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SCL - SacOil Holdings limited - Reviewed provisional results for the eight

Release Date: 29/05/2009 15:00:02      Code(s): SCL
SCL - SacOil Holdings limited - Reviewed provisional results for the eight      
months ended 28 February 2009                                                   
SacOil Holdings limited                                                         
Formerly SA Mineral Resources Corporation Limited                               
Registration No     1993/000460/06                                              
ISIN Number:        ZAE000127460                                                
Share code:         SCL                                                         
Incorporated in the Republic of South Africa                                    
("SacOil Holdings" or "the Company")                                            
REVIEWED PROVISIONAL RESULTS                                                    
FOR THE EIGHT MONTHS ENDED 28 FEBRUARY 2009                                     
INCOME STATEMENT                                                                
                                        Reviewed       Audited                  
                                        Eight          Twelve                   
                                        months to     months to                 
28 February    30 June                  
                                        2009           2008                     
                                        R 000`s       R 000`s                   
Revenue                                   20,802        21,810                  
Cost of sales                             (16,395)      (16,960)                
Gross profit                              4,407         4,850                   
Operating costs                           (7,850)       (9,957)                 
Loss from operations                      (3,443)       (5,107)                 
Share based payment expense               (23,754)      -                       
Impairment losses                         (383)         (5,159)                 
Realised gain on insurance claim          -             501                     
Investment income                         557           327                     
Interest paid                             (93)          (78)                    
Loss before tax                           (27,116)      (9,517)                 
Taxation                                  -             -                       
Loss after tax                            (27,116)      (9,517)                 
Weighted average number of shares         313,292       167,593                 
Loss per share (cents)                    (8.66)        (5.68)                  
Diluted loss per share (cents)            (8.64)        (5.68)                  
Reconciliation of headline earnings:                                            
Loss attributable to shareholders         (27,116)      (9,517)                 
Realised gain on insurance claim          -             (501)                   
Impairment loss on revaluation of                                               
plant and equipment                      -             5,159                    
Headline loss                             (27,116)      (4,859)                 
Headline loss per share (cents)           (8.66)        (2.90)                  
Diluted headline loss per share (cents)   (8.64)        (2.90)                  
BALANCE SHEET                                                                   
                                        28 February    30 June                  
                                        2009           2008                     
R 000`s       R 000`s                   
Non-current assets                        7,709         5,230                   
Property, plant and equipment             4,838         5,230                   
Loans receivable                          2,871         -                       
Current assets                            40,369        46,792                  
Loans receivable                          27,867        27,867                  
Inventory                                 2,048         1,454                   
Trade accounts receivable                 2,628         3,731                   
Sundry accounts receivable                970           1,920                   
Cash & cash equivalents                   6,856         11,819                  
Total assets                              48,078        52,022                  
Equity & liabilities                                                            
Equity attributable to equity holders     41,064        44,426                  
Stated capital                            83,726        83,726                  
Accumulated loss                          (66,416)      (39,300)                
Share based payment reserve               23,754        -                       
Non-current liabilities                   3,209         3,129                   
Long term liabilities                     2,503         2,503                   
Provision for environmental               706           626                     
Current liabilities                       3,805         4,467                   
Accounts payable                          3,537         3,546                   
Sundry accounts payable                   268           921                     
Total equity & liabilities                48,078        52,022                  
Number of shares in issue (`000)          313,292       313,292                 
Net asset value per share (cents)         13.11         14.18                   
CASH FLOW STATEMENT                                                             
Eight          Twelve                  
                                         months to     months to                
                                         28 February    30 June                 
                                         2009           2008                    
R 000`s       R 000`s                  
Cash utilised in operations                (2,951)       (4,177)                
Cash generated from/(utilised) in                                               
movements in working capital               796           (1,925)                
(Increase) in inventories                  (594)         (982)                  
Decrease/(increase) in accounts            2,053         (3,052)                
(Decrease)/increase in accounts payable    (663)         2,109                  
Cash utilised in operating activities      (2,155)       (6,102)                
Investment income                          494           327                    
Interest paid                              (93)          (78)                   
Net cash flows from operating activities   (1,754)       (5,853)                
Net cash flows from investing activities   (19)          (180)                  
Net cash flows from financing activities   (3,190)       17,687                 
