What Tongaat plans next after ‘appalling’ annual loss
Share price and market value fall as company says sugar sales are under pressure due to oversupply and the sugar tax
Tongaat Hulett’s market value plunged by a fifth on Friday after the sugar producer said it expects to report a loss for the year to end-March. The group’s share price closed 20.4% down at R37.01, the worst level since November 2004. Thanks to two successive years of disappointing results, the stock has fallen nearly two-thirds over the past 12 months alone. In the year to March 2018, headline earnings fell 37.2% to R617m. Those “appalling” results, which had caught the market off guard, prompted Investec analyst Anthony Geard to call for then-CEO Peter Staude to step down. On Friday, under new management, Tongaat shocked the market once again when it said it would report a headline loss per share for the year to end-March of at least R8.03. It said that with its high debt levels and interest costs, “any reduction in operating profit has a larger impact on earnings”. The company, headed by Gavin Hudson since February 1 2019, has appointed advisers and would enter into discussions wi...
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