| Thu 19 Nov 2009, 16:15 | | DLV - Dorbyl Limited - Interim group results for the six months ended 30 |
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DLV
DLV
DLV - Dorbyl Limited - Interim group results for the six months ended 30
September 2009
DORBYL LIMITED
(Incorporated in the Republic of South Africa)
(Registration Number: 1911/001510/06)
Sare Code: DLV ISIN: ZAE000002184
("Dorbyl" or "the Company" or "the Group")
INTERIM GROUP RESULTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2009
INCOME STATEMENT
Unaudited Unaudited Audited
6 Months 6 Months Year to
to to March 2009
September September R000
2009 2008
R000 R000
Continuing operations:
Revenue 70 172 149 799 260 223
Cost of sales (72 279) (139 230) (257 539)
Gross (loss)/profit (2 107) 10 569 2 684
Other operating income 459 8 586 9 657
Administrative expenses (19 370) (31 507) (58 210)
Sales and distribution expenses (684) (2 047) (5 009)
Other operating expenses
Employee benefit liabilities - - (7 909)
raised
Impairment of assets - - (31 809)
Operating loss (21 702) (14 399) (90 596)
Net finance income 2 924 7 098 2 088
Finance income 3 030 7 481 7 443
Finance costs (106) (383) (5 355)
Share of (loss)/profit of associate (7 916) 1 (5 741)
Loss before taxation (26 694) (7 300) (94 249)
Income tax (expense)/relief - (119) 7 221
Loss after taxation from continuing (26 694) (7 419) (87 028)
operations
Discontinued operations:
Loss from discontinued operations, (12 302) (74 193) (172 817)
net of taxation
Loss for the period (38 996) (81 612) (259 845)
Attributable to:
Equity holders of the parent (28 270) (81 736) (237 932)
Minority interest (10 726) 124 (21 913)
Loss for the period (38 996) (81 612) (259 845)
Cents Cents Cents
Loss per share (cents)
Basic and diluted loss per share (83.3) (240.9) (701.4)
Continuing operations (47.1) (22.2) (192.4)
Discontinued operations (36.2) (218.7) (509.0)
Headline and diluted loss per share (107.0) (115.5) (316.8)
Continuing operations (47.1) (22.2) (128.5)
Discontinued operations (59.9) (93.3) (188.3)
Headline loss reconciliation R000 R000 R000
Loss for the period (28 270) (81 736) (237 932)
Adjusted for : (8 040) 42 538 130 450
(Profit)/loss on disposal of plant, (40) 56
vehicles and equipment (103)
Loss on discontinuance of 5 317
operations - -
(Reversal)/impairment of assets (8 000) 37 324 129 139
Less: Minority interest - - (10 185)
Impairment of investments - - 11 440
Headline loss (36 310) (39 198) (107 482)
R000 R000 R000
Depreciation and amortisation 4 534 10 977 19 383
Finance income 6 728 7 313 11 952
Interest received 1 236 3 723 7 274
Foreign exchange gains 5 492 3 590 4 678
Finance cost (1 639) (1 211) (12 618)
Interest paid ( 11) ( 3) (1 363)
Foreign exchange losses (1 522) (1 102) (11 043)
Interest paid - other ( 106) (106) ( 212)
BALANCE SHEET
Unaudited Unaudited Audited
September September March
2009 2008 2009
R000 R000 R000
ASSETS
Non-current assets 47 019 204 670 96 260
Property, plant and equipment 28 231 161 488 70 826
Investment in associates 18 788 43 182 25 434
Current assets 366 130 444 012 416 185
Inventories 4 497 210 855 34 992
Taxation receivable 1 056 835 974
Trade and other receivables 19 237 157 567 23 543
Cash and cash equivalents 59 187 74 755 51 431
Assets classified as held for sale 282 153 - 305 245
Total assets 413 149 648 682 512 445
EQUITY AND LIABILITIES
Total equity 233 396 363 715 285 392
Equity attributable to equity 223 855 319 305 265 128
holders of the parent
Minority interest 9 541 44 410 20 264
Non-current liabilities 26 684 33 500 26 652
Preference share capital 3 980 3 980 3 980
Employee benefits liability 22 704 21 861 22 672
Deferred tax liabilities - 7 659 -
Current liabilities 153 069 251 467 200 401
Trade and other payables 22 000 250 393 74 669
Employee benefits liability 1 360 304 1 360
Provisions 770 770 770
Taxation payable - - 205
Liabilities classified as held for 128 939 123 397
sale -
Total equity and liabilities 413 149 648 682 512 445
Capital commitments authorised 208 13 611 3 168
Authorised and contracted for 208 5 226 1 815
Authorised but not contracted for - 8 385 1 353
Operating lease commitments 10 043 15 542 12 268
Operating lease receivables 191 437 30 439 195 917
Investments in associates 18 788 43 182 25 434
Net asset value per share (cents) 660 941 782
