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Canadian Overseas Packaging Industries Limited
(Incorporated under the laws of Canada)
Share code: CAN
ISIN: CA 13642P1018
UNAUDITED INTERIM RESULTS TO SHAREHOLDERS
for the six month period ended December 31, 2002
(all figures expressed in thousands of Canadian dollars except for the common
share data)
Consolidated Statement of Earnings
Unaudited Unaudited
December 31 December 31
2002 2001
(C$000) (C$000)
Revenues
Sales 88,827 86,138
Interest 2,757 2,874
Dividends 106
Gain on sale of marketable securities 5,482 4,125
Share in net earnings of company subject 9,532
to significant influence
Foreign currency gains 399
97,066 103,174
Expenses
Cost of Sales 64,809 62,078
Selling and administrative 19,937 18,658
Interest
Current 822 959
Long-term 20 48
Share in net loss of company subject to 6,503
significant influence
Foreign currency losses 303
92,394 81,743
Earnings from operations before income 4,672 21,431
taxes and minority interest
Current income taxes 534 1,086
Earnings from operations before minority 4,138 20,345
interest
Minority interest (68) (21)
Net Earnings 4,070 20,324
Earnings per common share (17,578,125 C$0.23 C$1.16
shares)*
*there is no difference between headline earnings per common share and earnings
per common share
The accompanying notes are an integral part of the interim consolidated
financial statements.
Consolidated Statements of Cash flows
(Unaudited) (Unaudited)
December 31 December 31
2002 2001
(C$000) (C$000)
Operating activities
Net earnings 4,070 20,324
Non-cash items
Depreciation 2,499 2,575
Minority interest 68 21
Gain on sale of marketable securities (5,482) (4,125)
Share in net loss (earnings) of company 6,503 (9,532)
subject to significant influence
Gain on sale of property, plant and (3) (669)
equipment
7,655 8,594
Changes in non-cash working capital items (8,610) (3,895)
Cash flows from operating activities (955) 4,699
investing activities
Purchase of marketable securities (64,740) (122,676)
Proceeds on sale of marketable securities 70,844 137,561
Purchase of property, plant and equipment (2,337) (1,327)
Proceeds on sale of property, plant and 3 756
equipment
Cash flows from investing activities 3,770 14,314
financing activities
Bank indebtedness (2,112) (8,109)
Repayment of long-term debt (346) (327)
Dividend (17,578) (16,699)
Cash flows from financing activities (20,036) (25,135)
Foreign exchange loss on cash and cash 415 301
equivalents held in foreign currency
Net decrease in cash and cash equivalents (16,806) (5,821)
Cash and cash equivalents, beginning of 75,495 70,000
period
Cash and cash equivalents, end of period 58,689 64,179
CASH AND CASH EQUIVALENTS
Cash 13,197 10,065
Term deposits 45,492 54,114
58,689 64,179
The accompanying notes are an integral part of the interim consolidated
financial statements.
Consolidated balance sheets
(Unaudited) (Unaudited)
December 31 June 30 December 31
2002 2002 2001
(C$000) (C$000) (C$000)
Assets
Current assets
Cash 13,197 32,460 10,065
Term deposits 45,492 43,035 54,114
Accounts receivable 42,298 35,992 39,119
Inventories 15,531 14,850 14,470
116,518 126,337 117,768
Investments
Marketable securities, at cost 85,629 86,251 87,185
(quoted value: $91,111;
$89,834 at 30 June, 2002;
$91,662 at 31 Dec, 2001)
Company subject to significant 224,109 230,612 216,752
influence, at equity
Investment company (estimated
fair value: $248,000; $247,000
at 30 June, 2002: $248,000 at
31 Dec, 2001)
Other investments, at cost 25 25 25
309,763 316,888 303,962
Property, plant and equipment 35,787 34,186 32,113
462,068 477,411 453,843
Liabilities
Current liabilities
Bank indebtedness - secured by 18,647 20,759 12,515
certain assets
Accounts payable and accrued 23,364 24,755 25,847
liabilities
Income taxes payable 465 697 1,489
Current portion of long-term 352 651 666
debt
42,828 46,862 40,517
Long-term debt 307
Future income taxes 4,493 4,289 3,620
Minority interest 772 687 767
48,093 51,838 45,211
Shareholders` equity
Capital stock 47,984 47,984 47,984
Retained earnings 368,304 381,812 364,283
Appraisal increment 1,959 1,817 2,001
Cumulative translation (4,272) (6,040) (5,636)
adjustments
413,975 425,573 408,632
462,068 477,411 453,843
The accompanying notes are an integral part of the interim consolidated
financial statements.
