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SLO
SLO
SLO - Southern Electricity Company Limited - Reviewed Interim Results Of
Southern Electricity Company Limited For The Six Months Ended 31 December
2008
Southern Electricity Company Limited
(Registration Number 1997/006894/06)JSE Share Code: SLO ISIN:
ZAE000041919("SELCo" or "the Group")
REVIEWED INTERIM RESULTS OF SOUTHERN ELECTRICITY COMPANY LIMITED FOR THE SIX
MONTHS ENDED 31 DECEMBER 2008
CONDENSED CONSOLIDATED BALANCE SHEET AS AT 31 DECEMBER 2008
As at As at As at
31 December 31 December 30 June
2008 2007 2008
Reviewed Reviewed Audited
(R`000) (R`000) (R`000)
ASSETS
Non-current assets
30 258 19 943 30 629
Investment property
13 000 12 500 13 000
Property plant and
equipment 8 578 7 443 8 384
Intangible assets
8 679 - 9 245
Current assets
7 596 11 847 5 177
Inventories
1 117 581 587
Other loans receivable
27 5 019 25
Trade and other
receivables 4 023 4 512 3 757
Cash and cash equivalents
2 430 1 735 808
Total assets
37 854 31 790 35 806
EQUITY AND LIABILITIES
Equity
21 694 19 057 21 186
Share capital
10 163 10 163 10 163
Non-distributable reserve
16 16 16
Retained income
11 515 8 879 11 007
Liabilities
Non-current liabilities
7 380 8 055 7 380
Other financial 3 222 3 503 3 379
liabilities
Operating lease liability
- 574 -
Deferred tax
4 158 3 978 4 000
Current liabilities
8 779 4 678 7 241
Other loans payable
5 056 - 3 390
Other financial
liabilities 290 240 253
Taxation payable
436 1 721 922
Trade and other payables
2 843 2 717 2 551
Provisions
154 - 125
Total liabilities
16 159 12 733 14 620
Total equity and
liabilities 37 854 31 790 35 806
CONDENSED CONSOLIDATED INCOME STATEMENT FOR THE SIX MONTHS ENDED 31 DECEMBER
2008
6 months 6 months 12 months
Ended Ended Ended
31 December 31 December 30 June
2008 2007 2008
Reviewed Reviewed Audited
(R`000) (R`000) (R`000)
Revenue
20 002 16 510 33 261
Turnover
19 865 16 021 32 537
Cost of sales
(9 753) (7 800) (16 057)
Gross profit
10 112 8 221 16 480
Other income
- - 829
Operating costs
(8 911) (7 681) (14 275)
Earnings before interest
and tax 1 201 540 3 034
Investment revenue
100 453 724
Fair value adjustment
- - 500
Impairment of investment - (3 093) (3 093)
Finance costs
(504) (227) (513)
Profit/(loss) before
taxation 797 (2 327) 653
Taxation
(289) (721) (1 178)
Profit/(loss) after
taxation 508 (3 048) (525)
Earnings and diluted
earnings/(loss) per share 0.92 (5.55) (0.96)
(cents)
Weighted average number 54 945 373 54 945 373 54 945 373
of shares
CONDENSED STATEMENT OF CHANGES IN EQUITY FOR THE SIX MONTHS ENDED 31
DECEMBER 2008
6 months 6 months 12 months
Ended Ended Ended
31 December 31 December 30 June
2008 2007 2008
Reviewed Reviewed Audited
(R`000) (R`000) (R`000)
Balance at beginning of
period 21 186 23 247 22 852
Profit/(loss) net profit
for the period 508 (3 048) (525)
Minority shareholding
sold - 1
Reversal of available-for-
sale investment reserve - (1 142) (1 142)
Balance at end of period
21 694 19 057 21 186
CONDENSED CONSOLIDATED CASH FLOW STATEMENT FOR THE SIX MONTHS ENDED 31
DECEMBER 2008
6 months 6 months 12 months
Ended Ended Ended
31 December 31 December 30
2008 2007 June2008
Reviewed Reviewed Audited
(R`000) (R`000) (R`000)
Cash flows from operating
activities 855 (336) 1 209
Cash receipts from
customers 19 865 14 255 34 194
Cash paid to suppliers
and employees (17 988) (14 647) (31 606)
Cash generated
by/(utilised in)
operating activities 1 877 (392) 2 588
Interest income
100 407 724
Finance costs
(504) (227) (513)
Taxation paid
(618) (124) (1 590)
Cash flows from investing
activities (806) 10 (10 928)
Property plant and
equipment acquired (778) (213) (1 747)
Property plant and
equipment sold - - 35
Intangible asset acquired
- - (9 245)
Investment of subsidiary
acquired - - (0)
Investment of subsidiary
sold - - 1
Financial asset sold
- - 30
(Advances)/repayments of
loans to group companies (29) 223 (2)
-
Cash flow from financing
activities 1 573 (19) 8 447
(Repayment)/advance of
other financial (120) (19) 8 854
liabilities
Repayment of loans from
group companies 2 357 -
Repayments of other loans
(663) - (407)
Total cash movement for
the period 1 622 (345) (1 272)
Cash at the beginning of
the period 808 2 080 2 080
Total cash at end of
period 2 430 1 735 808
COMMENTARY
Review for the reporting period
The gross profit margin has remained stable for the 6 months ended 31
December 2008. The profit after taxation for the period under review
amounted to R 508 000 compared to a loss of R3 048 000 during the prior
corresponding 6 month period. During the prior comparative period, the board
made a decision to impair the Group`s investment in ENMo (a company
incorporated in Mozambique for the execution of an electricity generation,
distribution and sale concession) as a result of the unilateral revocation
of the concession by the Government of Mozambique. Excluding the effect of
the above mentioned impairment, the Group achieved headline earnings of 0.08
cents per share for the six months ended 31 December 2007.
