Financial Mail and Business Day

Tongaat warns of loss due to unrest

Karl Gernetzky

Sugar producer Tongaat Hulett has warned that it swung into a loss in its six months to endSeptember, weighed down by a litany of issues, including violent civil unrest in July. The group expects to report a headline loss of R266m to R242m, from restated earnings of R241m previously.

Embattled sugar producer Tongaat Hulett has warned it has swung into a loss in its six months to end-September, due to a litany of issues, including SA’s violent civil unrest in July.

The group, valued at only R762m on the JSE, said in an update on Monday it experienced strong local demand across all sugar businesses and achieved good market share gains. Yet the group expects to report a headline loss of R266m-R242m, from restated earnings of R241m previously, weighed down by hyperinflationary effects and higher input costs in Zimbabwe, as well as a disappointing milling performance in SA due to Covid-19related maintenance delays.

JULY’S UNREST HAS ALSO HIT SENTIMENT IN PROPERTY, AND MADE SALES HARDER

The company, which produces about 43% of SA’s sugar and is the biggest employer in KwaZulu-Natal, is battling to recover from an accounting scandal, the second-biggest after Steinhoff’s. It is also trying to whittle down its debt pile, which stood at a net R6.57bn at the end of March.

Tongaat announced in November it may resort to a rights issue of as much as R4bn to settle its finances, saying this would allow it to keep its sugar businesses intact.

CEO Gavin Hudson, who has been leading a turnaround effort since February 2019, said July’s civil unrest has also hit sentiment in the property market, making sales more difficult.

Mauritius-based investment holding company Magister has offered to spend as much as R2bn to underwrite the offer.

FRONT PAGE

en-za

2021-12-07T08:00:00.0000000Z

2021-12-07T08:00:00.0000000Z

https://tisobg.pressreader.com/article/281758452579194

Arena Holdings PTY