| Tue 30 Mar 2004, 17:53 | | Consolidated Interim Results For The Six |
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Southern Electricity Company Limited - Consolidated Interim Results For The Six
Months Ended 31 December 2003
Southern Electricity Company Limited
(Registration Number 1997/006894/06)JSE Share Code: SLO ISIN:
ZAE000041919("SELCo" or "The Group")
CONSOLIDATED INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2003
INCOME STATEMENT
Group
6 months 6 months 12 months
ended ended ended
31 December 31 December 30 June
2003 2002 2003
Reviewed Unaudited Audited
(R"000) (R"000) (R"000)
Gross revenue 13 342 10 700 22 502
Cost of sales (6 584) (4 568) (11 228)
Gross profit 6 758 6 132 11 274
Other income 358 1 694 1 695
Operating costs (5 670) (5 633) (11 498)
Operating profit 1 446 2 193 1 471
Operating profit is stated
after:
Expenditure
Depreciation
- Property, plant and 423 478 973
equipment
Lease rentals
- Premises 103 183 832
Interest received - 57 57
Finance costs (275) (372) (694)
Profit before taxation 1 171 1 878 834
Taxation (817) (324) (26)
Profit after taxation 354 1 554 572
Earnings per ordinary 1,20 5,25 1,93
share (cents)
Headline (loss)/earnings (0,01) 1,15 1,93
per ordinary share (cents)
Weighted average number of 29,617,009 29,617,009 29,617,009
ordinary shares in issue
Earnings and headline
earnings per share
Profit after taxation 354 1,554 572
Adjustments:
Recovery of bad debt (358) (1 694) (1 695)
Legal fees not related to - 481 743
headline results
Listing expenses - - 951
Headline earnings (4) 341 571
CASH FLOW STATEMENT
Group
6 months 6 months 12 months
ended ended ended
31 December 31 December 30 June
2003 2002 2003
Reviewed Unaudited Audited
(R"000) (R"000) (R"000)
CASH FLOW FROM OPERATING 1 716 650 (234)
ACTIVITIES
Cash receipts from 14 495 8,244 26,975
customers
Cash paid to suppliers and (12 505) (7 279) (26,573)
employees
Cash generated by 1 990 965 402
operating activities
Interest received - 57 57
Interest paid (275) (372) (693)
CASH FLOW FROM INVESTING 1 712 (7 260) (3,053)
ACTIVITIES
Expenditure to maintain (2) - (1 850)
operating capacity
Proceeds on disposals of 1 714 - -
investments
Subsidiaries acquired - (7 260) (1 203)
CASH FLOW FROM FINANCING (2 991) 5 265 514
ACTIVITIES
Capital raised - 1 444 1 444
Costs written off against - (499) -
capital
Loans raised 3 387 4 336 5,216
Loans repaid (6 378) (16) (6,146)
Increase/(decrease) in 437 (1 345) (2 773)
cash and cash equivalents
Cash and cash equivalents 297 3,071 3,070
at beginning of the period
Cash and cash equivalents 734 1 726 297
at end of the period
BALANCE SHEET
Group
31 December 31 December 30 June
2003 2002 2003
Reviewed Unaudited Audited
(R"000) (R"000) (R"000)
ASSETS
Non-current assets 8,473 6 506 5 844
Property, plant and 4 852 5 731 5 273
equipment
Deferred tax - 727 571
Other investments and 3 622 48 -
loans
Current assets 6 603 6 398 6 497
Inventories 637 - 656
Receivables and 5 182 4 672 5 544
prepayments
Cash and cash equivalents 784 1 726 297
Total assets 15 076 12 904 12 341
EQUITY AND LIABILITIES
Capital and reserves 5 288 5 636 4 936
Issued capital 8 846 8 346 8 846
Non-distributable reserve 253 472 254
Accumulated loss (3 811) (3 182) (4 164)
Non-current liabilities 6 137 4 293 2 833
Loans from related parties - 4 073 36
Interest bearing 5 891 220 2 797
borrowings
Deferred tax 246 - -
Current liabilities 3 651 2 975 4 572
Trade and other payables 2 799 2 932 3 536
Bank overdraft 49 - -
Current portion of 803 43 1 036
interest bearing
borrowings
Total equity and 15 076 12 904 12 341
liabilities
STATEMENT OF CHANGES IN EQUITY
Accumu-
Share Share Capital lated
(R"000) capital premium reserve loss Total
Balance at 1 July 2002 386 7 032 456 (4 737) 3 137
Net profit for the period - - - 572 572
Issue of share capital 1 111 333 - - 1 444
Cancellation of share (16) - 16 - -
capital
Goodwill on acquisition of - - (219) - (219)
subsidiary
Balance at 1 July 2003 1 481 7 365 253 (4,165) 4 934
Net profit for the period - - - 354 354
Balance at 31 December 1,481 7,365 253 (3,811) 5 288
2003
COMMENTARYNATURE OF BUSINESSSELCo"s principal business is the supply and
distribution of energy and related municipal services.BUSINESS REVIEWThe Group
faced a number of challenges during the period under review, which were
mitigated by an increase in demand from customers and the effective containment
of operating costs.