Acquisition of property, plant and
equipment
Expansion 3 332 4 256 13 112
Replacement 1 830 10 108 13 718
Ordinary shares (000)
Issued - net of treasury shares 33 924 33 924 33 924
Weighted average number of shares 33 924 33 924 33 924
- net of treasury shares
CASH FLOW STATEMENT
Unaudited Unaudited Audited
6 Months 6 Months Year to
to to March 2009
September September R000
2009 2008
R000 R000
Cash utilised by operations (26 433) (29 599) (30 610)
Operating cash flow (35 741) (30 871) (98 428)
Movement in working capital 8 664 (732) 64 258
Interest income 1 236 3 723 7 274
Interest expense (117) (109) (1 575)
Income taxes paid (475) (1 610) (2 139)
Cash flows from investing 29 569 (10 869) (25 986)
activities
Proceeds on disposal of property, 36 000 107 279
plant and equipment
Acquisition of property, plant and (5 162) (14 364) (26 830)
equipment
Decrease in investments in (1 269) 3 388 565
subsidiaries/associates
Cash flows from financing - - -
activities
Dividends paid to equity holders - - -
Dividends paid to minority interest - - -
Net increase/(decrease) in cash and 3 136 (40 468) (56 596)
cash equivalents
Cash and cash equivalents at 51 431 115 223 115 223
beginning of the period
Classified as held for sale at 7 196 - -
beginning of period
Classified as held for sale at end (2 576) - (7 196)
of the period
Cash and cash equivalents at end of 59 187 74 755 51 431
the period
STATEMENT OF CHANGES IN EQUITY
Unaudited Unaudited Audited
6 Months 6 Months Year to
to to March 2009
September September R000
2009 2008
R000 R000
Balance at beginning of the period 285 392 445 327 445 327
Revaluation of property, plant and (13 000) - 102 017
equipment
Loss for the period (38 996) (81 612) (259 845)
Dividends to shareholders - - (2 107)
Balance at end of the period 233 396 363 715 285 392
Results
The automotive industry generally and component manufacturers in particular,
continue to face challenging trading conditions. During the interim period
under review, pressure on volumes and margins, as well as the costs incurred in
downsizing, resulted in the Group incurring a loss for the period of R38,9
million. The R81,6 million loss for the comparative period is not directly
comparable mainly due to the impairments raised in the prior period.
The Group reflected an earnings loss attributable to equity holders for the
period of R28,3 million or 83,3 cents per share.
The business units classified as held for sale (and therefore classified as
discontinued operations in the income statement) in the current period include
Dorbyl Automotive Systems (including Pullmaflex), Guestro Forging and Machining,
Guestro Casting and Machining and the properties held for sale include
Uitenhage, Struandale, Rosslyn and Benoni. Business units classified as
continuing operations in the income statement include Univel Transmissions and
the corporate head office. It should be noted that Univel Transmissions has
ceased production with complete closure expected by the financial year end at
which time any further financial results will be included in discontinued
operations. The prior period results have been restated for comparative
purposes.
The net cash position at R59,2 million is R7,8 million higher than the position
at 31 March 2009 mainly due to the receipt of the proceeds on the disposal of
the Neave property of R36 million which was off-set by closure related costs
including retrenchment pay-outs and operating losses.
Impairments, revaluations and net asset value
An R8 million reversal of impairments, due to updated valuations of the
properties, was effected during the period under review.
Shareholders are reminded that the impairment and revaluation assessments to
date reflect assumptions and judgements by the management of Dorbyl concerning
anticipated future outcomes. These assumptions and judgements may or may not
prove to be correct as there is significant uncertainty in the current economic
environment and should accordingly be viewed with caution.
The net asset value per share as at 30 September 2009 amounted to 660 cents per
share, compared to 782 cents per share as at 31 March 2009. It is unlikely that
there will be a material improvement in the loss for the period in the second
six months of the current financial year and will therefore further decrease the
net asset value.
