Slide 1: Tongaat Hulett
Tongaat Hulett NOVEMBER 2011
Slide 2: Tongaat Hulett
Tongaat Hulett • > 42 000 Employees • Operations in 6 countries in SADC • Sugar - 14 operations Harare ZIMBABWE • Maize/corn - 6 operations NAMIBIA Triangle Mafambisse Beira CSI Hippo Valley • 359 000 hectares supplying starch and BOTSWANA Gaborone sugar operations Windhoek Sugar Industries CSI Xina
Slide 3: Financial Results for the 6 Months Ended 30 September 2011
FINANCIAL RESULTS FOR THE 6 MONTHS ENDED 30 SEPTEMBER 2011 3
Slide 4: Tongaat Hulett Earnings
Tongaat Hulett Earnings 6 months to 6 months to % R million 30 Sept 2011 30 Sept 2010 Increase Revenue 6 027 4 724 +28% Profit from Operations 1 047 963 +9% o Excluding prior year Pension Fund ESA +26% gain Total Net Profit 597 552 +8% Headline Earnings 501 507 -1% o Minority interest: higher profit
Slide 5: Tongaat Hulett Profit from Operations
Profit from Tongaat Hulett Revenue Operations 6 months to 6 months to 6 months to 6 months to R million 30 Sept 2011 30 Sept 2010 30 Sept 2011 30 Sept 2010 Sugar operations Zimbabwe 364 303 1 179 734 Swaziland 30 19 117 108 Mozambique 267 163 1 082 489 SA agriculture, milling and refining 54 47 1 35
Slide 6: Mozambique Sugar Operations
Mozambique Sugar Operations • Profit from operations: H1 - 2011/12: R267 million (Metical 1 096 million) H1 - 2010/11: R163 million (Metical 739 million) • Higher production and sales volumes • Standing cane value reported in 2010/11 year converted to sugar and sold in 2011/12 • Operating cash flow
Slide 7: Zimbabwe Sugar Operations
Zimbabwe Sugar Operations • Profit from operations: H1 - 2011/12: R364 million (US$ 52 million) H1 - 2010/11: R303 million (US$ 41 million) • US$ operating profit up 27% • Increased H1 sugar production – particularly at Hippo Valley • Extent of harvesting in H1 less standing cane value than last yea
Slide 8: South African Sugar: Agriculture, Milling and Refining
South African Sugar: Agriculture, Milling and Refining • Profit from operations: R54 million (H1 - 2010/11: R47 million) • Unusually large gap between hectares under cane and hectares milled • Lower tonnage available for export from SA Industry • Revenue driven from local market: price increases in
Slide 9: Downstream and Sugar Value Added Activities; Swaziland - Tambankulu Estate
Downstream and Sugar Value Added Activities • Profit from operations: R142 million (H1 - 2010/11: R136 million) Generated from • Botswana and Namibia sugar packing and distribution • Voermol animal feeds - lower volumes (pith availability, high winter rainfall and less on-farm feeding) • Refined exp
Slide 10: Starch Operations
Starch Operations • Profit from operations: R167 million (H1 - 2010/11: R125 million) • Improvement in starch and glucose processing margins • Improved co-product recoveries • Local maize costs contracted below Chicago (CBOT) prices • Starch and glucose volumes grew by 0,5% compared to 2010/11 • Gro
Slide 11: Land Conversion and Development
Land Conversion and Development • 8 600 developable hectares available in South Africa • Opportunistic offers for some semi-bulk land sales turned down • Did not meet Tongaat Hulett’s value criteria • Revenue in H1 generated from 13 developable hectares sold • Umhlanga Ridge Town Centre, Zimbali and
Slide 12: Cash Flow
6 months to 6 months to Cash Flow 30 Sep 2011 30 Sep 2010 • Operating cash flow + R1,555 billion + R929 million • Working capital - R1,044 billion - R956 million • Half year is a high absorption point in the sugar season • Capital o Expenditure on plant and equipment - R359 million - R383 million •
Slide 13: Tongaat Hulett Operations
Tongaat Hulett Operations 13
Slide 14: Value Creation from Land Use Conversion
Value Creation from Land Use Conversion Hectares positioned for development in South Africa • Gross hectares: 13 639 • Developable hectares: 8 600 Land available around Durban for development • North 7 768 gross (4 900 developable) • West 2 047 gross (975 developable) 14
Slide 15: Eight Active TH Land Developments
