| Tue 3 Nov 2009, 16:00 | | IRA - Infrasors Holdings Limited - Reviewed Results For The Six Months Ended 31 |
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IRA
IRA
IRA - Infrasors Holdings Limited - Reviewed Results For The Six Months Ended 31
August 2009
INFRASORS HOLDINGS LIMITED
(Incorporated in the Republic of
South Africa)
(Registration number: 2007/002405/06)
Share Code on the JSE: IRA ISIN ZAE 000101507
("Infrasors" or "the Group")
REVIEWED RESULTS FOR THE SIX MONTHS ENDED 31 AUGUST 2009
GROUP CONDENSED STATEMENT OF COMPREHENSIVE INCOME
Note Reviewed Six Reviewed Six Audited twelve
month ended month ended months to 28
31/08/2009 31/08/2008 February
R000`s R000`s 2009R000`s
Revenue 116 770 154 136 250 328
EBITDA 20 103 35 769 46 688
Depreciation and (4 658) (3 324) (7 955)
amortization
Net financing costs (5 314) 3 420 256
Profit before taxation 10 131 35 865 38 989
Taxation (2 848) (10 793) (8 911)
Profit and total 7 283 25 072 30 078
comprehensive income for
the period
Earnings per 3 4.2 14.2 17
share (cents)
Diluted 3 4.2 14.2 17
earnings per
share (cents)
Headline 3 4.2 14.2 17.5
earnings per
share (cents)
Diluted 3 4.2 14.2 17.5
headline
earnings per
share (cents)
Number of shares in issue 172 985 175 966 172 985
(net of treasury shares)
(000`s)
Weighted average number 172 985 177 201 177 131
of shares in issue
(000`s)
Diluted weighted average 172 985 177 201 177 131
number of shares in issue
(000`s)
CONDENSED STATEMENT OF FINANCIAL POSITION
Note Reviewed as Reviewed as Audited as
at 31 at 31 August at 28
August 2009 2008 R000`s February
R000`s 2009 R000`s
Non-current assets 463 459 419 356 454 172
Property, plant and equipment 296 663 270 520 288 672
Intangible assets 89 449 89 449 89 449
Investments 7 000 - 7 000
Deferred tax 12 537 171
Other financial assets 70 335 58 850 68 880
Current assets 103 706 104 132 111 970
Inventories 16 465 19 233 16 240
Cash resources 36 982 16 493 51 200
Other current assets 50 259 68 406 44 530
Total assets 567 165 523 488 566 142
Capital and reserves 366 786 355 814 359 631
Share capital and premium 247 715 248 638 247 715
Retained income 119 071 107 176 111 916
Non-current liabilities 151 448 109 810 156 308
Borrowings 91 023 58 991 98 809
Other financial liabilities - 1 570 -
Environmental rehabilitation 14 135 14 141 14 030
provision
Deferred taxation 46 290 35 108 43 469
Current liabilities 48 931 57 864 50 203
Loans and borrowings 19 271 7 424 17 167
Taxation payable 1 257 15 869 1 976
Other current liabilities 28 403 34 571 31 060
Total equity and liabilities 567 165 523 488 566 142
Net asset value per 4 212 202.2 207.9
share (cents)
Tangible net asset 4 160.3 151.4 156.2
value per share
(cents)
GROUP CONDENSED STATEMENT OF CASH FLOWS
Reviewed Six Reviewed Six Audited year
month ended month ended ended 28/02/2009
31/08/2009 31/08/2008 R000`s
R000`s R000`s
Cash flows from 14 839 33 958 57 101
operations
Dividends paid - (21 208) (21 208)
Interest paid (7 162) (2 833) (9 987)
Interest received 1 848 6 253 10 174
Taxation paid (4 180) (4 499) (10 722)
Cash flows from 5 345 11 671 25 358
operating activities
Cash flows from (13 909) (35 707) (58 406)
investing activities
Cash flows from (5 654) (19 195) 24 523
