| Wed 26 Jun 2002, 0:00 | | South African Chrome & Alloys Limited - Results |
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SOUTH AFRICAN CHROME & ALLOYS LIMITED - RESULTS
SOUTH AFRICAN CHROME & ALLOYS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1987/003452/06)
("SA Chrome")
Share Code: SCE
ISIN Number: ZAE 000022943
Audited results for the 13 months ended 31 March 2002
Group abridged income statement
Audited
1 March 2001 1 March 2000
to to
31 March 2002 28 February 2001
R`000 R`000
Gross revenue 44,643 70,857
Cost of sales (39,414) (58,018)
Gross profit 5,229 12,839
Other operating income 811 704
Other operating expenses (22,788) (12,041)
(Loss)/profit from operations (16,748) 1,502
Interest received 9,953 409
Financing costs (9,793) (903)
(Loss)/profit before exceptional (16,588) 1,008
items
Exceptional items (6,535) (19,999)
Net (loss)/profit for the period (23,123) (18,991)
Transfer from non-distributable
reserves 61 57
Accumulated (loss)/income for the (23,062) (18,934)
period
Loss per share (cents) (2.54) (10.69)
Headline (loss)/earnings per share (1.82) 0.62
(cents)
Ordinary shares in issue 998,566,832 225,785,841
Weighted average for the period 911,400,085 177,583,065
Note 1: The Other operating expenses include various indirect smelter and
mine project start-up costs which have prudently not been capitalised, but
written-off during the period.
Note 2: The exceptional loss relates primarily to the sale of Welprop and
due diligence expenses outlined in the commentary below.
Note 3: The difference between the headline loss per share and loss per
share is attributable to the exceptional item of R6,535,000 being 0,72 cents
per share.
Note 4: The financing costs arising as a result of the increased borrowings
of the group had the effect of increasing the headline loss per share from
0,75 cents to 1,82 cents, being 1,07 cents per share.
Group abridged balance sheet
Audited
31 March 2002 28 February 2001
R`000 R`000
ASSETS
NON-CURRENT ASSETS 647,824 42,044
Options, minerals and participation 257 257
rights
Property, plant and equipment 630,960 41,302
Investments 14,401 65
Long-term receivables 2,206 420
CURRENT ASSETS 93,960 22,690
Inventories 23,076 5,597
Accounts receivable 24,263 14,751
Bank and cash 46,621 2,342
Total assets 741,784 64,734
EQUITY AND LIABILITIES
CAPITAL AND RESERVES 363,611 39,812
Share capital 9,986 2,258
Share premium 407,350 68,156
Non-distributable reserves 1 61
Accumulated loss (53,726) (30,663)
NON-CURRENT LIABILITIES
Long-term liabilities 284,229 6,104
CURRENT LIABILITIES 93,944 18,818
Accounts payable 63,418 14,375
Bank overdraft - 1,257
Short-term borrowings 30,526 3,186
Total equity and liabilities 741,784 64,734
Group abridged cash flow statement
Audited
1 March 2001 to 1 March 2000 to
31 March 2002 28 February 2001
R`000 R`000
OPERATING ACTIVITIES (30,605) (4,750)
Cash utilised by operations (30,765) (4,256)
Interest received 9,953 409
Interest paid (9,793) (903)
INVESTING ACTIVITIES (523,644) (19,777)
Acquisition of property, plant and
equipment (508,924) (20,154)
Proceeds on disposal of property,
plant and equipment 7 407
Disposal of listed investments 60 -
Increase in investments (14,397) -
Loans receivable (granted)/repaid (390) (30)
FINANCING ACTIVITIES 599,785 15,144
Proceeds on issue of shares 312,437 9,097
Share issue expenses (951) (42)
Long-term borrowings raised 296,814 6,968
Capital element of liabilities
repaid (8,515) (879)
Net (decrease)/increase in cash
and cash equivalents 45,536 (9,383)
Cash and cash equivalents at
beginning of period 1,085 10,468
Cash and cash equivalents at end
of period 46,621 1,085
Statements of changes in equity
Group
1 March 2001 1 March 2000
to to
31 March 2002 28 February 2001
R`000 R`000
Share capital 9,986 2,258
Balance at the beginning of the
year 2,258 1,286
New shares issued during the year 7,728 972
Share premium 407,350 68,156
Balance at the beginning of the
year 68,156 30,531
Premium on new shares issued 340,145 37,667
Share issue expenses written off (951) (42)
Non-distributable reserves 1 61
Balance at the beginning of the
year 61 118
Transfer on devaluation of listed
investment - (57)
Revaluation surplus realised on (60) -
sale of shares
Accumulated loss (53,726) (30,664)
Balance at the beginning of the
year (30,664) (11,729)
Net loss for the year (23,062) (18,934)
Equity at the end of the year 363,611 39,812
Commentary
Accounting policy
This report has been prepared in terms of statements of Generally Accepted
Accounting Practice (GAAP) using accounting policies consistent with those
applied in the financial statements for the year ended 28 February 2001.
