| Fri 3 Aug 2001, 0:00 | | Delta Electrical Industries Limited - Interim Resu |
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Delta Electrical Industries Limited
Registration number 1919/006020/06
Directors:
PG Joubert (Chairman), EW van Zyl (Joint Managing), BR Wright (Joint
Managing), PL Campbell, DJ Gleeson, BG Hitchcock, ME Ramano, JP Scott-
Maxwell*, PMAM Smits
*British Netherlands
- Interim headline earnings per share up 13% * improved operating margin
- cash available from operating activities R67,3 million
Unaudited group results for the six months ended 30 June 2001
GROUP INCOME STATEMENT
Unaudited Audited
Six Months Year to
to June December
2001 2000 Increase 2000
R'000 R'000 % R'000
Revenue 502 586 537 998 (7)1 042 882
Operating profit 110 978 102 728 8 247 287
Exceptional items - (56 013) (55 367)
Profit before interest 110 978 46 715 191 920
Interest received 17 040 8 181 21 780
Interest paid (14 090) (7 112) (18 710)
Profit before taxation 113 928 47 784 194 990
Taxation 38 166 36 890 86 217
Profit after taxation 75 762 10 894 108 773
Outside
shareholders' interest 1 879 1 767 4 161
Net profit attributable to
ordinary shareholders 73 883 9 127 104 612
Shares in issue and on
which earnings per
share are based (000's) 49 166 49 166 49 166
Attributable earnings
per share (cents) 150.3 18.6 212.8
Headline earnings
per share (cents) 150.3 132.7 13 325.4
Dividends per share (cents) 43.0 38.0 13 130.0
Dividend cover (times) 3.5 3.5 2.5
Depreciation (R000's) 18 076 17 114 33 976
RECONCILIATION OF
HEADLINE EARNINGS
Attributable net income
for the period 73 883 9 127 104 612
Exceptional items
after tax & minorities:
Goodwill on acquisitions
written off - 56 302 56 302
Profit on the disposal of
property, plant
and equipment - - (199)
Sundry - (203) (736)
Headline earnings 73 883 65 226 13 159 979
STATEMENT OF CHANGES IN EQUITY
Share Non-
distri- Distri
Capital and butable butable
Premium Reserves Reserves Total
R'000 R'000 R'000 R'000
Balance at
28 December 1999 117 445 14 898 278 494 410 837
Net profit for the year - - 104 612 104 612
Dividends declared
and paid - - (63 915) (63 915)
Foreign currency
translation reserve
movement - 15 398 - 15 398
Balance at
27 December 2000 117 445 30 296 319 191 466 932
Net profit for
the six months - - 73 883 73 883
Foreign currency
translation reserve
movement - (3 495) - (3 495)
Balance at
30 June 2001 117 445 26 801 393 074 537 320
SEGMENTAL ANALYSIS
Unaudited Audited
Six Months Year to
to June December
2001 2000 Increase 2000
R'000 R'000 % R'000
Revenue
Electrolytic Manganese
Dioxide 206 674 261 199 (21) 474 109
Repairs and Services 270 857 251 288 8 515 296
Replacement Parts 59 556 56 554 5 111 570
Inter group sales (34 501) (31 043) 11 (58 093)
502 586 537 998 (7) 1 042 882
Operating Profit
Electrolytic Manganese
Dioxide 71 782 68 137 5 171 560
Repairs and Services 31 276 27 002 16 60 849
Replacement Parts 7 920 7 589 4 14 878
110 978 102 728 8 247 287
Depreciation
Electrolytic Manganese
Dioxide 13 176 12 841 3 25 264
Repairs and Services 3 689 3 667 1 7 211
Replacement Parts 1 211 606 100 1 501
18 076 17 114 6 33 976
Capital Expenditure
Electrolytic Manganese
Dioxide 56 057 13 685 310 65 618
Repairs and Services 7 078 4 661 52 10 473
Replacement Parts 1 321 638 107 4 585
64 456 18 984 240 80 676
Segmental Assets
Electrolytic Manganese
Dioxide 568 725 432 990 31 505 287
Repairs and Services 215 368 195 064 10 196 128
Replacement Parts 60 193 52 027 16 57 354
Other 23 549 22 997 2 10 896
867 835 703 078 23 769 665
Cash and cash
equivalents 177 341 146 411 21 101 213
Total assets 1 045 176 849 489 23 870 878
Segmental Liabilities
Electrolytic Manganese
Dioxide 64 485 77 826 (17) 66 540
Repairs and Services 113 353 101 356 12 93 895
Replacement Parts 18 897 15 404 23 17 572
Other 7 932 26 923 (71) 39 797
204 667 221 509 (8) 217 804
Overdraft - - 32 595
Short-term loan 85 211 52 919 61 29 449
Intergroup loan 102 567 40 749 152 -
Taxation 84 047 53 161 58 76 764
Current liabilities 476 492 368 338 29 356 612
GROUP BALANCE SHEET
Unaudited Audited
Six Months Year to
to June December
2001 2000 2000
R'000 R'000 R'000
ASSETS
Property, plant and equipment 337 734 263 254 295 170
Trademarks 2 949 3 539 3 246
Loans to share incentive schemes 35 332 33 066 33 101
Current assets 669 161 549 630 539 361
Total assets 1 045 176 849 489 870 878
EQUITY AND LIABILITIES
Ordinary shareholders' equity 537 320 427 517 466 932
Outside shareholders' equity 17 447 17 191 17 607
Total capital and reserves 554 767 444 708 484 539
Current liabilities 476 492 368 338 356 612
Deferred taxation 13 917 36 443 29 727
Total equity and liabilities 1 045 176 849 489 870 878
Net asset value per share (cents) 1 091 870 950
Net gearing (%) 2% nil nil
Capital commitments (R'000) 212 866 256 575 231 405
Authorised but not contracted 160 107 241 484 185 740
Contracted 52 759 15 091 45 665
Lease commitments (R'000) 20 038 25 561 26 655
Minority contingent
liabilities (R'000) 13 666 10 481 10 481
GROUP CASH FLOW STATEMENT
Unaudited Unaudited Audited
Six months Six months Year to
to June to June December
2001 2000 2000
R'000 R'000 R'000
