to overcome. Its management says
it expects total sugar production
for the coming year to be 4% lower
than that achieved in the current
year. This, coupled with largely
unfavorable market conditions,
will continue suppressing
earnings growth.
•
Earnings vulnerable to
exogenous factors such as
weather and volatile exchange
rates
Nature of business: Tongaat Hulett
is an agri-processing business which
includes integrated components
Bull Factors
•
•
•
Increased focus on unlocking
value from large mass of
developable land
Toughening of tariff regime
by Zimbabwean and SA
governments expected to
deter imports
Initiatives in biofuels and
energy generation should help
drive long-term earnings
Bear Factors
•
of land management, property
development and agriculture.
Through its sugar and starch
operations in Southern Africa,
the company produces a range of
refined carbohydrate products from
sugar cane and maize.
Disclosures: The analyst has
no financial exposure to the
instrument discussed. The opinion
represents his true view. ■
Exchange rate volatility might
erode gains from a tougher
tariff system
Risks mount for Cullinan
IS SA TOURISM AT
ITS LOW POINT?
The sharp drop in international
tourist arrivals has hit Cullinan,
which owns tour operators like
Thompsons Holidays, Hylton Ross
Tours and Pentravel, particularly
hard. The Southern Africa Tourism
Services Association (Satsa)
reported that the last four months
of 2014 registered a sharp decline
in international arrivals largely
attributed to the Ebola virus scare.
That was the during the peak of
Cullinan’s key booking season, and
tourism numbers have remained
low as a result of SA’s new
draconian visa requirements.
Arrivals from China fell close to
50% in the last four months of
last year, India was down 15%
and Brazil retreated 37%. Adding
to the negative sentiment is the
xenophobia that has rocked SA in
recent times.
Cullinan group chairman Michael
Tollman says China’s tourism
ISSUE 4 – JULY 2015
15