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Trencor Limited - Reviewed Results And Declaration Of Dividends For The Year
ended 31 December 2004
TRENCOR LIMITED
REG NO 1955/002869/06
(`Trencor`)
SHARE CODE: ISIN:
TRE ZAE000007506
TED2 ZAE000007282
MOBILE INDUSTRIES LIMITED
REG NO 1968/014997/06
(`Mobile`)
SHARE CODE: ISIN:
MOB ZAE000004602
MBN ZAE000012274
MOBD ZAE000004610
REVIEWED RESULTS AND DECLARATION OF DIVIDENDS for the year ended 31 December
2004
Highlights
TRENCOR: GROUP
# Condensed income statements and balance sheets for Trencor are also presented
in US dollars for a better appreciation of the group`s results as virtually all
of its revenue and assets and much of its expenditure are denominated in that
currency. The US dollar statements have not been reviewed by the auditors.
# Trading profit from continuing operations after net financing costs increased
by 34% from US$35,2 million in 2003 to US$47,3 million. In rand terms, trading
profit has grown at a slower rate (from R273 million to R305 million) due tothe
negative effect of the much stronger rand on translation of income from
Trencor `s predominantly US dollar based operations.
# Valuation provision against the long-term receivables has been reduced by a
net R155 million in recognition of the favourable conditions currently being
experienced in the container leasing industry and the improved outlook for the
collectability and timing of receipts from the long-term receivables.
# Once-off financial effect of the settlement of the dispute with the South
African Revenue Service (`SARS`) over the tax treatment of our export partners
has been brought to account.
# Stronger rand again resulted in unrealised losses on translation of net
receivables of R232 million (2003: R519 million).
# Discount rate applied to rand amounts attributable to third parties in
respect of long-term receivables reduced from 12% p.a. to 10% p.a. which had an
adverse effect of R42 million on pre-tax income.
# Headline earnings, after taking account of the above, were 20,1 US cents per
share (2003: 5,6 US cents). Expressed in rand, headline earnings per share were
61,8 cents per share (2003: 108,2 cents loss).
# Dividend declared: 12 SA cents per share (2003: nil).
TEXTAINER
# Headline income increased by 57% to US$46,4 million. This follows an 81%
increase in 2003.
# Average fleet utilisation in 2004 was 93%; utilisation at 31 December 2004,
excluding new production in manufacturers` yards, was 97%.
# 150 000 TEU (20-foot equivalent unit) of new containers added to the fleet in
2004.
# Textainer purchased 79 000 units owned by Xtra International and which were
being managed by Textainer, for US$85,3 million.
# 67% of the total managed fleet of 1,14 million TEU is on long-term lease.
# Almost 70% of the 484 000 TEU owned by Textainer itself is on long-term lease.
TRENSTAR
# Acquired the beer keg fleet of Coors UK in June 2004, increasing the number
of kegs owned and managed in the UK by TrenStar to 4,1 million.
# Despite revenue increasing by 28% to US$51 million in 2004, delays in closing
certain significant contracts adversely affected attainment of profitability.
Settlement of tax matter
As reported on 22 December 2004, Trencor and SARS concluded an agreement that
disposed of the income tax queries raised by SARS on some of the group`s export
partners relating to the tax treatment of their participation in the container
export trade through export partnerships. The agreement did not involve any
admission by either SARS or Trencor and its partners as to the correctness of
the other parties` contentions.
In terms of the agreement, the tax treatment of the export partners up to and
including their 2004 tax years will be as contended for by Trencor and its
export partners. At the end of each of their respective first tax years ending
on or after 1 January 2005, the export partners collectively will, in effect,
accelerate payment of approximately R305 million in aggregate to SARS, being a
portion of the amount which Trencor and its partners had contended should be
paid over the following four to five years. Beyond the four to five year
period, the tax treatment of the partners will continue on the basis contended
for by Trencor and its export partners. It should be noted that of the amount
of R305 million to be paid in 2005, approximately R68 million would have been
paid in that year in any event.
Declaration of dividends
Dividends in respect of the year ended 31 December 2004 have been declared as
follows:
TRENCOR NO 78 12 CENTS PER SHARE
MOBILE NO 63 0,9 CENTS PER SHARE
The salient dates pertaining to the dividend payments are as follows:
Last day to trade cum the dividend Friday, 1 April 2005
Trading commences ex the distribution Monday, 4 April 2005
Record date Friday, 8 April 2005
Payment date Monday, 11 April 2005
Share certificates may not be dematerialised or rematerialised between Monday,
4 April 2005 and Friday, 8 April 2005, both days inclusive.
It is the intention of the boards to consider paying dividends on an annual
basis.
