- Sugar producer Tongaat has posted improved results as its restructure gathers momentum.
- Revenue has increased by 37% in the past six months and operating profit is up 95%.
- Under CEO Gavin Hudson, corporate governance and management has undergone a shake-up.
Sugar producer Tongaat has managed to move from a tough period marked by losses, accounting irregularities and debt, to posting improved results, as its restructure gathers steam.
On Friday, Tongaat's results for the six months ended 30 September showed that its revenue has increased by 37% in the past six months to R8.2 billion from R6 billion in 2019, while its operating profit shot up by 95% and its earnings went up 127% to R2.5 billion, from R1.1 billion.
The group has been at the centre of an accounting scandal, which stretched over six years and resulted in it restating its 2017 and 2018 results and its share price dropping by more than 90%.
Since its near collapse, the group has begun its recovery under the leadership of CEO Gavin Hudson, who was appointed in February 2019. Hudson, took over from interim CEO Sydney Mtsambiwa, who was appointed after disgraced former CEO Peter Staude stepped down. Staude and other top managers, have been implicated in the irregularities and the company is taking civil action against them.
- READ | INTERVIEW | Tongaat promises to hold Deloitte accountable for not tracking irregularities on its books
Hudson has shaken up the group's corporate governance and management, focusing on transparency and accountability and begun work on its debt, which stood at R12.6 billion in March this year. In the past six months Tongaat has put R5.76 billion towards the debt, against a target of a R8.1 billion debt reduction by 30 September 2021.
The group’s headline loss improved to R6 million, from R517 million in 2019. Despite its basic headline earnings per share improving by 156% to 130 cents from a 233 loss in 2019, the group is not declaring a dividend.
"Tongaat is a solid business with significant assets. Now is the time to pivot and look towards future growth. We are well placed to do so, given that our sugar business is a leading agri-business in SADC and our property business has one of the largest portfolios of premier commercial land in KwaZulu-Natal and indeed SA," said Hudson on Friday in a statement.
He explained that while there was more work to be done to turn the business around, Tongaat is happy with the progress it has made.
"We are rebuilding trust in Tongaat Hulett and that is testament to a great team and incredible hard work over the last two years," he said.