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Canadian Overseas Packaging Industries Limited - Unaudited Interim Results For
Release Date: 05/03/2004 17:04:00 Code(s): CAN
CANADIAN OVERSEAS PACKAGING INDUSTRIES LIMITED - UNAUDITED INTERIM RESULTS FOR
THE SIX MONTH PERIOD ENDED 31 DECEMBER 2003
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 31 DECEMBER 2003
(in thousands of Canadian dollars, except for the common share data)
Dec 31 "03 Dec 31"02
(C$000) (C$000)
CONSOLIDATED STATEMENTS OF EARNINGS
Revenues
Sales 74,380 88,827
Interest 1,992 2,757
Gain on sale of marketable securities 517 5,482
Share in net loss of company subject (17,983) (6,503)
to significant influence
Foreign currency gains 689
59,604 90,563
Expenses
Cost of sales 54,835 64,809
Selling and administrative 17,429 19,937
Interest
Current 529 822
Long-term 27 20
Foreign currency losses 303
72,820 85,891
Earnings (loss) from operations before (13,216) 4,672
income taxes and minority interest
Current income taxes 468 534
Earnings (loss) from operations before (13,684) 4,138
minority interest
Minority interest 310 (68)
Net earnings (loss) (13,374) 4,070
Basic earnings (loss) per common share C$(0.76) C$0.23
(17,578,125 shares*)
* There is no difference between headline earnings per common
share and basic earnings per common share
The accompanying notes are an integral part of the interim
consolidated financial statements.
Dec 31 "03 Dec 31"02
(C$000) (C$000)
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
OPERATING ACTIVITIES
Net earnings (loss) (13,374) 4,070
Non-cash items
Amortization 2,786 2,499
Minority interest (310) 68
Gain on sale of marketable securities (517) (5,482)
Share in net loss of company subject to 17,983 6,503
significant influence
Gain on sale of property, plant and (143) (3)
equipment
6.425 7,655
Changes in non-cash working capital items (2,584) (8,610)
Cash flows from operating activities 3,841 (955)
INVESTING ACTIVITIES
Purchase of marketable securities (63.401) (64,740)
Proceeds on sale of marketable securities 58,408 70,844
Purchase of property, plant and equipment (3,746) (2,337)
Proceeds on sale of property, plant and 402 3
equipment
Cash flows from investing activities (8,337) 3,770
FINANCING ACTIVITIES
Bank indebtedness 3,408 (2,112)
Repayment of long-term debt (121) (346)
Dividend (17,578) (17,578)
Cash flows from financing activities (14,291) (20,036)
Foreign exchange gain (loss) on cash (312) 415
and cash equivalents held in foreign
currency
Net decrease in cash and cash equivalents (19,099) (16,806)
Cash and cash equivalents, beginning of 51,615 75,495
period
Cash and cash equivalents, end of period 32,516 58,689
CASH AND CASH EQUIVALENTS
Cash 11,519 13,197
Term deposits 20,997 45,492
32,516 58,689
The accompanying notes are an integral part of the interim
consolidated financial statements.
(unaudited)
Dec 31 "03 June 30 `03
CONSOLIDATED BALANCE SHEETS (C$000) (C$000)
ASSETS
Current assets
Cash 11,519 13,739
Term deposits 20,997 37,876
Accounts receivable 38,142 30,966
Income taxes receivable 110
Inventories 12,225 12,372
82,993 94,953
Investments
Marketable securities, at cost (fair
value: $88,371; $82,648 at June 30, 2003)
90,782 85,272
Company subject to significant influence,
at equity
Investment company (estimated fair value: 209,038 227,021
$202,000; $207,000 at June 30, 2003
June 30, 2003)
Other investments, at cost 25 25
299,845 312,318
Property, plant and equipment 41,167 40,307
424,005 447,578
LIABILITIES
Current liabilities
Bank indebtedness - secured by certain 13,895 10,487
assets
Accounts payable and accrued liabilities 25,105 19,712
Income taxes payable 737
Current portion of long-term debt 245 251
39,245 31,187
Long-term debt 742 907
Future income taxes 4,341 4,350
Minority interest 231 353
44,559 36,797
SHAREHOLDERS" EQUITY
Capital stock 47,984 47,984
Retained earnings 339,070 370,022
Appraisal increment 1,327 1,482
Cumulative translation adjustments (8,935) (8,707)
379,446 410,781
424,005 447,578
The accompanying notes are an integral part of the interim
consolidated financial statements.