The Group achieved earnings of 0.92 cents per share compared to a loss of
5.55 cents during the corresponding 6 month period in 2007.
Outlook
SELCo`s business in Namibia demonstrates a profitable and sustainable
business model in the electricity distribution industry. Management
continues to explore opportunities to apply the business model in other
aspects of electricity distribution in Southern Namibia.
Directorate
Mr PM Bester was appointed as an executive director of SELCo with effect
from 15 August 2008. He has spent 31 years in the banking industry and holds
a diploma in bank credit management. Mr Bester`s expertise in revenue
management is certain to stand the Group in good stead. SELCo welcomes him
to the board.
Segmental Analysis
The Group operates as a vertically integrated electricity distributor and as
a result has only one reporting business segment as defined by IAS 14. The
rental income derived from the investment property is insignificant by
comparison and is therefore included in the primary business segment.
Furthermore, the geographical distribution of the business is limited to
Southern Namibia, therefore no geographical segments exist.
Accounting Policies
The interim results have been prepared in accordance with IAS 34 and the
South African Companies Act. The interim results have been prepared on the
historical cost basis except for the measurement of investment properties
and certain financial instruments. These interim results should be read in
conjunction with the most recently issued financial statements for the year
ended 30 June 2008. There has been no change to the Group`s accounting
policies for the period.
There were no material events subsequent to the six month period ended 31
December 2008.
Mazars Moores Rowland, the Group`s independent auditor, has reviewed the
interim financial statements contained in this interim report and has
expressed an unmodified conclusion on the interim financial statements.
Their review report is available for inspection at the Group`s registered
office.
Dividend
No dividend has been declared for the six month period ended 31 December
2008.
Related party transactions
6 months 6 months 12 months
Ended Ended Ended
31 December 31 December 30 June
2008 2007 2008
Reviewed Reviewed Audited
(R`000) (R`000) (R`000)
Interest paid
to/(received from)
related parties
Rural Maintenance (Pty)
Ltd 213 (321) (633)
Purchases from related
parties
Netelek (Pty) Ltd
429 92 137
Rent paid to/(received
from) related parties
Rural Maintenance (Pty)
Ltd (36) (36) (72)
Rural Maintenance (Pty)
Ltd 247 247 314
Management fees paid to/(received from) related parties
Rural Maintenance (Pty)
Ltd 2,038 1,973 2,760
Reimbursed expenses paid
to related parties
Netelek (Pty) Ltd
- - (250)
Assets capitalized
Rural Maintenance (Pty)
Ltd 39 361 808
Netelek (Pty) ltd
681 264 302
Earnings and headline earnings per share
6 months 6 months 12 months
Ended ended Ended
31 December 31 December 30 June
2008 2007 2008
Reviewed Reviewed Audited
Cents Cents Cents
Earnings and diluted
earnings per share 0.92 (5.55) (0.96)
Headline and diluted
headline earnings per 0.92 0.08 3.79
share
Basic attributable earnings per share is calculated by dividing the net
profit attributable to shareholders by the weighted average number of
ordinary shares in issue during the period.
The calculation of earnings and diluted earnings per ordinary share is based
on a profit/(loss) for the Group of R 508 000 (2007: (R 3 048 000)) on
weighted average ordinary shares of 54 945 373 (2007: 54 945 373) for the
period.
The calculation of headline earnings and diluted headline earnings per
ordinary share is based on a profit for the Group of R 508 000 (2007: (R 45
000)) on weighted average ordinary shares of 54 945 373 (2007: 54 945 373)
for the period.
There is no dilutive effect on earnings per share.
Headline and diluted headline earnings/(loss)have been computed as follows:
6 months 6 months 12 months
Ended Ended Ended
31 December 31 December 30 June
2008 2007 2008
Reviewed Reviewed Audited
(R`000) (R`000) (R`000)
Net profit/(loss) after
tax 508 (3 048) (525)
Revaluation gain on
investment property - - (500)
Impairment of investment
due to nationalization - 3 093 3 093
Loss on disposal of fixed
asset - - 14
508 45 2 082
By order of the Board
27 February 2009
DIRECTORS:
B Hlongwa* (Chairman), C F Bosch (CEO), PM Bester, I Bosch, M Senekal, A van
Zyl, H van Zyl*
* Non Executive
COMPANY SECRETARY AND REGISTERED OFFICE:
Elsa Steyn, 99 Fascia Street, Silvertondale, 0184
TRANSFER SECRETARIES:
Link Market Services South Africa (Pty) Limited, PO Box 4844, Johannesburg,
2000
SPONSOR:
Bridge Capital Advisors (Pty) Limited, PO Box 651010, Benmore, 2010
AUDITORS:
Mazars Moores Rowland
Date: 27/02/2009 10:52:56 Produced by the JSE SENS Department.
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