Net (decrease)/increase in cash and                                             
cash equivalents                          (4,963)       11,654                  
Cash and cash equivalents at the                                                
beginning of the period                   11,819        165                     
Cash and cash equivalents at the end                                            
of the period                             6,856         11,819                  
STATEMENT OF CHANGES IN EQUITY                                                  
                                        Eight          Twelve                   
                                        months to     months to                 
                                        28 February    30 June                  
2009           2008                     
                                        R 000`s       R 000`s                   
Stated capital                                                                  
Opening balance                           83,726        3,743                   
- Transfer from share premium            -             27,152                   
- Shares issued for cash                 -             54,148                   
- Expenses written off against stated    -             (1,318)                  
Closing balance                           83,726        83,726                  
Share premium                                                                   
Opening balance                           -             27,152                  
- Transfer to stated capital             -             (27,152)                 
Closing balance                           -             -                       
Accumulated loss                                                                
Opening balance                           (39,300)      (29,783)                
Net loss for the year                     (27,116)      (9,517)                 
Closing balance                           (66,416)      (39,300)                
Share based payment reserve                                                     
Opening balance                           -             -                       
Share based payment expense               23,754        -                       
Closing balance                           23,754        -                       
NOTES TO THE FINANCIAL STATEMENTS                                               
1.   Basis of preparation                                                       
The reviewed provisional financial statements of the group for the eight months 
ended 28 February 2009 have been prepared in compliance with International      
Financial Reporting Standards (IFRS), IAS 34 and the South African Companies Act
1973. The accounting policies and method of measurement and recognition applied 
in preparation of these financial statements are consistent with those applied  
in the group`s most recent audited annual financial statements for the previous 
year. They have been prepared on a going concern basis. Where appropriate,      
comparatives for cost of sales were reclassified to provide a more accurate     
gross profit.                                                                   
All monetary information and figures presented in these financial statements are
stated in thousands of Rand (R`000), unless otherwise indicated.                
2.   Auditors review                                                            
The provisional financial statements have been reviewed by the company`s        
auditors, Moore Stephens MWM. Their unmodified review opinion is available for  
inspection at the company`s registered office.                                  
3.   Change of year end                                                         
In order to comply with the requirements of Section 293 of the Companies Act the
board resolved to change the year end of the Company to the last day of February
to coincide with that of its holdings company Encha Capital (Proprietary)       
Limited. The Company therefore reports to shareholders on results for the eight 
months to 28 February 2009.                                                     
4.   Commentary on the Results                                                  
A loss of 8,66 (2008: 5,68) cents, a diluted loss of 8,64 cents, a headline loss
of 8,66 (2008: 2,90) cents, a diluted headline loss of 8,64 cents and a net     
asset value of 13,11 (2008: 14,18) cents per share were reported. Included in   
the loss for the eight months are corporate head office costs in relation to    
current and future anticipated corporate actions in an amount of R2,9 million.  
The 1,07 cent decrease in the net asset value is mainly due to these costs being
expensed as well as the impairment loss on the revaluation of loans receivable. 
Sale of products from the Greenhills plant increased due to an increase in      
export sales as well as increased orders for Manganese Oxide. Despite           
significant increases in the costs of raw materials and consumables, the plant  
managed to maintain its margins but the lag effect of cost increases to         
customers still negatively impacted gross profits.                              
During November 2008 expenses paid by SacOil Holdings on behalf of Pioneer Coal 
Limited ("Pioneer") in an amount of R1.19 million were debited to a loan        
account. A further loan was made in December 2008, in an amount of R2 million.  
The purpose of these loans is to provide Pioneer with seed capital to set up the
company as a coal exploration company. Pioneer Coal shall not be obliged to pay 
interest for a period of one year ("initial period") from the date that Pioneer 
Coal is granted a listing by the JSE Limited. Should the loan not be repaid in  
full by the end of the initial period, interest on the loan amount will become  
payable from the day that a listing is granted. Included in the loss for the    
eight months is a fair value loss in the amount of R0,4 million in relation to  
these loans.                                                                    
Loans advanced to Divine Inspiration Group (Proprietary) Limited ("DIG") and    
South Africa Congo Oil Company (Proprietary) Limited ("South Africa Congo Oil   
Company"), totalling R27,9 million have been reclassified as current financial  
assets. These loans are secured by pledges and sureties normal for transactions 
of this nature.                                                                 
Upon conclusion of the SacOil transaction, the indebtedness of DIG to SacOil    
Holdings under the relevant loan agreement will be set-off against the          
indebtedness of South Africa Congo Oil Company Holdings to DIG under the SacOil 
agreement. The indebtedness of South Africa Congo Oil Company to SacOil Holdings
under the relevant loan agreement will be capitalised to the value of the       
exploration and evaluation asset on conclusion of the transaction.              