Cash generated from operations 138 633 120 809 279 200
(Increase)/Decrease in
working capital (25 132) 80 926 14 487
Taxation paid (46 164) (38 149) (68 147)
Cash available from
operating activities 67 337 163 586 225 540
Dividends paid (47 494) (32 657) (54 951)
Cash retained from
operating activities 19 843 130 929 170 589
Investments in businesses - (79 620) (79 620)
Replacement of property,
plant & equipment (17 965) (12 023) (33 075)
Expansion of property,
plant & equipment (46 491) (6 961) (47 601)
Disposals of property,
plant and equipment 228 35 789
Net cash flow from
investing activities (64 228) (98 569) (159 507)
Loans to share incentive schemes (2 231) 320 220
Net cash flow from
financing activities (2 231) 320 220
Movement in cash
& cash equivalents (46 616) 32 680 11 302
Translation difference
on cash & cash equivalents (2 990) (6 317) 1 487
Cash & cash equivalents at
beginning of period 39 169 26 380 26 380
Cash & cash equivalents at
end of period (10 437) 52 743 39 169
ACCOUNTING POLICIES
Generally Accepted Accounting Statements
Except as mentioned below, the accounting policies used to prepare the
interim financial statements are consistent with those used in the
preparation of the 2000 annual financial statements. The interim financial
statements have been prepared in accordance with South African Statements of
Generally Accepted Accounting Practice.
Revenue
The company's accounting policy for revenue recognition has changed in order
to comply with Generally Accepted Accounting Standard AC132. Arms length
inter group sales are now illuminated on consolidation whereas previously
they were not. The comparative figures have been restated accordingly.
COMMENT ON RESULTS
Headline earnings per share grew by 13% to 150,3 cents (132,7 cents: June
2000) despite significant de-stocking in the US battery industry impacting
upon the groups largest division, Delta EMD.
The demand for batteries in the USA has been negatively affected by
overstocking as a result of a carry over from Y2K, lack of hurricane
activity, coupled with a weak US economy. Due to the resultant build-up of
stock at the Delta EMD plants, the company is delaying the commissioning of
the
11,000 tonne expansion at the South African plant until market conditions
improve.
The Repairs and Services division delivered pleasing results off increased
revenue and improved efficiencies. The Replacements Parts division also
performed well in difficult construction and transport markets.
Operating profits improved by 8% to R111,0 million although group revenue
declined by 7%. This improvement was largely due to the devaluation of the
South African rand and hedging the Australian dollar against the US dollar,
as well as improved operating efficiencies in most of the businesses.
Net interest earned increased to R3 million. Interest of R2,2 million was
capitalized on the EMD plant expansion.
The effective rate of tax for the period decreased due to a reduction in the
Australian company tax rate from 34% last year to 30% currently.
Cash retained from operating activities of R67,3 million was below that
achieved to June 2000 as a result of a build up of stock in Delta EMD and
higher tax payments. The company nevertheless ended the period with gearing
of only 2% after spending R46,5 million on the Delta EMD plant expansion and
R18,0 million on replacement of plant and equipment.
Prospects
The company is anticipating an improvement in EMD sales volumes to the USA
battery producers in the second half of the year. This, together with the
expected continued weakness of the South African rand and the beneficial
effect of the Australian dollar hedge against the American dollar, bodes
well for the results during the second half of the year. In the other
businesses the company does not foresee any significant change in market
conditions through to the year end.
However, due to the benefit of the accounting change as disclosed last year
it is expected that the comparative year's earnings growth will be similar
to that of the first half. The underlying demand for EMD is expected to
return to the historic growth trend in 2002.
Dividend No. 59
Notice is hereby given that an interim dividend number 59 of 43 cents per
share has been declared by the directors in respect of the six months ended
June 2001. The last date to trade in order to receive the dividend will be
24 August 2001 and Delta Electrical Industries Limited shares will trade ex-
dividend from start of trade on 27 August 2001. The record date will be 31
August 2001 and the date of payment of the dividend will be 3 September
2001. The dividend is declared in the currency of the Republic of South
Africa and will be paid either by electronic funds transfer or cheque posted
on or about 3 September 2001.
PG Joubert EW van Zyl BR Wright
(Chairman) (Joint Managing) (Joint Managing)
6 August 2001
Registered Office Transfer Secretaries
11th Floor, Office Tower Mercantile Registrars Limited
Sandton City 11 Diagonal Street
Rivonia Road Johannesburg
Sandown 2146 2001
website: www.profile.co.za
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