Slide 1: Tongaat Hulett
Q Tongaat Hulett MAY 2012
Slide 2: Financial Results for the Year Ended 31 March 2012
FINANCIAL RESULTS FOR THE YEAR ENDED 31 MARCH 2012 2
Slide 3: Tongaat Hulett Earnings
Tongaat Hulett Earnings 12 months to 12 months to R million % Change 31 March 2012 31 March 2011 Revenue 12 081 9 681 +25% Profit from Operating Areas 2 006 1 309 +53% Headline Earnings 891 806 +11% Annual Dividends per share 290 cents 250 cents +16% 3
Slide 4: Tongaat Hulett Profit from Operations
Profit from Tongaat Hulett Revenue Operations 12 months to 12 months to 12 months to 12 months to R million 31 March 2012 31 March 2011 31 March 2012 31 March 2011 Sugar operations Zimbabwe 621 454 2 266 1 646 Swaziland 51 17 163 126 Mozambique 402 135 1 437 715 SA agriculture, milling, refining and
Slide 5: Starch Operations
Starch Operations • Operating profit: R363 million (2010/11: R303 million) +20% • Margins benefitted from higher co-product revenues and maize costs previously contracted below Chicago (CBOT) levels • Improved manufacturing plant performance • Starch and glucose sales volumes 1,4% higher than prior
Slide 6: Land Conversion and Development
Land Conversion and Development • Revenue generated from 42 developable hectares sold • Umhlanga Ridge Town Centre, Zimbali, Izinga, Kindlewood, Bridge City, Mount Moriah and Cornubia industrial • Financial results for the year to 31 March 2012 • Profit from operations: R215 million (2010/11: R166 m
Slide 7: Mozambique and Zimbabwe Sugar Operations
Mozambique Sugar Operations • Profit from operations: R402 million (2010/11 R135 million) +198% Metical 1,493 billion (2010/11 Metical 628 million) • Increased sugar production and sales volumes: +42% Zimbabwe Sugar Operations • Profit from operations: R621 million (2010/11 R454 million) +37% US$ 84
Slide 8: South African Sugar and Downstream Operations
South African Sugar and Downstream Operations Profit from operations: R354 million (2010/11: R234 million) +51% • Agriculture, sugar milling and refining: R93 million (2010/11: loss of R7 million) • Higher sugar production volumes: +7% • Tongaat Hulett share of industry: 26% (up from 23%) • Lower co
Slide 9: Cash Flow (R million)
12 months to 12 months to Cash Flow (R million) 31 March 2012 31 March 2011 • Operating cash flow - IFRS format 1 757 894 (before working capital and interest, after tax) o R863 million improvement • Operating cash flow - before root planting 2 258 1 294 (before working capital, interest and tax) o
Slide 10: Starch Operations
Starch Operations @ Tongaat Hulett 10
Slide 11: Tongaat Hulett Starch maize prices
11 14/05/12 26/03/12 06/02/12 19/12/11 31/10/11 12/09/11 25/07/11 06/06/11 18/04/11 28/02/11 10/01/11 22/11/10 04/10/10 16/08/10 12,82 million tons 10,36 million tons 11,12 million tons 28/06/10 10/05/10 South African Maize Crop 16/03/10 26/01/10 CBOT - $ 03/12/09 15/10/09 26/08/09 07/07/09 18/05/09
Slide 12: Land Conversion and Developments
Land Conversion and Developments 8 600 developable hectares 13 607 gross hectares 12
Slide 13: Increasing the Pace of Land Conversion
Increasing the Pace of Land Conversion Expected cash Status - Developable realisation# Area Developable hectares hectares to sell (R m/developable sold hectare) 122 ha sold Umhlanga Ridge Town Centre 20 16,0 (3 ha this period) Ridgeside 42 ha sold 62 15,1 193 35 ha sold Izinga / Kindlewood 72 3,6 (1
Slide 14: Increasing the Pace of Land Conversion
