| Thu 16 Mar 2006, 16:37 | | SELCo - Consolidated Interim Results For The Six M |
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SLO
SLO
SELCo - Consolidated Interim Results For The Six Months Ended 31 December 2005
Southern Electricity Company Limited
(Registration Number 1997/006894/06)JSE Share Code: SLO
ISIN: ZAE000041919("SELCo" or "the Group")
CONSOLIDATED INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2005
INCOME STATEMENT
6 months 6 months 12 months
ended ended ended
31 December 31 December 30 June
2005 2004 2005
Unaudited Restated *Restated
unaudited unaudited
(R"000) (R"000) (R"000)
Gross revenue 11 838 12 433 23 497
Cost of sales (6 944) (6 332) (11 969)
Gross profit 4 894 6 101 11 528
Other income 653 - 830
Operating costs (4 484) (4 503) (10 792)
Operating profit 1 063 1 598 1 566
Operating profit is stated
after:
Interest received 70 19 435
Finance costs (96) (175) (380)
Profit before taxation 1 037 1 442 1 621
Taxation (383) - (246)
Profit after taxation 654 1 442 1 375
Earnings per ordinary share 1.19 2.62 2.50
(cents)
Headline earnings per ordinary 1.30 2.69 2.80
share (cents)
CASH FLOW STATEMENT
6 months 6 months 12 months
ended ended ended
31 December 31 December 30 June
2005 2004 2005
Unaudited Restated *Restated
(R"000) unaudited Unaudited
(R"000) (R"000)
CASH FLOWS FROM OPERATING 25 3 359 (309)
ACTIVITIES
Cash receipts from customers 10 799 13 104 21 558
Cash paid to suppliers and (10 365) (9 589) (21 555)
employees
Cash generated by operating 434 3 515 3
activities
Interest received 70 19 435
Interest paid (96) (175) (370)
Taxation paid (383) - (377)
CASH FLOWS FROM INVESTING 134 - 200
ACTIVITIES
Sale of financial assets 152 - 360
Property, plant and equipment (18) - (160)
acquired
CASH FLOWS FROM FINANCING (457) (3 313) 368
ACTIVITIES
Repayment of borrowings (589) (3 313) 379
Finance lease payments - - (11)
Other non-cash item 132 - -
(Decrease)/Increase in cash (298) 46 259
and cash equivalents
Cash and cash equivalents at 397 138 138
beginning of the period
Cash and cash equivalents at 99 184 397
end of the period
STATEMENT OF CHANGES IN EQUITY
Share Share Capital Retained
capital premium reserve income Total
(R"000) (R"000) (R"000) (R"000) (R"000)
Balance as at 01 July 2 747 7 415 7 840 (1 072) 16 930
2004
Net profit for the - - - 1 375 1 375
period
Revaluation of tangible - - - 247 247
assets
Transfer to deferred - - - (95) (95)
taxation
Balance as at 01 July 2 747 7 415 7 840 455 18 457
2005
Net profit for the - - - 654 654
period
Balance as at 31 2 747 7 415 7 840 1 109 19 111
December 2005
BALANCE SHEET
31 December 2005 31 December 2004 30 June 2005
Unaudited Restated *Restated
unaudited unaudited
(R"000) (R"000) (R"000)
ASSETS
Non-current assets 19 348 22 567 19 702
Investment property 9 300 9 300 9 300
Property, plant and 3 844 4 105 4 046
equipment
Investments in 3 061 3 061 3 061
associates
Other financial assets 3 143 6 101 3 295
Current assets 13 612 10 011 12 901
Inventories 561 535 541
Trade and other 12 950 9 292 11 910
receivables
Cash and cash 101 184 450
equivalents
Total assets 32 960 32 578 32 603
EQUITY AND LIABILITIES
Equity 19 111 19 464 18 458
Share capital 10 162 10 162 10 163
Reserves 7 840 8 754 7 840
Retained income 1 109 548 455
Liabilities
Non-current liabilities 5 174 4 855 5 780
Other financial 3 670 3 398 4 407
liabilities
Deferred tax 1 504 1 457 1 373
Current liabilities 8 675 8 259 8 365
Other financial 4 256 3 508 3 631
liabilities
Trade and other 3 457 3 351 3 245
payables
Bank overdraft 2 - 53
Current portion of 960 1 400 1 436
interest bearing
borrowings
Deferred tax - - -
Total equity and 32 960 32 578 32 603
liabilities
NOTES TO THE INTERIM RESULTS
Reconciliation between IFRS and SA GAAP
The following reconciliations provide a quantification of the effect, after
taxation, of the transition to IFRS:
Reconciliation of equity 30 June 31 December 1 July
2005 2004 2004
(R"000) (R"000) (R"000)
As reported under SA GAAP 16 344 17 254 15 723
Adjustment for:
Depreciation 2 114 2 210 1 207
As reported under IFRS 18 458 19 464 16 930
Reconciliation of net profit 12 months 6 months
30 June 31 December
2005 2004
(R"000) (R"000)
As reported under SA GAAP 1 885 1 531
Adustment for:
Depreciation (510) (89)
As reported under IFRS 1 375 1 442
Earnings and headline earnings per
share
6 months 6 months 12 months
ended ended ended
31 December 31 December 30 June
2005 2004 2005
Restated *Restated
Unaudited unaudited unaudited
(R"000) (R"000) (R"000)
Profit after taxation 654 1 442 1 375
Adjustments:
Listing expenses 59 34 164
Headline earnings 713 1 476 1 539
Weighted average number of 54 945 373 54 945 373 54 945 373
ordinary shares in issue
Earnings per ordinary share 1.19 2.62 2.50
(cents)
Headline earnings per ordinary 1.30 2.69 2.80
share (cents)
* The audited results for the 12 months ended 30 June 2005 under SA GAAP have
been restated as unaudited due to the IFRS adjustments not having been audited
by the external auditors.COMMENTARY
NATURE OF BUSINESSSELCo"s core business is the supply and distribution of
electrical energy directly to users of electricity whether such users are
governmental, parastatal, industrial, commercial or private home use. The
principle is to have numerous customers and not to be restricted to a few bulk
agreements.
