| Fri 5 Nov 2010, 17:00 | | IRA - Infrasors - Unaudited condensed group consolidated results for the six |
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IRA
IRA
IRA - Infrasors - Unaudited condensed group consolidated results for the six
months ended 31 August 2010
INFRASORS HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 2007/002405/06)
Share code on the JSE: IRA ISIN: ZAE000101507
("Infrasors", "the Company" or "the Group")
Unaudited Condensed Group Consolidated Results
For the six months ended 31 August 2010
CONDENSED GROUP STATEMENT OF COMPREHENSIVE INCOME
Represented*
Unaudited reviewed Audited
six months six months year
ended ended ended
31 August 31 August 28 February
2010 2009 2010
Note R000`s R000`s R000`s
Continuing operations
Revenue 124 834 108 755 211 479
Gross profit 36 062 29 577 62 260
Profit from
operating activities 20 584 19 282 34 870
Depreciation and amortisation (5 957) (3 870) (7 673)
Net finance costs (3 540) (4 924) (4 723)
Profit before tax and
separately disclosed items 11 087 10 488 22 474
Fair value adjustments - - 39 127
Profit before taxation 11 087 10 488 61 601
Income tax expense (3 468) (2 945) (8 759)
Profit from continuing
operations 7 619 7 543 52 842
Discontinued operations
Loss from discontinued operations - (260) (22 800)
Net profit for the period 7 619 7 283 30 042
Other comprehensive income
Net gain on revaluation of
property,plant and equipment - - 6 150
Total comprehensive income
for the period 7 619 7 283 36 192
Earnings per share
(cents) 3 4.2 4.2 17.4
Diluted 4.2 4.2 17.4
From continuing operations 4.2 4.4 30.6
Diluted 4.2 4.4 30.6
From discontinued operations - (0.2) (13.2)
Diluted - (0.2) (13.2)
*The 2009 results contain certain amounts that had been reclassified to
conform with the current period`s discontinued operations presentation, in
accordance with International Financial Reporting Standards ("IFRS").
CONDENSED GROUP STATEMENT OF FINANCIAL POSITION
Unaudited Reviewed Audited
as at as at as at
31 August 31 August 28 February
2010 2009 2010
Note R000`s R000`s R000`s
Non-current assets 509 081 463 459 491 728
Property, plant and equipment 293 448 296 663 280 695
Mineral rights 72 500 72 500 72 500
Goodwill - 16 949 -
Investments 7 000 7 000 7 000
Investment property 56 780 - 56 780
Deferred tax 6 347 12 3 001
Other financial assets 73 006 70 335 71 752
Current assets 84 385 103 706 84 776
Inventories 18 147 16 465 17 092
Cash resources 18 626 36 982 22 610
Trade and other receivables 45 014 44 027 38 842
Current tax receivable 2 598 6 232 6 232
Assets of discontinued
operation 2 6 594 - 12 983
Assets held for sale 5 000 - -
Other assets 1 594 - 12 983
Total assets 600 060 567 165 589 487
Capital and reserves 409 587 366 786 395 823
Share capital and premium 253 860 247 715 247 715
Revaluation reserve 6 150 - 6 150
Retained income 149 577 119 071 141 958
Non-current liabilities 136 982 151 448 139 039
Borrowings 65 281 91 023 70 287
Environmental rehabilitation
provision 13 564 14 135 13 657
Deferred taxation 58 137 46 290 55 095
Current liabilities 53 245 48 931 50 351
Borrowings 19 228 19 271 17 941
Current tax payable - 1 257 1
Trade and other payables 34 017 28 403 32 409
Liabilities of discontinued operations 246 - 4 274
Total equity and liabilities 600 060 567 165 589 487
Net asset value per share (cents) 227.6 212.0 228.8
Net number of shares in issue (000`s) 179 991 172 985 172 978
CONDENSED GROUP STATEMENT OF CASH FLOWS
Unaudited Reviewed Audited
six months six months year
ended ended ended
31 August 31 August 28 February
2010 2009 2010
R000`s R000`s R000`s
Cash flows generated from operations 13 782 14 839 38 635
Interest paid (4 161) (7 162) (9 846)
Interest received 621 1 848 2 969
Net taxation refund/(paid) 3 079 (4 180) (5 518)
Cash flows from operating activities 13 321 5 345 26 240
Cash flows from investing activities (16 397) (13 909) (30 416)
Cash flows from financing activities (912) (5 654) (24 410)
Net decrease in cash and
cash equivalents (3 988) (14 218) (28 586)
Cash and cash equivalents
at the beginning of the period 22 614 51 200 51 200
