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Sah - South African Coal Mining Holdings - Interim Results For The Six Months

Release Date: 26/09/2007 09:26:46      Code(s): SAH
SAH - South African Coal Mining Holdings - Interim results for the six months   
                                       ended 30 June 2007                       
South African Coal Mining Holdings Limited)                                     
(formerly Yomhlaba Resources Limited)                                           
Registration number 1994/009012/06                                              
Share code: SAH                                                                 
ISIN code: ZAE0000102034                                                        
("SACMH" or "the company")                                                      
Interim results for the six months ended 30 June 2007                           
Highlights                                                                      
-    Coal mine acquisitions completed on 30 June 2007                           
-    Listed on the Main Board of the JSE as SACMH on 20 August 2007             
-    First BBBEE-controlled coal miner on the JSE                               
-    Targeting production of 1.2 million tonnes Run of Mine in next 12 months   
Karl Gribnitz, Chief Executive, said:                                           
"With the acquisition of the Ilanga and Umlabu mines on 30 June 2007, we are now
focused on growing the company and achieving our production target of 1.2       
million tonnes over the next 12 months.  We are already well on the way to      
achieving this with the delivery of new production equipment, which has enhanced
our production capacity.  We believe we can deliver substantial shareholder     
value in the next phase of our growth plan."                                    
Introduction                                                                    
SACMH is now established as a BBBEE-controlled company with two profitable mines
following the completion of the first phase of a two phase plan to position the 
company as a significant BBBEE coal producing company in South Africa.  The     
first phase incorporated the acquisition of two productive coal mines (the      
Umlabu mine and the Ilanga mine), the restructure of the balance sheet and the  
introduction of the Royal Bafokeng as a BBBEE controlling shareholder of the    
company.  The completion of phase one was marked by the change in the name of   
the company to SACMH on 20 August 2007 following the listing of the company on  
the Main Board of the JSE on 31 July 2007.                                      
The plan under phase two is to grow the company both organically and by         
acquisition.  This phase is already well underway with the delivery of mining   
equipment to the mine.  Management is fully committed to delivering further     
shareholder value under phase two and is focused on ramping up production to 1.2
million tonnes per annum over the next year.                                    
Operational review and outlook                                                  
Management expects the current production levels at the Ilanga mine to wind down
from the end of December 2007 and is in discussions with Ilanga`s neighbours  to
extend the life of mine.                                                        
The opencast and underground equipment required for the Umlabu mine was         
delivered to the mine over the past 45 days.  Production is being ramped up to  
the target Run of Mine ("ROM") rate of 100 000 tonnes per month.  The regulatory
process for the establishment of the new railway siding at the Umlabu mine has  
been completed and it is expected that the construction of the siding will      
commence within the next 60 to 90 days.  A prospecting right has been granted to
a subsidiary of the group over various portions of the farm Kromkrans IS 208,   
which is close to the Umlabu mine.                                              
As set out in the circular to shareholders, the expected average ROM cost per   
tonne of coal produced will range from R64,00 (open pit) to R77,00 (underground 
mining).  The expected average ROM cost per tonne of beneficiating coal for the 
export market will range from R13,00 (own plant) to R40,00 (outside contractor) 
with a yield of 65%.                                                            
The final coal product is currently being sold at an average of the API 4 RBCT  
index price.  The price of coal has been buoyant and market projections indicate
that the demand for coal will remain strong for the next 12 to 24 months.       
Prospects                                                                       
The acquisition of the coal mines, access to domestic and export markets        
together with the company`s strong balance sheet and motivated management team  
presents investors with an exciting future.  With a proven acquisition track    
record, the board believes that SACMH is ideally positioned to take advantage of
consolidation opportunities in this segment of the South African coal sector.   
Accounting policies and presentation                                            
The company has changed its year end from 30 June to 31 December in order to    
align itself with its major shareholder - Royal Bafokeng Capital.  Accordingly, 
the current financial year will cover the period from 1 July 2006 to 31 December
2007.                                                                           
Due to the extent of the restructuring, shareholders are reminded that the      
interim results presented cannot be compared with the financial results of      
previous periods. Investors are referred to the circular to shareholders dated 8
June 2007 where the financial results of Ilanga Coal Mines (Pty) Limited and    
Umlabu Colliery (Pty) Limited for the 12 months ended 28 February 2007 are      
presented in Appendices 6 and 7.                                                
These interim financial statements have been prepared in accordance with        
International Financial Reporting Standards ("IFRS"), and its interpretations   
adopted by the International Accounting Standards Board ("IASB"), the           
preparation and disclosure requirement of IAS 34 (Interim Financial Reporting)  
and the Listings Requirements of the JSE Limited and Schedule 4 of the South    
African Companies Act.                                                          
The accounting policies applied in these condensed financial statements are     
compliant with IFRS and consistent with those used in the preparation of the    
financial statements for the year ended 30 June 2006.                           
In terms of IFRS 3 and IAS 27, the acquisition of the Umlabu and Ilanga mines   
through the acquisition of the shares in and claims against Ilanga Coal Mines   
(Pty) Limited and Umlabu Colliery (Pty) Limited are considered to be business   
combinations with an effective date of acquisition of 30 June 2007.             
Accordingly, the figures presented below reflect the effect of the              
implementation of the acquisitions from 30 June 2007 and do not include the     
results for the period of the two entities acquired.                            
Review opinion                                                                  
The interim financial information relating to the six months ended 30 June 2007 
has been reviewed by Compendium (Pretoria) Incorporated whose unmodified review 
report is available for inspection at the company`s registered office.          
INCOME STATEMENTS                                                               
                                  Reviewed    Reviewed   Audited                
Six  Six months                          
                                    months       ended      Year                
                                     ended          31     ended                
                                   30 June    December   30 June                
2007        2006      2006                
                                     R`000       R`000     R`000                
                                                                                
