Tongaat-Hulett are the colonial and apartheid era sugar plantation barons and the largest landowner in Durban who have now diversified into property development. After the savage repression of a Abahlali protest against Mayor Mlaba made it into the New York Times and The Economist Mlaba (a former manager at Hulett’s) announced a deal that would resettle shackdwellers on land owned by Tongaat-Hulett. Although the deal has disappeared without a trace, the profits of the group continue to rise with all kinds of public subsidies from the Municipality sweetening things up for the company that made its money on stolen land and with indentured labour. So it goes…
Huletts have best ever year
•Tue, 20 Feb 2007
By Kavith Harrilall
THE Tongaat-Hulett (TH) group yesterday announced their “best ever” financial year-end results, reflecting outstanding profits generated by two of their core businesses, sugar and aluminium, with headline earnings having increased by 51% to R703 million in 2006, compared with R466 million in 2005. Operating profit grew by 40% to R1,02 billion last year.
Hulett Aluminium (Hulamin), the Pietermaritzburg-based manufacturer of semi-fabricated aluminium products, saw its operating profit rise by 32% to R422 million (2005: R319 million), while sales revenue passed the R5 billion mark for the first time.
In respect of the sugar business, operating profit increased by 42% to R356 million, including dividends from Triangle Sugar in Zimbabwe. The group said that an increase in domestic and export realisations had offset lower sales volumes, due to a bad season.
Annual dividend was up 38% to 550 cents per share (2005: 400 cents per share). It is anticipated that the upcoming transactions related to Hulamin’s JSE listing, as well as the introduction of broad-based BEE (BBBEE) partners into Hulamin and TH, will have a considerable impact on the headline earnings to be reported in 2007.
Significantly, Moreland, the TH group’s property arm, grew its operating profits by about 41% to R325 million (2005: R231 million). It appears that Moreland’s results reflect the group’s growing focus toward property. Group CEO Peter Staude told The Witness that he expects to unlock even further value in their land (mainly on the KZN north coast), to the tune of about R2,5 billion over the next four to six years.
He said his central focus will revolve around creating value out of their agricultural land, when converting cane-land into property developments. Noting the trend, Staude said: “Moreland recorded profits of R20 million in 2002, R90 million in 2003, R181 million in 2004, R231 million in 2005 and now R325 million last year.”
He said the current pace of converting agricultural land into property sits at between 100 and 400 hectares per year.
Staude added that the intensified property focus would benefit business and various local communities, citing the Bridge City Urban Renewal development, which will inject billions of rands into the Durban area.
Hulamin’s impressive results come on the back of a decision, made late last year, to further expand their extensive operations in Pietermaritzburg to the tune of R950 million. Hulamin MD Alan Fourie told The Witness that they have issued concluded contracts worth about R63 million, adding that a further R400 million worth of contracts will be finalised within the next few weeks.
Staude reiterated the fact that the unbundling and listing of Hulett Aluminium on the JSE is on track, with a view to making a final announcement in May this year. He said the introduction of BBBEE partners was a key imperative. It is understood that BEE shareholding is expected to be introduced at the level of 25% in Tongaat-Hulett and 15% in Hulett Aluminium.
kavith@witness.co.za