The year under review
2002 was a year of remarkable achievement for SA Chrome
as the company transformed itself by the construction of a 235,000 ton per
annum ferrochrome facility in the Rustenburg area.
One of the major successes of the year was the appointment of a new
executive team, all of whom played a critical role in raising the funds for
the project (both equity and debt), introducing key shareholders and for the
implementation of the project. They were also instrumental in procuring an
operations team who are amongst the finest talents within the ferrochrome
industry. The executive and the operating team have the confidence in the
quality of our technology and have the potential to develop SA Chrome into a
significant resource player.
SA Chrome is proudly South African, owned by South Africans and is committed
to:
- protecting the environment and producing an environmentally friendly
product;
- continuing as a technology leader;
- being a reliable supply partner to the stainless steel industry;
- adding value to the Country and its people;
- empowerment and employment equity; and
- creating shareholder value.
The following milestones were achieved during the year under review:
- R350 million equity financing was raised by the issue of new ordinary
shares;
- The Royal Bafokeng Nation (35%) and The Industrial Development Corporation
(25%) ("the IDC") became major shareholders in
SA Chrome;
- R350 million in the form of long-term debt facilities was secured from
Rand Merchant Bank and the IDC;
- The share price has increased significantly from its equity financing
issue price of 45 cents;
- Entered into discussions with The Royal Bafokeng Nation
to acquire their chromite reserves to further improve
SA Chrome`s cost effectiveness and to allow for potential future expansion;
- The successful commissioning of the first furnace early in
June 2002 - a faultless start-up and first tap.
As the construction of the ferrochrome facility nears completion, your board
is confident that the cost thereof will be below the R700 million initially
budgeted.
The second furnace and pelletising and sintering plant are due to be
commissioned during July 2002.
Review of Results
The major focus of the year under review has been the construction of the
ferrochrome facility. SA Chrome was not producing ferrochrome during this
period and the results reflect initial start-up costs without any
corresponding revenue. These start-up costs include various indirect smelter
and mine project start-up costs which have prudently not been capitalised,
but written-off during the period.
There has, however, been turnover in the past 13 months from the sale of
chrome ore and trading by Welprop Mining Services ("Welprop"),
a wholly owned subsidiary of the company, for the period 1 March 2001 to 31
August 2001.
Trading in chrome sands, not utilized in the Company`s ferrochrome facility,
will continue.
As shareholders were notified during the course of last year, Welprop no
longer formed a core component of the future business of SA Chrome. Welprop
was sold with effect from 1 September 2001 to existing Welprop management.
Prospects
Your Directors remain confident that future prospects are promising given:
- the reduced start-up and financial risk now associated with
SA Chrome, as a result of the successful commissioning of the first furnace;
- the expected improvement in ferrochrome prices for the third quarter;
- the announcements of new stainless steel expansions globally;
- the quality and substance of the company`s major shareholders, The Royal
Bafokeng Nation and the IDC and their long-term commitment to the company;
and
- the securing of skills and expertise, both at executive and operations
level to take the company into the future.
Thanks
Finally, as the Company enters a new period in its history, we wish to thank
our fellow directors for their invaluable contributions during 2002 which
made it possible for the Company to arrive at this exciting point in its
life. Our appreciation also goes to our operations team at the smelter and
our financial partners.
We wish to express a special gratitude to The Royal Bafokeng Nation and the
IDC for the confidence and support they gave SA Chrome
during the year under review.
JG Dorfan TM McConnachie
Chairman wManaging Director
27 June 2002
Johannesburg
Date: 26/06/2002 05:19:00 PM Produced by the SENS Department
