Go Back Email this Link to a friend


Sah - Sacmh - Unaudited Results For The Year Ended 31 December 2008 And Reminder

Release Date: 09/04/2009 17:48:56      Code(s): SAH
SAH - SACMH - Unaudited results for the year ended 31 December 2008 and reminder
of cautionary announcement                                                      
South African Coal Mining Holdings Limited                                      
(Incorporated in the Republic of South Africa)                                  
Registration number 1994/009012/06                                              
Share code: SAH ISIN : ZAE0000102034                                            
("SACMH" or "the company")                                                      
UNAUDITED RESULTS FOR THE YEAR ENDED 31 DECEMBER 2008 AND REMINDER OF           
CAUTIONARY ANNOUNCEMENT                                                         
Shareholders are referred to the announcement released by the company on 30     
March 2009 advising that the board had resolved to place the company`s          
operations under care and maintenance for a period of three months. Given this  
situation, the auditors of the company are not able to provide a review or      
audit opinion on the financial results presented below as they have not         
completed their audit procedures. However, the board is of the view that,       
in the interests of full, transparent and timeous disclosure,                   
it is appropriate to release the financial results for the year ended 31        
December 2008 without an opinion.  Audited or reviewed results will be released 
as soon as it is possible to do so.                                             
Consolidated balance sheet as at 31 December 2008                               
                                                           Group                
                                                             Unaudited and      
                                                 Unaudited        restated      
as at           as at      
                                               31 December     31 December      
                                                      2008            2007      
                                                     R`000           R`000      
Assets                                                                          
Noncurrent assets                                   521,830         513,795     
Property, plant and equipment                       151,460         135,440     
Intangible assets                                   370,370         378,355     
Current assets                                       52,136          21,858     
Inventories                                          15,320           7,891     
Trade and other receivables                          22,106          12,387     
Cash and cash equivalents                            14,710           1,580     
Total assets                                        573,966         535,653     
Equity and liabilities                                                          
Capital and reserves                                203,179         194,055     
Issued capital                                      227,784         124,473     
Retained (loss) / income                           (24,605)          69,544     
Revaluation reserve                                       -              38     
Noncurrent liabilities                              241,765         274,672     
Interest bearing liabilities                        107,273         117,276     
Noninterest bearing liabilities                           -           1,500     
Noncurrent provisions                                34,431          35,444     
Deferred taxation                                   100,061         120,452     
Current liabilities                                 129,022          66,926     
Trade and other payables                             98,283          36,769     
Provisions                                            5,883           1,870     
Current portion of noncurrent liabilities            24,856          23,297     
Bank overdraft                                            -           4,990     
Total equity and liabilities                        573,966         535,653     
Number of shares in issue (`000)                    438,454         411,810     
Net asset value per share (cents)                     46.34           47.12     
Tangible net asset value per share (cents)          (38.13)         (44.75)     
Consolidated income statement for the period ended 31 December 2008             
                                                         Group                  
                                                              Unaudited and     
                                            Unaudited for     restated for      
the 12           the 18      
                                                   months           months      
                                                 ended 31         ended 31      
                                                 December         December      
2008             2007      
                                                    R`000            R`000      
Revenue                                            179,177           88,060     
Cost of sales                                    (146,970)         (53,161)     
Gross profit                                        32,207           34,899     
Other gains and losses                               (712)          138,020     
Impairment loss                                   (63,008)         (25,396)     
Depreciation and amortisation                     (24,459)          (6,404)     
Operating expenses                                (25,529)         (13,765)     
Operating (loss)/profit                           (81,501)          127,354     
Finance income                                       1,397              490     
Finance costs                                     (25,861)          (7,247)     
(Loss)/profit before taxation                    (105,965)          120,597     
Income tax expense/(credit)                         11,778          (8,730)     
Net (loss)/profit for the period                  (94,187)          111,867     
Attributable to Equity holders of the parent      (94,187)          111,867     
(Loss) / earnings per share                                                     
Number of ordinary shares in issue at the                                       
end of the period (`000)                           438,454          411,810     
Weighted average number of ordinary shares                                      
in issue (`000)                                    415,299          137,524     
Basic and dilutive (loss) / earnings per                                        
share (cents)                                      (22.68)            81.34     
Reconciliation between (loss) / earnings and                                    
headline (loss)/earnings per share                                              