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS" EQUITY
(unaudited)
Cumulative
(in thousands of Capital Retained Appraisal Translation
Canadian dollars) Stock Earnings Increment Adjustments Total
$ $ $ $ $
Balance June 30, 47,984 381,812 1,817 (6,040) 425,573
2002
Effect of exchange 142 1,768 1,910
rate changes
Net earnings 4,070 4,070
Dividend (C$1.00 (17,578) (17,578
per share) )
Balance December 47,984 368,304 1,959 (4,272) 413,975
31,2002
Realisation of 25 (25)
appraisal increment
Effect of exchange (452) (4,435) (4,887)
rate changes
Net earnings 1,693 1,693
Balance June 30, 47,984 370,022 1,482 (8,707) 410,781
2003
Effect of exchange (155) (228) (383)
rate changes
Net loss (13,374) (13,374
)
Dividend (C$1.00 (17,578) (17,578
per share) )
Balance December 47,984 339,070 1,327 (8,935) 379,446
31, 2003
The accompanying notes are an integral part of the interim consolidated
financial statements.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2003
(Tabulated amounts are in thousands of Canadian dollars, except per 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. The major differences between Canadian generally accepted
accounting principles (Canadian GAAP) and International Accounting Standards
(IAS), in so far as they apply to the Corporation, are described in Note 3. 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, 2003. 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 2003 annual report.
The results of operations for the interim periods presented do not necessarily
reflect results for the full year.
2.CHANGES IN ACCOUNTING POLICY
In June 2002, the Canadian Institute of Chartered Accountants issued Accounting
Guideline 13, "Hedging Relationship" (AcG-13) which establishes new criteria for
hedge accounting and applies to all hedging relationships in effect July 1, 2003
and EIC A bstract 128, "Accounting for trading, speculative or non-hedging
derivative financial instruments" which establishes the accounting for
derivative instruments that do not qualify for hedge accounting under AcG-13.
Derivative financial instruments are utilized by the Corporation to manage its
foreign currency exposure. These derivative financial instruments do not
qualify as hedges under AcG-13. EIC-128 requires that derivative financial
instruments be recognized on the balance sheet and measured at fair value with
changes in fair value recognized in earnings.
As a result of the adoption of these new rules, foreign exchange contracts have
been accounted for at fair value. The foreign exchange contracts result in an
increase in accounts payable and accrued liabilities of $1,022,000 and an
increase in net loss of $1,022,000 for the six-month period ended December 31,
2003.
3.DIFFERENCES BETWEEN CANADIAN GENERALLY ACCEPTED ACCOUNTING PRINCIPLES AND
INTERNATIONAL ACCOUNTING STANDARDS
(a) 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.
Under IAS, the marketable securities are classified as trading
and are recorded at market value. All unrealized holding gains
or losses are included in the statement of earnings in the period
in which they arise.
(b) Also, under Canadian GAAP, to June 30, 2003, foreign exchange
contracts were recorded at cost. Under IAS, these derivative
financial instruments are initially recorded at cost and are
subsequently remeasured at their fair value. The changes in the
fair value of the derivative financial instruments used by the
Corporation are recognized immediately in the statement of
earnings because they do not qualify for hedge accounting.
Had the Corporation followed IAS, certain items would have increased
(decreased) as follows:-
Consolidated balance sheets and statement (Unaudited) June 30 `03
of changes in shareholders" equity Dec 31 `03
Investments (a)(b) (2,411) (1,064)
Shareholders" equity
Retained earnings
Balance, beginning of period (1,064) 3,583
Net earnings (loss) (1,347) (4,647)
Balance, end of period (2,411) (1,064)
In addition, net earnings (loss) and earnings (loss) per common share
under IAS are as follows:
Consolidated statement of earnings (Unaudited) (Unaudited)
Dec 31 `03 Dec 31 `02
(six months) (six
months)
Net earnings (loss) according to Canadian (13,374) 4,070
GAAP
Unrealised gains on marketable 213 1,899
securities(a)
Unrealised change in fair value of foreign
exchange contracts(b) (1,560)
Net earnings (loss) under IAS (14,721) 5,969
Basic earning (loss) per common share under (C$0.84) C$0.34
IAS
March 5, 2004 By Order of the Board
Suite 1500, One Brunswick Square, D M Eramian
Germain Street Company Secretary
St John, New Brunswick, Canada E2L
4H8
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