| Tue 7 Sep 2004, 17:34 | | Results for the Year Ended 30 June 2004 |
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Comair Limited - Audited Group Results for the Year Ended 30 June 2004
Comair Limited
Reg. No. 1967/006783/06
Incorporated in the Republic of South Africa
(`Comair` or `the Company`)
ISIN Code: ZAE000029823
JSE Share Code: COM
Audited Group Results for the Year Ended 30 June 2004
Earnings Review
2004 presented a year of unprecedented competition in the market for domestic
air travel, characterised by over capacity and aggressive pricing. Despite a
significant decline in yields, Comair achieved 8% turnover increase on
substantial passenger gains of 31% and growth in market share. Capacity grew by
19% along with improved seat occupancy levels. Under the circumstances the
operating profit of R40.7 million and headline earnings per share of 12 cents
(prior year operating profit of R11.9million and headline earnings per share of
6.8cents) is a creditable achievement.
The stronger rand reduced operating costs in the second half of the year. This
benefit was partially offset by the increase in the dollar price of fuel over
the same period and lower rand yields from foreign currency sales. Comair
implemented a fuel surcharge on British Airways ticket sales to partially
recover the effect of the abnormal fuel price, but the benefit of this recovery
will only be reflected in the 2005 financial year.
Cash generated by operations remained strong at R63.3 million (prior year
R66.7million), resulting in a cash balance of R210 million at year end (prior
year R168 million).
Prospects
Comair expects to see continued reductions in its cost base through a more
efficient fleet, reduced selling costs and improved productivity.
The fuel price, which comprises 25% of Comair`s costs, remains of concern, and
may require a further increase to the fuel surcharge collected on ticket sales
in order to adequately address rampant dollar oil prices. However, increased
ticket prices also have the potential to reduce passenger demand. While the
fleet replacement programme will reduce exposure to the oil price and exchange
rate, approximately 40% of costs are expected to remain hard currency based.
Profits will ultimately depend on the level of competition in the market, and to
what extent revenue can be grown to cover potential cost increases as well as
deliver an acceptable profit margin. On current trends the board expects
reasonable prospects for a further improvement in operating profit for the 2005
financial year.
Dividends
The Directors have resolved to declare a dividend (Dividend number 6) of 2.0
cents per share (prior year: 2.0 cents per share) to all shareholders. The last
day to trade (cum the dividend) in order to participate in the dividend will be
Thursday, 23 September 2004. The shares will commence trading `ex` dividend
from the commencement of business on Monday, 27 September 2004 and the record
date is Friday 1 October 2004. Share certificates may not be de-materialised or
re-materialised between Monday, 27 September 2004 and Friday,1 October 2004 both
days included. The dividend payment will be made on Monday, 4 October 2004.
Change in accounting policy
During the year the company changed its accounting policy with respect to the
employee share incentive trust. The change was effected in order to provide more
appropriate presentation. The group now consolidates the share incentive trust
and the shares owned by the trust are accounted for as treasury shares. The
comparative amounts have been appropriately restated. This change has reduced
the weighted number of shares in issue for the computation of earnings per share
and headline earnings per share.
Financial Statements
ABRIDGED GROUP INCOME STATEMENT
2004 2003 %
R`000 R`000 Change
Revenue 1,474,549 1,365,907 8%
Operating Expenses (1,433,804) (1,354,003) 6%
Operating profit before 40,745 11,904 250%
exceptional items
Aircraft deposit translation loss (11,604)
(5,120)
Aircraft deposit write-off (24,752)
-
Aircraft impairment write-down (115,106) (35,000)
Aircraft forward cover exchange (16,658)
loss -
Sun Air investment settlement
- (3,600)
Loss before taxation (120,891) (38,300)
Net investment income / (expense) (15,257)
987
Loss before taxation (136,148) (37,313)
Taxation 39,448 14,386
Attributable loss (96,700) (22,927)
ABRIDGED GROUP BALANCE SHEET
2004 2003
R`000 R`000
ASSETS
Property, plant and equipment 343,927 295,452
Deferred Taxation 31,435 (8,017)
Current assets 316.639 408,658
692,001 696,093
EQUITY AND LIABILITIES
Capital and reserves 234,236 339,050
Interest-bearing liabilities 214,524 21,331
Current liabilities 243,241 335,712
692,001 696,093
ABRIDGED GROUP STATEMENT OF CHANGES IN EQUITY
Opening Balance 339,050 370,049
Change in accounting policy -
consolidation of share trust (125) (83)
Attributable loss (96,700) (22,927)
Dividend Paid (7,989) (7,989)
Closing Balance 234,236 339,050
ABRIDGED GROUP CASH FLOW STATEMENT
Cash and cash equivalents at the
beginning of the year 168,498 175,817
Cash generated by operations 63,279
66,680
Net interest expense (33,212)
(19,306)
Taxation (paid)/refunded (2) 9,242
Dividends paid (7,989) (7,989)
Addition to property, plant and (195,992) (24,710)
equipment
Proceeds on disposal of property,
plant and equipment 266 181
Net cost of share trust purchases (125) (83)
Aircraft deposits utilised / 17,724 (16,696)
(paid)
Proceeds on disposal of unlisted 135,490
investments
Cash generated/ (utilised) by
financing activities 62,264 (14,638)
Cash and cash equivalents at the
end of the year 210,201 168,498
HEADLINE EARNINGS PER SHARE RECONCILIATION
Earnings attributable to ordinary (96,700) (22,927)
shareholders
Add back Aircraft impairment write 115,106 35,000
down
Add back Sun Air Investment - 3,600
Settlement
Add back Aircraft deposit 5,120 11,604
translation loss
Add back Aircraft deposit write-off 24,752
Headline earnings attributable to 48,278 27,277
ordinary shareholders
SALIENT FEATURES
Headline earnings per share (cents) 12.0 6.8
Earnings per share (cents)
(24.2) (5.8)
Dividend per share (cents) - 2.0 2.0
declared
Weighted ordinary shares issued 399,431 399,434
(`000)
Depreciation (R`000) 32,182 28,380
Interest expense (R`000) 44,480 29,698
These financial statements have been prepared in accordance with South African
Statements of Generally Accepted Accounting Practice. Other than the change in
accounting policy relating to the consolidation of the share trust, the
accounting policies used in the preparation of these results are consistent in
all material respects with those used in the annual financial statements for the
year ended 30 June 2003.
These financial statements have been audited by Fisher Hoffman PKF (Jhb) Inc.
and their unqualified audit report is available at the registered office of the
company.
By order of the Board
D.Novick P.van Hoven
Chairman Managing Director
6 September 2004
Company Secretary: Transfer Secretaries
D. Borer Computershare Investor Services 2004 (Pty)
Ltd
1 Marignane Drive 70 Marshall Street
Bonaero Park, 1619 Johannesburg, 2001
P.O.Box 7015, Bonaero Park, 1622 P.O. Box 61051, Marshalltown, 2107
Sponsor : Nedbank Capital
Date: 07/09/2004 05:10:58 PM
Produced by the JSE SENS Department
