| Thu 22 Aug 2002, 0:00 | | Trencor Limited - Interim Results For The 6 Months |
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Trencor Limited - Interim Results for the 6 months ended 30 June 2002
TRENCOR LIMITED
REG NO 1955/002869/06
SHARE CODE: ISIN:
TRE ZAE000007506
TED2 ZAE000007282
MOBILE INDUSTRIES LIMITED
REG NO 1968/014997/06
SHARE CODE: ISIN:
MOB ZAE000004602
MBN ZAE000012274
MOBD ZAE000004610
INTERIM RESULTS for the 6 months ended 30 June 2002
Note: Following a change in the financial year-ends from 30 June to
31 December, the comparative figures are for the 6 months ended 30 June 2001 and
18 months ended 31 December 2001.
Abridged income statements
TRENCOR MOBILE
Unaudited Audited Unaudited Audited
6 months 18 months 6 months 18 months
ended ended ended ended
30 June 31 Dec 30 June 31 Dec
R Million 2002 2001 2001 2002 2001 2001
REVENUE
(INCLUDING EXCHANGE
DIFFERENCES) (NOTE 2) 267,9 911,0 4 436,1 11,0 17,8 49,5
TRADING INCOME BEFORE
ITEMS LISTED BELOW: 261,3 162,2 516,8 9,8 10,5 42,5
EXCHANGE (LOSSES)/GAINS
INCLUDED IN REVENUE (663,8) 215,1 2 120,8 - - -
NET LONG-TERM RECEIVABLE
REVALUATION ADJUSTMENT 270,0 (102,0) (1 075,2) - - -
(LOSS)/INCOME FROM
OPERATIONS (132,5) 275,3 1 562,4 9,8 10,5 42,5
NET INTEREST EXPENSE
- TEXTAINER (117,1) (71,2) (286,8) - - -
- OTHER (46,2) (56,3) (187,6) (8,8) (8,7) (38,7)
(295,8) 147,8 1 088,0 1,0 1,8 3,8
ATTRIBUTABLE INCOME/(LOSS)
OF ASSOCIATE COMPANY 1,1 (9,6) (15,5)(103,2) 46,9 344,2
(LOSS)/INCOME BEFORE
ABNORMAL ITEMS (294,7) 138,2 1 072,5 (102,2) 48,7 348,0
ABNORMAL ITEMS (NOTE 3) 5,3 59,8 79,0 2,5 30,3 37,1
(LOSS)/INCOME BEFORE
TAXATION (289,4) 198,0 1 151,5 (99,7) 79,0 385,1
TAXATION (99,4) 17,8 269,3 0,3 0,6 1,9
(LOSS)/INCOME AFTER
TAXATION (190,0) 180,2 882,2 (100,0) 78,4 383,2
OUTSIDE SHAREHOLDERS`
INTEREST 22,6 17,2 77,2 0,2 0,3 0,6
NET (LOSS)/INCOME
ATTRIBUTABLE
TO SHAREHOLDERS (212,6) 163,0 805,0 (100,2) 78,1 382,6
NUMBER OF SHARES
IN ISSUE (MILLION) 152,8 152,8 152,8 897,8 879,8 897,8
UNDILUTED (LOSS)/EARNINGS
PER SHARE (CENTS) (139,1) 106,6 526,7 (11,2) 8,9 42,6
DILUTED EARNINGS PER SHARE
(CENTS) (NOTE 4) - 89,9 452,6 - 7,3 36,6
UNDILUTED HEADLINE
(LOSS)/EARNINGS PER SHARE
(CENTS) (NOTE 4) (141,2) 66,7 471,9 (11,3) 5,3 38,4
DILUTED HEADLINE EARNINGS
PER SHARE (CENTS) (NOTE 4) - 56,2 406,5 - 4,1 33,0
PERIOD-END RATE OF EXCHANGE:
SA RAND TO US DOLLAR 10,36 8,07 12,06 - - -
Notes to the abridged financial statements
1. These consolidated abridged interim financial statements are prepared in
accordance with South African Statements of Generally Accepted Accounting
Practice. The accounting policies used in the preparation of the interim
financial statements are consistent with those used in the annual financial
statements for the 18 months ended 31 December 2001.