Eight Active TH Land Developments • Umhlanga Ridge Town Centre, Ridgeside, Kindlewood / Izinga, Zimbali, Zimbali Lakes, Bridge City, Mount Moriah and Riverhorse Valley • 348 developable hectares still to sell • Projected net cash inflow R2,19 billion# (R6,3 million per developable hectare) • To date
Slide 16: Umhlanga Ridge Town Centre
Umhlanga Ridge Town Centre • Exhibits typical development profile • Early anchor uses • Infrastructure front loaded • Early sales / establish brand • Node established • Land scarcity • Increase density Gateway Phase 1 Phase 2 To come Developable hectares 28 44 47 23 Net cash profit 64 98 403 318 Net
Slide 17: Cornubia and Sibaya
Cornubia and Sibaya Cornubia South • Integrated Housing (eThekwini) • 369 developable hectares (667 gross) • Industrial • 104 developable hectares (133 gross) Nodes 1 &5 • Sale process to optimise value CORNUBIA • New Town NORTH SIBAYA • 278 developable hectares (382 gross) • Bulk offers turned down
Slide 18: Starch Operations - Competitive SA Maize
19-09-11 Starch Operations - Competitive SA Maize 08-08-11 27-06-11 16-05-11 04-04-11 21-02-11 10-01-11 29-11-10 CBOT - $ (Chicago Maize Price) 18-10-10 06-09-10 26-07-10 14-06-10 03-05-10 16-03-10 02-02-10 18-12-09 18 05-11-09 23-09-09 12-08-09 30/06/09 18/05/09 30/03/09 16/02/09 SAFEX - YM in $ 05
Slide 19: Starch Operations - Maize Dynamics
Starch Operations - Maize Dynamics Forecast South African Maize Crop 2008/09 2009/10 2010/11 2011/12 Production (million tons) 12,05 12,82 10,61 12,13 • End of season maize stocks • May 2011 - 2,2 million tons • May 2012 - ? • Tongaat Hulett uses 630 000 tons per annum • Formula based customers 205
Slide 20: Starch - Operational Improvements
Starch - Operational Improvements • Targets established against international competitors • Capacity utilisation projects • EBIT benefit > R60 million for far away exports • Growth into selected African markets targeted • H1 cost reduction of R15 million • Utilities, yields and co-product separation
Slide 21: Key Focus Areas - Sugar Operations
Key Focus Areas - Sugar Operations • Optimise revenue out of every ton of sugar cane • Facilitate increased cane supply to its mills so as to fully utilise its existing installed milling capacity of some 2 million tons of sugar • Reduce costs to produce sugar throughout the value chain • Evolve next
Slide 22: Good Progress in Increasing Cane Supply
Good Progress in Increasing Cane Supply • Getting the basics right on a sustainable basis • Continue to set “ambitious” short-term targets • Natural time lag before some of the actions lead to more sugar production 22
Slide 23: Zimbabwe - Sugar Production
Zimbabwe - Sugar Production Actual May November Plan 2010/11 2011/12 Estimate ^ 2011/12 Estimate 2014/15 Total hectares under cane 37 815 39 525 39 525 46 348@ as at 1 April (beg. Season) Total hectares milled 33 737* 35 796 35 484 43 836# Cane yield (tcphm) 76,03* 84,87 87,05 84,20 101,78# Total ca
Slide 24: SusCo Launch - 4 November 2011
SusCo Launch - 4 November 2011 24
Slide 25: Zimbabwe - Private Farmers
Zimbabwe - Private Farmers • 15 880 hectares • 2011/12 season will produce 488 000 tons cane • Potential to increase to > 1,4 million tons in the 2014/15 season • Funding • EU funding for replanting of 1 200 hectares • BancABC 4-year revolving US$ 20 - 30 million financing scheme • Tongaat Hulett US
Slide 26: Mozambique - Sugar Production
Mozambique - Sugar Production November Actual May Plan 2011/12 2010/11 2011/12 Estimate ^ 2014/15 Estimate Total hectares under cane 25 272 26 649 26 649 28 243 as at 1 April (beg. Season) Total hectares milled 21 800 24 637 24 572 26 848 Cane yield (tcphm) 72,89 85,63 89,22 80,95 93,59* Total cane
Slide 27: Mozambique - Going Forward
Mozambique - Going Forward • Grow sugar production 30% by 2014/15 season • 2012/13 season • Additional 805 hectares to be harvested • Improvement in yields • Better cane to sugar ratio • Reduce unit costs of production 27
Slide 28: Cane Ownership Mix
