| Thu 26 Apr 2012, 15:55 | | 1TM - 1time Holdings Limited - Audited group condensed financial results for |
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1TM
1TM
1TM - 1time Holdings Limited - Audited group condensed financial results for
the year ended 31 December 2011
1time Holdings Limited
(Incorporated in the Republic of South Africa)
(Registration number: 1999/017536/07)
Share code: 1TM ISIN code: ZAE000102026
("1time holdings" or "the group")
Audited group condensed financial results for the year ended 31 December 2011
Condensed group statement of financial position
Audited Audited
31 December 31 December
Figures in Rand 2011 2010
Assets
Non-current assets 476 174 109 473 235 139
Aircraft 430 380 230 360 166 011
Property, plant and equipment 27 884 928 85 719 445
Deferred tax 10 087 645 18 531 984
Intangible assets 6 821 306 4 406 264
Goodwill - 1 794 078
Investment in joint venture - 1 617 357
Investment property 1 000 000 1 000 000
Current assets 147 568 145 169 167 094
Inventories 88 108 843 100 524 703
Trade and other receivables 41 542 581 39 752 165
Cash and cash equivalents 17 916 721 28 504 167
Current tax receivable - 386 059
Non-current assets held for sale - 6 653 100
Total assets 623 742 254 649 055 333
Equity and liabilities
Equity 87 810 489 150 787 188
Equity attributable to equity holders
of parent 87 810 489 154 819 219
Non-controlling interest - (4 032 031)
Liabilities 93 331 457 113 983 086
Loans payable - 11 126 210
Instalment sale and financial lease
agreements 15 993 876 53 632 197
Deferred tax 77 337 581 49 224 679
Current liabilities 442 600 308 384 285 059
Loans payable 12 600 000 39 173 474
Instalment sale and financial lease
agreements 80 444 664 58 417 643
Trade and other payables 341 102 200 274 001 343
Bank overdraft 5 434 539 4 419 372
Loans from shareholders 988 616 2 531 499
Current tax payable 2 030 289 5 741 728
Total equity and liabilities 623 742 254 649 055 333
Net asset value per share (cents) 31,36 71,80
Net tangible asset value per share
(cents) 28,92 68,85
Condensed group statement of comprehensive income
Audited Audited
31 December 31 December
Figures in Rand 2011 2010
Gross revenue 1 285 399 391 1 308 244 783
Other income 2 428 333 -
Operating costs (1 313 430 884) (1 194 177 220)
(Loss)/earnings before
disclosable items (25 603 160) 114 067 563
Depreciation and amortisation (46 302 718) (54 917 991)
Net impairment of PPE and
aircraft (18 773 245) (49 558 877)
Loans payable waivered 13 020 691 -
Impairment of investments and
loans (1 627 021) -
Impairment of goodwill (1 794 078) -
Profit on sale of assets 600 730 1 049 893
Foreign exchange difference (16 721 899) 11 068 500
Operating (loss)/profit (97 200 700) 21 709 088
Finance costs (34 642 964) (36 065 558)
Investment income 2 330 765 3 509 229
Loss before taxation (129 512 899) (10 847 241)
Taxation (27 711 574) (253 189)
Loss after taxation (157 224 473) (11 100 431)
Other comprehensive income:
Net (loss)/gain in aircraft
revaluations 47 179 484 (4 034 710)
Total comprehensive income/(loss) (110 044 989) (15 135 141)
Profit/(loss) attributable to:
Non-controlling interest (1 282) (12 264 652)
Owners of the parent (157 223 191) 1 164 221
(157 224 473) (11 100 431)
Total comprehensive income/(loss)
attributable to:
Non-controlling interest (1 282) (12 264 651)
Owners of the parent (110 043 707) (2 870 490)
(110 044 989) (15 135 141)
Headline earnings
(Loss)/profit attributable to
ordinary shareholders (157 223 191) 1 164 221
Impairment of goodwill 1 794 078 -
Net impairment of PPE and
aircrafts 18 773 245 46 079 941
Profit on sale of assets (600 730) (902 308)
Impairment of investments and
loans 1 627 021 -
Headline (loss)/earnings
attributable to ordinary
shareholders (135 629 577) 46 341 854
Earnings per share
(Loss)/profit attributable to
ordinary shareholders (157 223 191) 1 164 221
(Loss)/earnings attributable to
ordinary shareholders (157 223 191) 1 164 221
Weighted average number of shares
in issue 268 493 151 210 000 000
Headline (loss)/earnings per
share (cents) (50,52) 22,07
(Loss)/earnings per share (cents) (58,56) 0,55
Diluted headline (loss)/earnings
per share (cents) (50,52) 22,07
Diluted (loss)/earnings per share
(cents) (58,56) 0,55
Condensed group statement of changes in equity
Audited Audited
31 December 31 December
Figures in Rand 2011 2010
Opening balance 150 787 190 165 922 331
Shares issued 47 068 288 -
Share capital issued 7 000 -
Share premium 47 061 288 -
Total comprehensive loss (110 044 989) (15 135 141)
- Non-controlling interest (1 282) (12 264 651)
- Owners of the parent (110 043 707) (2 870 490)
Purchase of non-controlling
interest - -
Shares purchased 280 -
Minority interest 4 033 812 -
Acquisition of 28% shareholding (4 034 092) -
Total 87 810 489 150 787 190
Condensed group statement of cash flows
Audited Audited
31 December 31 December
Figures in Rand 2011 2010
Cash and equivalents at beginning of
period 24 084 795 50 328 685
Cash flows from operating activities 631 274 130 530 506