Unaudited Audited Unaudited Audited
6 months 18 months 6 months 18 months
ended ended ended ended
30 June 31 Dec 30 June 31 Dec
2002 2001 2001 2002 2001 2001
2. REVENUE
INVOICED SALES
- GOODS AND SERVICES 180,4 248,7 756,8 - - -
LEASING INCOME 539,6 325,0 1 168,1 - - -
MANAGEMENT FEES 82,1 58,1 219,3 - - -
FINANCE INCOME 129,6 64,1 171,1 11,0 17,8 49,5
REALISED AND UNREALISED
EXCHANGE DIFFERENCES (663,8) 215,1 2 120,8 - - -
267,9 911,0 4 436,1 11,0 17,8 49,5
3. ABNORMAL ITEMS
PROFIT ON SALE
OF INVESTMENTS - 76,1 163,1 - 36,0 77,3
PROFIT ON SALE OF PROPERTY - 1,3 1,2 - 0,6 0,6
PREMIUM PAID ON
ACQUISITION OF SHARES
FROM OUTSIDE SHAREHOLDERS - (13,4) (13,4) - (6,3) (11,2)
IMPAIRMENT OF GOODWILL - - (10,3) - - -
AMORTISATION OF GOODWILL (2,0) - - (1,0) - -
DISCONTINUED OPERATIONS 7,3 (4,2) 2,8 3,5 - 0,9
WRITE-OFF OF INVESTMENT - - (0,5) - - (0,2)
WRITE DOWN OF PROPERTIES
TO OPEN MARKET VALUE - - (8,6) - - (4,1)
IMPAIRMENT OF PLANT - - (17,5) - - (8,3)
IMPAIRMENT OF INVESTMENT - - (37,8) - - (17,9)
5,3 59,8 79,0 2,5 30,3 37,1
4. HEADLINE (LOSS)/EARNINGS
(LOSS)/EARNINGS (212,6) 163,0 805,0 (100,2) 78,1 382,6
DISCONTINUING OPERATIONS (5,1) 2,9 (2,0) (2,4) 0,5 (0,9)
LOSSES INCURRED UP
TO DATE OF DISCONTINUANCE - - (1,6) - (0,8) (0,8)
ABNORMAL ITEMS (EXCLUDING
DISCONTINUED OPERATIONS) 2,0 (64,0) (76,3) 1,0 (30,5) (36,1)
TAX ON ABNORMAL ITEMS - - (4,1) - - -
HEADLINE (LOSS)/EARNINGS (215,7) 101,9 721,0 (101,6) 47,3 344,8
NUMBER OF SHARES IN ISSUE
(MILLION) 152,8 152,8 152,8 897,8 897,8 897,8
HEADLINE (LOSS)/EARNINGS
PER SHARE (CENTS) (141,2) 66,7 471,9 (11,3) 5,3 38,4
The dilution arises as a result of any future conversion of convertible
debentures. The directors are of the opinion that the debentures will not be
converted in the foreseeable future and therefore no dilution is anticipated for
the foreseeable future. No dilutive effect has been presented in respect of the
current period as this would be antidilutive.
5. SEGMENTAL REPORTING
REVENUE
CONTAINER OPERATIONS
- SALES AND FINANCE (534,4) 278,0 2 279,7
CONTAINER OPERATIONS
- OWNING, LEASING-OUT
AND MANAGEMENT 636,9 423,8 1 497,8
CONTAINER OPERATIONS
- MANUFACTURING 38,0 24,2 153,6
SUPPLY CHAIN MANAGEMENT 124,9 13,9 59,5
TRAILERS - 158,1 434,2
OTHER 2,5 13,0 11,3
267,9 911,0 4 436,1
OPERATING INCOME
CONTAINER OPERATIONS
- SALES AND FINANCE (270,3) 179,5 1 192,6
CONTAINER OPERATIONS
- OWNING, LEASING-OUT
AND MANAGEMENT 188,6 139,7 553,4
CONTAINER OPERATIONS
- MANUFACTURING (6,6) (9,3) 14,2
SUPPLY CHAIN MANAGEMENT (8,7) (5,7) (38,2)
TRAILERS - (12,3) (38,4)
OTHER (35,5) (16,6) (121,2)
(132,5) 275,3 1 562,4
6. CURRENT ASSETS
INVENTORIES 89,5 109,9 93,9 - - -
ACCOUNTS RECEIVABLE 650,1 549,3 714,1 22,0 65,4 58,2
AMOUNT OWING
BY AFFILIATED COMPANY - - - 3,8 13,6 8,7
CASH AND CASH EQUIVALENTS 337,0 176,5 307,4 - 9,0 8,6
1 076,6 835,7 1 115,4 25,8 88,0 75,5
7. CURRENT LIABILITIES
ACCOUNTS PAYABLE 384,1 303,8 359,2 0,5 13,5 4,5