Cane Ownership Mix Supply of Cane to Tongaat Hulett South Africa Sugar Mills Actual on Actual on Estimate Plan % Change SA Cane Supply 1 April 1 April 1 April 1 April from 2010 Hectares Under Cane 2010 2011 2012 2014 to 2014 Tongaat Hulett owned 7 745 7 745 7 855 7 468 - 4% Tongaat Hulett leased/co
Slide 29: New Plantings - South Africa
New Plantings - South Africa Target for Season 2009/10 ^ 2010/11 ^ 2011/12 ^ Small scale farmers (hectares) 1 636 3 689 3 713 Commercial and medium scale farmers (hectares) 630 371 340 Tongaat Hulett leased land (hectares) 1 824 1 546 3 970 Total 4 090 5 606 8 023# ^ Information presented at the May
Slide 30: South Africa - Increasing Cane Supply
South Africa - Increasing Cane Supply Actual in Estimate Forecast for SA Cane Milled & Target 2010/11 2011/12 2012/13 Sugar produced 2014/15 Season Season Season Total hectares under cane as at 1 123 907 129 513 137 536 159 259 April (beg. Season) % Hectares under cane milled 80,3% 76,3% 80,0% 85,0%
Slide 31: Yield Improvement - Commercial and Medium Scale Farmers
Yield Improvement - Commercial and Medium Scale Farmers • Root age is fundamental to good yields • Yields for old roots are significantly impacted by drought conditions • To date 8 000 hectares identified where roots > 10 years old • 2011/12 season: R21 million Tongaat Hulett commercial farmer root
Slide 32: Additional Information
Additional Information a =P Tongaat Hulett
Slide 33: Ridgeside
Ridgeside Infrastructure • M41 Interchange completed in December 2010 • Office park infrastructure complete • Phase one and two of Precinct one infrastructure complete • Major electrical sub station structure completed by Municipality • Commissioning March 2012 Top Structures • One hotel and nine of
Slide 34: Umhlanga Ridge Town Centre
Umhlanga Ridge Town Centre • 2 mixed use sites left to sell in Commercial phase • Residential phase of 2 800 high density units commenced • 2 high density residential sites sold to date • Substantial progress on first developer’s building • Services installation virtually completed in the commercial
Slide 35: Izinga
Izinga • Medium to low density residential suburb • Open suburb with cameras and visible street security patrols • Appropriate indigenous landscaping • 280 potential dwelling units to be developed in the current phase (phase 1) • Sites sold to date 110 SR’s and 2 PUD sites • 84 sites transferred to
Slide 36: Cornubia South
Cornubia South • Cabinet approved priority project • Strong intergovernmental relations team led by eThekwini Municipality • Strategic location within northern corridor • Phase 1 • EIA approved • Planning approval in progress • Scarcity of industrial land in eThekwini - huge demand for Phase 1 indus
Slide 37: Kindlewood
Kindlewood • 573 units gated estate development • Comprises • Special residential • Maisonette • Planned unit developments • Phase 1 - sold out • Phase 2 - 79% sold • Launch of phase 3 being planned • 67 families living in the estate • 20 new structures under construction 37
Slide 38: Bridge City
Bridge City • Successful PPP with eThekwini Municipality • New mixed use, high density Town Centre and Business Park in a previously disadvantaged area/township • Regional 500 bed public hospital • Piling and site services underway • Building construction to commence 2012 • 48 000 m2 shopping centre
Slide 39: Sibaya: Nodes 1 and 5 (Bulk Sale Opportunity)
Sibaya: Nodes 1 and 5 (Bulk Sale Opportunity) EIA approval for both Nodes received Node 1 • Developable = 51 ha • Zoning approval received • Permission to sell during 2011 Node 5 • Developable = 65 ha • Permission to sell during 2012 39
Slide 40: Inyaninga: Bulk land sale/Partnership/TH development
Inyaninga: Bulk land sale/Partnership/ TH development • EIA process underway – planned date of approval for development rights – mid 2013 • Phase 1 – envisaged around existing rail – 40 opportunity for multi-modal logistics hub
Slide 41: Airport Cities and Tongaat Hulett Landholding
