South Africa’s Tongaat Hulett reports a narrower annual loss

PUBLISHED: Fri, 14 Aug 2020 12:20:08 GMT

JOHANNESBURG (Reuters) – South Africa sugar producer Tongaat Hulett on Friday reported a narrower annual loss thanks to an improved performance at some of its operations and increased land sales, sending shares higher.

Tongaat, which processes sugarcane and maize, posted a headline loss per share from continuing operations of 211 cents for the year ended March compared with a loss of 1,226 cents per share in the same year-ago period.

Full-year revenue rose 18% to 15.4 billion rand boosted by improved performance in its sugar operations and good outcomes in its starch and glucose business, Tongaat said.

Shares in the company rose 6.4% by 0719 GMT to 5.45 rand.

The overall results, however, were weighed down by hyperinflation and the currency dynamics in Zimbabwe.

The company, which has been battling high debt, said it had sought a six-month extension on its debt repayments after a dispute over the potential 5.35 billion rand ($307 million)disposal of its starch and glucose operations to KLL Group, a wholly owned subsidiary of Barloworld.

Tongaat said there had been a potential risk it would not meet its end September 30 and December debt obligations.

The company said it now has until end September 2021 to achieve an 8.1 billion rand debt reduction commitment.

The agriculture and agri-processing company, which was embroiled in a financial scandal after revealing accounting irregularities in 2019, has been seeking to cut debt through selling assets, cutting jobs, raising equity and other measures aimed at boosting cash flow.

Tongaat, which did not declare an interim dividend, said its focus would be repaying debt before it reinstated dividends.

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