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SAH
SAH
SAH - South African Coal Mining Holdings - Interim results for the six months
ended 30 June 2007
South African Coal Mining Holdings Limited)
(formerly Yomhlaba Resources Limited)
Registration number 1994/009012/06
Share code: SAH
ISIN code: ZAE0000102034
("SACMH" or "the company")
Interim results for the six months ended 30 June 2007
Highlights
- Coal mine acquisitions completed on 30 June 2007
- Listed on the Main Board of the JSE as SACMH on 20 August 2007
- First BBBEE-controlled coal miner on the JSE
- Targeting production of 1.2 million tonnes Run of Mine in next 12 months
Karl Gribnitz, Chief Executive, said:
"With the acquisition of the Ilanga and Umlabu mines on 30 June 2007, we are now
focused on growing the company and achieving our production target of 1.2
million tonnes over the next 12 months. We are already well on the way to
achieving this with the delivery of new production equipment, which has enhanced
our production capacity. We believe we can deliver substantial shareholder
value in the next phase of our growth plan."
Introduction
SACMH is now established as a BBBEE-controlled company with two profitable mines
following the completion of the first phase of a two phase plan to position the
company as a significant BBBEE coal producing company in South Africa. The
first phase incorporated the acquisition of two productive coal mines (the
Umlabu mine and the Ilanga mine), the restructure of the balance sheet and the
introduction of the Royal Bafokeng as a BBBEE controlling shareholder of the
company. The completion of phase one was marked by the change in the name of
the company to SACMH on 20 August 2007 following the listing of the company on
the Main Board of the JSE on 31 July 2007.
The plan under phase two is to grow the company both organically and by
acquisition. This phase is already well underway with the delivery of mining
equipment to the mine. Management is fully committed to delivering further
shareholder value under phase two and is focused on ramping up production to 1.2
million tonnes per annum over the next year.
Operational review and outlook
Management expects the current production levels at the Ilanga mine to wind down
from the end of December 2007 and is in discussions with Ilanga`s neighbours to
extend the life of mine.
The opencast and underground equipment required for the Umlabu mine was
delivered to the mine over the past 45 days. Production is being ramped up to
the target Run of Mine ("ROM") rate of 100 000 tonnes per month. The regulatory
process for the establishment of the new railway siding at the Umlabu mine has
been completed and it is expected that the construction of the siding will
commence within the next 60 to 90 days. A prospecting right has been granted to
a subsidiary of the group over various portions of the farm Kromkrans IS 208,
which is close to the Umlabu mine.
As set out in the circular to shareholders, the expected average ROM cost per
tonne of coal produced will range from R64,00 (open pit) to R77,00 (underground
mining). The expected average ROM cost per tonne of beneficiating coal for the
export market will range from R13,00 (own plant) to R40,00 (outside contractor)
with a yield of 65%.
The final coal product is currently being sold at an average of the API 4 RBCT
index price. The price of coal has been buoyant and market projections indicate
that the demand for coal will remain strong for the next 12 to 24 months.
Prospects
The acquisition of the coal mines, access to domestic and export markets
together with the company`s strong balance sheet and motivated management team
presents investors with an exciting future. With a proven acquisition track
record, the board believes that SACMH is ideally positioned to take advantage of
consolidation opportunities in this segment of the South African coal sector.
Accounting policies and presentation
The company has changed its year end from 30 June to 31 December in order to
align itself with its major shareholder - Royal Bafokeng Capital. Accordingly,
the current financial year will cover the period from 1 July 2006 to 31 December
2007.
Due to the extent of the restructuring, shareholders are reminded that the
interim results presented cannot be compared with the financial results of
previous periods. Investors are referred to the circular to shareholders dated 8
June 2007 where the financial results of Ilanga Coal Mines (Pty) Limited and
Umlabu Colliery (Pty) Limited for the 12 months ended 28 February 2007 are
presented in Appendices 6 and 7.
