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THE YORKOR TIMBER ORGANISATION LIMITED - INTERIM REPORT FOR THE SIX MONTHS TO 30
JUNE 2004
THE YORKOR TIMBER ORGANISATION LIMITED
Reg. No. 1916/004890/06
Share code: YRK ISIN: ZAE000008108
INTERIM REPORT FOR THE SIX MONTHS TO 30 JUNE 2004
Group income statements
Unaudited Audited
30 June 31 December
2004 2003 2003
R000 R000 R000
Revenue 66 893 52 924 116 796
Cost of sales (32 700) (21 041) (59 002)
Gross profit 34 193 31 883 57 794
DWAF compensation award - - 28 385
Staff costs (15 871) (14 343) (32 133)
Depreciation (1 616) (1 306) (2 871)
Other operating expenses (13 645) (11 367) (12 227)
Profit from operations 3 061 4 867 38 948
Legal costs (649) (1 143) (1 762)
Increase in net policy value
of sinking fund - - 419
Profit before finance costs 2 412 3 724 37 605
Finance costs (707) (312) (1 679)
Profit before taxation 1 705 3 412 35 926
Taxation (511) (992) (2 001)
Profit after taxation 1 194 2 420 33 925
Minority shareholders` interest - (199) (446)
Net profit for the period 1 194 2 221 33 479
Reconciliation of earnings
and headline earnings
Net profit for period 1 194 2 221 33 479
Profit on sale of fixed assets 32 569 1 226
DWAF compensation award - - 28 385
Increase in fair value of
investment property - - 2 769
Headline profit for period 1 162 1 652 1 099
Notes to the financial statements
Unaudited Audited
30 June 31 December
2004 2003 2003
1. Earnings per share (cents) 10,8 20,1 303,2
2. Headline earnings per share (cents) 10,5 14,9 9,9
3. Capital expenditure for
the period (R000) 474 5 435 6 947
4. Capital expenditure committed (R000) - - -
5. Capital expenditure authorised (R000) - - -
6. Shares in issue (000) 11 040 11 040 11 040
7. Net asset value per share (cents) 772 526 761
8. Gearing (%) (56) 6 8
9. Current ratio (ratio) 2,53 1,03 2,73
Group balance sheets
Unaudited Audited
30 June 31 December
2004 2003 2003
R000 R000 R000
ASSETS
Non-current assets
Property, plant, equipment and vehicles 59 579 60 502 60 722
Investments 2 274 1 908 2 274
Long-term receivables 5 631 5 631 5 631
Sinking fund - 3 207 -
67 484 71 248 68 627
Current assets 77 168 32 170 71 705
Inventories 10 711 11 013 10 928
Accounts receivable 23 030 16 408 17 925
Bank balances and cash 43 427 4 749 5 414
DWAF award - - 37 438
Total assets 144 652 103 418 140 332
EQUITY AND LIABILITIES
Capital and reserves
Share capital 3 612 3 612 3 612
Non-distributable reserves 18 209 21 159 18 629
Accumulated profits 63 390 29 301 61 776
Ordinary shareholders` funds 85 211 54 072 84 017
Minority shareholders` interest
in subsidiary - 4 000 -
Total shareholders` funds 85 211 58 072 84 017
Non-current liabilities 28 965 13 973 30 049
Interest bearing borrowings 9 295 2 700 10 379
Deferred taxation 10 617 11 273 10 617
Shut down costs 9 053 - 9 053
Current liabilities 30 476 31 373 26 266
Accounts payable 26 468 24 531 22 519
Taxation 368 763 1 653
Short-term borrowings 3 640 6 079 2 094
Total equity and liabilities 144 652 103 418 140 332
Abridged group cash flow statements
Unaudited Audited
30 June 31 December
2004 2003 2003
R000 R000 R000
Cash generated by operating activities 40 495 (1 390) (1 658)
Finance costs (707) (511) (2 125)
Dividends and tax paid (1 796) (401) (486)
Net cash inflow/(outflow) from
operating activities 37 992 (2 302) (4 269)
Net cash outflow from investing
activities (441) (5 031) (5 265)
Net cash inflow from financing
activities 462 4 926 7 792
Net increase/(decrease) in bank
balances and cash 38 013 (2 407) (1 742)
Bank balances and cash at beginning
of year 5 414 7 156 7 156
Bank balances and cash at end
of period 43 427 4 749 5 414
Statements of changes in equity
Unaudited - at 30 June
Share Share Non-distributable
capital premium reserve