financing activities
Net decrease in cash (14 218) (43 231) (8 525)
and cash equivalents
Cash and cash 51 200 59 725 59 725
equivalents at the
beginning of the period
Cash and cash 36 982 16 494 51 200
equivalents and the end
of the period
GROUP STATEMENT OF CHANGES IN SHAREHOLDERS` EQUITY
Note Reviewed Six Reviewed Six Audited Year
month ended month ended ended 28/02/2009
31/08/2009 31/08/2008 R000`s
R000`s R000`s
Share capital 865 881 865
Balance at the 865 888 888
beginning of the period
Treasury shares - -7 -23
acquired by subsidiary
Share premium 246 850 247 757 246 850
Balance at the 246 850 251 327 251 327
beginning of the period
- (3 570) (4 477)
Retained earnings 119 071 107 176 111 916
Balance at the 111 916 103 312 103 312
beginning of the period
Dividends paid - (21 208) (21 208)
Deferred taxation on -128 - -266
rehabilitation
investments
Profit for the period 7 283 25 072 30 078
Balance at end of the 366 786 355 814 359 631
period
SEGMENTED CONSOLIDATED RESULTS
Sand Aggregate Bricks Other Total
R000`s R000`s R000`s R000`s R000`s
31-Aug-09
38 320 67 768 7 943 - 114 031
Inter-company - - - 8 455 8 455
revenues
Interest revenue 114 525 - 1 209 1 848
Interest expense 767 198 388 5 809 7 162
Depreciation 2 292 1 429 761 176 4 658
Net profit before tax 8 949 9 249 -361 (7 706) 10 131
Additions to non- 2 664 9 895 - - 12 559
current assets
Assets 194 566 217 716 43 498 111 385 567 165
Liabilities 33 202 64 196 9 238 93 861 200 379
28-Feb-09
Turnover from 90 733 116 485 32 499 - 239 717
external customers
Inter-company - - - 7 400 7 400
revenues
Interest revenue 457 653 - 9 133 10 243
Interest expense 2 303 144 1 423 6 117 9 987
Depreciation 3 679 2 606 1 451 219 7 955
Net profit before tax 22 332 19 127 4 196 (6 666) 38 989
Additions to non- 28 760 11 530 2 532 1 352 44 174
current assets
Assets 208 471 198 720 43 459 115 492 566 142
Liabilities 33 066 64 248 9 622 99 575 206 511
31-Aug-08
Turnover from 46 252 70 357 19 885 - 136 494
external customers
Inter-company - - - 3 750 3 750
revenues
Interest revenue 406 439 - 5 408 6 253
Interest expense 728 58 - 2 047 2 833
Depreciation 1 432 949 867 172 3 420
Net profit before tax 13 342 17 292 2 243 2 988 35 865
Additions to non- 12 689 4 700 2 072 929 20 390
current assets
Assets 188 429 203 228 48 505 83 326 523 488
Liabilities 38 147 62 563 12 373 54 591 167 674
MANAGEMENT COMMENTARY
DEFINITION OF TERMS
Terms used in the following announcement have the following meanings:
i) F2009 - means the financial twelve months ended 28 February 2009;
ii) H1 F2009 - means the financial six months ended 31 August 2008, or the
first half of F2009;
iii) H2 F2009 - means the financial six months ended 28 February 2009, or the
second half of F2009;
iv) The "previous corresponding period" - means H1 F2009;
F2010 - means the financial twelve months ended 28 February 2010;
v) H1 F2010 - means the financial six months ended 31 August 2009, or the
first half of F2010; and
vi) H2 F2010 - means the financial six months ending 28 February 2010, or the
second half F2010.
Infrasors
Infrasors is a South African holding company, mining and beneficiating a spread
of base minerals for industry and construction.
