| Wed 20 Jun 2001, 0:00 | | South African Chrome And Alloys Limited Financial |
|
SOUTH AFRICAN CHROME AND ALLOYS LIMITED
( Registration number 1987 / 003452 / 06
)
Audited results for the year ended 28
February 2001
GROUP BALANCE SHEET
At 28 February 2001
2001 2000
R R
ASSETS
NON - CURRENT ASSETS 42,044,512 8,313,751
Options for
mineral and
257,487 257,487
participation
rights
Property , plant 41,302,123 7,555,430
and equipment
Investments 65,285 159,251
Long term 419,617 341,583
receivables
CURRENT ASSETS 22,689,178 19,877,780
Inventories 5,596,781 2,753,781
Accounts 14,750,595 5,418,977
receivable
Bank and cash 2,341,802 11,705,022
Total assets 64,733,690 28,191,531
EQUITY AND LIABILITIES
CAPITAL AND RESERVES 39,811,883 20,205,934
Share capital 2,257,857 1,285,894
Share premium 68,156,345 30,531,307
Non - 61,226 117,794
distributable
reserves
Accumulated loss (30,663,545) (11,729,061
)
NON - CURRENT
LIABILITIES
Long term 6,104,237 1,382,101
liabilities
CURRENT LIABILITIES 8,817,570 6,603,496
Accounts payable 14,374,760 4,991,878
Bank overdraft 1,256,748 1,236,404
Short term 3,186,062 375,214
borrowings
Total equity and 64,733,690 28,191,531
liabilities
GROUP INCOME STATEMENT
For the year ended 28 February 2001
2001 2000
R R
Gross revenue 70,856,994
32,453,272
Cost of sales (58,017,680)
(24,340,148
)
Gross profit 12,839,314
8,113,124
Other operating income 703,817 60,340
Other operating expenses (12,040,900) (6,847,015)
Profit from operations 1,502,231 1,326,449
Income from investments 409,435 531,981
Financing costs (903,533) (62,506)
1,008,133 1,795,924
Exceptional items (19,999,185) (2,579,265)
Net loss for the year (18,991,052) (783,341)
- 56,568 -
(18,934,484) (783,341)
Loss per share ( cents ) (10.69) (0.86)
0.62 1.98
Shares in issue 225,785,841 128,589,460
Weighted average for year 177,583,065 90,596,640
Reconciliation between
earnings and headline
earnings:
Net loss for the year (18 991 052) (783 341)
Acquisition expenses 1 124 087 2 579 265
Goodwill written off 1 175 711 -
Loss on investments written 93 966 -
down
Ferrochrome smelter project 17 699 387 -
expenses
Headline earnings 1 102 099 1 795 924
GROUP STATEMENT OF CHANGES IN EQUITY
For the year ended 28
February 2001
2001 2000
R R
Share capital 2,257,857 1,285,894
Balance at the 1,285,894 815,195
beginning of the year
New shares issued 971,963 470,699
during the year
Share premium 68,156,345 30,531,307
Balance at the 30,531,307 18,779,573
beginning of the year
Premium on new 37,667,487 11,872,190
shares issued
Share issue (42,449) (120,456)
expenses written off
Non - distributable 61,226 117,794
reserves
Balance at the 117,794 117,794
beginning of the year
Transfer on
devaluation of listed
(56,568) -
investments
Accumulated loss (30,663,545) (11,729,061
)
Balance at the (11,729,061) (10,945,720
beginning of the year )
Net loss for the (18,934,484) (783,341)
year
Equity at the end of 39,811,883 20,205,934
the year
GROUP CASH FLOW STATEMENT
For the year ended 28
February 2001
2001 2000
R R
OPERATING ACTIVITIES (4,749,974) 145,563
Cash utilised by (4,255,876) (323,912)
operations
Interest received 409,435 531,174
Interest paid (903,533) (62,506)
Dividends received - 807
INVESTING ACTIVITIES (19,777,458) (1,007,720)
Acquisition of fixed (20,154,137) (2,337,884)
assets
Proceeds on disposal of 406,713 59,042
fixed assets
Loans receivable ( granted (30,034) 1,271,122
) / repaid
FINANCING ACTIVITIES 15,143,868 10,993,072
Proceeds on issue of shares 9,096,450 11,000,000
Share issue expenses (42,449) (120,456)
Long term borrowings raised 6,968,489 567,716
Capital element of (878,622) (454,188)
liabilities repaid
Net ( decrease ) / increase
in cash
and cash (9,383,564) 10,130,915
equivalents
Cash and cash equivalents
at
beginning of 10,468,618 337,703
year
Cash and cash equivalents 1,085,054 10,468,618
at end of year
CHAIRMAN'S REVIEW
Set out below for the information of shareholders is the current state of
affairs of the company .
