| Mon 1 Sep 2003, 15:01 | | YORKCOR INTERIMS SHOW ROBUST IMPROVEMENT |
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YORKCOR INTERIMS SHOW ROBUST IMPROVEMENT
York Timber Organisation Limited
Share Code: YRK
ISIN: ZAE000008108
Yorkcor has posted a 25% improvement in headline earnings for the first half of
2003 - from 11,9 cents per share for the six months ended 30 June 2002 to 14,9
cents for the same period this year. Net profit for the six months to 30 June
rose from R1,3 million last year to R2,2 million in 2003. These results
translate into a 69% improvement in earnings per share, from 11,9 cents to 20,1
cents per share. The tax provision amounted to R992 000 compared to R22 000 for
the same period last year. Revenue was up 26%, from R41, 7 million to R52,9
million Margins improved 33% as a result of the quality of group sales and
production efficiencies, while group gross profit rose from R23,8 million to
R31, 9 million.
Significantly, the net asset value per share grew by almost 50% from 358 cents
at 30 June 2002 to 526 cents per share at 30 June 2003.
"Our much improved strategic position and operational capability is manifest in
our financial statements," asserts Yorkcor chairman Solly Tucker.
Tight cash and asset management strengthened the group balance sheet. Yorkcor"s
gearing reduced to 6% from 9% in the same period in 2002. Despite capital
expenditure of R5,4 million (2002: R0,24million), Yorkcor"s cash balance grew
from R0,27 million to R4,75 million.
"All in all, the group"s financial position is in good shape for the
opportunities and challenges that lie ahead," comments Tucker.
Commenting on markets, Tucker says, "In the period under review, Yorkcor sought
and found markets that were hospitable and continued to outperform national
performance averages."
For the half year ended 30 June 2003, national softwood lumber sales for formal
lumbermills totaled 843 937 m3, up from 736 232 m3 during the same period in
2002 - an increase of 14,6%. Industry prices have lagged inflation by about 5%
over the past five years due mainly to the strengthening of the rand. At R1
200/m3, the Lumber Price Index for SA Pine is about 12,5% higher than Southern
Yellow Pine, its American rival which currently sells at about R1,067/m3. "Rough
lumber exports have softened, along with other commodities, in the teeth of our
hardening currency. On the other hand, plans passed for local residential
housing are burgeoning," says Tucker.
Tucker says the current fires in Mpumalanga have been devastating. "The extent
of the damage has yet to be measured, but it has already been declared a
disaster area. This foreshadows timber shortages and rising prices. We are
losing no time focusing on plans to address the new situation. A windfall for
Yorkcor could be emerging: our long-term strategies for secure sources of supply
have taken on greater dimensions and redoubled urgency."
Commenting on industry conditions, Tucker says: "We do not remember a time when
so many momentous developments have simultaneously ignited challenge and
opportunity in our industry. A critical event playing out at this time is the
far-reaching process by which government is disposing of major publicly owned
forestry assets. The issue is one of method rather than principle.
"Government involvement in the forest products industry is ubiquitous. To what
extent is it really being phased out? Apart from the troubled Komatiland
restructuring process, government retains and will retain participation through
Safcol in the privatised forestry assets. Through the Industrial Development
Corporation (`IDC") it has substantial equity stakes in Global Forest Products
and the Merensky Group. A shadow of compounding concentration overcasts control
of wood resources and markets. The Competition Tribunal is looking at the
situation at a high level, but more needs to be put on the table for its
scrutiny.
"These compelling changes and gyrations are springboards for opportunity. The
tide is rising, we believe, for enterprise and creativity in the timber industry
and for Yorkcor."
On pending legal matters, Tucker says Yorkcor is cautiously optimistic on all
matters in process and has taken appropriate steps to deal with any eventuality.
"Perhaps the most important matter being litigated concerns Yorkcor"s
substantial claim for compensation from the government for terminating one of
our evergreen contracts. It is expected that the arbitrator will make his award
before the end of the year and that the government will effect payment of the
compensation by 30 June 2004."
On the outlook for the company, Tucker says that mixed signals are coming from
the industry arena. "The privatisation of the state"s assets in Mpumalanga and
Limpopo remain a key factor in developments. Preparations by Yorkcor to strike
down that process continue. The Department of Public Enterprises (DPE) has
refused certain information required for launching the litigation to derail the
bidding process. Yorkcor has instructed its legal advisors to pursue the matter
and they are gathering the necessary information. The DPE has advised our
lawyers to obtain that information through the mechanism of the Promotion of
Access to Information Act. We are considering our options."
As regards strengthening the board of directors, Tucker says: "I am pleased to
announce that two figures of great stature and capability have accepted our
invitation to join the board of Yorkcor - Dr "Tienie" van Vuuren and Benjamin
Trisk. They take up their appointments as non-executive directors with effect
from 1 September 2003.
"Apart from their role in widening opportunities for Yorkcor and turning them
to good account, the new appointments to the board will bring commitment and
effectiveness to the promotion of important alliances, developing mergers and
acquisitions, raising capital, forming empowerment partnerships and involvement
in and with Yorkcor"s corporate governance.
"We intend to structure the board and the share register of Yorkcor to embrace
strong empowerment representation. The extensive experience and the extensive
connections of our new directors will facilitate these plans," concludes Tucker.
Ends
ISSUED FOR : Yorkcor Limited
CONTACT : Solly Tucker 012 804 9730 / 083 456 9900
FAX NO : 012 804 8611
E-MAIL : sol@yorkcor.co.za
WEBSITE : www.yorkcor.co.za
ISSUED BY : TISH STEWART PR ASSOCIATES
CONTACT : Tish Stewart 011 325 4195 / 082 443 6399
FAX NO : 011 325 4199
E-MAIL : tish@tspr.co.za
DATE : 01 September 2003
Date: 01/09/2003 02:04:26 PM Supplied by www.sharenet.co.za
Produced by the JSE SENS Department
