| Tue 30 Mar 2004, 9:05 | | Samroc - Sa Mineral Resources Corporation Limited |
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Samroc - Sa Mineral Resources Corporation Limited - Reviewed Interim Group
Release Date: 30/03/2004 07:48:08 Code(s): SAM
SAMROC - SA Mineral Resources Corporation Limited - Reviewed interim group
results for the six months ended 31 December 2003
SA Mineral Resources Corporation Limited
Registration number 1993/000460/06
Incorporated in the Republic of South Africa
JSE share code: SAM
ISIN: ZAE000012019
("Samroc" or "the company")
Reviewed interim group results for the six months ended 31 December 2003
BALANCE SHEET
(R000"s)
Reviewed Unaudited Audited
31 December 31 December 30 June
2003 2002 2003
ASSETS
Non-current assets 16 044 16 309 16 362
Property, plant and equipment 16 044 16 309 16 362
Current assets 3 478 2 534 3 161
Inventory 626 852 1 621
Trade receivables 1 939 683 1 454
Cash and cash equivalents 913 999 86
Total assets 19 522 18 843 19 523
EQUITY AND LIABILITIES
Capital and reserves 8 457 10 386 9 060
Share capital 3 742 3 742 3 742
Share premium 27 152 27 152 27 152
Accumulated loss 22 437 20 508 21 834
Non-current liabilities 4 404 6 141 5 553
Long-term liabilities 3 980 6 141 5 148
Provision for environmental
rehabilitation 424 A- 405
Current liabilities 6 661 2 316 4 910
Trade and other payables 2 289 1 844 2 279
Current portion long-term liabilities 1 946 472 1 324
Short-term loans 2 426 A- 1 307
Total equity and liabilities 19 522 18 843 19 523
INCOME STATEMENT Reviewed Unaudited Audited
(R000"s) 6 months 6 months 18 months
to to to
31 December 31 December 30 June
2003 2002 2003
Revenue 7 905 3 612 14 045
Costs and expenses 7 925 5 384 17 100
Loss from operating activities 20 1 772 3 055
Net finance costs 583 521 1 605
Loss and headline loss for the
period 603 2 293 4 660
CASH FLOW STATEMENT Reviewed Unaudited Audited
(R000"s) 6 months 6 months 18 months
to to to
31 December 31 December 30 June
2003 2002 2003
Net cash flows from operating
activities 2 077 (6 760) (6 023)
Net cash flows from investment
activities (101) (1 373) (1 590)
Net cash flows from financing
activities (1 149) 6 986 7 396
Net increase/(decrease) in cash
and cash equivalents 827 (1 147) (217)
Cash and cash equivalents
at beginning of period 86 2 146 303
Cash and cash equivalents
at end of period 913 999 86
Ordinary shares in issue
at end of period (000"s) 374 275 374 275 374 275
Weighted average ordinary shares
in issue (000"s) 374 275 345 072 339 004
Net asset value per share (cents) 2,26 2,77 2,42
Net loss per share (cents) 0,16 0,66 1,37
Headline loss per share (cents) 0,16 0,66 1,37
Registered office: Block 3, Southern Implants Office Park, 1 Albert Road,
Irene 0062
Registered postal address: PO Box 7798, Centurion 0046
Transfer Secretaries: Ultra Registrars (Pty) Ltd,
PO Box 4844, Johannesburg 2000
Company Secretary: E M Taylor
CHANGES IN EQUITY Accum-
(R000"s) Share Share ulated
capital premium deficit Total
Balance at 31 December 2002 2 844 21 150 (17 173) 6 821
Shares issued 898 6 002 6 900
Net loss for period
January 2002 A- June 2003 (4 661) (4 661)
Balance at 30 June 2003 3 742 27 152 (21 834) 9 060
Net loss for period
July 2003 A- December 2003 (603) (603)
Balance at 31 December 2003 3 742 27 152 (22 437) 8 457
Commentary
The continued strength of the South African currency made it very difficult for
Samroc"s products to be competitive in its European and other export markets.
As a result, export sales in the last three months of the period under review
have been minimal. Since December 2003, manganese sulphate powder has been sold
to various overseas customers, but in low volumes, principally in order to keep
Samroc"s product familiar to the market while the restructure process referred
to below progresses to make the company more competitive.
Samroc"s negotiations with a potential major customer in Europe for a long-term
supply agreement failed principally on price issues. A bulk sample was sent to
the customer in July 2003, and although the product was well within the
required specifications, Samroc was unable to meet price expectations.
Discussions will be resumed towards the middle of this year, but if the Rand
strength persists, pricing will still be an issue that will be difficult to
resolve.
Samroc has reviewed its position in this difficult export environment and is
considering a number of initiatives to enable it to move forward. These
include:
- reducing its cost base to minimum levels while continuing with its successful
Rand-denominated sales;
- amalgamating its business with that of another business or businesses in a
similar field;
- delisting from the JSE Securities Exchange South Africa.
Shareholders will be advised once a course of action has been settled upon.
Financial
Samroc"s Greenhills manganese sulphate plant achieved an operating profit for
the six months ended 31 December 2003, but this was reduced to a loss of R603
000 after taking into account interest (R583 000) and head office expenses (R1
039 000). This issue is being addressed in the restructure review referred to
above. At the same time, Samroc is in discussions with the Industrial
Development Corporation ("IDC") regarding a delay in commencing capital
repayments on its long and short-term loans until March 2005.
Based on advice from Samroc"s major local customers of their requirements for
this calendar year, Samroc"s directors consider that local sales will be
sufficient to enable the company to break even in cash flow terms, excluding
capital repayments, even before any cost savings are put into place. This will
give the company time to pursue its recovery strategies as outlined above.
Directorate
As part of Samroc"s cost-cutting initiatives, Mr B H Christie has agreed to
stand down from his executive position with the company. He will remain as
chairman in a non-executive capacity. A review is taking place with respect to
the other management structures of the company.
Accounting policies
The accounts set out herein are prepared in accordance with South African
Statements of Generally Accepted Accounting Practice and are consistent with
Samroc"s accounting policies.
Review opinion
The financial information set out in these results has been reviewed by
Samroc"s auditors Ernst & Young who issued a modified review opinion that the
going concern status of Samroc is dependent on the IDC (a loan creditor)
granting a moratorium on capital repayments until March 2005 and the
achievement of the budgeted sales and forecasted cash flows. These matters
indicate the existence of a material uncertainty which may cast significant
doubt about the group"s ability to continue as a going concern.
This review opinion is available for inspection at Samroc"s registered office.
Dividend
No dividend has been declared or recommended for this period.
For and on behalf of the board
B H Christie N R Kaner
Executive Chairman Managing Director
Irene
30 March 2004
Directors: B H Christie*(Chairman), N R Kaner*(Managing), K J J de Rooster***,
R J Linnell, S J Farrell**** (*British, ***Belgian, ****Australian)