Cash generated by operations 35 103 567 144 461 364
Investment income 2 330 765 3 509 229
Finance costs (34 642 964) (14 180 773)
Tax paid (2 160 094) (3 259 314)
Cash flows in investing activities (1 422 191) (92 772 160)
Cash flows from financing activities (10 811 696) (64 002 236)
Cash and equivalents at end of 12 482 182 24 084 795
period
Condensed group segment report
Audited Audited
31 December 31 December
Figures in Rand 2011 2010
Gross revenue
Airlines 1 147 986 872 1 156 458 635
Maintenance 259 541 734 265 761 076
Inter-segment revenue (122 129 215) (113 974 928)
Total 1 285 399 391 1 308 244 783
Earnings before disclosable items
Airlines (9 632 992) 142 193 465
Maintenance (14 977 038) (26 325 249)
Inter-segment earnings (993 130) (1 800 653)
(Loss)/earnings before disclosable
items (25 603 160) 114 067 563
Disclosable items
Finance costs (34 642 964) (36 065 558)
Investment income 2 330 765 3 509 229
Net impairment of PPE and aircraft (18 773 245) (49 558 877)
Foreign exchange difference (16 721 899) 11 068 500
Profit on sale of assets 600 730 1 049 893
Depreciation and amortisation (46 302 718) (54 917 991)
Loans payable waivered 13 020 691 -
Impairment of investments and (1 627 021) -
loans
Impairment of goodwill (1 794 078) -
Taxation (27 711 574) (253 189)
Loss after taxation (157 224 473) (11 100 430)
Performance review
This has been a challenging time for the aviation sector. Sharp increases in
fuel and airport charges, and the weakening currency, have been the primary
factors that have hampered the industry for the year under review. Passenger
numbers were lower than budgeted for and average ticket prices were under
pressure due to fierce competition.
The 1time group has been adversely affected by these factors, which have led
to a R135,6 million headline loss (2010: R46,3 million profit) for the year.
Although the group reported a loss for the year, it generated cash from
operations of R35,1 million (2010: R144,4 million).
The management team has taken measures to address the loss, and a turnaround
strategy has been formulated in close co-operation with the board. Since the
last quarter of 2011 management have adjusted airline scheduling, and have
restructured 1time`s Jetworx maintenance subsidiary to achieve higher
operational efficiencies.
Airline
The airline faced several low demand cycles during the year resulting in load
factors 5% below 2010 and pressure on ticket pricing on key domestic
commercial passenger air routes, causing revenues to fall short of expected
levels. On the cost side, 1time as has been the case throughout the domestic
airline sector in 2011, had to absorb the adverse impact of increases in fuel
prices, fuel transport levies, airport taxes and a weakening local currency.
The airline`s financial performance for the year ended 31 December 2011 was
poor, and it incurred a R95,3 million loss compared to a R44,2 million profit
earned in the same period last year.
The losses were largely attributed to:
* Average rand fuel price increase of 30% for the period, increasing fuel
costs by R130,6 million for the year;
* Airport charges increased by 15% for the period resulting in a R16,5
million increase in airport costs;
* Losses on foreign exchange due to the weakening currency costing the
airline R8,7 million.
The increase in airport passenger taxes from 1 October 2011 is a major
concern going forward and is likely to impact on passenger numbers for the
2012 financial year.
The standard of service offered by the airline to its passengers has been
maintained at a world class standard, a fact that has again been confirmed by
the high "on-time" departure performance levels published by ACSA.
Maintenance
The company`s aircraft maintenance subsidiary, Safair Technical (trading as
Jetworx) did not perform as expected and reported a loss for the year of
R47,5 million (2010: R43,8 million). 1time acquired the remaining 28% of
Jetworx during the period under review. As a consequence of this process the
company incurred the following:
* Reduction in non-group related revenue of R14,5 million.
* Stock obsolescence of R11,5 million.
* Restructuring costs, amounting to R1,5 million.
* Impairments of property, plant and equipment of R13,2 million.
* Foreign exchange losses for the year of R7,3 million.
The streamlining of Jetworx has entailed a stricter focus on areas that
generate proven and consistent profits.
This effective supporting maintenance division is expected to contribute
positively to the group earnings in the current and future years.
Dividend policy
Due to the losses incurred for the year under review no dividend has been
declared.
Contingencies
We are pleased to announce that we were able to settle the dispute with the
South African Revenue Service regarding the application of the Section 24C
allowance on the unused ticket liability and the utilisation of the wear and
tear allowance on the aircraft purchased and the amount previously raised of
R16,7 million has been reversed.
