July unrest cost Tongaat Hulett R158 million

accreditation
0:00
play article
Subscribers can listen to this article
Tongaat Hulett has reduced its debt from R11.7 billion in the 2020 interim, to R6.9 billion in the six months ended 30 September 2021.
Tongaat Hulett has reduced its debt from R11.7 billion in the 2020 interim, to R6.9 billion in the six months ended 30 September 2021.
Tongaat Hulett

Sugar producer Tongaat Hulett’s restructuring has gained momentum, following the reduction of its debt but its R2 billion rights issue is still on the cards.

On Thursday, Tongaat released its interim results for the six months ended 30 September 2021. The results showed that its debt was down to R6.9 billion from R11.7 billion on 30 September 2020, meaning it had reduced its debt by 41%.

The group’s finance costs were down by 50% due in part, to the debt reduction, while its revenue rose by 5% to R8.5 billion, and its operating profit fell by 23% to R1.3 billion. Profit before tax increased by 23% to R677 million.

The sugar maker is working on recovering from a financial scandal, following a 2019 finding that it had inflated its financials by almost R12 billion over a seven-year period.

In addition to its debt woes, Tongaat had to contend with the impact of Covid-19, the July unrest in KwaZulu-Natal, unfavourable weather conditions and hyperinflation in Zimbabwe. 

The sugar producer said the unrest resulted in a loss of business of about R158 million, due to lost production capacity and cane arson fires.

“In addition, R38 million was lost through the looting of sugar in a third-party warehouse. The third-party has been invoiced for the recovery thereof, with R12 million having been received in November 2021,” said the company in its results statement.

Last month, Tongaat announced a R4 billion rights issue, with R2 billion underwritten by Mauritius-based Magister Investments.

“It is time for a new chapter for Tongaat Hulett. We believe that through a rights offer of up to R4 billion, Tongaat will unlock long-term growth, protect intrinsic shareholder value and create a legacy for the many people dependent on the Tongaat business across SADC (South African Development Community),” said Tongaat CEO Gavin Hudson.

We live in a world where facts and fiction get blurred
In times of uncertainty you need journalism you can trust. For 14 free days, you can have access to a world of in-depth analyses, investigative journalism, top opinions and a range of features. Journalism strengthens democracy. Invest in the future today. Thereafter you will be billed R75 per month. You can cancel anytime and if you cancel within 14 days you won't be billed. 
Subscribe to News24
Rand - Dollar
18.01
-1.3%
Rand - Pound
20.11
+0.1%
Rand - Euro
17.64
-0.4%
Rand - Aus dollar
11.55
-0.0%
Rand - Yen
0.12
-1.0%
Gold
1,713.07
-0.2%
Silver
20.66
+0.1%
Palladium
2,253.50
-0.2%
Platinum
925.00
+0.3%
Brent Crude
93.37
+1.7%
Top 40
59,416
+0.4%
All Share
65,833
+0.3%
Resource 10
63,279
-0.6%
Industrial 25
80,027
+1.0%
Financial 15
13,997
+0.3%
All JSE data delayed by at least 15 minutes Iress logo
Company Snapshot
Editorial feedback and complaints

Contact the public editor with feedback for our journalists, complaints, queries or suggestions about articles on News24.

LEARN MORE
Government tenders

Find public sector tender opportunities in South Africa here.

Government tenders
This portal provides access to information on all tenders made by all public sector organisations in all spheres of government.
Browse tenders