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MAS
MAS
MAS - Masonite - Unaudited Interim Results For The Six Months Ended 30 June 2009
MASONITE (AFRICA) LIMITED
Incorporated in the Republic of South Africa
Registration number: 1942/015502/06
Share code: MAS & ISIN: ZAE000004289
("Masonite" or "the company")
UNAUDITED INTERIM RESULTS for the six months ended 30 June 2009
Condensed income statement
Unaudited Unaudited Audited
Half-year Half-year Year ended
30 June 30 June 31 December
2009 2008 2008
R`000 R`000 R`000
Notes Re-presented Re-presented
Revenue 314 073 268 575 617 360
Cost of sales (218 689) (192 621) (438 528)
Gross profit 95 384 75 954 178 832
Fair value adjustment
of biological assets 9 480 39 046 41 603
Other income 2 748 1 642 3 639
Distribution expenses (32 590) (32 463) (72 832)
Administrative expenses (6 471) (6 417) (12 507)
Selling and marketing expenses (6 892) (5 640) (13 962)
Other expenses (12 437) (6 834) (18 478)
Results from
operating activities 49 222 65 288 106 295
Finance income 2 373 1 762 4 936
Finance cost (800) (760) (1 585)
Profit before income tax 50 795 66 290 109 646
Income tax expense 6 (13 826) (16 660) (28 214)
Profit for the period 36 969 49 630 81 432
Number of shares in issue 7 124 225 7 118 225 7 124 225
Earnings per share (cents)
Basic 519 697 1 144
Diluted 519 697 1 143
Statement of financial position
Unaudited Unaudited Audited
Half-year Half-year Year ended
30 June 30 June 31 December
2009 2008 2008
Notes R`000 R`000 R`000
ASSETS
Non-current assets
Property, plant and equipment 101 284 95 458 99 657
Intangible assets 291 443 347
Biological assets 3 184 891 172 854 175 411
Investments 30 30 30
Total non-current assets 286 496 268 785 275 445
Current assets
Inventories 87 561 54 139 59 823
Trade and other
receivables 95 107 66 013 85 322
Amounts due from fellow
subsidiaries 701 929 562
Cash and cash equivalents 71 607 47 420 71 005
Tax receivable - 409 -
Total current assets 254 976 168 910 216 712
Total assets 541 472 437 695 492 157
EQUITY AND LIABILITIES
Capital and reserves
Share capital 3 562 3 559 3 562
Share premium 3 156 3 134 3 156
Retained income 364 065 295 294 327 096
Total equity 370 783 301 987 333 814
Non-current liabilities
Deferred tax 58 565 56 177 55 761
Post-retirement benefit
obligation 4 21 322 20 089 20 715
Straight-lining lease
accrual 46 119 46
Total non-current
liabilities 79 933 76 385 76 522
Current liabilities
Trade and other payables 72 188 53 264 63 212
Provisions 5 6 630 5 544 5 517
Amounts payable to fellow
subsidiaries 972 483 1 453
Tax payable 10 931 - 11 561
Straight-lining lease accrual 35 32 78
Total current liabilities 90 756 59 323 81 821
Total equity and
liabilities 541 472 437 695 492 157
Condensed statement of cash flows
Unaudited Unaudited Audited
Half-year Half-year Year ended
30 June 30 June 31 December
2009 2008 2008
R`000 R`000 R`000
Cash flow from operating activities
Operating profit 49 222 65 288 106 295
Adjusted for:
Fair value adjustment of
biological assets (9 480) (39 046) (41 603)
Depreciation and amortisation 6 288 6 087 12 915
Foreign exchange (gain)/loss -
unrealised (2 366) 1 476 4221
Provisions utilised (1 915) (1 925) (4230)
Increase in liability for
retirement benefit obligation 607 552 1178
Loss/(profit) on disposal of
property, plant and equipment 19 (80) 133
Other non-cash items (43) 33 6
Tax payments (11 652) (9 839) (9 838)
Change in working capital (24 843) (4 781) (18 361)
Cash flow from operations 5 837 17 765 50 716
Net financing income 1 749 1 234 3 304
Net cash flow from
operating activities 7 586 18 999 54 020
Cash flow from investing activities
Expenditure on property,
plant and equipment
