JOHANNESBURG – Beleagured Tongaat Hulett, whose share price has been in free fall since February, when it reported a liquidity crises, yesterday renewed its cautionary announcement to shareholders and investors dealing in its stock.
This is as the sugar producer reports progress with efforts to stabilise its finances and investigate problems around what led to the fall in its headline earnings.
Tongaat Hulett said shareholders were advised that the strategic and financial review, expected to be completed in June, had revealed certain practices requiring further examination.
The review parameters are focusing on the timing and recognition of land sales and the allocation of the related costs; the apportionment of revenue between land sales and the provision of infrastructure; the appropriateness of overhead costs capitalised to specific assets; the assumptions used in establishing the fair value of growing crops; and the assessment of various assets for impairment.
“The implementation of a turnaround plan resetting the financial and commercial priorities, streamlining and rationalising businesses and revitalising the executive leadership team has commenced. Meaningful progress has been made and the turnaround plan will be presented to shareholders in a timely manner,” the group said.
While the full impact of this review was still being determined, a restatement of prior financial information is anticipated. “This might have a material effect on the price of the company’s securities. We continue to engage in a collaborative process with our debt providers,” the group said.
Tongaat Hulett’s share lost 3.4percent in mid-day trade and closed the day at R22.70.