Review of business units and assets
Previous announcements have endeavoured to keep shareholders informed of actions
being taken in respect of the five business units and the five properties which
constitute the Group.
The current status of these interventions is summarised below:
Dorbyl Automotive Systems (DAS): The disposal of this business unit, initially
announced in October 2008, has not yet been finalised, pending the securing of
finance by the purchaser. Potential alternative buyers of this business are
being investigated.
Univel Transmissions: Production has ceased and the process of vacating the
site and the realisation of the best value for the assets are expected to be
concluded by the financial year end.
Guestro Forging and Machining: The disposal of this business unit, initially
announced on 2 September 2009, has not yet been finalised. However, the
securing of the finance by the purchaser is imminent. Once the financing has
been secured in a form acceptable to Dorbyl, a circular will be sent to
shareholders containing further details of the disposal and calling for the
convening of a shareholders` meeting for the approval of the transaction.
Dorbyl Magnetto Wheels: Dorbyl retains its 50% interest in this business. The
down turn in the automotive industry has severely impacted volumes and the
business is generating losses. A substantial restructuring project is underway
to reduce these losses.
Guestro Castings and Machining: Concerted action to make this a viable business
in the present economic climate continues. The operation has been drastically
restructured from a two- shift to a one-shift operation retaining only those
products with acceptable margins whilst simultaneously broadening the customer
base outside the automotive industry. Management is currently engaging with a
number of parties who have expressed an interest in acquiring the business. The
property on which this operation is located, is also being re-evaluated with a
view to optimising maximum value.
Uitenhage and the Struandale properties: The disposals of these two properties
were announced on 17 August 2009 and approved at the shareholders` meeting held
on 1 October 2009. The receipts of the proceeds will be on registration of
transfer of the properties into the name of the purchaser. It should be noted
that operating lease receivables listed in the notes as R191 million will reduce
significantly by year-end as the majority of the lease receivables relates to a
long term lease on the Struandale property.
Rosslyn property: Whilst the disposal of the property was announced in December
2008, the agreement has been terminated due to the non-fulfilment of certain
conditions precedent by the proposed purchaser. Management is negotiating with
alternative potential buyers for the disposal of the property.
The cautionary announcement last renewed on 13 November 2009 is still effective.
Shareholders are accordingly advised to continue exercising caution when dealing
in their shares in Dorbyl Limited.
Segmental reporting
The primary segment during the period was automotive component manufacturing.
In terms of the geographical segment, automotive component manufacturing is
considered to be a South African operation. Due to the fact that the whole
business is considered as one segment, no segmental reporting has been provided.
Subsequent events
Other than the disposal of the Uitenhage and Struandale properties referred to
above, no matters which are material to the financial affairs of the Company or
the Group have occurred between the balance sheet date and the date of the
approval of the interim group results.
Basis of preparation
The results for the six months ended 30 September 2009 have been prepared in
accordance with International Financial Reporting Standards (IFRS), IAS 34 -
Interim Financial Reporting, the Companies Act and the Listings Requirements of
the JSE Limited. The accounting policies are consistent to those applied in the
prior comparative period.
Directorate
Mr BP Wood was appointed as Financial Director of Dorbyl effective 1 April 2009.
Mr J Newbury, the previous Chairman, retired from the Board at the conclusion of
the Annual General Meeting held on 4 September 2009 and was replaced by Mr JB
Magwaza as Chairman.
DIVIDEND
In view of the adverse results for the period under review, no dividend has been
declared.
On behalf of the board
JB Magwaza (Chairman) R Rohrs (Chief Executive)
19 November 2009
Registered Office:
13 Lincoln Road, Industrial Sites, Benoni South, 1501
Transfer Secretaries:
Computershare Investor Services (Pty) Ltd
70 Marshall Street, Johannesburg, 2001
(PO Box 61051, Marshalltown, 2107)
Company Secretary: BD Bhikha
Sponsor: PSG Capital (Pty) Ltd
Auditors: KPMG Inc
Directors: JB Magwaza (Chairman)**, RF Rohrs (Group Chief Executive)*, P
Bester**, JW Dreyer***, TA Morkel***, BP Wood*, T van Wyk***
*Executive **Independent non-executive ***Non-executive
Date: 19/11/2009 16:15:01 Produced by the JSE SENS Department.
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