Replacement (7 878) (3 833) (14 991)
Proceeds on disposal of property,
plant and equipment - 80 95
Net cash outflow from
investing activities (7 878) (3 753) (14 896)
Cash flow from financing activities
Shares issued - 24 49
Dividends paid - (25 035) (25 035)
Net cash outflow from
financing activities - (25 011) (24 986)
Net (decrease)/increase in cash and
cash equivalents (292) (9 765) 14 138
Effects of exchange rates on the
balance of cash
held in foreign currencies 894 (227) (545)
Net cash and cash equivalents at
the beginning of the year 71 005 57 412 57 412
Net cash and cash equivalents at
the end of the year 71 607 47 420 71 005
Condensed statement of changes in equity
Share Share Retained Total
capital premium income equity
R`000 R`000 R`000 R`000
Balance at 30 June 2008:
unaudited 3 559 3 134 295 294 301 987
Share capital issued 3 22 - 25
Net profit for the period - - 31 802 31 802
Balance at 31 December 2008:
audited 3 562 3 156 327 096 333 814
Net profit for the period - - 36 969 36 969
Balance at 30 June 2009:
unaudited 3 562 3 156 364 065 370 783
Segment revenue and results
Segment revenue
Unaudited Unaudited Unaudited
Half-year Half-year Year ended
30 June 30 June 30 December
2009 2008 2008
R`000 R`000 R`000
Segment
Hardboard 221 420 181 233 421 741
Other products 47 802 51 285 119 619
Forestry 56 163 50 139 105 404
Intersegment (11 312) (14 082) (29 404)
Total 314 073 268 575 617 360
Reconciliation
Loss/(profit) on disposal
of property, plant and equipment
Administrative expenses
Finance income
Finance cost
Total per condensed income statement
Segment PBIT
Unaudited Unaudited Unaudited
Half-year Half-year Year ended
30 June 30 June 30 December
2009 2008 2008
R`000 R`000 R`000
Segment
Hardboard 29 781 13 516 33 945
Other products 7 729 11 197 25 960
Forestry 18 202 46 912 59 030
Intersegment - - -
Total 55 712 71 625 118 935
Reconciliation
Loss/(profit) on disposal
of property, plant and equipment (19) 80 (133)
Administrative expenses (6 471) (6 417) (12 507)
Finance income 2 373 1 762 4 936
Finance cost (800) (760) (1 585)
Total per condensed income statement 50 795 66 290 109 646
Notes
1. Basis of preparation
The condensed financial statements have been prepared in accordance with
International Accounting Standard 34 Interim Financial Reporting.
2. Significant accounting policies
The same accounting policies, presentation and methods of computation have been
followed in these condensed financial statements as were applied in the
preparation of the company`s financial statements for the year ended 31
December 2008, except for the impact of the adoption of the Standards and
Interpretations described below.
IFRS 8 Operating Segments
The company has adopted IFRS 8 Operating Segments with effect from 1 January
2009. The adoption of IFRS 8 did not have any impact on the financial results
of the company as it is a disclosure standard which has resulted in a change to
the company`s reportable segments.
IFRS 8 requires operating segments to be identified on the basis of internal
reports about operations of the company that are regularly reviewed by the
chief operating decision maker in order to allocate resources to the segment
and to assess its performance. As a result, following the adoption of IFRS 8,
the identification of the company`s reportable segments has changed.
IAS 1 (revised 2007) Presentation of Financial Statements
The revised Standard has introduced a number of changes in presentation and
disclosure. The revised Standard has had no impact on the reported results or
financial position of the company.
Comparative information has been re-presented so that it also is in conformity
with the above Standards and Interpretations.
