| Thu 17 Mar 2011, 12:06 | | 1TM - 1time holdings Limited - PROVISIONAL AUDITED RESULTS FOR THE YEAR |
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1TM
1TM
1TM - 1time holdings Limited - PROVISIONAL AUDITED RESULTS FOR THE YEAR
ENDED 31 DECEMBER 2010
1time holdings Limited
Incorporated in the Republic of South Africa
(Registration number: 1999/017536/06)
Share code: 1TM ISIN: ZAE000102026
("1time" or "the Company" or "the Group")
PROVISIONAL AUDITED RESULTS FOR THE YEAR ENDED 31 DECEMBER 2010
HIGHLIGHTS
Revenue growth 4.6%
Passenger growth 6.7%
Cash generated from operations R145.0 million
Headline earnings R 46.3 million
Consolidated condensed statement of financial position
Figures in Rand Audited Audited
as at as at
31 31 December
December2010 2009
Assets
Non-current assets 473 235 139 459 552 905
Current assets 169 167 096 188 999 814
Non-current assets held for 6 653 100 21 209 842
sale
Total assets 649 055 335 669 762 561
Equity and liabilities
Capital and reserves 150 787 190 165 922 331
Non-current liabilities 64 758 407 124 084 819
Deferred taxation 49 224 679 36 411 483
Current liabilities 384 285 059 343 343 928
Total equity and liabilities 649 055 335 669 762 561
Number of shares in issue 210 000 000 210 000 000
Net asset value per share 71.8 79.0
(cents)
Net tangible asset value per 68.9 71.2
share (cents)
Consolidated condensed income statement
Figures in Rand Audited for Audited for
the year ended the year ended
31 December2010 31 December
2009
Gross revenue 1 308 244 783 1 251 061 344
Operating costs (1 194 177 220) (1 095 645 708)
Earnings before disclosable 114 067 563 155 415 636
items
Depreciation (54 917 991) (43 167 260)
Impairment of assets (49 558 877) (50 491 031)
Negative goodwill - 19 891 361
Profit/(Loss) on sale of 1 049 893 (4 887 298)
asset
Foreign exchange gain 11 068 500 16 621 929
Operating profit 21 709 088 93 383 337
Finance costs (36 065 558) (32 983 935)
Interest received 3 509 229 4 722 355
Loss/(Profit) before taxation (10 847 241) 65 121 757
Taxation (253 189) (19 029 677)
Loss/(Profit) after taxation (11 100 430) 46 092 080
Non-controlling interest 12 264 651 (5 223 757)
Profit attributable to owners 1 164 221 40 868 323
of the parent
Reconciliation to headline
earnings
Profit attributable to owners 1 164 221 40 868 323
of the parent
Impairment of assets 46 079 941 50 491 031
(Profit)/Loss on sale of (902 908) 4 887 298
asset after taxation
Negative goodwill - (13 612 425)
Headline earnings 46 341 254 82 634 227
attributable to owners of the
parent
Weighted average number of 210 000 000 210 000 000
shares in issue
Headline earnings per share 22.07 39.35
(cents)
Earnings per share (cents) 0.55 19.46
Consolidated condensed statement of comprehensive income
Figures in Rand Audited Audited
for the for the
year ended year ended
31 December 31 December
2010 2009
(Loss)/Profit after taxation (11 100 430) 46 092 080
Other comprehensive income:
Net loss on aircraft (4 034 711) (27 798 502)
revaluations
Total comprehensive (15 135 141) 18 293 578
(loss)/income
Total comprehensive
(loss)/income attributable to:
Non-controlling interest (12 264 651) 5 223 757
Owners of the parent (2 870 490) 13 069 821
(15 135 141) 18 293 578
Consolidated condensed statement of changes in equity
Figures in Rand Audited Audited
for the for the
year ended year ended
31 December 31 December
2010 2009
Opening balance 165 922 331 144 619 890
Non-controlling interest at - 3 008 863
acquisition
Total comprehensive loss
- Non-controlling interest (12 264 651) 5 223 757
- Owners of the parent (2 870 490) 13 069 821
Total 150 787 190 165 922 331
Consolidated condensed statement of cash flows
Figures in Rand Audited Audited
for the for the
year ended year ended
31 December 31 December
2010 2009
Cash and equivalents at the 50 328 678 6 534 243
beginning of the year
Cash flows from operating 131 058 115 224 204 589
activities
Cash generated from operations 144 988 972 232 779 534
Interest received 3 509 229 4 722 355
Finance costs (14 180 772) (13 315 589)
Taxation paid (3 259 314) 18 289
Cash flows from investing (92 772 154) (131 177 606)
activities
Cash flows from financing (64 529 735) (49 232 548)
activities
Cash and equivalents at the end 24 084 904 50 328 678
of the year
Consolidated segment report
Figures in Rand Audited Audited
for the for the
year ended year ended
31 December 31 December
2010 2009
Consolidated revenue
Airline 1 147 538 372 1 039 912 340
Charter 8 920 263 9 566 259
Saftech 264 861 076 288 859 528