Airport cities - “Even in today’s rocky economic times, airports and their immediate environments Airport Inner Ring are becoming 21st century commercial anchors, Tongaat Hulett Landholding taking on many features of destination retail 2 515 Gross hectares and urban centers.” Existing rail 1 517 Dev
Slide 42: uShukela Drive: Bulk Sale Opportunity
uShukela Drive: Bulk Sale Opportunity Gross Extent: 137 ha (comprising 57 ha DTP and 80 ha TH) • Formalised joint planning agreement with DTP for EIA and PDA processes • EIA process underway • Expected date of approval of development rights for end 2012 42
Slide 43: Ntshongweni
Ntshongweni • Located on the N3 Growth corridor • Supported by Municipal SDP and LAP’s • New regional centre • Important logistics location • 3 major uses • Residential infill developments • Mixed use centre • Business Park and logistics • Preparation for EIA and PDA processes are underway • Good pr
Slide 44: Zimbali Lakes
Zimbali Lakes Construction of Gary Player golf course by IFA in progress • Excavation of Lakes water body commenced • Amendments to the EIA in respect of the golf course submitted • Resort node potential as semi bulk sale • Potential retirement village being designed 44
Slide 45: Tinley Manor: Bulk Land Sales/Partnership/Own Development
Tinley Manor: Bulk Land Sales/Partnership/Own Development • Largest consolidated property surrounding a river on North Coast • 882 developable hectares 1 042 gross hectares • Full coastal frontage (3,9 km) and access to both sides of Umhlali Lagoon and River Basin • Tinley Manor ski boat launch site
Slide 46: Starch Operations - Additional Financial Data
Starch Operations - Additional Financial Data 6 months to 6 months to R millions September 2011 September 2010 Revenue: 1 210 1 185 Domestic 882 912 Exports 120 107 Co-Products 208 166 Operating Profit 167 125 46
Slide 47: Starch Operations - Volume Data
Starch Operations - Volume Data 6 months to 6 months to Volume (tons) September 2011 September 2010 Local Starch 44 433 44 660 Local Glucose 159 850 158 695 Total Local 204 283 203 355 Export Starch 17 997 17 622 Export Glucose 6 621 6 201 Total Exports 24 618 23 823 Co-Products 77 332 77 548 Total
Slide 48: Starch Operations: Co-product Pricing
Starch Operations: Co-product Pricing Price movement Co-product September 2011 over Major price drivers Comparative Period 50%: International edible oil price and Germ Up 36,9% local oil seeds 50%: Local maize International protein (Soya, fishmeal) Gluten-60 Up 2,8% prices Local maize price/hominy c
Slide 49: Raw Sugar Production
Raw Sugar Production Milling Season Est. Tons ’000 00/01 01/02 02/03 03/04 04/05 05/06 06/07 07/08 08/09 09/10 10/11 11/12 South Africa^ 977 762 868 659 731 760 674 612 652 573 455 490 Mozambique 39 36 71 82 85 115 106 108 108 134 166 240 Swaziland 41 45 50 54 50 56 55 58 56 54 54 57 RSE Zimbabwe *
Slide 50: Zimbabwe - Private Farmers
Zimbabwe - Private Farmers Actual May November Plan 2011/12 2010/11 2011/12 Estimate ^ Estimate 2014/15 Total hectares allocated to 15 880 15 880 15 880 15 880 cane farmers Total hectares under cane as 8 693 10 403 10 403 15 880 at 1 April Total hectares milled 8 693 9 403 9 108 15 880* Cane yield t
Slide 51: Zimbabwe - Own Estates
Zimbabwe - Own Estates Actual May November Plan 2011/12 2010/11 2011/12 Estimate ^ Estimate 2014/15 Total hectares under cane 29 122 29 122 29 122 29 172 Total hectares milled 24 932 26 393 26 376 26 660 Cane yield tcphm 86,28 97,98 100,25 94,76 108,80 Total cane crush (tons) 2 151 256 2 586 000 2 6
Slide 52: Cane Yields
Cane Yields May November Hectares Actual Plan Tongaat Hulett hectares 2011/12 2011/12 Harvested 2010/11 2014/15 Estimate ^ Estimate 2014/15 Xinavane 91,07 100,06 97,17 105,10 11 623 Mafambisse 48,12 63,24 56,64 75,92 8 526 Home Estate 35,10 52,00 49,78 68,68 6 075 Lamego Estate 96,80 92,13 74,39 93,
Slide 53: Mozambique
Mozambique Cane Yield and Sucrose Content Improvement Plans^ Field condition / Drainage Irrigation / Power Supply • Positive drainage pumps • Improved irrigation control • Renewal of one-way floodgates on dykes • Improved bulk water supply from pump • Field layouts and row spacing stations • Upgradi