Revenue                                   0           0         0               
Cost of sales                             0           0         0               
Gross profit/(loss)                       0           0         0               
Other income                              0          18       146               
Profit on debt restructure           30 762           0         0               
Profit on acquisitions              125 338           0         0               
Impairment on acquisition          (22 675)           0         0               
Operating expenses                  (2 390)     (1 424)   (4 337)               
Operating profit/(loss)             131 035     (1 406)   (4 191)               
Interest received                       167         282       568               
Finance charges                           0        (62)      (95)               
Profit/(loss) before taxation       131 202     (1 186)   (3 718)               
Taxation                                  0           0         0               
Profit/(loss) after taxation        131 202     (1 186)   (3 718)               
Loss from discontinued                                                          
operations                                0           0   (7 500)               
Net profit/(loss) for the period    131 202     (1 186)  (11 218)               
Number of ordinary shares                                                       
in issue (`000)                     400 000     600 000   600 000               
Weighted average number of                                                      
ordinary shares in issue (`000)     600 000     600 000   600 000               
Attributable earnings per                                                       
ordinary share (cents)                                                          
- Basic                               21,9       (0,2)     (0,6)                
Dilutive ordinary shares                                                        
- Convertible loans                  (0,5)           -         -                
- Diluted                             21,4       (0,2)     (0,6)                
Reconciliation between earnings                                                 
and headline earnings                                                           
Basic earnings per share (cents)       21,9       (0,2)     (1,9)               
Impairment per share (cents)            3,8           -      1,25               
Profit on debt restructure and                                                  
acquisitions (cents)                 (26,0)           -         -               
Headline earnings per share           (0,4)       (0,2)     (0,6)               
(cents)                                                                         
                                                                                
BALANCE SHEETS                                                                  
Reviewed    Reviewed   Audited                
                                     as at       as at     as at                
                                   30 June          31   30 June                
                                      2007    December      2006                
2006                          
                                     R`000       R`000     R`000                
Assets                                                                          
Non-current assets                  428 878      13 573    13 850               
Property, plant and equipment        39 609      13 573    13 850               
Mineral rights                      389 269           0         0               
                                                                                
Current assets                       38 305       8 662    10 017               
Inventories                           9 188           0         0               
Trade and other receivables          16 565       1 150     1 024               
Cash and cash equivalents            12 552       7 512     8 993               
                                                                                
Total assets                        467 183      22 235    23 867               
                                                                                
Equity and liabilities                                                          
Capital and reserves                210 148    (25 054)  (23 868)               
Share capital                        40 000       6 000     6 000               
Share premium                        46 562      12 562    12 562               
Retained income/(loss)               87 586    (43 616)  (42 430)               
Other reserves                       36 000           0         0               

Non-current liabilities             222 512      44 512    44 900               
Long-term liabilities interest                                                  
bearing                             108 000       9 000     9 388               
Shareholders loan                         0      35 512    35 512               
Deferred taxation                   114 512           0         0               
                                                                                
Current liabilities                  34 523       2 777     2 835               
Trade and other payables             32 523       2 777     2 429               
Current portion of long-term                                                    
liabilities                           2 000           0         0               
Bank overdraft                            0           0       406               

Total equity and liabilities        467 183      22 235    23 867               
                                                                                
Number of shares in issue (`000)    400 000     600 000   600 000               
Net asset value per share                53         (4)       (4)               
(cents)                                                                         
Tangible net asset value                                                        
per share (cents)                      (45)         (4)       (4)               

                                                                                
CASH FLOW STATEMENTS                                                            
                                  Reviewed    Reviewed    Audited               
Six months  Six months       Year               
                                     ended    ended 31      ended               
                                   30 June    December    30 June               
                                      2007        2006       2006               
R`000       R`000      R`000               
                                                                                
