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REVIEW
UnauditedInterim
InterimResults
Resultsfor
forthe
sixsix
months
ended
30 30
September
2011
months
ended
September
2013
Unaudited
ted Interim
Results for the six months ended 30 September 2011
GROUP S
TATEMENT OF C
OMPREHENSIVE INC
OME
ST
COMPREHENSIVE
INCOME
GROUP S
TATEMENT OF CA
SH FL
O WS
ST
CASH
FLO
Unaudited Unaudited
6 months
6 months
ended
ended
30.09.13
30.09.12
(Note 5)
US$000
US$000
Revenue
51 982
90 700
Operating profit
Net finance charges
10 990
(4 090)
17 380
(3 174)
23 289
(6 794)
6 900
14 206
16 495
(3 661)
(4 138)
5 117
10 545
12 357
710
519
1 230
5 827
11 064
13 587
Note 1
Note 2
(1 783)
(169)
5 658
174 239
(163)
10 901
(53)
13 534
193 021
193 021
193 021
2.9
5.6
7.0
GROUP S
TATEMENT OF FINANCIAL POSITION
ST
Unaudited Unaudited
As at
As at
30.09.13
30.09.12
(Note 5)
US$000
US$000
Audited
As at
31.03.13
(Note 5)
US$000
ASSETS
Non-current assets
238 920
240 752
243 518
200 228
35 303
3 389
198 247
39 342
3 163
202 428
37 917
3 173
Current assets
162 211
140 079
119 787
37
3
70
26
Total Assets
39
3
47
28
Unaudited Unaudited
6 months
6 months
ended
ended
30.09.13
30.09.12
(Note 5)
US$000
US$000
Audited
Ye a r
ended
31.03.13
(Note 5)
US$000
786
622
664
537
23 602
589
901
447
635
359
20 148
47
10
25
24
793
935
154
881
359
10 665
401 131
380 831
363 305
10 990
6 617
(1 371)
(68)
12 621
(44 132)
7 313
(4 090)
(300)
17 380
7 403
16
3 050
(25 599)
5 734
(3 174)
-
(12 420)
4 810
11 648
(5 420)
1 071
356
(8 889)
369
(17 585)
861
(3 993)
(8 520)
(16 724)
45 716
(16 366)
27 043
(13 504)
22 113
(16 691)
29 350
13 539
5 422
12 937
9 829
346
10 665
10 319
10 319
23 602
20 148
10 665
Unuadited Unuadited
6 months
6 months
ended
ended
30.09.13
30.09.12
(Note 5)
US$000
US$000
Audited
Ye a r
ended
31.03.13
(Note 5)
US$000
Notes
1.
2.
EQUITY AND LIABILITIES
Capital and reserves
Shareholders interest
216 560
208 269
210 902
15 442
128 077
73 041
15 442
128 136
64 691
15 442
128 246
67 214
Non-current liabilities
74 229
74 792
75 423
Deferred tax
Provisions
64 473
9 756
63 721
11 071
64 296
11 127
110 342
97 770
76 980
31 461
978
77 903
41 100
56 670
28 427
48 553
401 131
380 831
363 305
Current liabilities
Trade and other payables
Current tax liability
Short term loans
Total Equity and Liabilities
Audited
Ye a r
ended
31.03.13
(Note 5)
US$000
3.
4.
5.
23 289
11 918
450
(3 729)
(12 186)
(1 300)
(6 794)
-
(4 093)
3
(3 232)
58
(6 854)
60
(4 090)
(3 174)
(6 794)
(1 637)
(177)
31
(3 673)
12
(4 141)
3
(1 783)
(3 661)
(4 138)
Depreciation
Depreciation of property, plant and equipment
6 617
7 403
11 918
1 940
814
3 299
109
6 909
2 214
2 754
3 408
9 123
Nondistributable
reserves
US$000
Retained
income
US$000
To t a l
US$000
15 442
-
128 299
-
53 386
241
197 127
241
15 442
128 299
53 627
197 368
13 587
13 534
13 647
(60)
13 284
250
(53)
(363)
310
15 442
-
128 246
(169)
67 214
5 827
210 902
5 658
15 442
128 077
73 041
216 560
Comparative figures have been restated with the effect of the compulsory adoption of the revised IAS 19 on
profit or loss for the year ended 31 March 2013 (with the 6 months ended 30 September 2012 in brackets)
being a decrease in operating profit of US$81 000 (2012: US$16 000), a corresponding tax charge of US$
21 000 (2012: US$4 000) and net profit for the period of US$60 000 (2012: US$12 000). Other
comprehensive income increased by US$310 000 (2012: nil) after tax. The effect on the statement of
financial position at 31 March 2013 was a decrease in provisions for retirement benefits of US$661 000
(2012: US$309 000) and increases in equity and deferred tax of US$491 000 (2012: US$229 000) and
US$170 000 (2012: US$80 000) respectively.
6.
Currency of reporting
The financial statements are reported in United Sates Dollars (US$). This is the functional currency of the Group.
