| Tue 30 Mar 2004, 16:07 | | Preliminary Report For The Year Ended 31 December |
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Cementation - Preliminary Report For The Year Ended 31 December 2003
The Cementation Company (Africa) Limited
(Incorporated in the Republic of South Africa)
(Registration number 1926/008840/06)
Share code CMT/CMTP ISIN ZAE000001582 / ZAE000001590
("Cementation" or "the Group")
PRELIMINARY REPORT FOR THE YEAR ENDED 31 DECEMBER 2003
ABRIDGED CONSOLIDATED INCOME STATEMENT
Reviewed Audited
31 December 31 December
2003 2002
R"000 R"000
Revenue 1 296 292 1 109 558
Cost of sales 1 240 866 1 044 921
Gross profit for the year 55 426 64 637
Other operating income 2 695 6 381
Forex (losses)/profits (3 864) 4 552
Other 6 559 1 829
Administrative expenses (34 409) (31 655)
Net profit from operations 23 712 39 363
Net finance income/(cost) (3 357) 1 232
Net profit before taxation 20 355 40 595
Taxation (3 680) (13 363)
Net profit after taxation 16 675 27 232
Reconciliation between earnings and headline earnings
Income attributable to ordinary shareholders 16 657 27 214
Adjusted for profit/(loss) on sale of fixed assets 303 (1 028)
Adjusted for impairment of fixed assets 3 449 -
Tax effects of adjustments (1 126) 309
Headline earnings 19 283 26 495
Attributable earnings per ordinary share - cents 87,9 195,0
Attributable earnings per ordinary share - cents
(fully diluted) 87,9 151,6
Headline earnings per ordinary share - cents 101,8 190,0
Headline earnings per ordinary share - cents
(fully diluted) 101,8 147,8
ABRIDGED CONSOLIDATED CASH FLOW STATEMENT
Cash flows from operating activities 32 355 32 296
Cash flows from investing activities (52 670) (63 502)
Cash flows from financing activities 7 354 3 181
Net change in cash and cash equivalents (12 961) (28 025)
Cash and cash equivalents at beginning of year 43 183 71 208
Cash and cash equivalents at end of year 30 222 43 183
Number of ordinary shares in issue - "000 18 952 18 952
Net asset value per ordinary share - cents 517,5 428,6
Capital expenditure 56 212 66 616
Depreciation 46 063 45 174
Capital expenditure committed or authorised 26 486 58 303
ABRIDGED CONSOLIDATED BALANCE SHEET
Reviewed Audited
31 December 31 December
2003 2002
R"000 R"000
ASSETS
Non-current assets 96 973 93 923
Property, plant and equipment 96 858 93 808
Unlisted investments 115 115
Current assets 262 478 271 913
Inventories 27 606 24 722
Trade and other receivables 194 664 201 025
Tax pre-paid 55 -
Cash and cash equivalents 40 153 46 166
Total assets 359 451 365 836
EQUITY AND LIABILITIES
Capital and reserves 98 385 81 533
Ordinary share capital and premium 40 076 40 076
Cumulative preference share capital and premium 300 300
Non-distributable reserves 1 302 3 424
Accumulated profits 56 707 37 733
Non-current liabilities 19 636 5 879
Interest bearing borrowings 11 659 4 305
Deferred taxation 7 977 1 574
Current liabilities 241 430 278 424
Trade and other payables 224 449 259 219
Provisions 5 670 9 992
Short-term borrowings 9 931 2 983
Tax payable 1 380 6 230
Total equity and liabilities 359 451 365 836
ABRIDGED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Non- Accu-
Preference distri- mulated
Share share Share butable profit/
capital capital premium reserves (loss) Total
R"000 R"000 R"000 R"000 R"000 R"000
Balance at 31 December 2001 4 478 5 298 30 600 4 553 9 796 54 725
Transfer to accumulated profits (723) 723 -
Realisation of non-distributable
reserves that arose on
acquisition of additional
interest in joint venture (406) (406)
Net profit for the year 27 232 27 232
Dividends provided
- preference shares (18) (18)
Conversion of preference
shares 4 998 (4 998) -
Balance at 31 December 2002 9 476 300 30 600 3 424 37 733 81 533
Transfer to accumulated profits (2 317) 2 317 -
Revaluation of property 195 195
Net profit for the year 16 675 16 675
Dividends provided
- preference shares (18) (18)
Balance at 31 December 2003 9 476 300 30 600 1 302 56 707 98 385
PRELIMINARY REPORT
After three years of record growth which saw the Group double in size, 2003
proved to be a challenging year.