Consolidated statement of
changes in shareholders` equity (Unaudited)
Cumulative
translation
Capital Retained Appraisal adjust-
stock earnings increment ments Total
(C$000) (C$000) (C$000) (C$000) (C$000)
Balance June 47,984 360,658 1,833 (7,318) 403,157
30, 2001
Effect of 168 1,682 1,850
exchange
rate changes
Net earnings 20,324 20,324
Dividend (16,699) (16,699)
($0.95 per
share)
Balance 47,984 364,283 2,001 (5,636) 408,632
December 31,
2001
Realisation 27 (27)
of appraisal
increment
Effect of (157) (404) (561)
exchange
rate changes
Net earnings 17,502 17,502
Balance June 47,984 381,812 1,817 (6,040) 425,573
30, 2002
Effect of 142 1,768 1,910
exchange
rate changes
Net earnings 4,070 4,070
Dividend (17,578) (17,578)
($1.00 per
share)
Balance 47,984 368,304 1,959 (4,272) 413,975
December 31,
2002
The accompanying notes are an integral part of the interim consolidated
financial statements.
Notes to the consolidated financial statements
(Tabulated amounts are in thousands of Canadian dollars, except per common share
data)
1. Financial statements presentation
The unaudited interim consolidated financial statements have been prepared by
the Corporation in accordance with Canadian generally accepted accounting
principles (Canadian GAAP). The major difference between Canadian GAAP and
International Accounting Standards (IAS), in so far as they apply to the
Corporation is described in Note 2. The financial information was prepared in
accordance with the same accounting policies and methods as the audited annual
consolidated financial statements for the year ended June 30, 2002. The
unaudited interim consolidated financial statements should be read in
conjunction with the audited annual consolidated financial statements and notes
thereto in the Corporation`s 2002 annual report. The results of operations for
the interim periods presented do not necessarily reflect results for the full
year.
2. Difference between Canadian generally accepted accounting principles and
international accounting standards
Under Canadian GAAP, investments, excluding the investment in the company
subject to significant influence, should be recorded at cost, less any decrease
in value other than a temporary decline. Pursuant to IAS 39, for financial years
beginning on or after January 1, 2001, the marketable securities are classified
as trading and are recorded at market value. All unrealised holding gains or
losses are included in net earnings in the period in which they arise. Had the
Corporation followed IAS 39, certain items would have increased as follows:
Consolidated balance sheets and statement of changes in shareholders` equity
(Unaudited)
December 31 June 30
2002 2002
Marketable securities 5,482 3,583
Shareholders` equity
Retained earnings
Balance at beginning of period 3,583 2,677
Net earnings 1,899 906
5,482 3,583
Consolidated statement of earnings
(Unaudited)
December 31
2002
(six months)
Net earnings according to Canadian GAAP 4,070
Unrealised gains on marketable securities 1,899
Net earnings under IAS 5,969
Earnings per common share per IAS C$0.34
Summary of the financial results
(Unless otherwise stated all figures are in Canadian currency and, except for
per share amounts, in millions of dollars as indicated by the abbreviation "M").
Summary of the Financial Results
Net earnings for the half year ended December 31, 2002 were $4.1M compared with
$20.3M in 2001. Earnings per share were $0.23 versus $1.16 for the prior
comparable period. The combined revenues from the Corporation`s manufacturing
and investment activities were $97.1M (2001: $103.2M).
Manufacturing Operations
Sales of the Corporation`s products, which are corrugated fibreboard containers,
multiwall paper sacks and other paper products were $88.8M (2001: $86.1M). The
manufacturing operations` performance was satisfactory given the fragile state
of the economies in which they operate. Cost reduction and productivity
programmes have been successfully implemented.
Investment Activities
Interest, which comprises income from term deposits and bonds, decreased
slightly in the period to $2.8M (2001: $2.9M).
The gain on sale of marketable securities was $5.5M compared with $4.1M for the
same period last year.
The investment company subject to significant influence reported a loss of $6.5M
compared with a profit of $9.5M for the corresponding period last year. At
December 31, 2002 the Corporation`s equity interest in the investment company
was $224.1M compared with $216.8M at December 31, 2001 representing a 3.4%
increase for the calendar year.
Foreign currency losses were $0.3M compared with a gain of $0.4M last year.
At December 31, 2002 equities were 66%; bonds and cash represented 34%. These
figures compare with 65% and 35% as at December 31, 2001.
Outlook
It is expected that margins in all the manufacturing operations will continue to
come under pressure for the remainder of this fiscal year.
The world`s financial markets remain volatile and unpredictable. No significant
changes to our current investment strategy are expected.
On Behalf of the Board of Directors
D. M. Eramian
Company Secretary
February 28, 2003
Suite 1500, One Brunswick Square, Germain Street
St. John, New Brunswick, Canada E2L 4H8
Sponsor
Rand Merchant Bank
Corporate Finance
Date: 28/02/2003 05:48:00 PM Supplied by www.sharenet.co.za
Produced by the JSE SENS Department
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