| Wed 31 Mar 2004, 17:05 | | Reviewed Provisional Results For The Nine Months |
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African Gem Resources Limited - Reviewed Provisional Results For The Nine Months
Ended 31 December 2003
African Gem Resources Limited
(Registration number: 1998/007292/06)
Share code: AFG
ISIN code: ZAE000025540
CUSIP code (Level 1 ADR programme): 008283103
REVIEWED PROVISIONAL RESULTS FOR THE NINE MONTHS ENDED 31 DECEMBER 2003
Nine months ended Year ended
31 December 2003 31 Mar 2003
Reviewed Audited
R R
BALANCE SHEETS
Assets
Fixed assets 92 577 755 80 769 544
Non current assets
Deferred taxation 12 548 844 3 308 621
Current assets 94 086 545 83 618 946
Inventory 28 890 956 26 161 557
Accounts receivable 12 956 481 12 726 323
Taxation receivable 3 026 501 6 984 174
Cash and cash equivalents 49 212 607 37 746 892
Total assets 199 213 144 167 697 111
Equity and liabilities
Capital and reserves
Ordinary shareholders" interest 162 376 405 131 191 218
Outside shareholders" interest 159 815 1 973 148
Non current liabilities 26 690 271 24 217 810
Deferred taxation 9 401 722 6 231 492
Long term liabilities 16 744 099 17 197 408
Environmental rehabilitation 544 450 788 910
provision
Current liabilities
Accounts payable 9 986 653 10 314 935
Total equity and liabilities 199 213 144 167 697 111
Net asset value per share (cents) 114,14 101,24
Number of shares - issued 142 256 182 129 581 182
Number of shares - weighted 139 951 637 129 531 072
STATEMENTS OF CHANGES IN EQUITY
Share capital and share premium 131 041 436 112 028 936
Balance at beginning of period/year 112 028 936 111 968 176
Arising from share issue 19 012 500 60 760
Retained income 31 334 969 19 162 282
Balance at beginning of period/year 19 162 282 36 963 847
Income/(loss) attributable to 12 172 687 (17 801 565)
ordinary shareholders
Total ordinary shareholders" interest 162 376 405 131 191 218
Nine months ended Year ended
31 December 2003 31 Mar 2003
Reviewed Audited
R R
INCOME STATEMENTS
Revenue 72 659 236 74 079 745
Cost of sales (25 977 310) (40 024 972)
Gross profit 46 681 926 34 054 773
Net foreign exchange loss (8 203 809) (13 273 104)
Other income 221 571 30 534
Operating expenses (30 658 871) (34 398 068)
Operating income/(loss) 8 040 817 (13 585 865)
Net interest paid (1 120 616) (325 006)
Net income/(loss) before taxation 6 920 201 (13 910 871)
Taxation 5 269 815 888 120
Income/(loss) after taxation 12 190 016 (13 022 751)
Outside shareholders" interest (17 329) (4 778 814)
Income/(loss) attributable to 12 172 687 (17 801 565)
ordinary shareholders
Earnings/(loss) per share (cents) 8,70 (13,74)
Headline earnings/(loss) per share 8,70 (13,74)
(cents)
CASH FLOW STATEMENTS
Cash flows from operating activities
Cash generated/(utilised in) by 13 717 672 (4 015 717)
operations
Net interest paid (1 120 616) (325 006)
Taxation refund received/(paid) 3 193 165 (9 390 445)
Net cash inflow/(outflow) from 15 790 221 (13 731 168)
operating activities
Cash outflows from investing
activities
Investment to expand operations
Net additions to fixed assets (1 901 408) (10 147 796)
Additional investment in subsidiary (1 973 148) (2 805 666)
company
Net cash outflows from investing (3 874 556) (12 953 462)
activities
Cash flows from financing activities
Long term liabilities repaid (449 950) (2 597 098)
Proceeds from issue of shares - 60 760
Net cash outflows from financing (449 950) (2 536 338)
activities
Cash and cash equivalents
Net increase/(decrease) for the 11 465 715 (29 220 968)
period/year
At the beginning of the period/year 37 746 892 66 967 860
At end of period/year 49 212 607 37 746 892
The group annual financial statements have been prepared on the historical cost
basis, except for financial instruments, which are stated at fair value and in
accordance with South African Statements of Generally Accepted Accounting
Practice and in terms of the requirements of the South African Companies Act,
1973 (as amended). The principal accounting policies were consistently applied.
African Gem Resources Limited ("AFGEM") has changed its year end to 31 December
and now reports on the nine months to 31 December 2003.
The provisional results have been reviewed by the company"s auditors, KPMG Inc.
The review opinion is available for inspection at the company"s registered
address.
OverviewHigher revenues and increased gross profits resulted in an operating
income of R8,0 million being achieved compared to an operating loss at 31 March
2003 of R13,6 million. Results were once again affected by the appreciation of
the SA Rand against the US Dollar and this appreciation of the SA Rand resulted
in a net foreign exchange loss of R8,2 million, compared to a R13,3 million loss
for the year to 31 March 2003. The group"s foreign operating entities (Merelani
Mining Limited ("MML") and Tanzanite Foundation Limited) were both profitable
and production at the mining operation in Tanzania is ramping up in accordance
with the mine development plan. The South African operating company (The
Tanzanite Company (Pty) Ltd, previously Afgem SA (Pty) Ltd) was not profitable
during the period under review mainly as a result of stock write offs in line
with the appreciation of the SA Rand against the US Dollar. Income attributable
to ordinary shareholders was 168% up from the previous period and resulted in a
163% increase in earnings and headline earnings per share to 8,70 cents per
share (13,74 cents per share loss and headline loss in 2003).
Balance sheetsThe group ended the nine month period to 31 December 2003 with
total assets of R199,2 million. Cash and cash equivalents at 31 December 2003
amounted to R49,2 million, an increase of R11,5 million from the amount reported
at 31 March 2003. The net asset value per share increased by 12,7% compared to
the net asset value per share previously reported. The group has very low
gearing with the only debt in the group being R16,7 million, mainly in respect
of the aircraft owned by Afgem Logistics (Pty) Limited.
Cash flow statementsThe issue of the shares for the purchase of the additional
15% in MML was offset against the additional investment in subsidiary company
and not shown as a cash issue of shares.
DividendsNo dividend is proposed for the period under review.
Corporate governanceAFGEM separated the roles of Chairman and CEO with the
appointment of Keith Rayner as non-executive Chairman on 16 February 2004. AFGEM
continues to apply all material aspects of the King Code on Corporate Governance
for South Africa. AFGEM"s audit committee has approved these provisional
results.
Further cautionary announcementShareholders are reminded of the cautionary
announcement relating to the disposal by AFGEM of its tanzanite business and the
signing of a Memorandum of Understanding relating to the potential acquisition
of a diamond business. Both transactions are progressing and an announcement
will be made shortly as to the progress in this regard. Shareholders are
accordingly advised to exercise caution in dealing in AFGEM shares until a
further announcement is made.
For and on behalf of the boardMJ Nunn
MR SummersChief Executive Officer Group Financial Director
31 March 2004
Date: 31/03/2004 05:00:14 PM Produced by the JSE SENS Department