Increasing the Pace of Land Conversion Developable Area Ready for Development ^ hectares to sell Cornubia New Town - Phase 1 Expect first sales year by March 2014 26 Cornubia New Town - Phase 2 Expect first sales year by December 2014 252 Sibaya Node 5 By March 2014 76 iNyaninga By March 2014 550 uS
Slide 15: Cornubia map
N2 R102 M4 CORNUBIA NORTH (AIRPORT PHASE) 5 CORNUBIA NORTH (PHASE 1) 1 SIBAYA Industrial Integrated Housing CORNUBIA SOUTH New M41 Town UMHLANGA RIDGE
Slide 16: Airport cities
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 17: Sugar Operations
Sugar Operations @ Tongaat Hulett 17
Slide 18: Grow Sugar Production
Grow Sugar Production Sugar Tons Raw 2010/11 2011/12 2012/13 2014/15 Previously Production Sugar Actual Actual Estimate # Plan # Achieved (Year) at Capacity # South Africa 455 000 486 000 (7%) 537 000 - 610 000 801 000 (65%) > 1 000 000 (106%) 977 000 (2000/01) Zimbabwe 333 000 372 000 (12%) 450 000
Slide 19: Increase in Hectares Under Cane
Increase in Hectares Under Cane 1 April 1 April 1 April 2011 1 April 2012 1 April 2013 1 April 2014 Hectares 2009 2010 Actual Actual Estimate ^ Estimate ^ Actual Actual South Africa 119 817 123 907 129 513 137 652 # 147 158 159 259 Zimbabwe 37 815 37 815 38 626 43 185 45 069 46 348 Mozambique 23 253
Slide 20: Mathonsi July 2011
Mathonsi July 2011 20
Slide 21: Mathonsi May 2012
Mathonsi May 2012 21
Slide 22: Movements of Cane Between Sugar Mills
Movements of Cane Between Sugar Mills Within Close Proximity – 2012/13 Season • Zimbabwe • Chisumbanje Estate • 30 000 - 60 000 tons sugar • South Africa • 1 year contract, for cane from south of Durban • 12 000 - 15 000 tons sugar 22
Slide 23: Increasing Yields, Root Age and Root Replacement
Increasing Yields, Root Age, Root Replacement and Impact on Hectares Milled versus Hectares Under Cane Tons cane per 2010/11 2011/12 2012/13 2014/15 hectare Actual Actual Estimate ^ Plan ^ South Africa * 38,5 47,3 47,0 - 49,8@ 55,9 Zimbabwe 76,3@ 86,6 91,9 - 94,6@ 101,8 - Tongaat Hulett 86,3 95,9 10
Slide 24: South Africa - Increasing Sugar Production
South Africa - Increasing Sugar Production Actual Cane Milled & Estimate 2012/13 Plan 2011/12 Sugar produced Season ^ 2014/15 ^ Season Total hectares under cane as at 129 513 137 652 159 259 1 April (beginning of the season) % Hectares under cane milled 74,0% 74,7% 76,3% Hectares milled 95 815 102 7
Slide 25: Zimbabwe - Increasing Sugar Production
Zimbabwe - Increasing Sugar Production Actual Cane Milled & Estimate 2012/13 Plan 2011/12 Sugar produced Season ^ 2014/15 ^ Season Total hectares under cane as at 38 626 43 185 46 348 * 1 April (beginning of the season) % Hectares under cane milled 91,4% 87,0% 94,6% Hectares milled 35 307 37 577 43
Slide 26: Mozambique - Increasing Sugar Production
Mozambique - Increasing Sugar Production Actual Cane Milled & Estimate 2011/12 Plan 2011/12 Sugar produced Season ^ 2014/15 ^ Season Total hectares under cane as at 26 513 26 789 28 243 1 April (beginning of the season) % Hectares under cane milled 92,6% 92,9% 95,1% Hectares milled 24 555 24 886 26
Slide 27: Volume/Yield Cost Relationship
Volume/Yield Cost Relationship Milling costs (85% - 90% fixed) Agricultural costs Loading and Transport Human resources 39% Harvesting (per ton cane) 7% Farming costs (per ha) 78% Dependant on distance Maintenance & consumables 40% from mill Other 21% Other (fixed) 15% Total 100% Total 100% Cost Pre
Slide 28: South African Sugar Sales
