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SCN
SCN
Schamin - Unaudited Interim Results for the six months ended 30 September 2006
Scharrig Mining Limited
Registration number 1992/001973/06)
Share code: SCN & ISIN: ZAE000006474)
("Schamin" or "the Company")
UNAUDITED INTERIM RESULTS OF SCHARRIG MINING LIMITED FOR THE SIX MONTHS ENDED 30
SEPTEMBER 2006
Abridged Consolidated Balance Sheet as at 30 September 2006
Unaudited Audited
six months year
ended ended
30 Sept 31 March
2006 2006
R000 R000
ASSETS
Non-current assets
Property, plant
and equipment 1 032 441 766 969
1 032 441 766 969
Current assets
Inventories 85 072 29 140
Trade and other receivables 146 067 66 636
Bank balance and cash 50 167 23 640
281 306 119 416
Total assets 1 313 747 886 385
EQUITY AND LIABILITIES
Capital and reserves
Share capital and premium 305 198 93 032
Reserves 285 911 237 339
Ordinary shareholders" funds 591 109 330 371
Non-current liabilities
Long-term borrowings 250 783 178 169
Deferred taxation 145 017 121 255
395 800 299 424
Current liabilities
Trade and other payables 73 214 73 394
Current portion of
long-term borrowings 252 397 183 175
Taxation 1 227 21
326 838 256 590
Total equity and liabilities 1 313 747 886 385
Net asset value
per share (cents) 365 240
Abridged Consolidated Cash Flow Statement
for the six months ended 30 September 2006
Unaudited Unaudited Audited
six months six months year
ended ended ended
30 Sept 30 Sept 31 March
2006 2005 2006
R000 R000 R000
Operating profit before
working capital changes 172 403 138 101 282 045
Increase in working capital (97 786) (25 723) (8 980)
Cash generated from operations 74 617 112 378 273 065
Interest paid (19 798) (15 022) (27 448)
Dividend paid (9 952) (5 299) (11 897)
Taxation paid (2 507)
Cash flows from operating
Activities 44 867 92 057 231 21
Cash flows from investing
Activities (335 833) (105 001) (283 871)
Addition to property, plant
and equipment (277 674) (105 001) (283 871)
Acquisition of subsidiary (58 159)
Cash flows from financing
Activities 317 493 12 941 47 413
Issue of shares 212 166 654
Long-term liabilities 105 327 12 941 46 759
Net increase/(decrease) in cash
and cash equivalents 26 527 (3) (5 245)
Cash and cash equivalents
at the beginning of period 23 640 28 885 28 885
Cash and cash equivalents
at the end of period 50 167 28 882 23 640
Segmental Analysis
for the six months ended 30 September 2006
R000 R000
Turnover Net income
before
taxation
Opencast mining services 394 521 80 782
Drilling and blasting services 19 112 (56)
Second hand equipment and spares trading 39 257 1 634
452 890 82 360
Abridged Consolidated Income Statement
for the six months ended 30 September 2006
Unaudited Unaudited Audited
six months six months year
ended ended ended
30 Sept 30 Sept 31 March
2006 2005 2006
R000 R000 R000
Revenue 452 890 311 810 616 468
Operating profit before
finance charges 102 158 72 518 151 869
Finance charges 19 798 15 022 27 448
Net profit before taxation 82 360 57 496 124 421
Taxation 24 969 17 878 35 159
Net profit after taxation 57 391 39 618 89 262
Earnings attributable to
ordinary shareholders 57 391 39 618 89 262
Attritutable earnings
per share (cents) 43.5 31.0 69.3
Headline earnings
per share (cents) 43.5 31.0 69.3
Dividend per share (cents):
Interim (proposed) 7.0 5.0 5.0
Final (declared ) 7.0
7.0 5.0 12.0
Shares in issue (000)
- at end of period 161 931 137 431 137 431
- weighted average for
the period 132 043 127 650 128 814
Reconciliation of
headline earnings
Earnings attributed to ordinary
Shareholders 57 391 39 618 89 262
Headline earnings attributed
to ordinary shareholders 57 391 39 618 89 262
Statement of Changes in Equity
for the six months ended 30 September 2006
Reserve
on
acquisi-
tion
Accu- of
Share Share Capital Treasury mulated subsi-
Capital premium reserve shares profit diaries Total
R000 R000 R000 R000 R000 R000 R000
Balance at
30 September
2005 1 374 100 055 6 076 (8 866) 179 415 13 866 291 920
Dividends paid 155 (6 554) (6 399)
Share options
Exercised 314 314
Profit for the
six months
ended
31 March 2006 44 536 44 536
Balance at
1 April
2006 1 374 100 055 6 076 (8 397) 217 397 13 866 330 371
Shares issued 245 206 380 (18 375) 188 250
Share options
Exercised 23 675 23 675
Recognition of
share-based
payment 1 133 1 133
Profit for the
period ended
30 September
2006 57 391 57 391
Dividend paid 241 (9 952) (9 711)
Balance at
30 September
2006 1 619 306 435 7 209 (2 856) 264 836 13 866 591 109
COMMENTS
Nature of operations
Schamin"s vision is to be the mining services company of choice on the African
continent. The Company is currently one of the major players in the contract-
mining sector, primarily to the South African coal industry. With the recently
completed acquisition of Geosearch, Schamin has become one of the largest
exploration-drilling contractors on the African continent.