Cash and cash equivalents at the end
of the period 18 626 36 982 22 614
Continuing operations 18 626 36 982 22 610
Discontinued operations - - 4
CONDENSED GROUP STATEMENT OF CHANGES IN EQUITY
Unaudited Reviewed Audited
six months six months year
ended ended ended
31 August 31 August 28 February
2010 2009 2010
R000`s R000`s R000`s
Share capital 903 865 865
Balance at the beginning of the period 865 865 865
Issue of shares 38 - -
Share premium 252 957 246 850 246 850
Balance at the beginning of the period 246 850 246 850 246 850
Issue of shares 6 107 - -
Revaluation reserve 6 150 - 6 150
Balance at beginning of period 6 150 - -
Revaluation of property, plant and
equipment included in total comprehensive
income - - 6 150
Retained income 149 577 119 071 141 958
Balance at the beginning of the period 141 958 111 916 111 916
Deferred taxation on rehabilitation
investments - (128) -
Profit for the period in total
comprehensive income 7 619 7 283 30 042
Balance at end of the period 409 587 366 786 395 823
SEGMENTED CONSOLIDATED RESULTS
Segment information is presented in the condensed unaudited consolidated
financial statements in respect to the Group`s business segments.
The business segment reporting format reflects the Group`s management and
internal reporting structure. Inter-company pricing is determined on an arm`s
length basis. Segment results include items directly attributable to a segment
as well as those that can be allocated on a reasonable basis.
Sand Aggregate Other Total
R000`s R000`s R000`s R000`s
31 August 2010
Turnover from external customers 40 047 82 835 282 123 164
Inter-segment revenues 42 - 3 600 3 642
Net profit before tax 5 588 12 724 (7 225) 11 087
Additions to non-current assets 12 962 2 967 54 15 983
31 August 2009
Turnover from external customers 38 320 67 768 7 943 114 031
Inter-segment revenues - - 8 455 8 455
Net profit before tax 8 949 9 249 (8 067) 10 131
Additions to non-current assets 2 664 9 895 - 12 559
MANAGEMENT COMMENTARY
Infrasors
Infrasors is a South African mining resources company, mining and producing a
spread of base minerals for the industrial, metallurgical, mining and
construction sectors. The principal Infrasors operations are:
- Lyttelton Dolomite, incorporating two mining operations, namely:
Lyttelton Centurion mine, which opencast mines a dolomite ore-body and the
resultant beneficiation of metallurgical grade aggregate, construction
aggregate and powders; and Marble Hall mine which opencast mines a
metamorphosed dolomite ore-body (limestone) and the resultant beneficiation of
metallurgical grade aggregate, construction aggregate and powders;
- Delf Silica, which through its Delf Sand mine and its recently established
Delf Tongaat facility, opencast mines high silica content alluvial deposits
with the resultant beneficiation of the sand for the foundry, tile adhesive,
recreational and construction industries.
Financial review
Revenue for the period under review was R124.8 million (2009: R108.8 million).
The profit from continuing operating activities for the period under review
was R20.6 million (2009: R19.3 million), an increase of R1.3 million (6.7%).
The profit before taxation for continuing operations for the period under
review was R11.1 million (2009: R10.5 million), an increase of R0.6 million
(5.7%). The analysis of turnover and profit before tax on a segmented basis is
detailed herein.
Cash of R13.8 million (2009: R14.8 million) was generated by operations, prior
to net finance cost of R3.5 million (2009: R5.3 million) and taxation refunds
received of R3.1 million (2009: tax paid R4.2 million), before outflow of
investing activities of R16.4 million (2009:R13.9 million), and outflow of
financing activities of R0.9 million (2009:R5.7 million).
Capital expenditure of R16.0 million (2009: R12.6 million) was incurred in the
period under review, reflecting an ongoing investment by the Group in plant
infrastructure, development of mineral reserves and the establishment of the
Delf Tongaat facility.
There have been no material changes in the Group`s mineral reserves during
this period.
