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WSL
WSL
Wescoal - Reviewed Interim Results for the six months ended 30 September 2006
Wescoal Holdings Limited
(Incorporated in the Republic of South Africa)
(Registration number 2005/006913/06)
(JSE code: WSL & ISIN: ZAE000069639)
("Wescoal" or "the Group")
REVIEWED INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2006
HIGHLIGHTS
Revenue up 39%
Operating profits up 47%
UNAUDITED INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2006
The interim results for the six months ended 30 September 2006, with
comparative results for the period ended 2005 and the audited results for
the year ended 31 March 2006 are presented.
Consolidated Group Income Statements
Reviewed Reviewed Audited
interim interim results
results for results for for the
the six the six year
months months ended
ended ended 31 March
30 30 2006
September September R"000
2006 2005
R"000 R"000
Revenue 136 057 98 266 178 735
Gross Profit 11 689 9 157 14 357
Other operating income 91 33 117
Other operating costs (5 701) (5 055) (10 739)
Profit on sale of - - 437
associate company
Profit from operations 6 079 4 135 4 172
Acquisition expenses (1 527) - -
written off
Finance costs (386) (36) (323)
Profit before taxation 4 166 4 099 3 849
Taxation (1 177) (166) 748
Profit for the period 2 989 3 933 4 597
2 989 3 933 4 597
Headline earnings
reconciliation:
Net profit for the period
Less: Profit on sale of - - (437)
associate company 1 084 - -
Plus: Acquisition expenses
written off
Headline earnings for the 4 073 3 933 4 160
period
Ordinary shares in
issue(000"s)
-Total at period end 103 709 103 709 103 709
-Weighted average shares 103 709 92 517 98 098
in issue
-Fully diluted weighted 104 114 92 594 98 233
average shares in issue
(Note 1)
Earnings per share:
Attributable earnings per 2.9 4.3 4.7
ordinary share (cents)
Headline earnings per 3.9 4.3 4.2
share (cents)
Fully diluted attributable 2.9 4.2 4.7
earnings per share(cents)
Fully diluted headline 3.9 4.2 4.2
earnings per share(cents)
Note:
(1) Fully diluted earnings per share information is reflected showing the
potential effect of full dilution for 1 million options held by the
Wescoal directors to subscribe for new shares in Wescoal at 50 cents
per share.
Consolidated Group balance sheets
Reviewed Reviewed Audited
interim interim results
results for results for for the
the six the six year
months months ended
ended 30 ended 31 March
September 30 2006
2006 September R"000
R"000 2005
R"000
ASSETS
Non-current assets 47 407 40 433 44 787
Property, plant and 12 850 7 719 10 588
equipment
Goodwill 32 691 32 254 32 691
Interests in associate - - -
company
Deferred taxation 1 866 460 1 508
Current assets 48 520 31 423 36 502
Total assets 95 927 71 856 81 289
EQUITY AND LIABILITIES
Total Shareholders" funds 45 650 41 997 42 661
Long-term debt 6 367 262 6 435
Current liabilities 43 910 29 597 32 193
Total equity and 95 927 71 856 81 289
liabilities
Net asset value per share 44.02 40.50 41.14
(cents)
Tangible net asset value 12.50 9.39 9.61
per share (cents)
Consolidated Statement of Changes in Equity
Share Share Distri- Total
Capital Premium butable R"000
R"000 R"000 Reserve
R"000
Balance at 1 April 2006 204 37 860 4 597 42 661
Share issued - - - -
Listing expenses - - - -
Earnings attributable to - - 2 989 2 989
shareholders
Balance as at 30 204 37 860 7 586 45 650
September 2006
Group Cash Flow Statements
Reviewed Reviewed Audited
interim interim results
results for results for for the
Wescoal for Wescoal for year
the six the six ended
months ended months 31 March
30 September ended 2006
2006 R"000 30 R"000
September
2005
R"000
Net cash from operating (2 266) 6 407 80
activities
Investing activities (3 559) (10 765) (7 344)
Financing activities 2 187 8 365 9 458
Net increase/(decrease) (3 638) 4 007 2 194
in cash and cash
equivalents
Cash and cash 2 962 768 768
equivalents at beginning
of period
Cash and cash (676) 4 775 2 962
equivalents at end of
period
Commentary
Operations and market review
The group"s revenue for the six month period was 38.5% higher than the
comparative period. The group experienced strong demand from both the
domestic market as well as from sales of coal into the industrial market.