Turnover increased from R10,7 million, for the six months ended 31 December
2002, to R13,342 million, for the six months ended 31 December 2003, but profit
after taxation was largely eroded by temporary tax timing differences relating
to property, plant and equipment, and assessed losses being brought forward.
Cash flow from operating activities increased by more than 160% to R1,716
million in relation to the comparable period (2002 : R650 000) mainly as a
result of the increase in customer demand which led to increased revenue.
During the period under review the Group increased its borrowings to provide for
costs in the development of the Ugandan concession. Following SELCo"s withdrawal
from the Ugandan project (see "Prospects" below) the Group has instituted a
claim in the amount of US$250 000, in order to recover its development expenses.
PROSPECTSNamibiaThe Namibian operation is stable and continues to contribute
positively to the Group results. The restructuring of the electricity industry
in Namibia is behind schedule, but we are confident of future business in this
regard.
MozambiqueThe Group is in the process of securing a stake in a generation and
distribution concession in Mozambique, which, when concluded, should contribute
meaningfully to its results.UgandaThe Uganda concession, where we previously
reserved a 45% interest in the Ugandan operation, WENRECo, commenced on 1 April
2003. However, the Reserve Bank declined our application for foreign exchange
transfers to Uganda and we are therefore not able to take up equity in WENRECo.
In addition, the majority shareholder in WENRECo has not allowed us, as a
minority stakeholder, to contribute to the project and being in this position,
we are unable to add value to the project and ensure that our effort generates
further value. As such, we are in the process of withdrawing from the project.
ACCOUNTING POLICIESThe interim results have been prepared in accordance with the
Statements of Generally Accepted Accounting Practice of South Africa and
Schedule 4 of the South African Companies Act, 1993, as amended and should be
read in conjunction with the 2003 annual financial statements. The accounting
policies adopted remain consistent with those applied in the financial
statements for the year ended 30 June 2003.TAXATIONTaxation consists of deferred
tax for the six month period ended 31 December 2003. This deferred tax has
arisen as a result of temporary tax timing differences relating to property,
plant and equipment and assessed losses being brought forward.RELATED PARTY
TRANSACTIONSDuring the period the company and its subsidiaries, in the ordinary
course of business, entered into transactions with Rural Maintenance (Pty) Ltd,
the holding company of SELCo. These transactions resulted in a balance owing by
Rural Maintenance at 31 December 2003, included in accounts receivable.SEGMENTAL
REPORTINGNo segmental information is supplied as the Group operates in a single
line of business in one geographical region (Namibia).DIVIDENDNo dividend for
the 6 month period ended 31 December 2003 is declared.INDEPENDENT REVIEW BY THE
AUDITORSThese interim results have been reviewed by the auditors, SAB&T
Chartered Accountants Incorporated, who have performed the review in accordance
with the statement of South African Auditing Standards applicable to review
engagements. The scope of the review was to enable the auditors to report that
nothing has come to their attention that causes them to believe that the
accompanying condensed consolidated interim financial statements are not fairly
presented, in all material respects, in accordance with South African Statements
of Generally Accepted Accounting Practice and in the manner required by the
Companies Act in South Africa. SAB&T"s unmodified review report on the condensed
consolidated interim financial statements is available for inspection at the
registered office of the company.DIRECTORSIK Amuah (Chairman)*, CF Bosch (CEO),
I Bosch, B Hlongwa *, PH Jacobs,
F Sekandi*#, FR Ueckermann*, A van Zyl * Non Executive # UgandaREGISTERED OFFICE
TRANSFER SECRETARIES156 Kleine Street Ultra Registrars
(Pty) LtdNew Muckleneuk PO Box 4844, Johannesburg,
2000PretoriaPO Box 73130Lynnwood Ridge COMPANY SECRETARY
SPONSOR0040 E.A. Steyn Bridge Capital Services
(Pty) Ltd
Date: 30/03/2004 05:45:05 PM Produced by the JSE SENS Department
