| Wed 30 Mar 2011, 14:11 | | SLO - SELCo - Reviewed interim results for the six months ended 31 December |
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SLO
SLO
SLO - SELCo - Reviewed interim results for the six months ended 31 December
2010
Southern Electricity Company Limited
(Registration Number 1997/006894/06)JSE Share Code: SLO ISIN:
ZAE000041919("SELCo" or "the Group")
REVIEWED INTERIM RESULTS OF SOUTHERN ELECTRICITY COMPANY LIMITED FOR THE SIX
MONTHS ENDED 31 DECEMBER 2010
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE PERIOD ENDED
31 DECEMBER 2010
Reviewed Reviewed Audited
6 months (Restated) (Restated)
Ended 6 months 12 months
31 December ended ended
2010 31 December 30 June
2009 2010
(R`000) (R`000) (R`000)
Revenue 27 164 24 428 49 968
Turnover 27 164 24 371 49 958
Cost of sales (16 447) (16 108) (28 999)
Gross profit 10 717 8 263 20 959
Other income 33 57 61
Operating costs (10 586) (7 737) (17 394)
Profit before interest and tax 164 583 3 626
Investment revenue 14 - 11
Finance costs (148) (301) (484)
Profit before taxation 30 282 3 153
Taxation (659) (108) (1 058)
Total comprehensive income (629) 174 2 095
(Loss) earnings & diluted (loss) (1.14) 0.32 3.81
earnings per ordinary share
(cents)
Headline & Diluted (loss)earnings (1.14) 0.32 3.83
per share
Weighted average number of shares 54 948 173 54 945 373 54 945 373
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2010
Reviewed Reviewed Audited
6 months as at 6 months as at 12 months
31 December 31 December ended 30
2010 2009 June 2010
(R`000) (R`000) (R`000)
ASSETS
Non-current assets 26 705 28 588 27 961
Investment property 13 000 13 000 13 000
Property plant and equipment 7 290 8 041 7 980
Intangible assets 6 415 7 547 6 981
Current assets 16 446 7 816 12 869
Inventories 1 217 1 163 1 721
Other loans receivable - 47 -
Current tax receivable 1 426 424 1 426
Trade and other receivables 7 831 3 678 6 388
Cash and cash equivalents 5 972 2 504 3 335
Total assets 43 151 36 404 40 830
EQUITY AND LIABILITIES
Equity 23 757 22 466 24 386
Share capital 10 163 10 163 10 163
Non-distributable reserve 16 16 16
Retained income 13 578 12 287 14 207
Liabilities
Non-current liabilities 9 076 7 368 8 525
Other financial liabilities 3 221 3 122 3 329
Deferred tax 5 855 4 246 5 196
Current liabilities 10 318 6 570 7 919
Other loans payable 6 042 2 725 2 615
Other financial liabilities 322 122 427
Taxation payable - - -
Trade and other payables 3 852 3 613 4 775
Provisions 102 110 102
Total Liabilities 19 394 13 938 16 444
Total equity and liabilities 43 151 36 404 40 830
CONDENSED STATEMENT OF CHANGES IN EQUITY FOR THE PERIOD ENDED 31 DECEMBER 2010
Reviewed Reviewed Audited
6 months 6 months 12 months
as at as at ended
31 December 31 December 30 June
2010 2009 2010
(R`000) (R`000) (R`000)
Balance at beginning of period 24 386 22 291 22 291
Total comprehensive income (629) 174 2 095
Balance at end of period 23 757 22 465 24 386
CONDENSED CONSOLIDATED CASH FLOW STATEMENT FOR THE PERIOD ENDED 31 DECEMBER
2010
Reviewed Reviewed Audited
6 months 6 months 12 months
as at as at ended
31 December 31 December 30 June
2010 2009 2010
(R`000) (R`000) (R`000)
Cash flows from operating (541) 2 311 3 297
activities
Cash receipts from customers 24 192 24 371 49 958
Cash paid to suppliers and (24 634) (21 712) (45 123)
employees
Cash generated by operating (442) 2 659 4 834
activities
Interest income 14 - 11
Finance costs (113) (286) (484)
Taxation paid - (62) (1 064)
Cash flows from investing 140 (48) (639)
activities
Property plant and equipment - (29) (779)
acquired
Proceeds on sale of property, - - 144
plant and equipment
Movement in financial assets - - 29
Increase in loans receivable 140 (19) (33)
Cash flow from financing 3 039 (2 459) (2 024)
activities
Repayment of borrowings (179) (136) (2 499)
Other loans - repayments 1 718 (2 323) 475
Repayment of loans from group 1 500 - -
companies
Total cash movement for the 2 638 (196) 634
period
Cash and cash equivalents at the 3 334 2 700 2 700
beginning of the period
Cash and cash equivalents at end 5 971 2 503 3 334
of period
COMMENTARY
Review for the reporting period
The gross profit margin has remained stable for the 6 months ended 31 December
2010. The total comprehensive loss for the period under review amounted to
R629 000 compared to a restated comprehensive income of R174 000 for the
corresponding 6 month period in 2009. Details of the earnings per ordinary
share are reflected in the Condensed Consolidated Statement of Comprehensive
Income.
