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DAEWOO ELECTRONICS S.A.LIMITED
PRELIMINARY REPORT
for the year ended 31 December 2000
CONSOLIDATED INCOME STATEMENT
for the year ended 31 December 2000
2000 1999
R000's R000's
Audited Audited
Revenue 159 116 170 079
Loss from operations 53 844 13 092
Finance costs 6 083 7 496
Net loss before taxation 59 927 20 588
Taxation 131 869
Net loss after taxation 60 058 21 457
Preference dividends 1 048 6 955
Total net loss 61 106 28 412
Reconciliation of headline loss
Total net loss 61 106 28 412
Loss on disposal of fixed assets (25) (35)
Revaluation of fixed property - (4 000)
Restructuring costs (1) (1)
Headline loss 61 080 24 376
Number of shares in issue (000) 51 600 51 600
Loss per share (cents) 118,4 55,1
Headline loss per share (cents) 118,4 47,2
Net deficit per share (cents) 162,6 160,5
Capital expenditure
incurred (R000's) 562 396
CONSOLIDATED BALANCE SHEET
at 31 December 2000
2000 1999
R000's R000's
Audited Audited
Capital employed
Ordinary shareholders' deficit 83 909 82 803
Total borrowings 807 79 236
Preference share capital - 60 000
Borrowings
- long-term 386 799
- short-term 421 18 437
(83 102) (3 567)
Employment of capital
Fixed assets 11 045 11 314
Inventory 51 250 58 451
Accounts receivable 95 030 75 193
Cash 2 052 33
Total assets 159 377 144 991
Current liabilities 242 479 148 558
(83 102) (3 567)
CASH FLOW STATEMENT
for the year ended 31 December 2000
2000 1999
R000's R000's
Audited Audited
Operating activities
Cash utilised by operations (52 997) (7 827)
Changes in working capital 84 069 32 784
31 072 24 957
Interest paid (6 083) (7 496)
Preference dividends paid (2 948) (7 985)
Taxation paid (1 076) 1 147
20 965 10 623
Investing activities
Net fixed assets (517) (189)
(517) (189)
Net cash inflow/(outflow) 20 448 10 434
Financing activities
Net loans (repaid)/raised (413) (308)
(413) (308)
Cash
Net cash movements 20 035 10 126
Net short-term borrowings at
the beginning of the year (18 404) (28 530)
Net cash/(short-term borrowings)
at the end of the year 1 631 (18 404)
RESULTS
Revenue for the 2000 year was lower than expected, dropping from the previous
corresponding period by 11%. This was due to difficulties experienced by
financial restrictions imposed on the company's major supplier, Daewoo
Electronics Co. Limited, Korea. Further to that heavy competition also played a
big part in reduced sales.
Margins were under severe pressure throughout the period due to market
conditions, heavy competition and the deteriorating Rand:US Dollar exchange
rate which declined by 24% during the period under review.
Overheads were well contained but the lower margins resulted in a continuation
of operating losses, exacerbated by the unrealised currency loss referred to
below.
Excluding cash on hand, total assets were R157 million. This is an increase of
R12 million since 31 December 1999 and is due mainly to the asset carried on
behalf of the holding company Daewoo Electronics Co. Limited, Korea for the
settlement of the preference shares.
The company continues to be financed by extended trade credit provided by the
holding company Daewoo Electronics Co. Limited, Korea. The amount owing has
increased from R126 million (USD21 million) at the beginning of the year to
R226 million (USD30 million) at 31 December 2000. As at
31 December USD17 million of this was unhedged. Based on the exchange rate of
R7.60 = USD1 ruling at 31 December 2000 this has resulted in an unrealised
currency loss of R24 million which is provided for in the accounts.
Preference Share Capital
Shareholders were previously advised that the company's preference share
capital had been redeemed by Anglo American Corporation of South Africa Limited
(Anglo) on due date, namely 8 March 2000. Arising out of this redemption
shareholders were also advised that the company was making payments on behalf
of its holding company in respect of the debt due by the holding company to
Anglo for its share of the redemption of the preference share capital. At 31
December 2000 the full debt of R30 million had been repaid to Anglo. This has
resulted in the creation of a general reserve of R60 million at 31 December
2000.
Activities
The Group's activities remain solely the importation and distribution of Daewoo
branded consumer products.
Prospects
Owing to supply difficulties occasioned by financial restrictions imposed on
the company's major supplier, Daewoo Electronics Co. Limited, Korea, stock
shortages were experienced in the third and fourth quarters. This has resulted
in substantially reduced turnover in this period. The matter was resolved
toward the end of December increasing stock levels for the beginning of the
2001 year. However the trend of the business generally shows slow sales in the
first quarter of any year.
The dispute with customs relating to the classification of satellite receivers
for duty purposes has now been resolved, unfortunately the battle with customs
was unsuccessful for the Group and no claims against customs are to be made.
The company's gearing remains unsatisfactory and it is hoped that the holding
company will be in a position to address this to a greater extent in the new
year. In this event the unrealised currency losses could be eliminated in whole
or in part.
By 31 December 2000 the Sale of the Midrand property had been finalised with
the deed registration at the deeds offices waiting to be registered. The
registration officially happened on 18 January 2001.
For and on behalf of the board
W. Dong Y.G. Kim
Chairman Chief Executive
29 March 2001
Daewoo Electronics S.A. Limited
Registration number 1987/004570/06
Directors
W. Dong (Chairman), Y.G. Kim (Chief Executive)
J. H. Huh*, Y.S. Kim*
*Non-executive directors
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