May 24 (Bloomberg) -- Tongaat Hulett Ltd., South Africa’s second-largest sugar producer by market value, reported full-year profit that missed analyst estimates as earnings growth slowed amid a decline in world sugar prices.
Net income in the 12 months through March rose 20 percent to 1.07 billion rand ($112 million) from 889 million rand a year earlier, the Mount Edgecombe, South Africa-based company said today in a statement. Per-share earnings excluding one-time items climbed 15 percent to 9.42 rand, missing the 10.82-rand average of six analyst estimates compiled by Bloomberg. Earnings jumped 27 percent in the six months ended September.
“The advantage of higher overall sugar production volumes with the related benefits in the unit costs of production were offset partially by continued general margin pressure in the relationship of selling price movements versus higher input costs,” Tongaat said.
Sugar output increased 9 percent in fiscal 2013 compared with 14 percent a year earlier, the company said. Tongaat, with operations in Swaziland, Mozambique, Zimbabwe and South Africa, estimated on Nov. 12 that full-year production would rise 14 percent.
World sugar prices are at their lowest level in three years, and the market is oversupplied, Chief Executive Officer Peter Staude said in the statement. Sugar for delivery in July, the most actively traded contract, slumped 20 percent over the last 12 months and traded 0.7 percent higher at 16.76 cents a pound on ICE Futures U.S. today.
The company plans to raise the dividend 17 percent to 3.40 rand a share from 2.40 rand the previous year.
Tongaat has fallen 4.6 percent this year in Johannesburg trading, compared with a 1.7 percent decline in the 10-stock FTSE/JSE Africa Food Producers Index.
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