The principal Infrasors subsidiaries are:
- Lyttelton Dolomite, which is involved in mining and beneficiation
activities and supplies aggregate and metallurgical dolomite to the
industrial and construction sectors;
- Delf Sand, which undertakes mining and beneficiation, milling, grinding,
sorting and manufacture of metallurgical sand and silica products for the
glass industry, the leisure sector, foundries and building and construction
sectors;
- Infrabric which manufactures cement bricks;
- Pienaarspoort, a crushing plant project to supply crushed silica for the
glass, filter and aggregate markets; and
- Corporate head office, which is responsible for strategy, risk management,
and administration. It is also the provider of shared services across
common business functions such as finance, IT and human resources,
centralised procurement, capital expenditure, growth and replacement
projects.
Financial review
Revenue for the period under review was R116.8 million, (R96.1 million H2 F2009,
R154.1 million H1 F2009). Profit before taxes for the period under review was
R10.1 million, (R3.1 million H2 F2009, R35.9 million H1 F2009). The analysis of
turnover and profit before tax on a segmented basis is detailed herein.
Cash of R15.1 million was generated by operations (H2 F2009 R13.7 million, H1
F2009 R11.7 million), before outflow of investments of R13.9 million (H2 F2009
R22.7 million, H1 F2009 R35.7 million), and outflow of financing activities of
R5.7 million (H2 F2009 R5.3 million, H2 F2009 R19.2 million).
Capital expenditure of R12.6 million was incurred in the six months under
review, reflecting an ongoing investment by the group in plant infrastructure
and development of mineral reserves.
The upgrade and refurbishment at the Lyttelton Centurion mine included the
installation of the Pluto plant, upgrade of the existing aggregate Sputnik
plant, together with the commissioning of the new Lunar aggregate plant and the
expansion of the mining development in the southern and western portions.
The installation and commissioning of the new mill at the Marble Hall mine was
also conducted during H2 F2009, to upgrade the Marble Hall milling capacity.
Delf Sand incurred capital expenditure to refurbish all the sand driers 1 - 4,
as well as the commissioning of the new 5th dryer at the Delf Sand mine during
H2 F2009.
The capital expenditure was made up as follows for the period under review:
6 months to 6 months to 12 months to
31 August 31 August 28 February
2009 2008 2009
R000`s R000`s R000`s
Lyttelton Dolomite 9 895 4 700 11 530
Delf Sand 2 447 11 342 24 400
Infrabric - 2 072 2 532
Pienaarspoort 217 1 347 5 500
Corporate Office - 929 1 658
Total 12 559 20 390 45 620
Operational review
Health and Safety
During the 6 months ended 31 August 2009, the Group`s Health and Safety
initiative towards a zero harm philosophy continued to gain momentum with the
appointment of a group safety manager and enhanced safety procedures.
Regrettably however one disabling injury was recorded at the brick operation. No
other major incidents or fatalities occurred at any of the other Group
operations.
Lyttelton Dolomite
Lyttelton Dolomite produced 479 935 tons of dolomite from the Lyttelton Dolomite
Centurion mine operation during the 6 months under review (H2 F2009 227 456
tons, H1 F2009 695 407 tons). At the Marble Hall operation, production amounted
to 110 778 tons (H2 F2009 48 433 tons, H1 F2009 169 567 tons).
As part of the pit expansion to open up and develop the southern and western
portions of the mine, extensive over-burden was removed, totaling 187 080 tons,
facilitating further production increases and enhanced production efficiencies.
Lyttelton`s turnover was R67.8 million for the period under review (H2 F2009
R46.1 million, H1 F2009 R70.4 million). Lyttelton`s profit before tax was R9.3
million (H2 F2009 R1.8 million, H1 F2009 R17.3 million).
In anticipation of the expected upturn in the economy the primary crusher at the
Lyttelton Dolomite Centurion mine has undergone extensive refurbishment
resulting in higher than expected repair and maintenance costs and consequential
downtime of approximately 3 weeks over the six month period resulted in higher
costs per ton and less product available for sale. A continuous program has been
put into place to expand preventative maintenance to minimize downtime occurring
in the future.