Review opinion
These results, other than the figures stated in US dollars, have been reviewed
by the auditors, KPMG Inc, and their unmodified review reports are available
for inspection at the registered office.
ON BEHALF OF THE BOARDS
NI JOWELL C JOWELL
CHAIRMAN TRENCOR LIMITED CHAIRMAN MOBILE INDUSTRIES LIMITED
28 FEBRUARY 2005
Directors:
Trencor: NI Jowell* (Chairman), HR van der Merwe* (Managing), HA Gorvy,
JE Hoelter (USA), C Jowell, JE McQueen*, DM Nurek, E Oblowitz (*executive)
Mobile: C Jowell (Chairman), HA Gorvy, NI Jowell, E Oblowitz (all non-executive)
Secretaries to Trencor and Mobile: Trencor Services (Pty) Ltd
Registered Office: 1313 Main Tower, Standard Bank Centre, Heerengracht,
Cape Town 8001
Transfer Secretaries: Computershare Investor Services 2004 (Pty) Ltd,
70 Marshall Street, Johannesburg 2001 (PO Box 61051, Marshalltown 2107)
Sponsors: Rand Merchant Bank (A division of FirstRand Bank Ltd)
Corporate Finance
THESE RESULTS CAN BE VIEWED ON THE WEBSITES:
WWW.TRENCOR.NET AND WWW.MOBILE-INDUSTRIES.NET
Condensed income statements FOR THE YEAR ENDED 31 DECEMBER 2004
TRENCOR
REVIEWED AUDITED
R MILLION 2004 2003
Revenue (including exchange differences) (Note 2) 1 119,9 731,8
Trading profit before items listed below: 554,3 503,5
Continuing operations 554,3 516,5
Discontinuing operations - (13,0)
Exchange (losses)/gains
Translation of long-term receivables included in
revenue (393,7) (854,5)
Translation of borrowings 21,2 84,0
Net long-term receivable valuation adjustment 316,9 335,2
Reduction due to translation of dollar amount 161,9 335,2
Reduction in valuation provision 155,0 -
Change in discount rate relating to amount
attributable to third parties in respect of
long-term receivables (42,2) -
Goodwill amortisation - subsidiary (2,1) (3,6)
Impairment of goodwill (3,5) (0,8)
Discontinuing operations (Note 3) 7,2 1,1
Profit from operating activities 458,1 64,9
Net interest expense - Textainer (146,4) (165,8)
- Other (102,7) (78,2)
Share of profit/(loss) of associate company 2,3 5,5
Exceptional items (Note 4) (38,8) 72,9
Profit/(Loss) before taxation 172,5 (100,7)
Income tax 1,9 (114,5)
Continuing operations (5,1) (110,9)
Discontinuing operations (Note 3) 7,0 (3,6)
Profit/(Loss) after taxation 170,6 13,8
Minority interest 111,5 112,3
Net profit/(loss) for the year 59,1 (98,5)
Number of shares in issue (million) 154,0 153,6
Weighted average number of shares in issue (million) 153,8 153,2
Undiluted earnings/(loss) per share (cents) 38,4 (64,3)
Diluted earnings/(loss) per share (cents) 37,7 (64,3)
Headline earnings/(loss) per share (cents) (Note 5) 61,8 (108,2)
Year-end rate of exchange: SA rand to US dollar 5,61 6,62
MOBILE
REVIEWED AUDITED
R MILLION 2004 2003
Revenue (including exchange differences) (Note 2) 8,6 12,1
Trading profit before items listed below: 11,0 10,3
Profit from operating activities 11,0 10,3
Net interest expense (7,8) (8,5)
Share of profit/(loss) of associate company 27,9 (46,6)
Exceptional items (Note 3) (0,1) (0,6)
Profit/(Loss) before taxation 31,0 (45,4)
Income tax 3,6 0,7
Profit/(Loss) after taxation 27,4 (46,1)
Minority interest 0,1 0,4
Net profit/(loss) for the year 27,3 (46,5)
Number of shares in issue (million) 897,8 897,8
Weighted average number of shares in issue (million) 897,8 897,8
Undiluted earnings/(loss) per share (cents) 3,0 (5,2)
Diluted earnings/(loss) per share (cents) 3,0 (5,2)
Headline earnings/(loss) per share (cents) (Note 4) 4,9 (8,6)
Condensed statements of changes in shareholders` equity
FOR THE YEAR ENDED 31 DECEMBER 2004
TRENCOR
REVIEWED AUDITED
R MILLION 2004 2003
Balance at the beginning of the year 1 506,2 1 732,8
Proceeds on issue of shares 2,1 3,1
Movements in distributable reserves 51,4 (177,4)
Net profit/(loss) for the year 59,1 (98,5)
Gain on dilution of interest in subsidiaries