Basis of preparation and accounting policies
The condensed group financial statements have been prepared in accordance
with the recognition and measurement criteria of International Financial
Reporting Standards ("IFRS"), the AC 500 Standards, disclosure as required by
IAS34: Interim Financial Reporting, the JSE Listing Requirements and the
requirements of the Companies Act of South Africa, 2008 as amended. The group
financial statements have been prepared on the historical cost basis as
modified by the valuation of aircraft and investment properties and are
consistent with the previous period.
Directors report - going concern
The directors have reviewed the group`s cash flow forecast, estimates, and
income and expenditure projections for the coming year. Fuel is the biggest
driver of costs in the industry, and we have based our assumptions on an
estimated average oil price for the year. Management have been very
aggressive in reviewing the route scheduling and pricing structure to ensure
that we have established the correct yields in our cash flow forecasts and
estimates.
We have already restructured the group, and designed a fit for purpose
structure which resulted in substantial savings for the coming year.
In addition we are in the final stages of discussion with a major institution
and are awaiting final approval of a proposal which would convert foreign
currency denominated debt into longer term instalment finance in local
currency.
This will strengthen the group`s financial position and allow the new
management team time to institute the turnaround strategy, and return the
group to profitability within three years.
The goal is to have initiatives in place to improve the operating profits by
the interim period.
After rigorous investigation and considering the uncertainties described
above, the directors have a reasonable expectation that the company has
adequate resources to continue operations for the foreseeable future. For
these reasons, they continue to adopt the going concern basis of accounting
in preparing the annual financial statements.
Audit opinion
The condensed Group financial statements of 1time Holdings Limited for the
year ended 31 December 2011 have been extracted from the complete set of
financial statements on which the Group`s auditors, Nexia SAB&T, have
expressed an unqualified audit opinion. The audit report contains the
following Emphasis of Matter paragraph:
"Without qualifying our opinion, we draw attention to the Directors` Report
in the annual financial statements which indicates that the Group incurred a
net loss of R157 224 473 for the year to 31 December 2011, and the current
liabilities of the Group exceeded its current assets by R295 032 163 at 31
December 2011. The Directors` Report also indicates that these conditions,
along with other matters, indicate the existence of a material uncertainty
which may cast significant doubt on the group`s ability to continue as a
going concern."
A copy of the auditor`s report is available to shareholders for inspection at
the Company`s registered office.
Changes to the board
During the period under review the following changes have been made to the
directorate:
Executive Directors:
Mike Snyman - resigned 31 May 2011;
Glenn Orsmond - resigned 1 October 2011;
Rinesh Ramkissoon - appointed 2 September 2011;
Lorna Terblanche - appointed 1 November 2011.
Subsequent to the year end:
Rodney James - resigned 12 March 2012;
Michael Kaminski - resigned 12 March 2012;
Non-Executive Directors:
Brandon Topham - appointed 2 September 2011;
Khaya Sikosana - appointed 2 September 2011;
Kenneth Jarvis - appointed 1 November 2011;
Kesebone Maema - appointed 26 March 2012.
Subsequent events
The board is not aware of any material matter or circumstance arising since
the year ended 31 December 2011 up to the date of this report.
Prospects
Passenger travel will remain at the core of 1time`s activities.
Operationally, 2012 has so far seen demand levels reach closer towards market
supply, allowing the market driven ticket pricing mechanism to bring the
majority of routes and sectors back to an operating profit. On the assumption
that operating conditions continue to stabilise during 2012 and beyond, the
board and management will implement material changes to the positioning and
structure of 1time. These will allow the group to improve the gearing ratios
and will enable the group to deliver positive earnings from a stronger base.
An improved balance sheet will allow the company to move from its current
fleet to newer generation and more fuel-efficient aircraft over the next
three years. This process has commenced with the first aircraft due in the
3rd quarter of 2012. The fleet change will reduce the airline`s operating
costs, while the current operating model of the airline has been adjusted to
match demand with supply to achieve better operating margins.
The long term prospects for commercial airline travel in the region remain
positive. Latest air passenger data shows that an ever increasing proportion
of the population is making use of domestic air travel as a means to commute
between major cities. This justifies the argument that air travel is a cost
and time effective travel option, meeting both business and leisure transport
demands.
In line with demand trends 1time will continue to introduce new flights to
serve regional and domestic passenger demand.
By order of the Board
Blacky Komani Sipho Twala
Chief Executive Officer Chairman
26 April 2012
Corporate information
Non-executive directors: Sipho Twala (Chairman)*; Tania Matshine*; Grant
Wishart; Brandon Topham*; Ken Jarvis*; Khaya Sikosana*; Kesebone Maema; Myles
Sinclair (Alternate).
* Independent non-executive director
Executive directors: Blacky Komani (Chief Executive Officer); Rinesh
Ramkissoon; Lorna Terblanche (Financial Director); Busiwe Maqungo.
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: Nexia SAB&T
Date: 26/04/2012 15:55:01 Produced by the JSE SENS Department.
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