Lyttelton Dolomite`s Centurion and Marble Hall mines continue to have healthy
demand and back order for their production which outstrips and outweighs
production capacity. The preventative maintenance and plant expansion is
currently in place in order to address this demand.
Delf Sand
Delf Sand sold 135 393 tons of silica in the period under review (H2 F2009 155
130 tons, H1 F2009 182 000 tons).
Delf Sand contributed R38.3 million (H2 F2009 R44.4 million, H1 F2009 R46.3
million) to Group turnover, and contributed R9.0 million (H2 F2009 R9.0 million,
H1 F2009 R13.3 million) to Group profit before tax.
Delf expanded their customer base with various new clients, but given the
current economic situation key industries reduced their product off-take as
follows from F2009:
- Foundry market down 23%;
- Building construction market down 47%; and
- Golf and leisure market down 10%, and the
- Tile industry market being 4.7% higher, due to new customer off take.
During the downturn in demand Delf proceeded to conduct an extensive
refurbishment program on all their exiting sand driers in order to improve their
efficiencies and increase their production capacity.
An adjacent property to the Cullinan property had been acquired for the sum of
R1 million in a purchase agreement of a portion of the farm Brandwag 471 JR in
extent some 20 hectares. The portion was acquired as part of a strategic
purchase to enhance the reserves on hand as well as provide an access road to
the Cullinan property.
Pienaarspoort Silica
The mining license has been provisionally granted, pending finalisation of the
rehabilitation provision. Once granted bulk samples are expected to be mined.
Infrabric
Infrabic sold 9.6 million bricks in the first half of F2010 and contributed R7.9
million (H2 F2009 R 12.6 million, H1 F2009 R19.9 million) to Group turnover. The
decrease in turnover is a result of the gradual reduction in production due to
the reduction of 2 productions teams with 2 shifts (April - June), to 2
production teams with 1 shift, and currently 1 production team with 1 shift
(July - August).
The decision to relocate and move the plant and its operation to
Pienaarspoort/Delf has been approved by the board for the following reasons:
- Low sales due to the depressed building and construction sectors;
- Expected synergies due to the consolidation at a central site at Delf and the
sharing of management and administrative staff;
- Low levels of available ash resources at the current site at Allandale;
- The availability and use of aggregate by products generated by the
Pienaarspoort/Delf operations; and
- High rental increases expected will be avoided by operating on own site.
The relocation of the Infrabric plant is planned to be conducted during December
2009.
Mining Assets, Mining Licenses and Mineral Reserves
New order mining rights have been granted for the alluvial Delf Sand and
alluvial Pienaarspoort mines in Donkerhoek. The Lyttelton Dolomite Centurion and
Marble Hall mining right conversion applications have been submitted to the DME
and await finalization of the conversions.
The crushed silica Pienaarspoort mine new order mining rights have been
provisionally granted.
New order prospecting right applications have been submitted in respect of the
Cullinan property as well as extensions to the existing Marble Hall mine.
A small scale mining permit has been applied for in respect to the newly
acquired portion of the farm Brandwag 471 JR, adjacent to the Cullinan property.
Outlook - Infrasors Group
The products and services supplied by the Infrasors group broadly form part of
the industrial minerals supply chain and are directly and immediately affected
by overall demand in the base minerals and manufacturing economy. Consequently
Infrasors was directly and immediately affected by the demand slump which
manifested in H2 F2009 and is equally well positioned to respond immediately to
the anticipated upturn.
The Infrasors Group anticipates demand driven growth in H2 F2010 which is
expected to remain positive and in line with the first half production given
ongoing stable market conditions. The anticipated end of the recession in the
South African economy and the lessening of the global financial instability have
resulted in the beginnings of increased demand by Infrasors key clients in
manufacturing base metals industrial applications. The possibility of a "w-
shaped" recession has lessened and the "u-shaped" recession appears to be
trending towards the upside.