transferred to non-distributable reserve (7,7) (78,9)
Movements in non-distributable reserves (78,4) (52,3)
Currency translation differences (123,8) (169,1)
Unrecognised profit on derivative instruments (in
Textainer) 29,0 42,4
Fair-value adjustment - available for sale investments 0,2 (4,5)
Transfer from distributable reserves (see above) 7,7 78,9
Impairment of available for sale investment
transferred to income statement 8,5 -
Balance at the end of the year 1 481,3 1 506,2
MOBILE
REVIEWED AUDITED
R MILLION 2004 2003
Balance at the beginning of the year 713,6 822,1
Proceeds on issue of shares - -
Movements in distributable reserves 23,8 (83,2)
Net profit/(loss) for the year 27,3 (46,5)
Loss on dilution of interest in associate transferred
to non-distributable reserve 0,1 0,6
Gain on dilution of associate`s interest in
subsidiaries transferred to non-distributable reserve (3,6) (37,3)
Movements in non-distributable reserves (37,2) (25,3)
Transfer from distributable reserves (see above) 3,5 36,7
Share of decrease in non-distributable reserve of
associate company (40,7) (62,0)
Balance at the end of the year 700,2 713,6
Condensed balance sheets AT 31 DECEMBER 2004
TRENCOR
REVIEWED AUDITED
R MILLION 2004 2003
Assets
Non-current assets
Property, plant and equipment 5 596,1 4 759,8
Investment properties - 29,3
Intangible assets and goodwill 30,4 43,1
Investment in associates 0,3 64,8
Other investments 38,4 36,3
Long-term loans 8,3 27,7
Net investment in direct finance leases 19,0 34,9
Long-term receivables 1 341,3 1 446,6
Deferred taxation 257,1 188,8
7 290,9 6 631,3
Current assets (Note 7) 934,0 849,7
Total assets 8 224,9 7 481,0
Equity and liabilities
Capital and reserves
Share capital and premium 170,8 168,7
Reserves 1 310,5 1 337,5
Shareholders` equity 1 481,3 1 506,2
Minority interest 553,2 522,1
Total shareholders` funds 2 034,5 2 028,3
Convertible debentures 260,5 260,5
Other non-current liabilities
Interest-bearing borrowings 3 947,5 3 548,8
Amounts attributable to third parties in respect of
long-term receivables 458,6 380,0
Derivative instruments 25,4 87,0
Deferred taxation 295,1 276,8
7 021,6 6 581,4
Current liabilities (Note 8) 1 203,3 899,6
Total equity and liabilities 8 224,9 7 481,0
Capital expenditure incurred during the year 2 206,5 831,7
Capital expenditure committed and authorised, but not
yet incurred 126,4 152,4
Market value of listed investments 6,1 10,2
Directors` valuation of unlisted investments 32,4 26,1
Ratio to aggregate of total shareholders` funds and
convertible debentures:
Total liabilities excluding convertible debentures (%) 258,4 226,9
Interest-bearing debt excluding convertible
debentures (%) 187,1 173,9
MOBILE
REVIEWED AUDITED
R MILLION 2004 2003
Assets
Non-current assets
Investment in associates 820,8 829,5
Participation in export partnerships 5,6 6,1
Long-term receivables - 6,3
826,4 841,9
Current assets (Note 5) 9,5 11,1
Total assets 835,9 853,0
Equity and liabilities
Capital and reserves
Share capital and premium 66,5 66,5
Reserves 633,7 647,1
Shareholders` equity 700,2 713,6
Minority interest - 4,1
Total shareholders` funds 700,2 717,7
Convertible debentures 127,6 127,6
Other non-current liabilities
Deferred taxation 5,6 5,3
833,4 850,6
Current liabilities (Note 6) 2,5 2,4
Total equity and liabilities 835,9 853,0
Market value of listed investments 1 257,1 886,2
Ratio to aggregate of total shareholders` funds and
convertible debentures:
Total liabilities excluding convertible debentures (%) 1,0 0,9
Condensed cash flow statements FOR THE YEAR ENDED 31 DECEMBER 2004
TRENCOR
REVIEWED AUDITED
R MILLION 2004 2003
Cash generated from operations 1 338,2 712,6
Interest received 8,9 14,5
Interest paid (255,7) (254,8)
Dividends paid to minorities (36,2) (17,9)
Taxation paid (70,1) (71,8)
