Tongaat delays 2019 financials while it conducts forensic probe | Fin24
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Tongaat delays 2019 financials while it conducts forensic probe

Jun 03 2019 12:30
Jan Cronje, Fin24

After falling sharply on Friday, shares in Tongaat Hulett [JSE:TON] were even on Monday morning as markets consider the sugar producer's announcements that it needs to restate its 2018 financials and is delaying publishing its 2019 earnings while it conducts a forensic probe.   

In an update to shareholders last week, Tongaat announced that its audited financial statements for the year to March 2018 need to be restated. Its audited earnings report for the year ended March 2019, meanwhile, will only be published after it has the results of a forensic probe. 

The sugar producer said on Friday it had identified "certain past practices which are of significant concern to the board and the company's auditors". The adjustments, of a non-cash nature, include the reassessment of land sales values and growing cane valuations.

Tongaat estimates it will have to reduce the equity reflected on its March 2018 balance sheet by between R3.5 and R4.5bn.

"Current timelines indicate that the company's audited consolidated financial statements for the year ended 31 March 2019, which will include the restated prior financial information, should be released by October 2019," it said. 

Share price fall

The group's shares were trading at R16.60 at noon on Monday. They are down 78% over a year ago, when shares in the sugar producer were changing hands at R79.  

The company’s market capitalisation, meanwhile, has shrunk to R2.25bn as of Monday morning. A year ago, it was valued at R10.67bn.

KwaZulu-Natal MEC for Economic Development, Tourism and Environmental Affairs, Nomusa Dube-Ncube, has met with the company in a bid to try and stave off job losses. 

This comes after Tongaat announced it had issued section 189 letters to employees as it battles "significant business challenges". 

Dube-Ncube on Saturday announced the formation of a joint task comprising the sugar producer and government officials to "minimise the impact this will have on the livelihood of the employees," she said.



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