These interim financial statements have been prepared in accordance with
International Financial Reporting Standards ("IFRS"), and its interpretations
adopted by the International Accounting Standards Board ("IASB"), the
preparation and disclosure requirement of IAS 34 (Interim Financial Reporting)
and the Listings Requirements of the JSE Limited and Schedule 4 of the South
African Companies Act.
The accounting policies applied in these condensed financial statements are
compliant with IFRS and consistent with those used in the preparation of the
financial statements for the year ended 30 June 2006.
In terms of IFRS 3 and IAS 27, the acquisition of the Umlabu and Ilanga mines
through the acquisition of the shares in and claims against Ilanga Coal Mines
(Pty) Limited and Umlabu Colliery (Pty) Limited are considered to be business
combinations with an effective date of acquisition of 30 June 2007.
Accordingly, the figures presented below reflect the effect of the
implementation of the acquisitions from 30 June 2007 and do not include the
results for the period of the two entities acquired.
Review opinion
The interim financial information relating to the six months ended 30 June 2007
has been reviewed by Compendium (Pretoria) Incorporated whose unmodified review
report is available for inspection at the company`s registered office.
INCOME STATEMENTS
Reviewed Reviewed Audited
Six Six months
months ended Year
ended 31 ended
30 June December 30 June
2007 2006 2006
R`000 R`000 R`000
Revenue 0 0 0
Cost of sales 0 0 0
Gross profit/(loss) 0 0 0
Other income 0 18 146
Profit on debt restructure 30 762 0 0
Profit on acquisitions 125 338 0 0
Impairment on acquisition (22 675) 0 0
Operating expenses (2 390) (1 424) (4 337)
Operating profit/(loss) 131 035 (1 406) (4 191)
Interest received 167 282 568
Finance charges 0 (62) (95)
Profit/(loss) before taxation 131 202 (1 186) (3 718)
Taxation 0 0 0
Profit/(loss) after taxation 131 202 (1 186) (3 718)
Loss from discontinued
operations 0 0 (7 500)
Net profit/(loss) for the period 131 202 (1 186) (11 218)
Number of ordinary shares
in issue (`000) 400 000 600 000 600 000
Weighted average number of
ordinary shares in issue (`000) 600 000 600 000 600 000
Attributable earnings per
ordinary share (cents)
- Basic 21,9 (0,2) (0,6)
Dilutive ordinary shares
- Convertible loans (0,5) - -
- Diluted 21,4 (0,2) (0,6)
Reconciliation between earnings
and headline earnings
Basic earnings per share (cents) 21,9 (0,2) (1,9)
Impairment per share (cents) 3,8 - 1,25
Profit on debt restructure and
acquisitions (cents) (26,0) - -
Headline earnings per share (0,4) (0,2) (0,6)
(cents)
BALANCE SHEETS
Reviewed Reviewed Audited
as at as at as at
30 June 31 30 June
2007 December 2006
2006
R`000 R`000 R`000
Assets
Non-current assets 428 878 13 573 13 850
Property, plant and equipment 39 609 13 573 13 850
Mineral rights 389 269 0 0
Current assets 38 305 8 662 10 017
Inventories 9 188 0 0
Trade and other receivables 16 565 1 150 1 024
Cash and cash equivalents 12 552 7 512 8 993
Total assets 467 183 22 235 23 867
Equity and liabilities
Capital and reserves 210 148 (25 054) (23 868)
Share capital 40 000 6 000 6 000
Share premium 46 562 12 562 12 562
Retained income/(loss) 87 586 (43 616) (42 430)
Other reserves 36 000 0 0
Non-current liabilities 222 512 44 512 44 900
Long-term liabilities interest
bearing 108 000 9 000 9 388
Shareholders loan 0 35 512 35 512
Deferred taxation 114 512 0 0
Current liabilities 34 523 2 777 2 835
Trade and other payables 32 523 2 777 2 429
Current portion of long-term
liabilities 2 000 0 0
Bank overdraft 0 0 406
Total equity and liabilities 467 183 22 235 23 867