Aeronexus 900 000 45 049 474
Inter-segment revenue (113 974 928) (132 326 257)
Total 1 308 244 783 1 251 061 344
Segment result
Airline 140 214 113 152 759 868
Charter 1 979 352 (430 876)
Saftech (26 420 441) 2 086 755
Aeronexus 95 192 1 899 078
Eliminations (1 800 653) (899 189)
Earnings before disclosable 114 067 563 155 415 636
items
Finance costs (36 065 558) (32 983 935)
Interest received 3 509 229 4 722 355
Impairment of assets (49 558 877) (50 491 031)
Foreign exchange gain 11 068 500 16 621 929
Profit/(Loss) on sale of asset 1 049 893 (4 887 298)
Negative goodwill - 19 891 361
Depreciation (54 917 991) (43 167 260)
Taxation (253 189) (19 029 677)
Loss/(Profit) after taxation (11 100 430) 46 092 080
Commentary
GROUP PERFORMANCE
The Group achieved mixed results for the financial year ended 31 December
2010. 1time airline performed well with R66.9 million headline earnings
(2009: R94.3 million). Safair Technical (Proprietary) Limited ("Safair
Technical"), the aircraft maintenance business, performed poorly with a
R22.6 million attributable headline loss.
- Group revenue increased by 4.6% supported by higher passenger volumes
and higher yields in tough market conditions;
- Safair Technical incurring a R22.6 million headline loss compared to a
R8.1 million headline loss in 2009;
- airport charges for ACSA and ATNS increased by 36% increasing airport
charges by R40 million; and
- average fuel prices increased by 9.7% for the year costing the Company
an additional R36 million.
Cash flow generated from operations remained strong at R145.0 million and
was mostly used to acquire aircraft and reduce debt.
The continued strengthening of the Rand to the US Dollar is reflected in
the impairment loss in the income statement which relates to the US Dollar
based aircraft valuations. This is partly offset by the translation
currency gains earned on foreign debt.
1TIME AIRLINE
The airline increased gross revenue by 10.3% from R1 040 million in 2009 to
R1 148 million in 2010 despite difficult trading conditions.
The airline maintained its status as the fastest growing airline for seven
years in a row increasing passenger volumes by 6.7% from 1 800 000 in 2009
to 1 921 000 in a flat market. Capacity increased by only 5% to increase
the average load factor to 82%.
The African growth strategy has proved successful with the Zanzibar,
Livingstone and Maputo routes all performing well along with the eight
domestic destinations currently serviced by 1time.
The 2010 FIFA World Cup had no material impact on airline earnings for the
period. While demand increased in June and July this was fully offset by
abnormally poor demand during May and August.
Revenue growth for 2011 will be focused on growth on current routes,
expanding into Africa as and when these rights become available and
introducing air services from Lanseria airport subject to market
conditions.
1time charters division
1time charters performed well during the World Cup offering charter air
services to foreign supporters, groups and tour operators. Fleet capacity
in the second half was however constrained as the fleet was deployed
towards our African growth strategy in the airline.
1time holidays division
1time holidays increased revenue from R4.2 million in 2009 to R14.9 million
in 2010. Further revenue growth is expected during 2011 particularly as we
focus on selling holiday packages to our African destinations that are
currently serviced by 1time.
Aircraft fleet
The airline operates a fleet of twelve standardised MD80 aircraft operating
over 1300 flights a month. Our fleet review process included international
comparatives and has indicated that the MD80 type aircraft continues to
offer the lowest seat kilometer cost in the domestic market combined with a
premium carrier service experience.
A longer term fleet renewal plan is being investigated and the Group is
currently in talks with the major aircraft manufacturers.
SAFAIR TECHNICAL
Management plans and expectations at Safair Technical were not realized
during the year.
The R22.6 million headline attributable loss is due to a variety of
factors:
- Continued strengthening of the Rand has severely impacted operating
margins as most revenue is charged in US Dollars.
- once off costs incurred relating to an employee reduction programme
reducing head count from over 700 at the start of the 2010 financial year
to under 500 by year end.
- third party maintenance revenue which was expected during the final
quarter of 2010 was only realised in the first quarter of 2011.