Results
The results for the 6 months ended 30 September 2006 show another increase over
the corresponding period. Turnover is up 45% and operating profit has increased
by 41% from R72.5 million to R102.0 million. Headline earnings per share have
increased by 40% to 43.5 cents from 31 cents per share. Net asset value per
share has since 31 March 2006 increased by 52% from 240 cents per share to 365
cents per share. Turnover in September 2006 was significantly higher than March
2006, and this resulted in an increased investment in working capital.
The group"s debt to equity ratio has decreased to 77% from the 102% reported at
31 March 2006.
These interim results incorporate four months of trading from the Benicon
acquisition that became unconditional on 29 May 2006.
Operations
Scharrighuisen Opencast Mining
The Scharrighuisen operations have continued to expand. The abnormally high
rainfall experienced in March continued into April and May and operations in
those months were below budget, but since then volumes have increased and the
performance has been satisfactory. A new contract was started towards the end of
the last financial year on behalf of Umcebo Mining Group. This contract has
progressed to steady state mining and the volumes are exceeding budget. In
respect of the contracts with BHP Billiton all minipits are running at
acceptable volumes with the Khutala minipit being the benchmark operation with
volumes stabilising at 1.5 million cubic metres per month. The top soil
stripping and rehabilitation contracts are performing on target.
Benicon Opencast Mining
Benicon has experienced growth in the volumes moved and continues to expand its
market share. Its monthly volumes have averaged in excess of 1 million cubic
metres over the period under review and consequently Benicon trades ahead of
expectations.
Drilling and blasting
There has been a movement towards the outsourcing of drilling and blasting
operations by mine owners and it was decided to take advantage of this
opportunity and enter this segment of the mining contracting business. The group
invested R59 million in the drilling and blasting operation primarily in the
acquisition of drill rigs and support equipment. Drilling and blasting
complements the earthmoving operations and expands the group"s earning potential
and client base. This operation is in its infancy and at present is in a break-
even position. Management is confident that this will improve in the near
future. For the period under review in excess of 800 000 metres was drilled for
clients.
Geosearch
The Geosearch acquisition became unconditional with the approval of the
Competition Commission and the South African Reserve Bank and will be
consolidated into the group with effect from 1 October 2006. The operations of
both the international and local arms of Geosearch are trading significantly
above expectations.
Capital expenditure
The group has invested an amount of R277 million during the period under review.
Of this an amount of R58 million was acquired as part of the fair value exercise
on the Benicon acquisition. Benicon acquired plant to the value of R45 million
to expand its operations in the period June to September 2006. The group
invested a further R59 million in the establishment for the drilling and
blasting operations.
The worldwide shortage of opencast mining equipment continues to impact the
expansion opportunities of the group and as a result of this shortage Schamin
has been aggressive in acquiring new and reasonably priced second hand mining
equipment, which became available on the world market. As a consequence an
amount of R87 million was invested in new equipment and R28 million on second
hand plant.
Prospects
The mining operations continue to experience strong demand, which is expected to
continue to the end of the current financial year and beyond. Benicon has been
bedded down and is a meaningful contributor to the bottom line. Geosearch is
expected to contribute significantly to the group"s results.
Basis of presentation
The interim financial statements are prepared on the historical cost basis
except for the revaluation of certain financial instruments which are carried at
either fair value or amortised cost as appropriate. The financial statements
have been prepared in accordance with International Financial Reporting
Standards (IFRS) and IAS 34 - Interim Financial Reporting. The accounting
policies have been applied consistently to all periods presented in the interim
financial statements.
Dividend
An interim dividend of 7 cents per share has been declared by the board in
respect of the six months ended 30 September 2006, payable on Monday 18 December
2006 to those shareholders recorded in the register of the company at the close
of business on Friday 15 December 2006 .The salient dates of the interim
dividend are as follows:
Last date to trade cum dividend Friday, 8 December 2006
Shares trade ex dividend Monday, 11 December 2006
Record date Friday, 15 December 2006
Payment date Monday, 18 December 2006
No dematerialisation or rematerialisation of shares may take place between
Monday, 11 December 2006 and Friday, 15 December 2006, both dates inclusive.
Invitation to conference call
Shareholders and other interested parties are invited to take part in a
conference call to be held on Thursday, 30 November 2006 at 10:30am. The
numbers to dial in order to participate are as follows:
SA Toll +27.11.535.3600
SA Toll Free 0800.200.648
On behalf of the board
C Scharrighuisen
Managing Director
J Holland
Financial Director
Boksburg
30 November 2006
Directors: Sir S E Jonah (Chairman) *D C M Gihwala* (Deputy Chairman), C
Scharrighuisen (Managing), J Holland (Financial), T R Hendry*, Dr P Huysamer*, A
Joffe*, R K Jonah*, C Moorcroft, T Scharrighuisen*,E H J Stoyell*
*Non-Executive
SPONSOR
Vunani Corporate Finance (Pty) Limited
Date: 30/11/2006 07:00:08 AM Produced by the JSE SENS Department
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