PROVISIONS 75,3 60,9 76,1 - - -
TAXATION 10,6 2,6 9,0 1,3 3,0 6,7
BANK OVERDRAFTS AND
SHORT-TERM LOANS 2,9 134,3 179,4 0,1 - -
CURRENT PORTION OF
INTEREST-BEARING
BORROWINGS 610,9 255,0 623,5 23,1 71,6 53,8
DEFERRED INCOME 22,1 - 19,1 - - -
1 105,9 756,6 1 266,3 25,0 88,1 65,0
Abridged statements of changes in shareholders` funds
BALANCE AT THE
BEGINNING OF THE PERIOD 2 323,9 1 602,3 1 312,9 1103,4 761,4 645,0
MOVEMENTS IN
DISTRIBUTABLE RESERVES (212,6) 163,0 805,8 (100,2) 78,1 382,6
NET (LOSS)/INCOME
FOR THE PERIOD (212,6) 163,0 805,0 (100,2) 78,1 382,6
TRANSFER FROM =
NON-DISTRIBUTABLE
RESERVES - - 0,8 - - -
MOVEMENTS IN
NON-DISTRIBUTABLE
RESERVES (132,6) 24,5 205,2 (62,8) 11,6 75,8
CURRENCY TRANSLATION
DIFFERENCES (94,6) 29,5 275,5 - - -
REVALUATION OF
FIXED ASSETS - - (1,7) - - -
REALISATION ON
SALE OF PROPERTY - 2,2 2,2 - - -
UNRECOGNISED LOSS
ON DERIVATIVE
INSTRUMENTS (IN TEXTAINER)
CUMULATIVE EFFECT DUE TO
CHANGE IN ACCOUNTING POLICY - - (21,9) - - -
NET CHANGE IN
UNRECOGNISED LOSS
- CURRENT PERIOD (13,0) (7,2) (48,1) - - -
FAIR VALUE ADJUSTMENT
- INVESTMENT (25,0) - - - - -
RESERVES OF
ASSOCIATE COMPANIES - - (0,8) (62,8) 11,6 75,8
BALANCE AT THE
END OF THE PERIOD 1 978,7 1 789,8 2 323,9 940,4 851,1 1 103,4
Abridged balance sheets
TRENCOR MOBILE
Unaudited Audited Unaudited Audited
30 June 31 Dec 30 June 31 Dec
2002 2001 2001 2002 2001 2001
ASSETS
NON-CURRENT ASSETS
PROPERTY, PLANT
AND EQUIPMENT 6 297,0 3 190,0 6 112,6 - - -
INTANGIBLE ASSETS
AND GOODWILL 30,0 - 35,6 - - -
INVESTMENTS 108,4 114,6 141,9 1054,1 964,9 1 217,8
LONG-TERM LOANS 31,6 37,8 29,5 - - -
NET INVESTMENT IN
DIRECT FINANCE LEASES 94,2 30,8 70,9 - - -
PARTICIPATION IN
EXPORT PARTNERSHIPS - - - 6,7 7,9 7,0
LONG-TERM RECEIVABLES 2 449,0 2 417,6 2 900,4 41,8 97,5 57,2
9 010,2 5 790,8 9 290,9 1102,9 1 070,3 1 282,0
CURRENT ASSETS (NOTE 6) 1 076,6 835,7 1 115,4 25,8 88,0 75,5
TOTAL ASSETS 10 086,8 6 626,5 10 406,3 1128,7 1 158,3 1 357,5
EQUITY AND LIABILITIES
CAPITAL AND RESERVES
SHARE CAPITAL AND PREMIUM 164,5 164,5 164,5 66,5 66,5 66,5
RESERVES 1 814,2 1 625,3 2 159,4 873,9 784,6 1 036,9
SHAREHOLDERS` EQUITY 1 978,7 1 789,8 2 323,9 940,4 851,1 1 103,4
INTEREST OF OUTSIDE
SHAREHOLDERS IN
SUBSIDIARIES 526,7 224,2 635,0 3,7 3,6 3,5
TOTAL SHAREHOLDERS` FUNDS 2 505,4 2 014,0 2 958,9 944,1 854,7 1 106,9
CONVERTIBLE DEBENTURES 260,5 260,5 260,5 127,6 127,6 127,6
OTHER NON-CURRENT LIABILITIES
INTEREST-BEARING
BORROWINGS 5 206,2 2 757,1 4 763,9 26,1 80,8 51,9
AMOUNTS ATTRIBUTABLE
TO THIRD PARTIES IN
RESPECT OF LONG-TERM
RECEIVABLES 408,2 480,0 431,6 - - -
DERIVATIVE INSTRUMENTS 131,0 39,3 130,9 - - -
DEFERRED TAXATION 469,6 319,0 594,2 5,9 7,1 6,2
8 980,9 5 869,9 9 140,0 1103,7 1 070,2 1 292,6
CURRENT LIABILITIES
(NOTE 7) 1 105,9 756,6 1 266,3 25,0 88,1 65,0
TOTAL EQUITY
AND LIABILITIES 10 086,8 6 626,5 10 406,3 1128,7 1 158,3 1 357,6
CAPITAL EXPENDITURE
INCURRED 1 336,6 355,3 1 467,5 - - -
CAPITAL EXPENDITURE
COMMITTED AND