South African Sugar Sales 2011/12 Actual 2012/13 Estimate Saleable sugar production - Total Industry sugar production (tons) 1,822 million 2,205 million @ - Tongaat Hulett share of Industry 26% ? Tongaat Hulett raw sugar production (tons) 486 000 537 000 - 610 000 Local sales (including SACU) - tons
Slide 29: Increasing Sugar Production
Increasing Sugar Production Investment Required Next 3 Years Tongaat Hulett Greenfield irrigated - Africa 2011/12 1,150 mt 1,835 mt 2015/16 200 000 tons Additional 685 000 tons tons/year ^ Total R/ton Next 3 years Total R/ton Agriculture R1,3 billion R6 500 Agriculture R1,2 billion R1 752 Tongaat Hu
Slide 30: Additional Information
ADDITIONAL INFORMATION @ Tongaat Hulett 30
Slide 31: Starch Information
Starch Information @ Tongaat Hulett 31
Slide 32: Starch Operations Financial Data
Starch Operations Financial Data 12 months to 12 months to R millions March 2012 March 2011 Revenue 2 580 2 357 Domestic 1 865 1 782 Exports 259 222 Co-Products 456 353 Operating Profit 363 303 32
Slide 33: Volume Data
Volume Data 12 months to 12 months to Volume (tons) March 2012 March 2011 Local Starch 90 361 92 350 Local Glucose 332 264 324 927 Total Local 422 625 417 277 Export Starch 36 240 36 557 Export Glucose 12 294 12 033 Total Exports 48 534 48 590 Co-Products 158 111 155 680 Total 629 270 621 547 33
Slide 34: Co-product Pricing
Co-product Pricing Price movement Co-product March 2012 over Major price drivers Comparative Period 50%: International edible oil price and Germ Up 33,6% local oil seeds 50%: Local maize International protein (Soya, fishmeal) Gluten-60 Up 4,4% prices Gluten-20 Up 49,2% Local maize price / hominy cho
Slide 35: Tongaat Hulett Starch Outlook
Tongaat Hulett Starch Outlook for South African maize 2011/12 1979/80 2008/09 2009/10 2010/11 Forecast Hectares Planted (000 ha) 4 031 2 428 2 742 2 372 2 699 Yield (t/ha) 3,37 4,96 4,67 4,37 4,12 Production (000 tons) 13 583 12 050 12 815 10 360 11 121 Outlook for World maize International Starch a
Slide 36: Land Conversion and Development Information
Land Conversion and Development Information 36
Slide 37: Ridgeside
Ridgeside Infrastructure • M41 Interchange, Office park infrastructure and Phase one and two of Precinct one infrastructure complete • Major electrical sub station to service entire development completed by Municipality and is being commissioned Development status and progress • One hotel and sevent
Slide 38: 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 • 4 High density residential sites sold to date • The first developer’s building is nearing completion • Services installation virtually completed in the commerci
Slide 39: Izinga
Izinga • Medium/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 124 SR’s and 3 PUD sites, only 7 sites left to sell •
Slide 40: Cornubia South
Cornubia South Industrial • Permissions to sell - March 2012 • 22 hectares sold by end March 2012 • 80 developable ha (60 ha industrial platform) left – substantial demand, subject to infrastructural agreement being reached • Civils contract to commence in June 2012 New Town • Destination retail pre
Slide 41: Kindlewood
Kindlewood • 573 units gated estate development • Comprises • Special residential • Maisonette • Planned unit developments • 188 units have been sold • 66 families are living in the estate • 20 new structures are under construction • Phase 3 to be launched in May 2012 41
Slide 42: Bridge City
