Boom pos­si­ble, post-drought

Finweek English Edition - - MARKETPLACE - ed­i­to­rial@fin­week.co.za

Ton­gaat Hulett’s re­sults man­aged to sneak in pos­i­tive growth at the top rev­enue level, but there­after it all went down­hill with all the im­por­tant num­bers be­ing down. The starch and glu­cose oper­a­tions and the land con­ver­sions did well, but the sugar oper­a­tions got killed with profit down from R806m to R124m due to the im­pact of the drought and lower international sugar prices. If the drought is over and we re­turn to nor­mal rain­fall pat­terns, Ton­gaat should be able to re­cover markedly in the next year’s re­sults. Land con­ver­sions have been do­ing re­ally well for the com­pany, but how much land does Ton­gaat have left? Well, there’s a de­tailed 62-page doc­u­ment on its web­site (http://goo. gl/9cqarN) that gives great in­sights. While it only pro­vides five-year tar­gets, the level of de­tail is im­pres­sive and al­lays any fears that Ton­gaat may run out of land any time soon. Con­ver­sions will be a part of this com­pany’s rev­enues and prof­its for a long time to come. The price is al­ready off the lows and I want to dig some more here – a re­turn to nor­mal rain­fall pat­terns could see boom­ing prof­its next year.

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