The improvement in revenue levels is both volume and price driven with
volume increasing by 8.4% and price increases contributing 27.7%. Demand
for coal has been extremely high since May 2006 and this is expected to
continue throughout this financial year.
The gross margin improved by 0.6% to 8.6% since March 2006 and is expected to
improve even further towards the 9% level by March 2007. This is mainly
driven by a further increase in coal prices of 20% on 1 October 2006, the
high demand for inland coal and the group"s focus on higher margin
business.
Profits from operating activities are up 47% however headline earnings for the
period are only 3.6% higher and attributable earnings 24% lower than the
comparative period due to the expenses incurred during the acquisition
process of Anker Coal and Mineral Holdings (Pty) Limited.
Subsequent to the reporting period, the group terminated the proposed
acquisition of Anker Coal and Mineral Holdings South Africa (Pty) Limited
as the outstanding regulatory approvals could not be obtained timeously.
The costs associated with this proposed transaction have been expensed in
the period to end September 2006.
Prospects
The group continues to aggressively pursue additional coal deposits and value
adding businesses. The demand for coal is extremely high and the expansion
of the Richards Bay Coal Terminal will put additional pressure on the
inland supply of coal. Additional coal deposits will therefore secure part
of the future supply line. The inland price of coal is reaching export
parity and it is expected to be on par within the next financial year.
The group and the coal industry in general are experiencing the most buoyant
market conditions for many years and this is expected to continue in the
short to medium term due to worldwide energy demand. Based on this and the
results to end September 2006, the group expects to achieve its forecast
earnings of 8.6 cents per share for the year to March 2007 with further
improvement thereafter.
Dividends
No interim dividend has been declared.
Accounting policies and presentation
The consolidated interim financial statements have been prepared in accordance
with International Financial Reporting Standards (IFRS) as well as the
South African Companies Act, 1973.
Audit opinion
The group"s auditors, Middel & Partners have reviewed the financial
information in terms of Rule 3.18 of the listing requirements of the JSE.
Their unqualified review opinion is available for inspection at Wescoal"s
offices.
By order of the Board
5 December 2006
T E Skweyiya A R Boje
Chairman Chief Executive Officer
CORPORATE INFORMATION
Non-Executive JG Pansegrouw,
directors: TA Tulwana,
JM Nieman (alternate for TA Tulwana)
Executive directors: TE Skweyiya
AR Boje
P Janse van Rensburg
Registration number: 2005/006913/06
Registered address: 74 von Brandis Street
Krugersdorp
1740
Postal address: PO Box 133
Krugersdorp
1740
Company secretary: P Janse van Rensburg
Telephone: 011 - 660 2484
Facsimile: 011 - 660 2894
Transfer secretaries: Computershare Investor Services 2004 (Pty)
Limited
Designated Adviser: Exchange Sponsors (Pty) Limited
Warning: The listing of ordinary shares in the company is on ALTx. Investors
are advised of the risks of investing an a company listed on ALTx.
Investors are advised that the JSE does not guarantee the viability or the
success of a company listed on ALTx. In terms of the Listing Requirements,
the company is obliged to appoint and retain a Designated Adviser, which is
required to, inter alia, attend all board meetings held by the company to
ensure that all the Listing Requirements and applicable regulations are
complied with, approve the Financial Director of the company and guide the
company in a competent, professional and impartial manner. If the company
fails to retain a Designated Adviser, it must make arrangements to appoint
a new Designated Adviser within 10 business days, failing which the company
faces suspension of trading of its secrities. If a Designated Adviser is
not appointed within 30 days of its suspension, the company faces the
termination of its listing without the prospect of an appropriate offer to
minority shareholders.
Date: 06/12/2006 11:05:20 AM Produced by the JSE SENS Department
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