Funding delays stalls Tongaat project
LIVINGSTONE MARUFU
Tongaat Hulett’s game changing project, Project Kilimanjaro, is expected to delay further amid indications that the banks are facing challenges in raising all important funds for the project.
Tongaat Hulett has entered into partnership with the government and local banks to undertake a 4000 hectare cane development project known as Project Kilimanjaro but financial institutions are not forthcoming in funding resulting in the slowing down of the project.
In a joint statement accompanying the FY2021 financial results, Tongaat Hulett chief executive officer Aiden Mhere and the company’s chairman Canaan Dube said a total of 2 700 hectares of virgin land bush had been cleared and ripped and only 562 hectares planted with sugarcane due to the delays in funding.
“The project works were slowed down on account of delays in obtaining the requisite funding from financial institutions pending further clarity on land tenure, both of which are being progressed,” it said.
The company said to ensure productive use of the cleared land in the interim, 76 hectares and 750 hectares were put to maize and sorghum respectively and an additional 902 hectares of maize was planted on company fallow cane land as a break crop.
Total revenue for the year increased by 34% to ZWL$16.8bn from ZWL$12.5bn b largely due to the increased export volumes.
Operating profit and profit for the year decreased by 28% to ZWL$3.8bn from ZWL$5.3bn and by 58% to ZWL$1.1bn from ZWL$2.6bn respectively, weighed down by a fair value loss on biological assets.
Net cash inflow from operating activities was ZWL$1.2bn from ZWL$0.6bn driven by the improved adjusted EBITDA partially offset largely by an increase in tax paid.
Capital expenditure totalled ZWL$365m from ZWL$159m of which ZWL$225m was for root replanting.
The group had a net cash balance of ZWL$886m compared to a net cash balance of ZWL$406m in the previous corresponding year. The board declared a final dividend of ZWL$1.24 per share for the year ended March 31 2021 payable in respect of all the ordinary shares of the company in view of the company’s positive financial performance.
