substantial progress that is being made with intensive agricultural improvement programmes, increased hectares under cane, irrigation efficiency and power reliability," it said in a statement.
"There is a positive outlook for the full year with earnings' growth expected to continue and the cash-flow momentum expected to be maintained."