The "green shoots" have indicated that demand is on the increase and should
continue to slowly grow in the short term.
In the medium term Infrasors is well placed to grow its revenue and profits as
capital expenditure projects and plant refurbishments designed to expand
production and reduce unit costs per ton mined and beneficiated at Lyttelton and
Delf have been implemented enabling greater tonnage throughput per month once
the recovery takes off and Cullinan is brought into production.
Outlook - Lyttelton Dolomite
Capital expenditure to the Lunar plant of R15 million had been approved in H2
F2009 and is currently being implemented to establish a third phase of
production capacity and increased throughput by 18 000 tons per month upon
reaching full average production of 135 000 tons per month. The Lunar Plant is
expected to be fully operational by November 2009, to meet the demand with its
full benefit seen in February 2010. Demand at both Lyttelton Centurion and
Marble Hall mines continue to be higher than production capacity.
Outlook - Delf Sand
Delf Sand`s core customers in foundry and related industries continue to off-
take product with steady demand, which is expected to strengthen to improve
volumes slightly in H2 F2010 and return towards 2007 levels of demand. The H2
F2010 is anticipated to increase and signal the beginning of the recovery of the
foundry and related industries. Demand for the building industry remains soft in
current economic conditions. Demand in the glass and foundry industries are
driven by local and global economic conditions which are currently experiencing
renewed interest.
Delf Sand is establishing new silica beneficiation and distribution facilities
in other national geographical footprint areas to continue growth in the foundry
and tile adhesive markets to provide better service to our various client needs.
The main objective is to create a stronger countrywide presence in the emerging
silica markets and offer a better product and a more affordable client service.
Outlook - Pienaarspoort
Upon finalization of the mining license bulk samples will be mined in order to
conclude economically viable off take with our existing silica customers and
hence the finalization of the plant design.
Outlook - Infrabric
Infrabric`s profitability and production has been affected by the softening of
the current construction industry and the slowdown in building activities, as
well as low levels of ash resource, and high rental increases.
For these reasons the Board decided to relocate the Infrabric plant operation to
Pienaarspoort/Delf and exploit the growing building markets in that area.
NOTES TO THE CONDENSED CONSOLIDATED REVIEWED FINANCIAL STATEMENTS
1. Significant accounting policies
Infrasors is a company domiciled in South Africa. The condensed consolidated
reviewed financial statements of Infrasors for the six months ended 31 August
2009 comprise the Company and its subsidiaries (together referred to as the
"Group").
The condensed consolidated reviewed financial statements were authorised for
issue by the directors on 23 October 2009.
1.1 Basis of preparation
The condensed consolidated interim financial statements have been prepared in
accordance with IAS 34 Interim Financial Reporting and in compliance with the
South African Companies Act, 1973. The condensed consolidated reviewed interim
financial statements are prepared on the historical cost basis, with the
exception of certain financial instruments which are measured at fair value. The
results of the interim period are not necessarily indicative of the results for
the entire year, and these reviewed financial statements should be read in
conjunction with the audited financial statements for the year ended 28
February, 2009.
The preparation of condensed consolidated reviewed interim financial statements
requires the use of estimates and assumptions that affect the reported amounts
of assets and liabilities and disclosure of contingent assets and liabilities at
the date of the condensed consolidated reviewed interim financial statements and
the reported amounts of revenue and expenses during the reporting periods.
Although these estimates are based on management`s best knowledge of current
events and actions that the Group may undertake in the future, actual results
may differ from those estimates.
The accounting policies have been applied consistently by Group companies to all
periods presented in these condensed consolidated reviewed financial statements.