Operational review
Lyttelton Dolomite Centurion and Marble Hall mines
The Lyttelton Dolomite Centurion mine produced 555 888 tons during the period
under review (2009: 479 935 tons), an increase of 75 953 tons (15.8%). At the
Marble Hall mine, production amounted to 182 124 tons (2009: 110 778 tons), an
increase of 71 346 tons (64.4%).
The Lyttelton Dolomite Centurion and Marble Hall mines turnover was R82.8
million for the period under review (2009: R67.8 million), an increase of
R15.0 million (22.1%). Contribution to Group profit before tax was R12.7
million (2009: R9.3 million), an increase of R3.4 million (36.6%).
Delf Silica
The Delf Sand mine sold 140 408 tons of silica in the period under review
(2009: 135 393 tons), an increase of 5 015 tons (3.7%).
The Delf Silica`s turnover was R40.0 million (2009: R38.3 million), and
contributed R5.6 million (2009: R9.0 million) to Group profit before tax , a
reduction of R3.4 million (37.8%).
The reduction in the profitability resulted from the change in product mix
sold, from higher margin products in the foundry market, to lower margin
products in the tile adhesive market. Production costs increased, resulting
from the inflationary pressures in wage and electricity costs.
The Delf Tongaat facility has been established and commissioned during August
2010 to serve the KwaZulu-Natal foundry and tile adhesive industries.
Outlook - Infrasors Group
Infrasors is a mining resources company, which mines and produces a spread of
base minerals for the industrial, metallurgical, mining and construction
sectors. As such, the volumes are dependent on overall demand within each
sector. The construction market is being constrained by slow implementation of
Government infrastructural projects and the economic downturn. A slight return
of confidence has been experienced in the markets with the exception of the
foundry industry which appears to be lagging.
The Company continues to look at ways to augment its business profile to boost
its growth and profitability. Included in this strategy is the spread in
geographical footprint of Delf Silica.
Overall demand for its products is expected to remain consistent over the next
six months as the South African industry continues to claw itself out of
recession. Key clients in manufacturing base metals industry are expected to
gradually increase their demands which will be beneficial for our supplies to
the foundry industry. The construction market over the next six months is
expected to remain under pressure and should improve upon implementation of
the Government infrastructure development projects in the medium term.
Outlook - Lyttelton Dolomite
Lyttelton Centurion mine - The introduction of the Lunar aggregate sizing
plant has provided flexibility in its product mix and at the same time has
increased throughput. The mine has seen a slow return to normality in terms of
its metallurgical sales after the reduction in off-take from the steel
industries during financial year 2009. The supply to the local construction
market is expected to remain flat.
Marble Hall mine - Sales have increased steadily with higher off-take in
metallurgical grade aggregate, and powder sales are expected to continue for
the short and medium term. In the medium to long term the mine is well-
positioned to supply products utilised in the clean air and water initiatives.
Outlook - Delf Silica
Delf Sand mine - A flat volume off-take has been experienced within the
foundry market. Positivity has however returned and a slow increase in off-
take is expected strengthen in the six months ahead. Supply into the tile
adhesive market is anticipated to remain steady as a result of the current
building market conditions.
Delf Tongaat - The new processing and distribution facility in KwaZulu-Natal
is in a position to commence servicing the KwaZulu-Natal foundry and tile
adhesive sectors. The plant was successfully commissioned in August 2010.
Pienaarspoort Silica Quartz mine - It is anticipated that the bulk sampling
and beneficiation will be completed during the next period allowing for
possible off-take agreements to be concluded prior to establishment of the
plant.
NOTES TO THE CONDENSED CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS
1. Significant accounting policies
Infrasors is a company domiciled in South Africa. The unaudited condensed
Group consolidated financial statements of Infrasors for the six months ended
31 August 2010 comprise the Company and its subsidiaries (together referred to
as the "Group").
The condensed consolidated unaudited financial statements were authorised for
issue by the directors on 4 November 2010.
1.1 Basis of preparation
The unaudited results for the period have been accounted for in accordance
with International Financial Reporting Standards and prepared in accordance
with IAS 34 - Interim Financial Reporting, AC 500 Standards as issued by the
Accounting Practices or its successor, the JSE Limited ("JSE") Listings
Requirements and in compliance with the South African Companies Act, 1973. The
condensed consolidated unaudited interim financial statements are prepared on
the historical cost basis, with the exception of certain financial instruments
and investment property 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 unaudited financial statements should be read in conjunction
with the audited financial statements for the year ended 28 February 2010.
