UPDATE 1-S.Africa's Tongaat narrows half-year loss as turnaround strategy pays off

  • Reuters
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UPDATE 1-S.Africa's Tongaat narrows half-year loss as turnaround strategy pays off
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JOHANNESBURG, Dec 11 (Reuters) - South African sugar producer Tongaat Hulett TONJ.J said on Friday interim earnings loss narrowed as its turnaround strategy paid off while strong performances from all its sugar operations helped boost cash generation.

Tongaat narrowed its headline loss per share for continuing operations for the six months ended Sept. 30 to 4 cents per share from 383 cents last year.

"The restructuring and reinvigoration of our group over the past two years has permitted us to thrive in this challenging environment, supported by a leaner, fit-for-purpose platform from which to weather the storm," Tongaat said.

The agriculture and agri-processing company has sold assets, cut jobs and sought an equity raise to boost cash flow amid high debt levels. financial impact of COVID-19 pandemic on sugar operations was limited, Tongaat said, adding that uncertainty will still linger over the second half of the year.

Cash generated from operations during the period surged to 1.3 billion rand ($86.54 million) from an outflow of 615 million rand in the year-ago period, while group revenue rose 37% to 8.2 billion rand.

Improved cash generation and asset sales have also helped the firm reduce its debt with net borrowings at the end of the period down 1.038 billion rand to 10.898 billion rand.

Tongaat on Wednesday finalised the final sale amount of around 5.260 billion rand of its starch business to a subsidiary of Barloworld (LON: BWOB ) BAWJ.J . company said it would continue to review its capital structure as it looks to achieve its remaining debt reduction milestones.

($1 = 15.0219 rand)

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