FINANCIAL REVIEWThe interim results for the six months ended 31 December 2005
are for the first time being reported in an IFRS-compliant manner. This major
exercise has been successfully completed and we are pleased to conclude that no
material differences have come to light.
BUSINESS REVIEWNamibiaAs SELCo"s revenue is currently mostly reliant on its
Namibian interests, the Board has thought it appropriate to provide more details
pertaining those interests, as follows: The expansion of SELCo"s business
interests in Namibia, as originally envisaged in 2002, is still in the balance
for political reasons, as the Namibian Government seems intent on creating a
single distributor in Southern Namibia. However due to the lack of funding
available at local authority level, this process has been somewhat delayed.
SELCo anticipates that the Government could either elect to provide the
pertinent local authorities with funding for the premature termination of
SELCo"s long term management agreements so as to form a government-based service
provision company (Southern RED), or that SELCo could be requested to set up the
new envisaged Southern RED on a Build Operate and Trade (BOT) basis. Either
possibility has associated benefits and SELCo is conducting ongoing discussions
with the relevant authorities in this regard.
The decrease in earnings per share is largely the result of an ongoing tariff
dispute with the Keetmanshoop Municipal Council in the face of a NamPower
increase. SELCo is taking steps to mitigate its loss and the matter is currently
before the courts of Namibia. Our legal advisors are confident that the issue
can be resolved in the courts and an interim order has been granted in our
favour. An arbitrable dispute has also been launched to protect and to enforce
the rights of SELCo herein. We expect that this interim situation will be
remedied before the end of the current financial year.
MozambiqueThe project located in the northern Province of Inhambane is making
steady headway with the fulfilment of all statutory approvals and requirements.
The construction phase has commenced and commissioning of the first new
infrastructure set is expected by June 2006. This will have a marked positive
impact on the project"s long-term revenue generation capabilities.
OutlookManagement is comfortable in the public arena and is intent on expanding
SELCo"s business interests materially within its scope of business. The
company"s medium to long-term outlook is to expand its business such that its
Namibian interests no longer form the bulk of the company"s business.
BASIS OF PRESENTATION AND ACCOUNTING POLICIESThe results for the six months
ended 31 December 2005, and comparative information, have been prepared in terms
of International Financial Reporting Standards (IFRS) expected to be applicable
at 30 June 2006 and comply with IAS 34 - Interim Financial Reporting and
relevant sections of the Companies Act in South Africa.
The Group"s transition date for compliance with IFRS is 1 July 2004. The
financial statements for the year ending 30 June 2006 will be the Group"s first
consolidated IFRS-compliant financial statements. The disclosures required by
IFRS 1 (First-time Adoption of International Financial Reporting Standards)
concerning the transition from South African Statements of Generally Accepted
Accounting Practice (SA GAAP)and the required changes in accounting policies are
presented under the heading - "Reconciliation between IFRS and SA GAAP".
At transition date IFRS 1 allows a number of exemptions to the retrospective
application principle on adoption of IFRS. The Group has taken advantage of the
following optional exemptions from full retrospective application:
- The Group made an election not to restate acquisitions prior to the date of
transition to IFRS.
The following significant new accounting policies were applied for IFRS
reporting:
- Residual values and useful lives of all assets are re-assessed annually.
TAXATIONTaxation consists of deferred tax for the six month period ended 31
December 2005. This deferred tax has arisen as a result of temporary tax timing
differences relating to property, plant and equipment and assessed losses being
brought forward.
RELATED PARTY TRANSACTIONSDuring the period the company and its subsidiaries, in
the ordinary course of business, entered into transactions with Rural
Maintenance (Pty) Ltd, the holding company of SELCo. These transactions resulted
in a balance owing by Rural Maintenance at 31 December 2005, included in
accounts receivable.
DIVIDENDNo dividend for the six month period ended 31 December 2005 is declared.
On behalf of the board 16 March 2006
DIRECTORSB Hlongwa (Chairman), CF Bosch (CEO), I Bosch, PH Jacobs, F Sekandi*#,
A van Zyl * Non Executive # Uganda
REGISTERED OFFICE
156 Kleine Street, New Muckleneuk, Pretoria. PO Box 73130, Lynnwood Ridge, 0040
TRANSFER SECRETARIES
Ultra Registrars (Pty) Ltd, PO Box 4844, Johannesburg, 2000
COMPANY SECRETARY:
EA Steyn
SPONSORBridge Capital Services (Pty) Ltd
AUDITORSBDO Spencer Steward Inc
Date: 16/03/2006 04:37:46 PM Produced by the JSE SENS Department
