South Africa's Tongaat FY earnings rise by 6 percent

Reuters

JOHANNESBURG (Reuters) - South African sugar producer Tongaat Hulett reported a 6 percent increase in full-year earnings on Monday, after softer global sugar prices and weak domestic demand weighed.

The company said diluted headline earnings for the year to end-March totalled 1,022.3 cents a share from 961 cents the previous year.

Local producers such as Tongaat say the world price of sugar is lower than the cost of their production resulting in money-losing sales.

Chief Executive Peter Staude told Reuters import tariffs introduced in Zimbabwe and South Africa in April would benefit sales and prices in the next financial year.

"There is an underlying trend of volatility in the world sugar price," he said. "But imports dropped dramatically in April and May after some protection came in."

Total sugar output rose 13.5 percent to 1.424 million tonnes and is expected to rise 1,800 million tonnes over the next four years.

The company said it expects international sugar prices to stabilise and import protection to help sales volumes.

Tongaat Hulett has interests in land management and property development, but its main business is sugar production and milling.

The Durban-based company lauded the Zimbabwean authorities for acting swiftly to remove illegal settlers off its sugar plantations last week. [ID:nL6N0O8228].

Shares of the company were down 0.4 percent at 121.99 rand at 0838 GMT, slightly underperforming Johannesburg's All-Share index, which was flat.

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