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JOHANNESBURG, Nov 14 (Reuters) - South Africa’s Tongaat Hulett posted a 3.7 percent rise in half-year profit on Monday, in line with its forecast, citing higher international prices and effective import protection.
The sugar producer said that headline earnings per share, which strips out certain one-off items and is the main profit measure in South Africa, rose to 546.7 cents for the six months to Sept. 30 from 527.4 cents in the same period last year.
Operating profit from sugar operations increased by 73 percent to 825 million rand ($56.98 million).
“This is reflective of improved local market prices, more effective import protection dynamics in the countries where Tongaat Hulett produces sugar and higher international prices, including for exports into regional African markets and the EU,” the company said.
Tongaat remains affected by the the driest year on record, it said, estimating that 2016/17 sugar production will be between 1 million tonnes and 1.1 million tonnes, against 1.02 million tonnes last year.
The company expects a full sugar production recovery to take two years and to reach levels of between 1.2 million tonnes and 1.3 million tonnes in 2017/18, based on improved rain forecasts in key growing areas.
Southern Africa, where Tongaat has its mills, was affected by a severe drought that cut production of crops ranging from maize to sugar.
“Given ongoing average to above-average rainfall and a recovery of key dam levels, total sugar production is expected to recover over two years,” the company said.
Tongaat will pay an interim dividend of 100 cents per share, down 41 percent from last year.
The company’s share price was up 1.2 percent at 0750 GMT. ($1 = 14.4777 rand) (Reporting by Tanisha Heiberg; Editing by David Goodman)