Net cash inflow from operating activities 985,1 382,6
Cash flows from investing activities (2 005,3) (778,5)
Cash flows from financing activities 1 182,7 429,9
Net increase/(decrease) in cash and cash equivalents
before exchange rate changes 162,5 34,0
Net cash and cash equivalents at the beginning of the
year 330,5 368,6
Effects of exchange rate changes on cash and cash
equivalents (53,3) (72,1)
Net cash and cash equivalents at the end of the year
(Note 7) 439,7 330,5
MOBILE
REVIEWED AUDITED
R MILLION 2004 2003
Cash generated from operations 11,7 35,5
Interest received 7,5 7,8
Interest paid (7,8) (8,5)
Dividends paid to minorities (3,1) -
Taxation paid (3,3) (1,1)
Net cash inflow from operating activities 5,0 33,7
Cash flows from investing activities (5,3) (2,3)
Cash flows from financing activities - (26,9)
Net increase/(decrease) in cash and cash equivalents
before exchange rate changes (0,3) 4,5
Net cash and cash equivalents at the beginning of the
year 9,6 5,1
Net cash and cash equivalents at the end of the year
(Note 5) 9,3 9,6
Notes to the condensed financial statements FOR THE YEAR ENDED 31 DECEMBER 2004
1. These consolidated condensed financial statements are prepared in accordance
with South African Statements of Generally Accepted Accounting Practice. The
accounting policies used in the preparation of the reviewed financial
statements are consistent with those used in the annual financial statements
for the year ended 31 December 2003.
TRENCOR
REVIEWED AUDITED
R MILLION 2004 2003
2. Revenue
Invoiced sales - goods and services 60,1 70,5
Leasing income 1 210,3 1 117,5
Management fees 193,2 232,3
Finance income 6,9 109,5
1 470,5 1 529,8
Discontinuing operation - container
manufacturing 43,1 56,5
1 513,6 1 586,3
Realised and unrealised exchange differences (393,7) (854,5)
1 119,9 731,8
3. Discontinuing operations - container
manufacturing
Operating profit/(loss) 7,2 (11,9)
Interest expense 0,4 -
Profit/(Loss) before taxation 6,8 (11,9)
Income tax 7,0 (3,6)
Net loss after taxation (0,2) (8,3)
4. Exceptional items
Premium paid on acquisition of shares from
outside shareholders - (5,1)
Goodwill written off pursuant to change of
interest in subsidiary (0,1) (1,5)
(Loss)/Gain on sale of investment properties (2,2) 0,6
Net gain on dilution of interest in
subsidiaries 9,2 78,9
Loss on sale of interest in associate (37,2) -
Impairment of available for sale investment (8,5) -
(38,8) 72,9
5. Headline earnings/(loss)
Net profit/(loss) for the year 59,1 (98,5)
Amortisation of goodwill in respect of
associate company 0,9 3,6
Amortisation of goodwill in respect of
subsidiary 2,1 3,6
Impairment of goodwill 3,5 0,8
(Gain)/Loss on sale of property, plant and
equipment (9,0) 0,2
Exceptional items (Note 4) 38,8 (72,9)
Discontinuing operations 0,2 (1,0)
Minority share of exceptional items (0,6) (1,5)
Headline earnings/(loss) 95,0 (165,7)
6. Segmental reporting
Revenue
Containers - sales and finance (including
exchange differences) (387,3) (752,5)
Containers - owning, leasing and management 1 103,6 1 097,1
Mobile asset management services 358,9 327,5
Other 1,6 3,2
1 076,8 675,3
Discontinuing operations 43,1 56,5
1 119,9 731,8
Profit/(Loss) from operating activities
Containers - sales and finance (82,6) (433,6)
Containers - owning, leasing and management 538,6 465,5
Mobile asset management services (12,7) (16,3)
Other 7,6 61,2
450,9 76,8
Discontinuing operations 7,2 (11,9)
458,1 64,9
7. Current assets
Inventories 9,3 50,8
Accounts receivable 485,0 459,9
Current portion of long-term loans - 8,5
Cash and cash equivalents 439,7 330,5
Restricted cash balances 156,8 47,7
Unrestricted cash balances 282,9 282,8
934,0 849,7
8. Current liabilities
Accounts payable 752,4 300,1
Provisions 42,4 75,8
Taxation 37,9 64,2
Current portion of interest-bearing