The group incurred a loss of 1.14 cents per share compared to restated
earnings of 0.32 cents in the corresponding 6 month period in 2009.
This decrease can largely be ascribed to the substantial costs involved in the
restructuring transaction that did not materialize.
Outlook
SELCo`s business in Namibia demonstrates a profitable and sustainable business
model in the electricity distribution industry. Management continues to
explore opportunities to apply the business model in other aspects of the
electricity distribution in Southern Namibia.
Directorate
Mr Eckhard Cloete was appointed as Independent Non-Executive Director and
member of the Audit Committee with effect 16 March 2011. Mr Cloete holds a
MComm degree and has served as Financial Director of GP Retail Operations
(Pty) Ltd for the past 10 years. Prior to that he spent 8 years in the
banking sector, variously as Manager Public Sector Banking, Corporate Banker
and in Structured Finance. His financial and business expertise will stand
SELCo in good stead and will serve to strengthen the Audit Committee.
Segmental Analysis
The group engages in only one business activity providing only one product or
service as a vertically integrated electricity distributor. The rental income
and management fees received within the group are insignificant and the group
therefore only reports as one operating segment. The group`s business is
limited to southern Namibia.
The numbers reported to the chief operating decision maker are made in
accordance with IFRS and can therefore be read directly from the annual
financial statements.
Subsequent events
There were no material events subsequent to the six month period ended 31
December 2010.
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 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 unaudited financial statements should
be read in conjunction with the audited financial statements for the year
ended 30 June 2010.
The preparation of condensed consolidated 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 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 and methods of computation are consistent with those
applied in the financial statements for the year ended 30 June 2010 and are in
terms of IFRS.
Middel & Partners, the group`s independent auditor, has reviewed the interim
financial statements contained in this interim report and has expressed an
unqualified review opinion on the interim financial statements. Their review
report is available for inspection at the company`s registered office.
Dividend
No dividend has been declared for the six month period ended 31 December 2010.
Prior period error
Reviewed Audited
(Restated) (Restated)
6 months ended 12 months ended
31 December 30 June 2010
2009
R`000 R`000
During the course of
management`s review of
accounting records and
current interim results it
was discovered that an error
was made in the accrual for
the cost of electricity
during the 2010 period. The
comparative amounts have been
appropriately adjusted. The
effect of the correction of
this error on the results of
2010 is as follows:
Increase in cost of sales 1 362 1 362
Decrease in tax expense (463) (463)
Decrease in profit 899 899
Increase in creditors 1 362 1 362
Decrease in deferred tax (463) (463)
liability
Decrease in equity 899 899
Decrease in earnings per (1.64) (1.64)
share (cents)
Decrease in headline earnings (1.64) (1.64)
per share (cents)
EARNINGS AND HEADLINE EARNINGS PER SHARE
Reviewed Reviewed Audited
6 months (restated) (restated)
as at 6 months 12 months
31 December as at ended
2010 31 December 30 June
2009 2010
Cents Cents Cents
Earnings and diluted earnings (1.14) 0.32 3.81
per share
Headline and diluted headline (1.14) 0.32 3.83
earnings per share
Basic attributable earnings per share are calculated by dividing the net
profit attributable to shareholders by the weighted average number of ordinary
shares in issue during the period.
The calculation of earnings and diluted earnings per ordinary share is based
on a loss for the group of R 629 000 (2009: R174 000 profit) on weighted
average ordinary shares of 54 948 173 (2009: 54 945 373) for the period. There
are no reconciling items to headline earnings.
By order of the Board
30 March 2011
DIRECTORS:
B Hlongwa* (Chairman), PM Bester (CEO), I Bosch, EE Cloete*, WB Mahlangu*, H
van Zyl*
* Non Executive
COMPANY SECRETARY AND REGISTERED OFFICE:
Eugene Espag, 99 Fascia Street, Silvertondale, 0184
TRANSFER SECRETARIES:
Link Market Services South Africa (Pty) Limited, PO Box 4844, Johannesburg,
2000
SPONSOR:
Grindrod Bank Limited, PO Box 78011, Sandton, 2146
AUDITORS:
Middel & Partners
Date: 30/03/2011 14:11:02 Produced by the JSE SENS Department.
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