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Yomhlaba Resources Limited - Abridged Unaudited Maiden Interim Financial Results
For The Six Months Ended 31 December 2004
YOMHLABA RESOURCES LIMITED
(formerly Zenith Concessions Limited)
(Incorporated in the Republic of South Africa)
(Registration number 1994/009012/06)
Share code: YBA ISIN: ZAE000060281
(`YBA` or `the company` or `the group`)
ABRIDGED UNAUDITED MAIDEN INTERIM FINANCIAL RESULTS FOR THE SIX MONTHS ENDED 31
DECEMBER 2004
BALANCE SHEETS
Unaudited Audited Unaudited
31 Dec 2004 30 Jun 2004 31 Dec 2003
R`000 R`000 R`000
ASSETS
Non-current assets 35 609 0 401
Plant and equipment 30 311 - 251
Goodwill 5 298 0 150
Current assets 25 268 539 561
Trade and other receivables 680 - 529
Sundry debtors 20 500 -
Cash and cash equivalents 24 568 39 32
Total assets 60 877 539 962
EQUITY AND LIABILITIES
Capital and reserves 7 265 (221) 593
Share capital 6 000 2 655 2 655
Share premium 12 562 5 607 5 607
Retained income/(loss) (11 297) (8 483) (7 669)
Non-current liabilities 46 598 760
Shareholders loans 36 132 760 -
Redeemable preference share 9 000 - -
Loans payable 1 466 - 48
Current liabilities 7 014 - 321
Trade and other payables
Total equity and liabilities 60 877 539 962
Net asset value
per share (cents) 1.21 (0.1) 0.2
Net tangible asset
value per share (cents) 0.33 (0.1) 0.2
Closing number
of shares (`000) 600 000 265 552 265 552
INCOME STATEMENTS
Unaudited Audited Unaudited
6 Months ended 12 Months ended 6 Months Ended
31 Dec 2004 30 Jun 2004 31 Dec 2004
R`000 R`000 R`000
Revenue 19 435 - -
Other income 939 2 357 2 444
Operating costs (22 874) (1 189) (460)
Operating profit/(loss) (2 500) 1 168 1 984
Interest received 393 2 0
Finance charges (707) - -
Profit/(loss) before
taxation (2 814) 1 170 1 984
Taxation - - -
Net profit/(loss) for
the period (2 814) 1 170 1 984
Reconciliation between
earnings and
headline earnings
Earnings per
share (cents) (0.47) 0.4 0.7
Gains on loans
written off (cps) (0.12) (0.3) (0.8)
Profit on sale of
fixed assets (cps) - (0.7) (0.1)
Headline earnings/(loss)
per share (cents) (0.59) (0.6) (0.2)
Weighted average
number of shares (`000) 600 000 265 552 265 552
CASH FLOW STATEMENTS
Unaudited Audited Unaudited
6 Months 12 Months 6 Months
ended ended ended
31 Dec 2004 30 Jun 2004 31 Dec 2003
R`000 R`000 R`000
Cash flows from operating
activities 2 863 (947) 1 750
Cash flows from investing
activities (37 493) 1 562 1 584
Cash flows from financing
activities 59 159 (607) (3 333)
Net movement in cash and
cash equivalents 24 529 8 1
Cash and cash equivalents at
beginning of period 39 31 21
Cash and cash equivalents
at end of period 24 568 39 32
STATEMENTS OF CHANGES IN EQUITY
Share capital Share premium Accumulated
R`000 R`000 profit/(loss) Total
R`000 R`000
Balance at
1 Jul 2003 2 655 5 607 (9 653) (1 391)
Net profit for
the period - - 1 170 1 170
Balance at
1 Jul 2004 2 655 5 607 (8 483) (221)
Cancellation of shares
Issue of
ordinary shares 3 345 6 955 10 300
Net loss
for the period (2 814) (2 814)
Balance
at 31 Dec 2004 6 000 12 562 (11 297) 7 265
COMMENTARY
1. General
The acquisition of Yomhlaba Coal (Pty) Ltd (`Yomhlaba`) was approved at a
special shareholders meeting held on 18 November 2004. Jigmining Operations No 1
(Pty) Ltd (Jigmining) a wholly owned subsidiary of Yomhlaba, operated 3 plants
under contract with Ingwe Collieries Ltd (`Ingwe`): a subsidiary of BHP Billiton
Ltd, beneficiating coal from discard dumps. At the time of the listing it was
YBA`s intention to commission at least two new plants, acquire its own resources
to reduce its dependence on the Ingwe relationship.