The preparation of condensed consolidated unaudited 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 unaudited 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 unaudited financial
statements. All comparative figures throughout this report relate to the
corresponding period of the prior year.
2. Discontinued operation
Assets totalling R6.3 million consisting of transport vehicles, mobile
equipment and other fixed plant previously held as part of the assets in the
discontinued operation were re-allocated to property, plant and equipment of
the continuing operations. The remaining assets of the discontinued operation
total R6.6 million, consists of fixed plant held for sale of R5.0 million, and
inventory and debtors to the value of R1.6 million.
3. Earnings per share ("EPS")
Basic and diluted
EPS is based on the Group`s profit for the six months ended 31 August 2010,
divided by the weighted average number of shares in issue during the six-month
period and its comparative six-month period 31 August 2009.
Six months ended 31 August 2010
Weighted
average
number of
Net shares in Earnings
profit issue per share
R000`s 000`s Cents
Continued operations
Earnings per share 7 619 179 991 4.2
Discontinued operations
Earnings per share - 179 991 -
Earnings per share 7 619 179 991 4.2
Six months ended 31 August 2009
Weighted
average
number of
Net shares in Earnings per
profit issue share
R000`s 000`s Cents
Continued operations
Earnings per share 7 543 172 985 4.4
Discontinued operations
Earnings per share (260) 172 985 (0.2)
Earnings per share 7 283 172 985 4.2
Headline earnings per share ("HEPS") reconciliation
Basic and diluted
HEPS is based on the Group`s headline earnings divided by the weighted average
number of shares in issue during the six months ended 31 August 2010 and its
comparative six-month period 31 August 2009.
Six months ended 31 August 2010
Weighted
average
number of Headline
Net shares in earnings
profit issue per share
R000`s 000`s Cents
Continued operations
Net profit 7 619
Loss/(profit) on sale of assets 440
Tax effect on headline adjustments (123)
Headline earnings per share 7 936 179 991 4.4
Discontinued operations
Headline earnings per share - 179 991 -
Headline earnings per share 7 936 179 991 4.4
Six months ended 31 August 2009
Weighted
average
number of Headline
Net shares in earnings per
profit issue share
R000`s 000`s Cents
Continued operations
Net profit 7 543
Loss/(profit) on sale of assets (133)
Tax effect on headline adjustments 37
Headline earnings per share 7 447 172 985 4.3
Discontinued operations
Headline earnings per share (260) 172 985 (0.1)
Headline earnings per share 7 187 172 985 4.2
4. Dividends
The directors have elected not to declare a dividend for the six months ended
31 August 2010 (2009: Rnil).
5. Issue of shares
On 16 March 2010 the Company issued 7 681 600 shares at 80 cents per share, to
finance additions to property, plant and equipment, as part of the
installation of the Delf Tongaat facility in KwaZulu-Natal (2009: Rnil).
6. Related party transactions
Unaudited Reviewed Audited
six months six months year
ended ended ended
31 August 31 August 28 February
2010 2009 2010
R000`s R000`s R000`s
Product purchases between fellow
subsidiary companies 42 3 006 7 395
Management fees paid to Infrasors 3 600 8 455 11 205
Interest paid by subsidiaries to
holding company 191 416 567
Contributions made to the Infrasors
Environmental Rehabilitation Trust 1 201 465 1 371
Rent paid to Whirlprops 35
(Proprietary) Limited 301 261 550
7. Directorate
Trevor Robinson (Director and chief executive 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)
David Nabarro* (Non-executive director and deputy chairman)
(retired 22 October 2010)
Kerry Colley (Company secretary)
* British
Apart from David Nabarro, all of the above directors are South African and
resident in South Africa.
Sponsor
Sasfin Capital
A division of Sasfin Bank Limited
Auditors
Mazars
Legal Advisers and Attorneys
HR Levin Attorneys, Notaries and Conveyancers
Transfer Secretaries
Link Market Services South Africa (Proprietary) Limited
On behalf of the Board
P Molefe
Chairman
T Robinson
Chief executive officer
05 November 2010
VISIT US AT www.infrasors.co.za
"RESOURCES FOR GROWTH"
Date: 05/11/2010 17:00:04 Produced by the JSE SENS Department.
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