Bridge City Successful PPP with eThekwini Municipality New mixed use, high density Town Centre and Business Estate in a previously disadvantaged area/township Regional 500 bed public hospital • Building construction to commence September 2012 • Up to 60 000 m2 to be developed 48 000 m2 shopping cent
Slide 43: Sibaya
Sibaya Node 1 Zoning approval received Permission to sell received Node 5 EIA approved Zoning and subdivisional applications underway Ready for development before March 2014 Node 4 Office/commercial node Excellent location relative to Umhlanga Ridge and airport Preparatory work for EIA underway 43
Slide 44: Inyaninga: Bulk land sale/Partnership/TH development
Inyaninga: Bulk land sale/Partnership/ TH development • Aligned with Municipal plans for North Urban development Corridor • EIA process underway – planned date of approval of development March 2014 • Phase 1 – envisaged around existing rail – 44 opportunity for multi-modal logistics hub
Slide 45: uShukela Drive: Bulk Sale Opportunity
uShukela Drive: Bulk Sale Opportunity Total Gross Extent – 137 ha comprising 57 ha DTP and 80 ha Tongaat Hulett Formalised joint planning agreement with DTP for EIA and PDA processes Business Park, Logistics and Trade Zone extension Frontage on N2 and M43. DTP Link Road construction to commence mid
Slide 46: Ntshongweni
Ntshongweni • Development supported by Municipal SDP and LAP’s Hillcrest • 3 major uses • Residential infill developments • Mixed use centre • Business Park and logistics Westmead • Regional shopping centre as a proposed catalytic development on the N3 growth corridor • EIA processes under way • Con
Slide 47: Zimbali & Zimbali Lakes
Zimbali & Zimbali Lakes • Last few Zimbali sites being marketed • Zimbali Lakes • Golf Course construction delayed while EIA amendments being processed • Alternate models/layouts are being assessed to optimize value • Application to phase the Resort Node and increase the number of residential opport
Slide 48: Tinley Manor
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 s
Slide 49: Sugar Information
Sugar Information @ Tongaat Hulett 49
Slide 50: Cane Ownership Mix
Cane Ownership Mix Supply of Cane to Tongaat Hulett South Africa Sugar Mills Actual on Actual on Actual 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 7 803 7 468 - 4% Tongaat Hulett leased/co-
Slide 51: New Plantings - South Africa
New Plantings - South Africa Actual Actual Actual Target Categories - new hectares 2009/10 2010/11 2011/12 2012/13 # Small scale farmers 1 636 3 689 4 411 4 320 Commercial and medium scale farmers 630 371 1 831 1 180 Tongaat Hulett leased land 1 824 1 546 2 445 4 006 Total 4 090 5 606 8 687 9 506 #
Slide 52: Yield Improvement - Commercial and Medium Scale Farmers
Yield Improvement - Commercial and Medium Scale Farmers in South Africa 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: R11,3 million spent equivalent to 1 612 he
Slide 53: Government Partnerships with Tongaat Hulett
Government Partnerships with Tongaat Hulett Cane Development in South Africa 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
Slide 54: Zimbabwe - Private Farmers
Zimbabwe - Private Farmers 15 880 hectares • 2011/12 season produced 531 990 tons cane • Plan 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 $30 million financing scheme • Tongaat Hulett $3 million initial fund
Slide 55: Zimbabwe - Private Farmers
Zimbabwe - Private Farmers Actual Estimate Plan 2011/12 2012/13 ^ 2014/15 ^ Total hectares allocated to cane farmers 15 880 15 880 15 880 Total hectares under cane as at 1 April 9 501 14 060 15 880 Total hectares milled 8 966 11 184 15 880 Cane yield tcphm 59,33 68,26 90,00 Total cane crush (tons) 5
