(Reuters) – South Africa’s top sugar producer Tongaat Hulett Ltd swung to a first-half loss and held back dividend on Thursday, saying the civil unrest in the country had a 158 million rand ($10.06 million) impact on its profit.
The company reported headline loss per share of 188 cents for the six months to September, compared to a profit of 178 cents a year earlier. Tongaat’s 4 billion rand equity raise to cut debt has been initiated, it added.
Tongaat said it does not expect to pay dividends until it reduces debt to a sustainable level. Total borrowings as of Sept. 30 stood at 6.9 billion rand, compared to 11.7 billion rand a year earlier.
It said sugarcane yields have been under pressure across the region and milling performance was generally disappointing due to COVID-19-related maintenance delays as well as significant challenges related to the civil riots.
Still, revenue rose by 5% to 8.5 billion rand, thanks to strong performance by the company’s Zimbabwe and Mozambique sugar operations.
“Operationally, the Group experienced strong local demand across all sugar businesses and achieved good market share gains,” the company said.
Tongaat said it expects lower debt levels to further benefit finance costs in 2022, adding cash generation, reducing debt to a sustainable level, liquidity management and the ongoing review of its capital structure remained as priorities.
($1 = 15.7118 rand)
(Reporting by Muvija M in Bengaluru; Editing by Subhranshu Sahu and Rashmi Aich)