Basic (loss)/earnings per share (cents)            (22.68)            81.34     
Profit on debt restructure and acquisitions                                     
per share (cents)                                        -          (98.90)     
Impairments per share (cents)                        15.17            18.47     
Headline basic and dilutive (loss)/earnings                                     
per share (cents)                                   (7.51)             0.91     
Consolidated statement of changes in equity for the period ended 31 December    
Group - Unaudited                         Share       Share     Revaluation     
                                       capital     premium         Reserve      
                                         R`000       R`000           R`000      
Balance at 1 July 2006                    6,000      12,562               -     
Issue of ordinary shares                 35,181      70,730                     
Gain on revaluation of property,                                                
plant and equipment                           -           -             145     
Transfer on revaluation reserve realised      -           -           (107)     
Restated net profit for the period            -           -               -     
Net profit as previously reported             -           -               -     
Prior year adjustment                         -           -               -     
Restated revaluation reserve                                                    
Gain on revaluation of mineral rights                                           
as previously reported                        -           -         325,890     
Change in accounting policy                   -           -       (325,890)     
Balance at 1 January 2008                41,181      83,292              38     
Issue of ordinary shares                  2,664     103,914                     
Share issue costs                             -     (3,267)               -     
Transfer on revaluation reserve realised      -           -            (38)     
Net loss for the period                       -           -               -     
Balance at 31 December 2008              43,845     183,939               -     
Group - Unaudited                                 Accumulated         Total     
                                               profit/(loss)                    
                                                       R`000         R`000      
Balance at 1 July 2006                               (42,430)      (23,868)     
Issue of ordinary shares                                            105,911     
Gain on revaluation of property,                                                
plant and equipment                                         -           145     
Transfer on revaluation reserve realised                  107             -     
Restated net profit for the period                    111,867       111,867     
Net profit as previously reported                     115,143       115,143     
Prior year adjustment                                 (3,276)       (3,276)     
Restated revaluation reserve                                                    
Gain on revaluation of mineral rights                                           
as previously reported                                      -       325,890     
Change in accounting policy                                 -     (325,890)     
Balance at 1 January 2008                              69,544       194,055     
Issue of ordinary shares                                            106,578     
Share issue costs                                           -       (3,267)     
Transfer on revaluation reserve realised                   38             -     
Net loss for the period                              (94,187)      (94,187)     
Balance at 31 December 2008                          (24,605)       203,179     
Consolidated cash flow statement for the period ended 31 December 2008          
                                                     Group                      
Unaudited and      
                                       Unaudited for          restated for      
                                       the 12 months         the 18 months      
                                   ended 31 December     ended 31 December      
2008                  2007      
                                               R`000                 R`000      
Cash flows from operating activities                                            
Cash generated by operations                   26,766                60,993     
Net financing costs                          (24,464)               (6,757)     
                                               2,302                56,236      
Cash flows from investing activities                                            
Acquisition through business combination            -               (124,783)   
Payments for property,                                                          
plant and equipment                          (92,399)              (51,137)     
Proceeds from disposal of property,                                             
plant and equipment                            17,657                    -      
Payments for intangible assets                (2,808)                    -      
                                            (77,550)             (175,920)      
Cash flows from financing activities                                            
Proceeds from share issue                     106,578                     -     
Payments for share issue costs                (3,267)                     -     
Proceeds from borrowings                       59,744               107,282     
Repayment of borrowings                      (69,687)                     -     
                                              93,368               107,282      
Net increase / (decrease) in cash                                               
and cash equivalents                           18,120              (12,402)     
Cash and cash equivalents at                                                    
beginning of the period                       (3,410)                 8,992     
Cash and cash equivalents at the                                                
end of the period                              14,710               (3,410)     
Segment information                                                             
For management purposes, the group is organised into three major operating      
divisions - coal, equipment leasing and railway siding. These divisions are     
the basis on which the group reports its primary segment information. The       
principal products and services of each of these divisions are as follows:      
Coal               - the mining and sale of coal.                               
Equipment leasing  - the leasing of movable mining equipment.                   
Railway siding     - the leasing of owned and leased railway sidings.           