Slide 56: Zimbabwe - Own Estates
Zimbabwe - Own Estates Actual Estimate Plan 2011/12 2012/13 ^ 2014/15 ^ Total hectares under cane 29 122 29 125 29 172 Total hectares milled 26 341 26 393 26 660 Cane yield tcphm 95,92 103,88 108,80 Total cane crush (tons) 2 526 517 2 741 800 2 900 625 Root replant (hectares) 5 439 4 197 2 660 tcphm
Slide 57: Cane Yields - Tons cane per hectare milled
Cane Yields - Tons cane per hectare milled Actual Estimate Plan Hectares to be Tongaat Hulett hectares Harvested 2011/12 2012/13 ^ 2014/15 ^ 2014/15 ^ Xinavane 96,84 102,00 105,10 11 623 Mafambisse 55,27 65,10 75,92 8 526 Home Estate 48,15 54,87 68,68 6 075 Lamego Estate 73,34 91,75 93,85 2 451 Tota
Slide 58: 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 Upgrading of drainag
Slide 59: Raw Sugar Production
Raw Sugar Production Milling Season 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 977 762 868 659 731 760 674 612 652 573 455 486 Mozambique 39 36 71 82 85 115 106 108 108 134 164 233 Swaziland 41 45 50 54 50 56 55 58 56 54 54 59 RSE Zimbabwe * 282 26
Slide 60: Triangle Hippo Tambankulu Mafambisse Xinavane
Triangle Hippo Mafambisse Xinavane Tambankulu 60
Slide 61: 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% 61
Slide 62: Sugar Production - SA
Sugar Production - SA 3 Industry 2011/12: 1 822 488 tons Tons Sugar - Millions Tongaat Hulett share of Industry: 26,1% 2.5 2 1.5 1 0.5 0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 TH Industry Season ended March 62
Slide 63: Financial Information
Financial Information @ Tongaat Hulett 63
Slide 64: 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 in t
Slide 65: 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 66: 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 s
Slide 67: Growing Crops on the Tongaat Hulett Balance Sheet
Growing Crops on the Tongaat Hulett Balance Sheet 31 March 2011 31 March 2012 South Total Total Swaziland Zimbabwe Mozambique Africa Roots Hectares 75 855 81 960 25 013 3 840 28 432 24 675 Amortised root value 15 540 20 355 14 682 11 997 18 155 29 941 (Rands per hectare) Standing Cane Hectares for h
Slide 68: Growing Crops - Income Statement
Growing Crops - Income Statement • IAS 41 Fair Value Change included in the Income Statement: Year to 31 March 2012 R million R million South Africa 192 Roots 201 Swaziland 20 Zimbabwe 214 Standing cane 264 Mozambique 39 Change in fair value 465 Change in fair value 465 • Comparative IAS 41 Fair Val
Slide 69: 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 12 months 12 months R millions 2011/12 2010/11 Operating profit + 1 878 + 1 606 Includes all agricultural costs Growing crop fair value adjustment - 465 - 662 As per Income Statement Root planting costs (di
Slide 70: Exchange Rates
Exchange Rates More Favourable in 2011/12 than in 2010/11 Average 2011/12 2010/11 % Change Rand/US$ 7,44 7,19 +3% Rand/Euro 10,24 9,49 +8% Rand/Metical 0,27 0,21 +29% US$/Euro 1,38 1,32 +5% Export proceeds: US$ and Euro (exchange rates at time of export) Earnings conversion on consolidation (at aver
Slide 71: Exchange Rates
Exchange Rates Currency Exchange Rates Prices Costs Export Euro US$ proceeds EU exports: Euro US$ Zimbabwe USA quota: US$ Earnings Zim inflation Local market: US$ conversion on US$ Rands consolidation Export US$ Metical proceeds Euro Metical USA quota: US$ Rands Mozambique EU exports: Euro US$ Earni
Slide 72: Thank You
Thank You @ Tongaat Hulett 72