Balance at 31 December 2002 552 3 060 21 579
Depreciation on asset
revaluations reversed (416)
Expenses of non-revenue
producing subsidiaries (4)
Net profit for the period
Balance at 30 June 2003 552 3 060 21 159
Balance at 31 December 2003 552 3 060 18 629
Depreciation on asset
revaluations reversed (420)
Net profit for the period
Balance at 30 June 2004 552 3 060 18 209
Statements of changes in equity
Unaudited - at 30 June
Accumulated
profit Total
Balance at 31 December 2002 26 660 51 851
Depreciation on asset revaluations reversed 416 -
Expenses of non-revenue
producing subsidiaries 4 -
Net profit for the period 2 221 2 221
Balance at 30 June 2003 29 301 54 072
Balance at 31 December 2003 61 776 84 017
Depreciation on asset revaluations reversed 420 -
Net profit for the period 1 194 1 194
Balance at 30 June 2004 63 390 85 211
COMMENTARY
The modest decline in Yorkcor`s results for the half-year to 30 June 2004
should be read in the context of far reaching changes which the timber industry
is undergoing. A contributing factor was engineering problems experienced at
the group`s newly acquired sawmills in the Mpumalanga Highlands. These mills
are now operating satisfactorily and, in the case of the larger sawmill, profit
performance has been good.
On 9 September 2004, the Supreme Court of Appeal reversed a judgment of the
High Court and upheld Safcol`s cancellation of Yorkcor`s `evergreen` contracts
of forty years standing. All sawmillers who also held such contracts had
already relinquished their indefinite log supply rights more than five years
ago. This was to make way for the privatisation of the state`s forestry assets.
At this very time, the Competition Commission is asked to sanction a merger,
which will create a monopoly controlling about 75% of the total softwood sawlog
resources in Mpumalanga and Limpopo. There is widespread opposition in the
industry to the concentration of such market power.
During the half year under review, the group received an amount of R37 438
498,00 from the government in compensation for the termination of a long term
sawlog contract in respect of three plantations near Bushbuckridge.
The payment was in terms of an arbitrator`s award which was made an order of
the High Court on 22 April 2004.
National figures have shown no growth in the volume of sales in the year to 30
June 2004 which stems from a shortage of logs. Yorkcor has coped well in these
challenging circumstances. The domestic demand for product is good and it is
likely to remain so for some time.
Two court cases are pending which relate to Safcol`s claims and Yorkcor`s
counter-claims, which could take years to finalise although the commitment to
resolve the remaining disputes is a matter of public record. Yorkcor enters the
second half-year with a robust balance sheet, a full order book and innovative
plans for the road ahead.
We expect satisfactory results for the rest of 2004.
BASIS OF ACCOUNTING
These results are prepared in accordance with South African Statements of
Generally Accepted Accounting Practice and the accounting policies used in the
preparation of the year end financial statements have been consistently
applied.
Solly Tucker
Chairman
20 September 2004
Directors: S Tucker*, I S D Tucker*, A C de Villiers*, Dr M J C van Vuuren,
L S Cooper*, Dr J Kopp, S Motlana, *Executive directors
Company Secretary: J F Dekker
Registered Office: 5th Floor, Yorkcor Park
86 Watermeyer Street
Val de Grace
Pretoria 0184
PO Box 380, Pretoria 0001.
Transfer Secretaries: Computershare Investor Services 2004
(Proprietary) Limited
70 Marshall Street
Johannesburg 2001
PO Box 61051, Marshalltown 2107.
Date: 20/09/2004 02:01:45 PM Produced by the JSE SENS Department
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