DIRECTORS: M H Munro (Chairman), S D Mtsambiwa (Chief Executive Officer), P H Staude, S L Slabbert, L R Bruce, N Kudenga, J P Maposa, S G Nhari, J E Chibwe, F D A Musikavanhu
11 November 2013
CHAIRMANS REVIEW
CHAIRMANS
REVIEW
Unaudited
Results2013
for the six months end
Unaudited Interim Results for the six months
ended Interim
30 September
Revenue of US$52 million (2012: US$90,7 million) - 42.7%
Operating profit of US$11 million (2012: US$17,4 million) -36.8%
Profit for the period of US$5.8 million (2012: US$11,1 million) - 47.3%
COM
MENT
AR
Y
OMMENT
MENTAR
ARY
The Companys sugar production for the period to 30 September 2013 amounted to
178 946 tons compared to 160 910 tons for the same period last year, an increase
of 11,2%. Total cane deliveries to the mill amounted to 1 409 062 tons (2012:
1 349 467 tons), an increase of 4,4%.
The private farmers responded positively to the accelerated rehabilitation initiatives
embarked upon in 2011, collectively delivering 650 945 tons of cane over the six
month period to 30 September 2013 (2012: 581 460 tons), an increase of 12,0%
inclusive of cane deliveries from Green Fuel amounting to 134 386 tons (2012:
178 689 tons). The Companys cane deliveries over the period amounted to 758
117 tons (2012: 768 007 tons), a decrease of 1,3%.
Revenue for the six month period to 30 September 2013 amounted to US$52
million (2012: US$90,7 million), a decrease of 43%. Operating profit and profit
for the period totalled US$11 million (2012: US$17,4 million) and US$5,8 million
(2012: US$11,1 million) respectively. The business experienced severe pressure
from significantly lower international sugar prices and from a surge in sugar imports
into the domestic market which significantly reduced domestic sales volume. With
the changing dynamics in the European Union, the price levels that the business is
achieving for sales into the EU this season are averaging some 6 US cents per pound
lower than the levels in the last two years. Cane valuations have been impacted by
lower prices and the effect of curtailed root replanting as a consequence of the
current water dynamics.
The industrys domestic and export sales volumes for the period to 30 September
2013 totalled 192 542 tons (2012: 247 741 tons), a 22,3% decrease. The
Companys share amounted to 84 990 tons (2012: 117 532 tons), a 27,7%
reduction as a result of lower local market sales and a timing difference on export
shipments.
The trading environment has added impetus to the drive to reduce costs of sugar
production, with substantial reductions being achieved in the current season.
Operating cash flow, before working capital, for the six months to 30 September
2013 amounted to US$28,9 million (2012: US$27,8 million). The US$36,8
million absorption of cash in working capital (2012: US$19,9 million) whilst
consistent with the seasonal peak cash demand, was exacerbated by a large sugar
stock build up.
total sugar production for the current season is expected to be between 226 000
and 235 000 tons (2012/13 season: 228 000 tons).
With the low dam levels and the corresponding mitigating actions related to irrigation
to protect the substantial current investment in sugar cane roots, cane expansion and
root replanting for both private farmers and Company estates have been curtailed, to
be resumed once the dam levels recover. For the first time in many years, the rainfall
forecast in the catchment area of the dams is for La Nina (wetter weather pattern)
compared to the dry El Nino of the past number of years. Should the water inflow in
the coming summer be similar to the lower inflow periods during the last 8 years,
then it would necessitate a reduction of irrigation to some 50% of normal levels,
which would substantially reduce cane yields and sugar production.
A period of unsustainably low international prices has been experienced following
two seasons of exceptionally good weather conditions for sugar cane growing globally
and low Government controlled ethanol prices in Brazil. The changes in the EU are
on-going, with some fundamentals remaining in place, including duty free access for
Zimbabwe. At present, this benefit is being eroded by the EU allowing additional
imports at reduced duty and the low world price. The business is focusing a great deal
of attention in multiple areas on achieving the best possible outcome in terms of
sugar prices, the mix of sugar flow destinations and combating unfair import
competition. The sugar industry in Zimbabwe is in a receptive engagement with
Government to restrict imports. Local market sales are being lost to imports as a
result of the current low world price, leading to increased export volumes at lower
prices. Generally, the most vulnerable to these dynamics are rural communities and
emerging farmers.
The Sugar Industry, which directly employs about 24 000 people of which 5 600
workers are employed by the indigenous private farmers, is in an important recovery,
growth and expansion phase. A central part of this recovery is the substantial
development of indigenous private farmers. As at the end of 2012/13 season,
some 670 active private farmers on 11 200 hectares delivered 853 000 tons of
cane to the Tongaat Hulett sugar mills and generated US$56 million in revenue.
There is sufficient milling capacity to double the current number of indigenous private
farmers and their labour force and increase their cane production and deliveries to the
mills correspondingly with Tongaat Hulett as a key development partner.
As part of its on-going objective to economically empower communities around its
operations in Zimbabwe, the Company has embarked on a socio-economic upliftment
drive to create value for relevant entrepreneurs, by developing sustainable new business
enterprises and outsourced services within its value chain, with particular focus on
employment creation for the youth.
OUTL
O OK
OUTLO
Industry production estimates for the 2013/14 season are between 460 000 and
478 000 tons sugar (2012/13 season: 475 000 tons). The Companys share of
M H Munro
Chairman
11 November 2013
DIRECTORS: M H Munro (Chairman), S D Mtsambiwa (Chief Executive Officer), P H Staude, S L Slabbert, L R Bruce, N Kudenga, J P Maposa, S G Nhari, J E Chibwe, F D A Musikavanhu
S D Mtsambiwa
Chief Executive Officer