The sugar producer says operating profit is expected to be at least 15% less than that reported in the year before
Tongaat Hulett said on Thursday that lower sugar prices, a stronger rand and higher imports took the wind out of its sails in the year to March.
Headline earnings per share will drop by at least 30% in the review period, from the year-before period, the company said in a trading update.
Markets reacted negatively to the news, sending the share price down nearly 8% to R85.70, its lowest point since early 2016.
The sugar producer, which has operations in neighbouring countries, including Zimbabwe, Mozambique and Swaziland, said operating profit was expected to be at least 15% less than the R2.33bn reported a year ago.
“The South African sugar operations experienced higher than anticipated import volumes into the local market as a result of inadequate duty protection that prevailed for a period,” according to the trading statement.
“The displaced locally produced sugar was exported in the latter part of the year and was impacted by lower world prices and a stronger currency.”
The KwaZulu-Natal-based company also generates income from land conversion and development activities.
Source: BusinessDay