Cash flows from operating                                                       
activities                                                                      
Cash receipts from customers              0           0         0               
Cash paid to suppliers and                                                      
employees                           (2 760)       (907)   (3 749)               
Movement in working capital           7 143           0         0               
Cash from operations                  4 383       (907)   (3 749)               
Interest paid                             0        (62)      (95)               
Taxation paid                             0           0         0               
Net cash from operating                                                         
activities                            4 383       (969)   (3 844)               
Cash flows used in                                                              
 investing activities                                                           
Acquisitions through business                                                   
combination                         166 831           0         0               
Interest received                         0         282       568               
Net cash used in investing                                                      
activities                          166 831         282       568               
Cash flows from financing                                                       
 activities                                                                     
Proceeds from issue of ordinary                                                 
 share capital                      68 000           0         0                
Raising/(repayment) of long-term                                                
 liabilities                        99 488       (794)     (793)                
Net cash from financing                                                         
activities                          167 488       (794)     (793)               
Net increase/(decrease) in cash                                                 
 and cash equivalents                5 040     (1 481)   (4 069)                
Cash and cash equivalents at                                                    
 beginning of period/year            7 512       8 993    13 062                
Cash and cash equivalents at                                                    
 end of period/year                 12 552       7 512     8 993                
                                                                                
STATEMENTS OF CHANGES IN EQUITY                                                 
Share    Share     Other   Accumu-      Total             
                    capital  premium  reserves     lated                        
                                                 profit/                        
                                                  (loss)                        
R`000    R`000     R`000     R`000      R`000             
Balance at 1 July                                                               
2005                   6 000   12 562         0  (31 212)   (12 650)            
Net profit/(loss)                                                               
for the period                                   (11 218)   (11 218)            
Balance at 1 July                                                               
2006                   6 000   12 562         0  (42 430)   (23 868)            
Net profit/(loss)                                                               
for the period                                    (1 186)    (1 186)            
Balance at 31                                                                   
December 2006          6 000   12 562         0  (43 616)   (25 054)            
Issue of new shares   34 000   34 000                         68 000            
Convertible loans                        36 000               36 000            
Net profit/(loss)                                                               
for the period                                    131 202    131 202            
Balance at 30 June                                                              
2007                  40 000   46 562    36 000    87 586    210 148            
                                                                                
EFFECTIVE CHANGES IN COMPOSITION OF THE GROUP DURING THE PERIOD                 
The changes in composition of the group resulted from the acquisition of 100% of
the voting equity instruments in the following entities - Ilanga Coal Mines     
(Pty) Ltd ("Ilanga") and Umlabu Colliery (Pty) Ltd ("Umlabu") - with an         
acquisition date of 30 June 2007.  No profit or loss from the entities acquired 
has been included in the income statement above. The revenue and profit after   
tax of the combined entity for the period if the acquisition date had been the  
beginning of the financial year (i.e. 1 July 2006) would have been R 57.000     
million and R 2.543 million respectively.                                       
Amounts recognised at acquisition and cost of business combination              
Amounts recognised at acquisition                                               
                                         Ilanga       Umlabu                    
                                          R`000        R`000                    
                                                                                
Property, plant and equipment             10 631       15 146                   
                                          8 680      380 589                    
Mineral rights                                                                  
Inventories                                7 408                                
1 781                    
Trade and other receivables               20 535                                
                                                         105                    
Cash and cash equivalents                  7 528                                
1 207                    
Deferred taxation                        (4 495)                                
                                                   (110 017)                    
Trade and other payables                 (4 962)                                
(7 697)                    
                                          45325      281 115                    
Cost of business combination                                                    
                                       (68 000)            -                    
340 million shares with par                                                     
value of R0.10 issued at an                                                     
issue price of R0.20                                                            
Cash resources                                 -                                
(10 000)                    
Convertible loans                              -                                
                                                    (26 000)                    
Medium term loan                               -                                
(105 000)                    
                                              -                                 
Interest on purchase                                 (11 776)                   
consideration                                                                   
Debt arranging fee                             -                                
                                                     (3 000)                    
                                         22 675            -                    
Goodwill on acquisition                                                         
Profit on acquisition                          -                                
                                                   (125 338)                    
For and on behalf of the board                                                  
Mirkwood                                                                        
26 September 2007                                                               
TV Mogatlha                   KJ Gribnitz                                       
Chairman                      Chief executive officer                           
Executive Directors: KJ Gribnitz, P Swanepoel                                   
Non Executive Directors: TV Mogatlha, LM Ndala, WN Gardyne                      
Registered office : Mirkwood Estate, Plot 26, Klipkop JR 396                    
Transfer Secretaries: Computershare Investor Services 2004 (Pty) Ltd            
Sponsor: BDO QuestCo(Pty) Ltd                                                   
Date: 26/09/2007 09:26:45 Supplied by www.sharenet.co.za                     
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