Segment revenue and segment results - continuing operations                     
                                    Coal                 Equipment leasing      
Unaudited Unaudited and    Unaudited Unaudited and     
                              2008      restated         2008     restated      
                                            2007                      2007      
                             R`000         R`000        R`000        R`000      
Segment revenue                                                                 
and segment result                                                              
Continuing operations                                                           
Segment revenue                                                                 
External sales              157,984        74,429       21,193       13,631     
Intersegment                                                                    
sales                                                                           
External revenue            157,984        74,429       21,193       13,631     
Other gains and losses          712       138,020            -            -     
Operating                                                                       
(loss)/profit              (83,334)       123,287        2,074        4,067     
Net finance charges        (18,801)       (5,262)      (5,663)      (1,495)     
(Loss)/profit                                                                   
before tax                (102,135)       118,025      (3,589)        2,572     
Income tax expense           11,883       (6,504)          105        (743)     
(Loss)/profit for                                                               
the year from                                                                   
continuing operations      (89,883)       110,038      (4,063)        1,829     
Segment assets and                                                              
liabilities                                                                     
Assets                      478,107       457,165       34,780       55,533     
Total assets                478,107       457,165       34,780       55,533     
Liabilities               (234,764)     (190,364)     (26,724)     (38,714)     
Deferred tax               (99,746)     (120,033)        (315)        (419)     
liabilities                                                                     
Total liabilities         (334,510)     (293,227)     (27,039)     (39,133)     
Capital expenditure          11,674       133,820       20,745       41,003     
Depreciation                  5,726           491        8,340        2,408     
Amortisation                 10,163           950                               
Noncash items                59,901       110,614        3,107            -     
                              Railway siding                 Total              
                       Unaudited  Unaudited and   Unaudited  Unaudited and      
2008     restated          2008      restated      
                                          2007                        2007      
                            R`000        R`000         R`000         R`000      
Segment revenue                                                                 
and segment result                                                              
Continuing operations                                                           
Segment revenue                                                                 
External sales                   -            -       179,177        88,060     
Intersegment                                                                    
sales                                                                           
External revenue                 -            -       179,177        88,060     
Other gains and losses           -            -           712       138,020     
Operating                                                                       
(loss)/profit                (241)            -      (81,501)       127,354     
Net finance charges              -            -      (24,464)       (6,757)     
(Loss)/profit                                                                   
before tax                   (241)            -     (105,965)       120,597     
Income tax expense               -            -        11,778       (7,247)     
(Loss)/profit for                                                               
the year from                                                                   
continuing operations        (241)            -      (94,187)       111,867     
Segment assets                                                                  
and liabilities                                                                 
Assets                      61,079        1,097       573,966       513,795     
Total assets                61,079        1,097       573,966       513,795     
Liabilities                (9,238)        (989)     (270,726)     (230,067)     
Deferred tax                     -            -     (100,061)     (120,452)     
liabilities                                                                     
Total liabilities          (9,238)      (9,238)     (370,787)     (341,598)     
Capital expenditure         59,980        1,097        92,399       175,920     
Depreciation                   230            -        14,296         3,129     
Amortisation                                           10,163           950     
Noncash items                    -            -        63,008       110,614     
Prior period adjustments                                                        
                            As previously        Unaudited   Unaudited and      
                                 reported     prior period        restated      
31 Dec 2007       adjustment     31 Dec 2007      
                                    R`000            R`000           R`000      
Balance sheet                                                                   
Noncurrent assets                  976,070        (462,275)         513,795     
Current assets                      21,858                           21,858     
Capital and reserves             (523,220)          329,165       (194,055)     
Noncurrent liabilities           (407,781)          133,109       (274,672)     
Current liabilities               (66,925)              (1)        (66,926)     
Income statement                                                                
Gain on debt restructure            30,762                -          30,762     
Gain on acquisitions               105,248                -         105,248     
Impairment on acquisitions        (24,407)                -        (24,407)     
Depreciation and amortisation      (3,129)          (3,275)         (6,404)     
Nett profit for the period         115,143          (3,275)         111,867     
Earnings per share                   83.72           (2.38)           81.34     
Headline earnings per share           3.29           (2.38)            0.91     
Care and maintenance and unaudited results                                      
On 30 March 2009, the board announced, with regret, that following              
significantly reduced coal prices and difficult operating conditions, the       
company`s operations were to be placed on "care and maintenance" for a period   
of 3 months. External financing has been sourced to cover the expenses during   
this care and maintenance period. During this period, the board will review the 
operations of the company, including capital requirements and cost structures,  
with a view to determining the future direction of the company`s business.      