AUTHORISED, BUT
NOT YET INCURRED 56,1 37,0 7,8 - - -
MARKET VALUE OF
LISTED INVESTMENTS 17,2 86,9 49,1 752,3 452,8 881,8
DIRECTORS` VALUATION
OF UNLISTED INVESTMENTS 91,2 27,7 92,8 - - -
RATIO TO AGGREGATE OF
TOTAL SHAREHOLDERS`
FUNDS AND CONVERTIBLE
DEBENTURES:
TOTAL LIABILITIES
EXCLUDING CONVERTIBLE
DEBENTURES (%) 264,7 191,3 223,2 5,3 17,9 10,0
INTEREST-BEARING
DEBT EXCLUDING
CONVERTIBLE DEBENTURES (%) 210,4 138,3 172,9 4,6 15,5 8,6
Abridged cash flow statements
TRENCOR MOBILE
Unaudited Audited Unaudited Audited
6 months 18 months 6 months 18 months
ended ended ended ended
30 June 31 Dec 30 June 31 Dec
2002 2001 2001 2002 2001 2001
CASH GENERATED
FROM OPERATIONS 338,6 107,6 656,1 57,8 6,8 119,1
INTEREST RECEIVED 11,0 17,2 28,7 4,4 5,5 14,7
INTEREST PAID (173,8) (144,7) (502,8) (8,8) (14,4) (38,7)
DIVIDENDS RECEIVED - - 0,1 - - -
DIVIDENDS PAID TO
OUTSIDE SHAREHOLDERS (20,9) (23,6) (23,4) - - -
TAXATION PAID (1,6) (7,2) (24,6) (5,7) (0,1) (0,7)
NET CASH INFLOW/(OUTFLOW)
FROM OPERATING ACTIVITIES 153,3 (50,7) 134,1 47,7 (2,2) 94,4
CASH FLOWS FROM
INVESTING ACTIVITIES (1 346,8) (80,2) (1 216,4) - 18,6 -
CASH FLOWS FROM
FINANCING ACTIVITIES 1 439,7 (110,3) 962,0 (56,5) (10,1) (83,9)
NET INCREASE/(DECREASE)
IN CASH AND CASH
EQUIVALENTS BEFORE
EXCHANGE RATE CHANGES 246,2 (241,2) (120,3) (8,8) 6,3 10,5
NET CASH AND CASH
EQUIVALENTS AT THE
BEGINNING OF THE PERIOD 128,1 270,4 67,0 8,7 2,7 (1,8)
EFFECTS OF EXCHANGE RATE
CHANGES ON CASH AND
CASH EQUIVALENTS (40,2) 13,0 181,4 - - -
NET CASH AND CASH
EQUIVALENTS AT THE
END OF THE PERIOD 334,1 42,2 128,1 (0,1) 9,0 8,7
Comments
Holders of securities in Trencor and Mobile are reminded that the previous
financial period was for the eighteen months ended 31 December 2001. These
interim results are unaudited and cover the six months to
30 June 2002; the comparative figures are for the six months ended
30 June 2001 and eighteen months ended 31 December 2001, as applicable.
TRENCOR
Trading income for the six months ended 30 June 2002 increased by 61% to R261
million from R162 million for the same period last year. Due however to the
strengthening of the Rand, the aggregate loss before tax for the six months
under review was R289 million (30 June 2001: profit R198 million) and the
undiluted headline loss per share was 141,2 cents (30 June 2001: headline
earnings of 66,7 cents).
The main factor giving rise to the loss for the period was a net downward
adjustment in the translation of the present value of the dollar denominated
long-term receivables amounting to R394 million flowing from the appreciation of
the rand during the period from US$1 = R12,06 to R10,36. Portion of the exchange
gains recognised last year in the translation of the net receivables have now
been reversed, resulting in a loss of R664 million, while the rand equivalent of
the net dollar denominated provision has been reduced by R270 million (the
provision in dollars remains unchanged).
