Picture: REUTERS
Picture: REUTERS

On Thursday, sugar producer Tongaat Hulett put flesh on the bones of its earlier trading update, saying its full-year headline earnings would drop more than one-third, as lower sugar prices, a stronger rand and higher imports weighed on the firm.

Sugar output increased marginally to 1.171-million tonnes in the year to end-March, from 1.056-million tonnes a year-earlier, with the company attributing the output to partial recovery from the drought.

Tongaat, which has operations in neighbouring countries including Zimbabwe, Mozambique and Swaziland, said operating profit from various sugar operations fell to R837m from R1.056bn.

The starch and glucose operation realised an operating profit of R572m, which was slightly higher than the R510m in the matching period a year ago.

The KwaZulu-Natal-based company also generates income from land conversion and development activities. Operating profit in the segment dropped to R2.27bn from R3.17bn.

The share price was only marginally lower in late trade, suggesting that the statement was not materially different in substance to the one released late in April.