As stated in our interim announcement, the period has been one of consolidation
with management focused on improving operational efficiencies and commercial
controls. The benefits of this will be seen in 2004.
Rapid growth brought with it difficulties on certain contracts, the most
significant of these were satisfactorily resolved in the third quarter of the
year.
Revenue increased to R1,3 billion (2002 - R1,1 billion) mainly through
extensions to existing contracts. Gross profit for the year declined to R55,4
million (2002 - R64,6 million). The strengthening Rand had a negative impact
on results of R3,9 million, a reversal of R8,4 million year on year. This,
together with a R3,5 million impairment of property, resulted in
operating profits declining to R23,7 million (2002 - R39,4 million).
Attributable earnings were R16,7 million (2002 - R27,2 million). Fully
diluted headline earnings per share declined 31,1% from 147,8 cents to
101,8 cents.
Prospects
The strength of the Rand has widely impacted on the market and mine owners
are reporting reduced earnings and cutbacks in capital projects. Despite
this we have maintained a healthy order book of R1,5 billion with our
long-term customers.
The continuing trend towards contract production mining led to the
establishment in 2003 of a subsidiary company, Cementation Emgodini
Skanska, which is solely focused on this important and expanding market.
Our strategy for 2004 remains unchanged in that we will continue to
concentrate on those mining industry opportunities in sub-Saharan Africa
where we are certain that we can provide value to our customers and our
shareholders.
DIVIDENDS
Preference
Notice is hereby given that the board has declared the following preference
dividend to be paid on Monday, 3 May 2004:
Dividend number 65 of 6 cents per 6% cumulative preference share, for the six
months ended 31 December 2003.
To comply with the procedures of STRATE, the last day to trade in the shares for
the purposes of the dividend is Thursday, 22 April 2004. The shares will
commence trading ex-dividend from Friday, 23 April 2004 and the record date will
be Friday, 30 April 2004.
Share certificates may not be dematerialised or rematerialised between Friday,
23 April 2004 and Friday, 30 April 2004, both days inclusive.
Ordinary
While the Group maintained a positive cash balance at year-end, the impact of
contract difficulties on cash has meant a continuing peak in borrowings levels
at crucial times in the month. The board reluctantly concluded that the prudent
view on the payment of dividends must be maintained for the present.
As a consequence the directors have agreed not to declare an ordinary dividend.
The directors will continue to review the dividend policy on a regular basis.
CORPORATE ACTIVITY
Our major shareholder, Skanska AB, announced on 19 November 2003 that they have
entered into exclusive negotiations with Murray & Roberts Limited regarding the
purchase of Skanska AB"s entire interests in its Cementation mining operations
in South Africa, Canada and Australia.
At the time of print, these negotiations were still underway.
Accordingly, shareholders are advised to continue to exercise caution when
dealing in Cementation ordinary and preference shares.
ACCOUNTING POLICIES
The financial statements are prepared on the historical cost basis and in
accordance with South African Statements of Generally Accepted Accounting
Practice. The accounting policies are, in all material respects, consistent with
the annual financial statements for the year ended 31 December 2002.
REVIEW OPINION
These financial results have been reviewed by KPMG Inc., who have issued an
unqualified review report which is available for inspection at the registered
offices of Cementation.
DIRECTORS
There were no changes to the directorate during the period under review.
For and on behalf of the board
30 March 2004
Executive directors: A A B Douglas, B J Hancock
Non-executive directors: S Keeble, D G Fison, G Hancock
Independent non-executive directors: T J Motlatsi, B R van Rooyen
Company Secretary: B J Hancock
Sponsor
Standard Bank Limited
Date: 30/03/2004 03:31:21 PM Produced by the JSE SENS Department