borrowings 347,5 432,1
Deferred income 23,1 27,4
1 203,3 899,6
MOBILE
REVIEWED AUDITED
R MILLION 2004 2003
2. Revenue
Finance income 8,6 12,1
3. Exceptional items
Loss on dilution of interest in associate (0,1) (0,6)
(0,1) (0,6)
4. Headline earnings/(loss)
Net profit/(loss) for the year 27,3 (46,5)
Exceptional items (Note 4) 0,1 0,6
Discontinuing operations
Minority share of exceptional items
Attributable share of headline earnings adjustments of
associate company 17,0 (31,7)
Headline earnings/(loss) 44,4 (77,6)
5. Current assets
Accounts receivable 0,2 1,1
Amount owing by affiliated company - 0,4
Cash and cash equivalents 9,3 9,6
9,5 11,1
6. Current liabilities
Accounts payable 1,0 0,8
Taxation 1,5 1,6
2,5 2,4
In order to provide a better appreciation of the results of the group`s
activities, condensed income statements and balance sheets are also presented
in US dollars, as virtually all of the group`s revenue and assets and much of
its expenditure are denominated in that currency. The amounts stated in US
dollars have been prepared by management, are unaudited and have not been
reviewed by the company`s auditors.
Unaudited Trencor condensed income statement FOR THE YEAR ENDED
31 DECEMBER 2004
UNAUDITED
US$ MILLION 2004 2003
Revenue 243,1 192,8
Trading profit before items listed below: 86,4 66,5
Continuing operations 86,4 68,3
Discontinuing operations - (1,8)
Exchange losses arising on translation (12,0) (15,0)
Net long-term receivable valuation adjustment 25,0 -
Change in discount rate relating to amount attributable
to third parties in respect of long-term receivables (6,0) -
Goodwill amortisation - subsidiary (0,3) (0,3)
Impairment of goodwill (0,7) (0,1)
Discontinuing operations 1,1 0,2
Profit from operating activities 93,5 51,3
Net interest expense - Textainer (23,0) (22,5)
- Other (16,1) (10,6)
Share of profit of associate company 0,4 0,7
Exceptional items (5,1) 9,9
Profit before taxation 49,7 28,8
Income tax expense 6,0 (2,8)
Continuing operations 4,9 (2,3)
Discontinuing operations 1,1 (0,5)
Profit after taxation 43,7 31,6
Minority interest (17,6) (15,1)
Net profit for the year 26,1 16,5
Number of shares in issue (million) 154,0 153,6
Weighted average number of shares in issue (million) 153,8 153,2
Undiluted earnings per share (US cents) 17,0 10,8
Diluted earnings per share (US cents) 14,1 9,3
Headline earnings per share (US cents) 20,1 5,6
Year-end rate of exchange: SA rand to US dollar 5,61 6,62
Trading profit from continuing operations comprises:
Textainer 84,7 63,0
TrenStar (1,1) (1,7)
Other 2,8 7,0
86,4 68,3
Unaudited Trencor condensed balance sheet AT 31 DECEMBER 2004
UNAUDITED
US$ MILLION 2004 2003
Assets
Property, plant and equipment 997,5 723,4
Long-term receivables 239,1 218,5
Other non-current assets 63,0 61,0
1 299,6 1 002,9
Current assets 166,6 127,1
Inventory 1,7 7,7
Accounts receivable 86,5 69,5
Cash and cash equivalents 78,4 49,9
Total assets 1 466,2 1 130,0
Shareholders` equity 264,3 227,5
Minority interest 98,6 78,8
Total shareholders` funds 362,9 306,3
Convertible debentures 46,4 39,4
Interest-bearing borrowings 703,7 536,1
Amounts attributable to third parties in respect of
long-term receivables 81,7 57,4
Derivative instruments 4,5 13,1
Deferred taxation 52,6 41,8
1 251,8 994,1
Current liabilities 214,4 135,9
Accounts payable 148,4 66,5
Current portion of interest-bearing borrowings 61,9 65,3
Deferred income 4,1 4,1
Total equity and liabilities 1 466,2 1 130,0
Ratio to aggregate of total shareholders` funds and
convertible debentures:
Total liabilities excluding convertible debentures (%) 258,2 226,9
Interest-bearing debt excluding convertible
debentures (%) 187,1 174,0
Date: 28/02/2005 05:56:57 PM
Produced by the JSE SENS Department
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