2. Review of results
Mazars Moores Rowland has signed an unqualified review opinion on the condensed
interim financial statements. These financial statements have been approved by
the board and condensed for the purposes of this report. The auditors have
reviewed the condensed financial statements. Both the auditors` opinion and the
condensed interim financial statements are available for inspection at the
Company`s registered office as well as being posted on the company`s website.
3. Earnings per share ("EPS")
EPS is based on the Group`s profit for the six month period ended 31 August
2009, divided by the weighted average number of shares in issue during the six-
month period.
Net Weighted average Earnings
profit number of shares per share
R000`s in issue Cents
000`s
Earnings per share 7 283 172 985 4.2
Diluted earnings per share 7 283 172 985 4.2
Headline earnings
reconciliation
Headline earnings per share is based on the Group`s headline earnings
divided by the weighted average number of shares in issue during the 6
month period ended 31 August 2008
Net profit 7 283
Sale of assets (133)
Tax effect on sale of assets 37
Headline earnings per share 7 187 172 985 4.2
4. Net asset value ("NAV") per share
The net asset value per share is the value of the Group`s assets, less the sum
of the value of its liabilities, divided by the number of shares in issue.
Reviewed Reviewed Audited 12
6 months 6 months months to
ended 31 ended 31 28 February
August 2009 August 2008 2009
Ordinary share capital and 366 786 355 814 359 631
reserves (R000`s)
Total number of shares in issue 172 985 175 966 172 985
(net of treasury shares) (000`s)
NAV per share (cents) 212.0 202.2 207.9
Ordinary share capital and 366 786 355 814 359 631
reserves (R000`s)
Intangible assets (89 449) (89 449) (89 449)
Tangible net asset value 277 337 266 365 270 182
Total number of shares in issue 172 985 175 966 172 985
(net of treasury shares) (000`s)
Tangible NAV per share (cents) 160.3 151.4 156.2
5. Dividends
The directors have elected not to declare a dividend for the six months ended 31
August 2009 in view of the current economic climate and the need for prudent
capital preservation policies.
6. Related party transactions
Reviewed Reviewed Audited
6 months 6 months year ended
ended ended 28 February
31 August 31 August 2009
2009 2008
Purchases between fellow
subsidiary companies
Delf Sand purchased from 3 006 2 075 4 330
Pienaarspoort
Purchases from related parties
are made at normal market
prices
Management fees paid to
Infrasors Holdings Limited
Management fees were paid for 8 455 3 750 7 400
services rendered in the areas
of administration and technical
advice, based on the
apportioned time spent
Interest paid by subsidiaries
to Holding company
Infrabric - 546 1 093
Delf Sand 416 228 685
Donations made to Infrasors
Environmental Rehabilitation
Trust
Lyttelton Dolomite 465 423 852
Dividends received by
subsidiary company
Infrasors Management Services - 132 132
Rent paid to Whirlprops 35
Infrasors Holdings Limited 261 237 475
7. Directorate and administration
Directors and executive officers
Trevor Robinson (Executive Director and Chief Executive Officer)
Frans Liebenberg (Chief Operating Officer)
Marius Potgieter (Financial Director)
Stephen Courtney (Commercial Director)
Popo Molefe (Non-Executive Director and Chairman of the Board)
Chris Boulle (Non-Executive Director)
Mochele Noge (Non-Executive Director)
Dereck Alexander (Non-Executive Director)
Kerry Colley (Company Secretary)
All of the above directors are South African and resident in South Africa
03 November 2009
Designated adviser Auditors
Sasfin Capital Mazars Moores Rowland
A division of Sasfin Bank Limited
Legal Advisers and Attorneys Transfer Secretaries
HR Levin Attorneys Notaries and Link Market Services South Africa
Conveyancers (Proprietary) Limited
On behalf of the board
P Molefe T Robinson
Chairman* Chief Executive
VISIT US AT www.infrasors.co.za
"INFRASTRUCTURE BY INFRASORS"
Date: 03/11/2009 16:00:01 Produced by the JSE SENS Department.
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