At a general meeting of shareholders held on 21 November 2008, 41 986 136 share 
options were granted to the directors of SacOil Holdings. In compliance with    
IFRS 2 - Share based payments, the options were valued, on the grant date, at   
R23,8 million using the Black - Scholes valuation model for non-dividend paying 
shares. As no vesting conditions are attached to these options, a share based   
payment expense of R23,8 million is included in the loss for the eight months   
ended 28 February 2009.                                                         
5.   Investment in South Africa Congo Oil Company (Proprietary) Limited         
Further to previous announcements regarding the Company`s investment in South   
Africa Congo Oil Company (Pty) Limited ("the transaction") and as noted in the  
interim results announcement dated 25 March 2009, the date for fulfilment of the
conditions precedent to the agreements referred to therein has been extended to 
31 July 2009. The last condition outstanding is the receipt of a Presidential   
Decree from the President of the Democratic Republic of the Congo. Following    
meetings with the relevant authorities, the directors are confident this        
condition will be fulfilled by 31 July 2009.                                    
6.   Conditional acquisition of coal exploration assets and proposed unbundling 
of shares in Pioneer Coal Limited                                               
It was announced on 15 December 2008 that the directors of SacOil Holdings have 
finalised proposals in terms of which Pioneer Coal Limited ("Pioneer Coal"), a  
newly formed company, will issue 313 291 612 ordinary shares to SacOil Holdings 
at a price of R0.001 per share which shares will be distributed to SacOil       
Holdings` shareholders by way of an unbundling, following which Pioneer Coal    
would, subject to certain conditions precedent, including completing a due      
diligence investigation and the raising of sufficient capital, acquire certain  
coal exploration companies.                                                     
The due diligence process will be completed shortly. The capital raising process
is still underway but proceeding satisfactorily, following which SacOil Holdings
will begin the process of the unbundling.                                       
On the basis that the Pioneer shares will be unbundled to SacOil Holdings       
shareholders immediately after the shares have been issued to SacOil Holdings,  
the results of Pioneer have not been consolidated into the results of SacOil    
Holdings for the period under review.                                           
7.   Dividend                                                                   
The board has resolved not to declare any dividend to shareholders for the      
period under review.                                                            
8.   Future direction                                                           
SacOil Holdings` current operating business remains that of manufacturing       
manganese sulphate powder, manganese sulphate solution and manganese oxide at   
its plant near Graskop in Mpumalanga, referred to as the Greenhills plant.      
The focus of the Company has however shifted to that of an integrated Oil and   
Gas company. The Company is in the process of evaluating various value adding   
acquisition opportunities and considering additions to its financial and        
technical resources base which will be announced to shareholders in due course. 
By order of the board                                                           
Melinda van den Berg                                                            
Fusion Corporate Secretarial Services (Proprietary) Limited                     
Company secretary                                                               
29 May 2009                                                                     
Directors: RJ Linnell (Chairman),  C Bird*, BH Christie*, RT Vela (Executive)*  
Registered office: 119 Rosen Office Park, 37 Invicta Road, Midrand, 1685        
Registered postal address: P.O. Box 8439, Halfway House, 1685                   
Transfer secretaries: Link Market Services SA (Proprietary) Limited             
Company secretary: Melinda van den Berg - Fusion Corporate Secretarial Services 
(Proprietary) Limited                                                           
Corporate Advisers: Lonsa Corporate Finance (Proprietary) Limited               
Sponsor: Sasfin Capital (a division of Sasfin Bank Limited)                     
29 May 2009                                                                     
Sasfin Capital (A division of Sasfin Bank Limited)                              
Date: 29/05/2009 15:00:01 Supplied by www.sharenet.co.za                     
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