2. Operational overview
Prior to December 2004 more than 2.8m ton of coal had been delivered under
contract to Ingwe. With effect from 1 December 2004, Ingwe unilaterally demanded
coal of a higher specification and started to reject coal produced, which
complied with the contract specifications. Production was seriously disrupted
and YBA, in good faith, made a number of attempts to restructure the contract
with Ingwe, all of which failed.
On 1 March 2005 Ingwe terminated its contract with Jigmining Operations No 1
(Pty) Ltd, effective from 2 March 2005 on the grounds of `alleged illegal and /
or unethical practices`.
YBA was verbally informed of these allegations on 1 March 2005 and requested
Ingwe for proof of the allegations. Ingwe has to date failed to provide evidence
of such alleged wrong-doing. YBA strongly denies all the allegations. This
contract was the company`s only income-producing contract and in view of Ingwe`s
refusal to commercially resolve the matter, the Board of YBA decided to
voluntarily suspend the trading of YBA shares on 3 March 2005 until further
notice.
The Board of YBA is unanimous that the termination of the contract is
unjustified.
3. Financial review
The interim results for the six months ended 31 December 2004 reflect the first
trading period for YBA after the acquisition of the entire share capital in
Yomhlaba Coal (Pty) Ltd. These results are therefore not comparable to any
previously reported figures.
The company was on track to meet its profit forecast for the full financial
year, in line with the listing financial forecast, however the results were
seriously affected by the contract delivery disruptions since December 2004.
Major upgrades were completed during November 2004 at a cost of R4m. Ingwe`s
refusal to accept the December production put the company in a loss situation.
4. Prospects
YBA has signed a licensing agreement with an Australian company, Lambada Ltd. In
terms of the agreement, the Yomhlaba technology for the recovery of commodities
from discard dumps in Australia and the Far East. In terms of this agreement,
YBA will be entitled to a 2% gross revenue royalty and a 10% net profit
interest.
Yomhlaba is in advanced negotiations with local parties pertaining to the right
to process and beneficiate various discard dumps and it is expected that an
announcement will be made shortly.
The directors believe that YBA is solvent and has good business prospects to put
YBA on a solid financial footing.
5. Accounting policies
The accounting policies of the company comply in all material respects with
South African Statements of Generally Accepted Accounting Practice and the
Companies Act of 1973. The accounting policies and methods of measurement and
recognition are consistent with those applied in the previous financial period.
6. Dividends
No dividends were recommended or declared for the interim period.
7. Legal
The company`s lawyers have advised that the dispute with Ingwe should be
ringfenced to Jigmining Operations No.1 (Pty) Ltd. The lawyers are also of the
opinion that the unilateral cancellation of the contract is unjustified and have
advised the company to institute legal proceedings against Ingwe.
For and on behalf of the board
Arthur Mashiatshidi
Chairman
31 March 2005
Directors: NC van Huyssteen, JH Jonck, DB Steyn, AB Mashiatshidi*, KJ Gribnitz*,
TV Mokgatlha*, ND Moloi*, JL Taylor* (*non-executive)
Transfer secretaries Registered address
Computershare Investor Services 2004 (Pty) Ltd 76 Garsfontein Road, Alphen
Park, Pretoria
Designated Advisor
River Sponsors (Pty) Ltd
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