Durban - Crookes Brothers` earnings for the year to March 2000 would not
match 1999 earnings and could be as low as R17 million, Fred Palmer, the
chairman, said at the weekend.
Crookes Brothers is the sugar, fruit and grain farming group that has a
shareholding in CG Smith, the investment holding company, valued at R31
million.
Palmer said that, based on a South African sugar crop of 2,4 million tons,
a depressed world market price of $0,052 a pound and an average exchange
rate of R6,40 to the dollar, it was estimated a sucrose price of R850 a ton
would be paid to growers.
This was about R92 a ton lower than the 1998-99 price.
Crookes Brothers turned in a 22 percent increase in attributable earnings
for the year to March 31. But market value a share declined 25 percent.
Sugar cane remained the major contributor to group earnings, accounting for
75 percent of operating income, followed by bananas at 19 percent and
citrus fruit at 4 percent.
Palmer said in the company``s 1999 annual report that production of cane and
sucrose had increased by 6 percent and 11 percent respectively after good
seasonal rains.
The disappointment was the reduced sucrose price in South Africa of R942
compared with R958 in 1998, but this was partly offset by a higher price in
Swaziland.
As a result, the division``s contribution had been static, Palmer said.
South Africa``s sugar industry had produced a record crop. The surplus was
exported at world prices considerably lower than last year``s.
In addition, cheaper imports from neighbouring states, as well as reduced
consumption within the country, contributed to lower prices paid to farmers
in the past year.
On the banana division, Palmer said the crop was now well established.
Prices had been disappointing, with average prices a carton at 5 percent
below those of 1998 because of overproduction.
Crookes was unchanged at R8,20 on the JSE last Friday.