Slide 54: Triangle Hippo Mafambisse
Triangle Hippo Mafambisse Massingir Xinavane Tambankulu 54
Slide 55: Mozambique Sugar Operations
Mozambique Sugar Operations • Mafambisse • Expansion completed in 2008 • Mill: Tongaat Hulett owns 85% • Agriculture: Tongaat Hulett owns 100% • Xinavane • Mill: Tongaat Hulett owns 88% after major expansion • Agriculture: Tongaat Hulett owns 100% 55
Slide 56: South African Sugar: Agriculture, Milling and Refining
South African Sugar: Agriculture, Milling and Refining • SA sugar industry legislated regulations • 89% deemed local in current season • 11% recognised and valued as exports • Export realisations: R4 612 / ton (H1 2010/11: R3 674 / ton) • 30,5* US c/lb (H1 - 2010/11: 19,0 US c/lb) • R7,22/US$ (H1 -
Slide 57: Government Partnerships with Tongaat Hulett
Government Partnerships with Tongaat Hulett Cane Development Govt. Grant Application of Type of Funding Beneficiary Term (R million) Grant Planting, replanting, Comprehensive • 3 year partnership ratoon management, agricultural support R38 m • 84 beneficiaries • 2008/9, 2009/10, 2010/11 irrigation a
Slide 58: LDC Countries
LDC Countries • 50 LDC countries • 22 sugar producing LDC countries • Countries that have exported into EU Ethiopia Tanzania Togo Senegal Nepal Malawi Mozambique Zambia Sierra Leone Sudan DRC Benin Bangladesh • LDC criteria • Gross national income per capita < US$ 750 • Human asset index based on nu
Slide 59: Sugar Cane Growing Crops
Sugar Cane Growing Crops • Accounted for in terms of International Accounting Standard - IAS 41: Agriculture • Measured and recognised at fair value • Changes in fair value are included in the income statement • Replanting and agricultural costs actually incurred are charged to the income statement
Slide 60: Accounting for Sugar Cane Growing Crops
Accounting for Sugar Cane Growing Crops International Accounting Standards - IAS 41: Agriculture • Sugar cane growing crops are accounted for as biological assets • Measured and recognised at fair value • Changes in the fair value are included in the income statement • The fair value of roots is det
Slide 61: Accounting for Sugar Cane Growing Crops (cont)
Accounting for Sugar Cane Growing Crops (cont) • Fair Value adjustments - over time: zero sum equation in the Income Statement • At time of cane establishment / expansion: costs incurred, cash outflow and fair value gain • Approximately 18 months later: standing cane harvested, sugar produced and so
Slide 62: Growing Crops on the Tongaat Hulett Balance Sheet
Growing Crops on the Tongaat Hulett Balance Sheet 30 Sep 10 31 Mar 11 30 September 2011 South Total Total Total Swaziland Zimbabwe Mozambique Africa Roots Hectares 73 725 75 855 77 206 20 090 3 838 28 614 24 664 Amortised root value 14 024 15 540 19 427 12 177 11 896 16 259 30 182 (Rands per ha) Sta
Slide 63: Growing Crops - Income Statement
Growing Crops - Income Statement • IAS 41 Fair Value Change included in the Income Statement: Six months to 30 September 2011 R million R million South Africa 11 Roots 57 Swaziland -24 Zimbabwe -48 Standing cane -296 Mozambique -178 Change in fair value -239 Change in fair value -239 • Standing cane
Slide 64: Cash Flow: Cane Valuations, Root Planting and Off Crop costs
Cash Flow : Cane Valuations, Root Planting and Off Crop costs highlighted in a Sugar Business R millions H1: 2011/12 H1: 2010/11 FY: 2010/11 Includes all agricultural Operating profit + 1 029 + 949 + 1 606 costs Growing crop fair value adjustment + 239 - 189 - 662 As per Income Statement Root planti
Slide 65: Average Exchange Rates - Effect on Earnings
Average Exchange Rates - Effect on Earnings H1 H1 Average % Change 2011/12 2010/11 Rand/US$ 6,95 7,39 -6% Rand/Euro 9,91 9,58 +3% Rand/Metical 0,24 0,22 +10% US$/Euro 1,43 1,30 +10% • Export proceeds: US$ and Euro (exchange rates at time of export) • Earnings conversion on consolidation (at average
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