Management has implemented various measures to restore profitability for
2011. These include:
- strict staff cost controls and managing headcount on a "fit for
purpose" basis;
- renegotiating loss making maintenance contracts; and
- concluding an Letter of intent ("LOI") with Safair Operations
(Proprietary) Limited ("Safair Operations") subsequent to year end in terms
of which debt is significantly reduced to achieve interest and rental costs
savings as noted under subsequent events.
BASIS OF PREPARATION AND ACCOUNTING POLICIES
The accounting policies applied in the preparation of these condensed
financial statements, which are based on reasonable judgments and
estimates, are in accordance with International Financial Reporting
Standards ("IFRS"), the disclosure requirements of IAS 34 - Interim
Financial Reporting and are consistent with those applied in the annual
financial statements for the year ended 31 December 2009. These audited
consolidated condensed financial statements as set out in this report
comply with the Companies Act, 1973 (Act 61 of 1973), as amended, and the
Listings Requirements of JSE Limited.
AUDIT OPINION
These condensed consolidated results for the year ended 31 December 2010
have been audited by the Groups auditors, SAB&T Chartered Accountants
Incorporated and their unqualified audit report is available for inspection
at 1time`s registered office.
SUBSEQUENT EVENTS
BEE transaction
As announced on SENS on 7 March 2011, the Company concluded a BEE
transaction with Oakleaf Investments 59 (Proprietary) Limited ("Oakleaf")
(incorporating Mtha Aviation (Proprietary) Limited ("Mtha") and SKMT
Sunrise Investment Group (Proprietary) Limited ("Sunrise")) effective 2
March 2011 in terms of which Oakleaf subscribed for 70 million ordinary
shares in 1time for cash at 70.16202 cents per share, raising R49.1 million
cash for the Group. The BEE transaction represents a 25% BEE equity stake
in 1time. Mtha Aviation is an aviation focused group, headed by Busiwe
Maqungo. The capital raised from the BEE Transaction will be deployed
towards the 1time airline`s growth strategies. Our solid BEE credentials
place the airline in a good position to acquire rights to further African
routes. We are particularly pleased that Sipho Twala, our Chairman and
founding shareholder of 1time has also participated in the BEE transaction
through his directorship at Sunrise.
Safair Technical restructuring
The Company has concluded a LOI with Safair Operations (owners of 28% of
Safair Technical) in terms of which Safair Operations assume responsibility
for R51.8 million of Safair Technical`s debt in exchange for the cession of
certain lease agreements and the sale of assets at book value. The
transaction significantly improves gearing in the Group and is earnings
enhancing.
BOARD OF DIRECTORS
The Board is pleased to welcome Blacky Komani as a non executive director
and Busiwe Maqungo as an executive director to the 1time board effective 4
March 2011. Blacky brings a wealth of leadership expertise in the travel
and tourism sector while Busiwe fills a key role in achieving human
resource development and transformation objectives.
DIVIDEND POLICY
The Board has adopted a dividend policy of a minimum of eight times cover
moving into the 2011 financial year. This has resulted from the successful
BEE Transaction as detailed in the Subsequent Events paragraph above
PROSPECTS
For the airline we expect a tough trading environment for 2011. High oil
prices will put pressure on yields which will in turn negatively impact
overall market volumes. We are confident however that our low cost
advantage will enable us to continue offering the lowest prices and best
service. Further passenger growth is expected on current routes and new
services into Lanseria and Africa.
Cost savings achieved in Safair Technical will be the main driver to
achieve a significant improvement in 2011.
While the high oil prices and strong Rand environment is expected to place
margins under pressure during 2011 we are pleased that the BEE Transaction
and Safair Technical restructuring combined with our low cost advantage
places the Group in a strong position for 2010.
By order of the Board
Glenn Orsmond Sipho Twala
Chief Executive Officer Chairman
17 March 2011
CORPORATE INFORMATION
Non-executive directors: S M Twala (Chairman)*; T R Matsinhe*; G L Wishart;
B Komani, M L Sinclair (Alternative)
* - Independent
Executive directors: G W Orsmond (Chief Executive Officer); R L James; M J
Kaminski; B Maqungo; M Snyman (Financial Director)
Company secretary: Merchantec Capital
Registered address: 16 Quality Street, Isando
Postal address: PO Box 7110, Bonaero Park, 1622
Telephone: 011 086 8100
Facsimile: 0866 492 712
Web address: www.1timeholdings.co.za
Transfer secretaries: Computershare Investor Services (Proprietary) Limited
Sponsor: Merchantec Capital
Auditors: SAB&T Chartered Accountants Incorporated
Date: 17/03/2011 12:06:24 Produced by the JSE SENS Department.
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