The board is currently actively engaging in several processes to find an        
optimal long term solution for the company including:                           
- an internal process to reduce costs as a matter of urgency;                   
- an externally assisted process to explore the recapitalisation of the         
business; and                                                                  
- an externally assisted process to find a technology partner to assist with    
 cost reductions.                                                               
Shareholders will be kept informed of developments in this regard and are       
reminded that the company released a cautionary announcement on 30 March 2009   
and that they should accordingly be exercising caution when trading in the      
company`s securities.                                                           
Review of operations                                                            
During the year, the company advanced its strategy of logistical development    
with the completion of the Umlabu siding, thereby reducing road transport       
costs, and securing access to 500 000 tons of RBCT allocation through the Phase 
V development.                                                                  
However, the year under review was very challenging to the small operational    
team as the complexities of conversion from `mining right holder` to `mining    
operator` overextended capacity and capabilities. The group previously followed 
a strategy of contract mining with outsourced partners. The strategic services  
partnership with Fraser Alexander, which was concluded in order to add skills   
and capacity to support the mining contractor, has since been terminated and an 
internal Chief Operating Officer, Mining Engineer and a Logistics and           
Maintenance Manager have been appointed.                                        
The Umlabu mine was in `start up` phase during the year. Operations were        
affected by heavy rain in January, February and December 2008 as well as        
operational problems at the plant. Fraser Alexander took over the management of 
the plant on 1 July 2008 and a significant amount of time and resources were    
invested in bringing the plant into sustainable production. Despite this,       
production at the plant remained disappointing resulting in a decision to in    
source this process. In short, despite the increase in the spot coal price in   
the period of May and September 2008, the operations still returned a loss as   
a result of a material stock loss, significant increases in contractor mining   
costs and higher interest rates. During October, a material stock discrepancy   
was detected between the production records and the weighbridge. An extensive   
external investigation did not result in any recovery and a claim is being      
investigated. Improved internal controls have now been instituted and the       
security company is also being replaced. Although, subsequent to the year end,  
the prices of diesel and steel have come down, mining costs during the 2008     
financial year increased more than 40% as a result of increases in diesel,      
explosives, steel, TFR railage and equipment costs.                             
No mining was conducted at the Ilanga site this year. The old order mining      
right was not converted to a new order right and a mine closure certificate has 
been applied for. As a result, the group had to impair the remaining Ilanga     
assets to realisable value but is actively seeking to deploy these in the       
existing operations.                                                            
During the year, the company embarked on a capital raising program to raise     
R150 million in terms of which R79.5 million was raised from a 79% subscribed   
rights offer and R27 million from a private placement of shares, both of which  
were priced at R4,00 per share. These funds were used to build the Umlabu       
siding, upgrade the Blinkpan siding and to acquire other assets. Building cost  
increases had a significant effect on the Umlabu siding costs where the full    
cost of R61 million exceeded the R42 million reported in the rights offer       
circular. Additional capital expenditure will be required to continue the plant 
upgrade process into the 2009 financial year.                                   
Changes to the board                                                            
Karl Gribnitz, the founder of the group and the previous CEO, was not available 
for reappointment upon the expiry of his contract as CEO in December 2008.      
However, he has remained on the board. Grant Scrutton was appointed as CEO      
with effect from 1 March 2009.                                                  
Notes to the annual financial statements                                        
1. Basis of reporting                                                           
The annual financial statements set out above have been prepared in             
accordance with the measurement and recognition criteria of International       
Financial Reporting Standards ("IFRS"), and its interpretations adopted by the  
International Accounting Standards Board ("IASB"), the Listings Requirements of 
the JSE Limited and Schedule 4 of the South African Companies Act. The          
accounting policies and methods of computation applied in these annual          
financial statements are consistent with those used in the preparation of the   
financial statements for the period ended 31 December 2007, except where it is  
specifically indicated that this is not the case (refer note 2 Change in        
accounting policy).                                                             
The results presented above have been prepared on the going concern basis.      
However, until the matters set out in the paragraph "Care and maintenance       
and unaudited results" have been satisfactorily resolved, the board             
of directors is not able to determine the appropriateness of the going concern  
basis.                                                                          
2. Change in accounting policy                                                  
The audit committee and board have reviewed the accounting policy for           
intangible assets relating to mineral rights. These assets were previously      
revalued using the revaluation model and the revaluation portion shown as non   
distributable reserves. The board has decided to change to the historical cost  
basis to enhance industry comparability. This resulted in a reduction of R 459  
million in the carrying value of intangible assets (mineral rights) from R 840  
million as previously reported (31 December 2007) to the restated cost of R 381 
million, before amortisation of R 3,275 million, resulting in the restated      
carrying value of R 378,3 million as at 31 December 2007.                       