Elandsdrift Chrome Mine
This operation achieved profits as forecast . The opencast mining operation
only has three months before total opencast reserves are depleted .
Negotiations are under way to sell the underground chrome reserves .
Coal Reserves
An option to purchase or utilise the company's coal reserves on a royalty
basis has been given to a third party .
Welprop Mining Services ( Pty ) Ltd
The company achieved a creditable profit on its conventional prop contracts
during an extremely difficult period resulting from the downturn of gold
mining activity .
The Alimak Division, in spite of the loss of a major contract, was
marginally profitable . Corrective measures, changes of staff and a
replacement Alimak contract at West Driefontein Gold Mine have ensured a
turn around on this division with useful profits being generated for the
past two months .
Rationalisation , consolidation , focus and some new products will ensure
that this division improves on last year's satisfactory performance .
Welprop Mining Services ( Pty ) Ltd achieved an operating profit of R1,3
million for the year against a forecast of R 1,4 million .
CHAIRMAN'S REVIEW
Horizon Chrome Mines ( Pty ) Ltd
Despite low prices for its chrome sands , flooding and the necessity to
halt production to upgrade the mine's beneficiation plant , the mine
continued to generate income to partly offset the substantial expenses
which were necessary to bring the ferrochrome project to fruition. The
company is at present only mining its opencast reserves. In order to secure
sufficient material for its ferrochrome smelters , underground decline
equipping has started . Details of the underground mining are at an advanced
stage of planning and mining contractors are to be appointed shortly .
Ferrochrome smelters
In a successful capital raising exercise the company was able to bring in
exceptional strategic partners. These being The Industrial Development
Corporation of South Africa , The Royal Bafokeng Nation , Thyssen Krupp
Metallurgie , Bateman Titaco and Outokumpu , all of whom have shown faith in
the long term success of the project .
The directors of SA Chrome are pleased to announce that the establishment
of SA Chrome's 235 000 ton per annum ferrochrome facility near Rustenburg
is on budget and ahead of schedule .
The contract with SA Chrome's lump-sum turnkey contractor , Bateman Titaco ,
became effective on 24 March 2001 and as such the first furnace is due to
be completed 12 months later on 25 March 2002 . In turn , the second
furnace is set to be completed on 6 May 2002 and the pelletising and
sintering plant likewise on 17 June 2002 .
The directors are confident that the project will continue to run ahead of
schedule and below the final R700 million budget .
While the cyclic ferrochrome market is extremely depressed at today's date ,
it is anticipated that by mid 2002 ferrochrome prices will have improved .
Bearing in mind that all the company's projections have been calculated at a
rand dollar exchange rate of R7 to the dollar your directors estimate that
profits will not be less than as set out in the circular to shareholders
dated 22 December 2000 .
Acquisition of Hernic Ferrochrome
The acquisition agreement, details of which were disclosed in the
announcement dated 5 April 2001, has lapsed by mutual consent .
Cautionary announcement :
The boards of SA Chrome and Hernic are nevertheless pursuing discussions
with the objective of concluding a revised agreement and shareholders will
be kept informed of developments in this regard .
In the meantime shareholders are advised to exercise caution when dealing in
SA Chrome's shares .
Exceptional items
Substantial expenses have been incurred to bring the ferrochrome project to
fruition . It has been decided to write these amounts off in the year in
which they occurred , rather than to capitalise such costs .
Prospects
Irrespective of the outcome of negotiations with Hernic Ferrochrome your
directors are confident that future prospects , while linked to the
Ferrochrome price and rand dollar exchange rate , are extremely bright .
Substantially improved profits are forecasted from the year ended February
2003 , our first year of operation in the ferrochrome market .
JG Dorfan
Chairman