3. Biological assets
Land, logging roads and related facilities are accounted for under property,
plant and equipment. Trees and sugar cane are generally felled at the optimum
age when ready for their intended use. After harvest, timber to be utilised at
the Mill is accounted for under inventories.
Timber and sugar cane are accounted for as biological assets. Biological assets
are stated at fair value with any resultant gain or loss recognised in the
income statement. The company owns timber plantations which it operates in
order to supply the Mill at Estcourt with its primary raw material. Sugar cane
has been planted in areas unsuitable for timber, in order to use the land
productively.
Unaudited Unaudited Audited
Half-year Half-year Year ended
30 June 30 June 31 December
2009 2008 2008
R`000 R`000 R`000
Timber plantations
Establishment costs 10 495 19 556 18 724
Immature timber 72 304 36 415 40 017
Mature timber 92 913 112 523 109 563
Total 175 712 168 494 168 304
Sugar cane
Establishment costs 3 395 982 3 220
Immature sugar cane 3 853 1 075 1 127
Mature sugar cane 1 931 2 303 2 760
Total 9 179 4 360 7 107
Total biological assets 184 891 172 854 175 411
4. Retirement benefit obligation
The company provides post-retirement medical benefits to retired employees who
were employed before January 1997. The liability in respect of this
post-retirement medical benefit is actuarially valued on an annual basis using
the Projected Unit Credit Method. Actuarial gains or losses in respect of
post-retirement medical benefits are recognised as income or expenses if the
net cumulative unrecognised actuarial gains or losses at the end of the
previous period exceed 10% of the present value of the post-retirement
obligation at that date. There are no plan assets held. The amount recognised
is the excess determined above, divided by the average remaining working lives
of the employees participating in the plan.
Past service costs are recognised as an expense on a straight-line basis over
the average period until the benefits vest. To the extent that benefits have
already vested, past service costs are recognised immediately.
5. Provisions
The amounts at the balance sheet date comprise provisions for leave pay.
6. Income tax expense
Unaudited Unaudited Audited
Half-year Half-year Year ended
30 June 30 June 31 December
2009 2008 2008
R`000 R`000 R`000
Current tax 11 022 7 242 19 212
Deferred tax 2 804 11 031 10 615
Reduction in corporate tax rate - (1 613) (1 613)
Total 13 826 16 660 28 214
7. Headline earnings
Reconciliation of headline earnings
Profit for the year 36 969 49 630 81 432
Adjusted for:
Loss/(profit) on disposal of assets 19 (80) 133
Tax effect of loss/(profit) on
disposal of assets (5) 22 (37)
Headline earnings 36 983 49 572 81 528
Headline earnings per share (cents) 519 697 1 145
8. Subsequent events
No material fact or circumstance has occurred between the end of the period and
the date of this report.
COMMENTARY
Results from operating activities (excluding the effect of the adjustment of
biological assets - IAS 41 Agriculture) was R39,7 million (2008: R26,2
million).
This improvement was mainly attributable to an effective cost containment
programme, and a better product mix in both the domestic and export markets.
Biological assets in 2008 were positively impacted by large timber price
increases. The price of timber in 2009 has stabilised.
Expectations for the balance of the year should take into account a slowdown in
business activity, and the negative effect of a strong Rand on both export and
domestic margins.
AH Wilson MJ Slater
Chairman Managing Director
28 September 2009
DIRECTORS
AH Wilson (Chairman), MJ Slater (British) (Managing), WP Coetzee,
MM Clark (USA), CA Virostek (Canadian), KMP Spencer, AG Venton,
GE Coulter (USA), AD DiLucente (USA), FJ Lynch (USA), LP Repar (Canadian)
SPONSOR
Nedbank Capital
135 Rivonia Road, Sandton, 2196
TRANSFER SECRETARIES
Computershare Investor Services (Proprietary) Limited
70 Marshall Street, Johannesburg, 2001
Date: 28/09/2009 16:00:01 Produced by the JSE SENS Department.
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