3. Property, plant and equipment ("PPE")                                        
3.1 Additions                                                                   
The total payments for additions to PPE amounted to R 92,399 million (2007: R   
175,920 million), of which R 61,077 million (2007: R 0,3 million) was           
attributable to the construction and commissioning of the Umlabu railway        
siding.                                                                         
3.2 Impairments                                                                 
The total impairments on PPE are R 45,056 million (2007: R Nil). The asset      
classes affected in the impairments are "Land & buildings" in the amount of R   
6,048 million (relating to the Blinkpan siding) as well as the old Ilanga       
"Plant & equipment" (R 35,901 million) and other movable mining equipment which 
was impaired by R 3,107million.                                                 
4. Trade and other receivables                                                  
The total impairment on trade and other receivables is R 17,953 million (2007:  
R 0,9 million). Trade and other receivables in the subsidiary, Ilanga Coal      
(Pty) Ltd, which related to the acquisition of the subsidiary in the prior      
period, were impaired by R 11,521 million. In another subsidiary, South African 
Coal Mining Operations (Pty) Ltd, trade and other receivables to the value of R 
6,431 million were impaired.                                                    
5. Capital and reserves                                                         
5.1 Issued capital                                                              
On 21 July 2008, SACMH announced a rights offer and a general issue of shares   
for cash at an issue price of 400 cents per share. The company raised R 106,5   
million through this capital raising process. Share issue costs attributable to 
this capital raising process amounted to R 3,267 million.                       
5.2 Revaluation reserve                                                         
The revaluation reserve previously reported at R 326 million was reversed as a  
result of the change in accounting policy (refer note 2 Change in accounting    
policy.)                                                                        
6. Contingencies and commitments                                                
6.1 Summonses issued against Ingwe Collieries                                   
The summonses against Ingwe Collieries instituted by the subsidiaries of SACMH  
(Jigmining No 1 (Pty) Ltd and Jigmining No 3 (Pty) Ltd) have not been resolved  
through arbitration as at balance sheet date. The board has resolved to         
reactivate the legal process while still continuing to negotiate commercial     
alternatives.                                                                   
6.2 Commitment to deliver coal                                                  
SACMH has two outstanding contracts for 165 000 tons of coal to be delivered    
including deliveries for the period under "care and maintenance." The group is  
currently endeavouring to find alternative ways of completing the undelivered   
portions of these contracts.                                                    
6.3 Mkhulu Resources (Pty) Ltd                                                  
Subsequent to the year end, the company has formally put this contractor in     
breach of the outsource mining contract and is in discussions to resolve the    
issues. A claim is also being investigated as a result of the breach and a      
counter claim has been intimated.                                               
7. Related parties                                                              
With effect from 1 June 2008, Mkhulu Resources (Pty) Ltd no longer qualified as 
a related party due to the resignation of its key shareholder from the board.   
8. Capital commitments                                                          
Capital commitments as at 31 December 2008 amounted to R 4,4 million relating   
to a new beneficiation plant at the Umlabu mine and R 3,6 million in relation   
to the upgrade of the Blinkpan siding.                                          
9. Prior period adjustments                                                     
The prior period adjustments as set out in the table above "Prior period        
adjustments" reflects the change in accounting policy and the resultant impact  
thereof in addition to the amortisation of mineral rights (refer to note 2      
Change in accounting policy).                                                   
10. Post balance sheet events                                                   
As reported above, the board of SACMH resolved on 30 March 2009 to cease        
operations of the company with immediate effect for a period of three months    
and to place the operations on care and maintenance.                            
For and on behalf of the board                                                  
TV Mokgatlha                                    GM Scrutton                     
Chairman                                        Chief Executive Officer         
Mirkwood                                                                        
9 April 2009                                                                    
Directors: P Kotze, M Steyn TV Mokgatlha (Chairman)*, KJ Gribnitz*,             
WN Gardyne*, LM Ndala*, V Lickfold* (* Nonexecutive)                            
Registered office: Mirkwood Estate, Plot 26, Klipkop, JR 396                    
Transfer secretaries: Computershare Investor Services (Pty) Ltd                 
Sponsor: QuestCo Sponsors (Pty) Ltd                                             
Auditors: Deloitte & Touche                                                     
Date: 09/04/2009 17:48:55 Supplied by www.sharenet.co.za                     
Produced by the JSE SENS Department                             .                  
The SENS service is an information dissemination service administered by the    
JSE Limited (`JSE`). The JSE does not, whether expressly, tacitly or            
implicitly, represent, warrant or in any way guarantee the truth, accuracy or   
completeness of the information published on SENS. The JSE, their officers,     
employees and agents accept no liability for (or in respect of) any direct,     
indirect, incidental or consequential loss or damage of any kind or nature,     
howsoever arising, from the use of SENS or the use of, or reliance on,          
information disseminated through SENS.                                          



                                        
Email this JSE Sens Item to a Friend.

Send e-mail to
© 2017 SHARENET (PTY) Ltd, Cape Town, South Africa
Home     Terms & conditions    Privacy Policy
    Security Notice    Contact Details
Market Statistics are calculated by Sharenet and are therefore not the official JSE Market Statistics. The calculation/derivation may include underlying JSE data.