Number of shares in issue (`000) 400 000 600 000 600 000
Net asset value per share 53 (4) (4)
(cents)
Tangible net asset value
per share (cents) (45) (4) (4)
CASH FLOW STATEMENTS
Reviewed Reviewed Audited
Six months Six months Year
ended ended 31 ended
30 June December 30 June
2007 2006 2006
R`000 R`000 R`000
Cash flows from operating
activities
Cash receipts from customers 0 0 0
Cash paid to suppliers and
employees (2 760) (907) (3 749)
Movement in working capital 7 143 0 0
Cash from operations 4 383 (907) (3 749)
Interest paid 0 (62) (95)
Taxation paid 0 0 0
Net cash from operating
activities 4 383 (969) (3 844)
Cash flows used in
investing activities
Acquisitions through business
combination 166 831 0 0
Interest received 0 282 568
Net cash used in investing
activities 166 831 282 568
Cash flows from financing
activities
Proceeds from issue of ordinary
share capital 68 000 0 0
Raising/(repayment) of long-term
liabilities 99 488 (794) (793)
Net cash from financing
activities 167 488 (794) (793)
Net increase/(decrease) in cash
and cash equivalents 5 040 (1 481) (4 069)
Cash and cash equivalents at
beginning of period/year 7 512 8 993 13 062
Cash and cash equivalents at
end of period/year 12 552 7 512 8 993
STATEMENTS OF CHANGES IN EQUITY
Share Share Other Accumu- Total
capital premium reserves lated
profit/
(loss)
R`000 R`000 R`000 R`000 R`000
Balance at 1 July
2005 6 000 12 562 0 (31 212) (12 650)
Net profit/(loss)
for the period (11 218) (11 218)
Balance at 1 July
2006 6 000 12 562 0 (42 430) (23 868)
Net profit/(loss)
for the period (1 186) (1 186)
Balance at 31
December 2006 6 000 12 562 0 (43 616) (25 054)
Issue of new shares 34 000 34 000 68 000
Convertible loans 36 000 36 000
Net profit/(loss)
for the period 131 202 131 202
Balance at 30 June
2007 40 000 46 562 36 000 87 586 210 148
EFFECTIVE CHANGES IN COMPOSITION OF THE GROUP DURING THE PERIOD
The changes in composition of the group resulted from the acquisition of 100% of
the voting equity instruments in the following entities - Ilanga Coal Mines
(Pty) Ltd ("Ilanga") and Umlabu Colliery (Pty) Ltd ("Umlabu") - with an
acquisition date of 30 June 2007. No profit or loss from the entities acquired
has been included in the income statement above. The revenue and profit after
tax of the combined entity for the period if the acquisition date had been the
beginning of the financial year (i.e. 1 July 2006) would have been R 57.000
million and R 2.543 million respectively.
Amounts recognised at acquisition and cost of business combination
Amounts recognised at acquisition
Ilanga Umlabu
R`000 R`000
Property, plant and equipment 10 631 15 146
8 680 380 589
Mineral rights
Inventories 7 408
1 781
Trade and other receivables 20 535
105
Cash and cash equivalents 7 528
1 207
Deferred taxation (4 495)
(110 017)
Trade and other payables (4 962)
(7 697)
45325 281 115
Cost of business combination
(68 000) -
340 million shares with par
value of R0.10 issued at an
issue price of R0.20
Cash resources -
(10 000)
Convertible loans -
(26 000)
Medium term loan -
(105 000)
-
Interest on purchase (11 776)
consideration
Debt arranging fee -
(3 000)
22 675 -
Goodwill on acquisition
Profit on acquisition -
(125 338)
For and on behalf of the board
Mirkwood
26 September 2007
TV Mogatlha KJ Gribnitz
Chairman Chief executive officer
Executive Directors: KJ Gribnitz, P Swanepoel
Non Executive Directors: TV Mogatlha, LM Ndala, WN Gardyne
Registered office : Mirkwood Estate, Plot 26, Klipkop JR 396
Transfer Secretaries: Computershare Investor Services 2004 (Pty) Ltd
Sponsor: BDO QuestCo(Pty) Ltd
Date: 26/09/2007 09:26:45 Produced by the JSE SENS Department.
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