Trading
Textainer`s fleet utilisation has been improving steadily from a low point of
just under 71% in March and is currently over 80%. During the period under
review Textainer incurred significant costs in repositioning empty containers
into areas of demand, but the benefits of this will mainly be felt in the second
half of the financial year. Textainer`s contribution to earnings in the period
under review amounted to R36 million compared to R49 million in the same period
last year.
TrenStar Inc, Trencor`s 61% owned US subsidiary which offers services and
returnable packaging assets for the supply chain, made excellent progress during
the review period. It achieved a breakthrough when it acquired, for some R1
billion, the entire beer keg fleet of Scottish Courage, a major UK brewer,
through its 75% owned subsidiary, Brewers Logistics International Limited
("BLI"). TrenStar will now make available and manage the fleet of 1,9 million
kegs under a 15-year container services agreement with Scottish Courage.
Negotiations with a second large brewer to enter into a similar transaction in
respect of another substantial fleet of kegs should be concluded soon. In both
instances, the purchase of the kegs is 100% funded by UK banks. These
transactions will not contribute materially to earnings in the current year.
TrenStar also succeeded in securing new contracts with major companies in the
food and automotive industries in the US.
Trencor Solutions, which is engaged in activities in South Africa similar to
those of TrenStar, is approaching breakeven. It is anticipated that this trend
will continue during the balance of the year.
The order intake for our stainless steel tank container manufacturing facility
at Parow, near Cape Town, has improved and there appear to be signs of an
improvement in trading conditions in this industry.
The trailer business, in which the group has a 40% interest, traded
satisfactorily during the period under review and made a positive contribution
to group earnings.
Finance
As reported on 10 May 2002, Trencor elected, in terms of the arrangements with
its South African and foreign bankers, to procure a draw down under the US
dollar denominated letter of credit provided by its two foreign banks and, from
the proceeds, repaid its financial indebtedness to its South African banks in
full. The combined effects of the changing value of the rand against the dollar
and the current interest rate profiles in South Africa and the US respectively
made it beneficial for Trencor to have these borrowings in US dollars.
An amount of US$56 385 000 was drawn down under the facility on 9 May 2002.
The amount drawn down is repayable in fourteen quarterly instalments of US$4 027
500 each, which commenced on 20 July 2002 with the final instalment payable on
20 October 2005. The outstanding balance bears interest at LIBOR plus 1,825% per
annum; the current effective rate payable on the loan is 3,68% per annum.
Pursuant to the acquisition of the beer keg fleet of Scottish Courage Limited
by BLI, the financial statements of BLI have been consolidated into those of
Trencor. As is the case with the borrowings of Textainer, all of the borrowings
of BLI are ring-fenced and without recourse to Trencor, or to TrenStar.
The ratio of Trencor`s consolidated interest-bearing debt to permanent
capital, being the sum of total shareholders` funds and the convertible
debentures, increased from 173% at 31 December 2001 to 210% at 30 June 2002.
However, with Textainer and BLI notionally equity accounted (the debt of these
companies is without recourse to Trencor), this ratio was 44,3% compared to
41,3% at 31 December 2001 and 37% at
30 June 2001.
Tax queries
The enquiry by the South African Revenue Service ("SARS") into the tax
treatment of the group`s export partners` participation in the export of cargo
containers (in respect of transactions entered into in prior years) continues
into its fourth year. It is not possible to anticipate when it will be
concluded.
As previously reported, a successful challenge by SARS, which we believe is
unlikely, may result in the acceleration of the payment of a portion of the
amounts attributable to third parties (i.e. our export partners) which are
carried at their net present values, and which would otherwise be paid over
periods of up to thirteen years.
Dividend
The board of directors does not recommend the payment of an interim dividend.
MOBILE
Following the merger of Trencor`s trailer division into a new entity, in which
Trencor has a 40% interest, effective 1 December 2001, the Mobile Industries`
subsidiaries, Mobile Acceptances and Transport Acceptances, ceased writing new
business and are now just collecting the outstanding debtors book. As Mobile
Industries derives virtually all of its income from dividends it receives from
Trencor, Mobile will not declare dividends unless and until Trencor does.
ON BEHALF OF THE BOARDS
NI JOWELL CHAIRMAN TRENCOR LIMITED
C JOWELL CHAIRMAN MOBILE INDUSTRIES LIMITED
22 AUGUST 2002
Registered Office: Registrars:
1313 Main Tower Computershare Investor Services Limited
Standard Bank Centre 2nd Floor Edura, 41 Fox Street
Heerengracht Johannesburg 2001
Cape Town 8001 (PO Box 61051, Marshalltown 2107)
These results are available on the websites:
http://www.trencor.net and http://www.mobile-industries.net
Date: 22/08/2002 05:02:00 PM Produced by the JSE SENS Department
