Go Back Email this Link to a friend


Dta - Delta Emd Limited - Unaudited Group Results For The Six Months Ended 27

Release Date: 17/08/2010 12:45:03      Code(s): DTA
DTA - Delta EMD Limited - Unaudited group results for the six months ended 27   
June 2010 and declaration of a special dividend                                 
DELTA EMD LIMITED                                                               
(Formerly Delta Electrical Industries Limited)                                  
Registration number: 1919/006020/06                                             
Share code: DTA                                                                 
ISIN: ZAE000132817                                                              
("Delta EMD" or "the Group")                                                    
UNAUDITED GROUP RESULTS FOR THE SIX MONTHS ENDED 27 JUNE 2010 AND DECLARATION OF
A SPECIAL DIVIDEND                                                              
Condensed Group Statement of Comprehensive Income                               
Unaudited          Audited      
                                              six months to        year to      
                                                   June           December      
                                            2010         2009         2009      
Note        R`000        R`000        R`000      
Revenue                                   198 898      276 702      478 122     
Profit before interest, depreciation,                                           
closure costs, impairment and taxation    120 683      101 117      154 854     
Depreciation                              (9 931)     (11 950)     (20 915)     
Closure costs reversal                     51 975            -       81 748     
Impairment reversal                           316          627        7 155     
Net foreign exchange                                                            
gains/(losses)                              1 672      (3 136)      (4 783)     
Operating profit                          164 399       86 658      218 059     
Interest received                           5 748        9 835       17 123     
Profit before taxation                    170 147       96 493      235 182     
Taxation                                 (31 736)     (38 145)     (67 493)     
Normal taxation                          (24 803)     (28 312)     (42 910)     
Secondary taxation on companies           (3 933)      (9 833)     (24 583)     
Capital gains taxation on                                                       
disposal of the                                                                 
industrial services division              (3 000)            -            -     
Profit for the period                     138 411       58 348      167 689     
Other comprehensive income                                                      
(Decrease)/Increase in foreign                                                  
currency translation reserve              (1 898)        (264)        1 512     
Proceeds on disposal of treasury shares         -        2 280        3 949     
Total comprehensive income for                                                  
the period                                136 513       60 364      173 150     
Attributable to equity holders                                                  
of parent company                                                               
Profit for the period                     138 411       58 348      167 689     
Total comprehensive income for the period 136 513       60 364      173 150     
Headline earnings attributable to                                               
ordinary shareholders              1       81 780       56 840       90 389     
Number of shares in issue (`000)           49 166       49 166       49 166     
Weighted number of shares in issue (`000)  49 144       49 060       49 083     
Dilutive number of shares in issue (`000)  49 144       49 060       49 105     
Attributable earnings per share (cents)                                         
- basic                                     281.6        118.9        341.6     
- diluted                                   281.6        118.9        341.5     
Dividend per share (cents)                   80.0            -            -     
Special dividend per share                                                      
(cents)                                         -        200.0        500.0     
Condensed Group Statement of Financial Position                                 
                                                 Unaudited         Audited      
                                               six months to       year to      
                                                   June           December      
2010        2009        2009      
                                             R`000       R`000       R`000      
ASSETS                                                                          
Property, plant and equipment               278 265     287 079     282 412     
Non-current assets held for sale              9 856       9 599      15 957     
Non-current asset                             1 051       1 051       1 051     
Bank balances and cash                      213 109     351 254     216 846     
Current assets                              194 578     211 496     222 664     
Outstanding proceeds from asset disposal     80 450           -           -     
Total assets                                777 309     860 479     738 930     
EQUITY AND LIABILITIES                                                          
Total shareholders` funds                   620 164     557 602     522 964     
Deferred taxation liabilities                57 085      61 220      57 085     
Non-current liabilities                       7 605      23 758       7 229     
Capital reduction liability                       -           -           -     
Current liabilities                                                             
- Trade and other                            84 434      96 233      95 245     
- Short-term provisions                       8 021     121 666      56 407     
Total equity and liabilities                777 309     860 479     738 930     
Net asset value per share (cents)             1 261       1 134       1 064     
Condensed Group Statement of Cash Flows                                         
                                               Unaudited           Audited      
                                             six months to         year to      
                                                 June             December      
2010         2009          2009      
                                          R`000        R`000         R`000      
Cash generated by trading                 45 055       96 653       140 803     
Decrease in working capital               34 158      119 096       105 760     
Cash (utilised)/generated by operations   79 213      215 749       246 563     
Net interest received                      5 748        9 835        17 123     
Taxation paid - normal                  (49 611)        (776)         (774)     
Taxation refund - capital gains taxation       -            -      (24 583)     
Cash (outflow)/inflow from                                                      
operating activities                      35 350      224 808       238 329     
Replacement capital expenditure          (5 784)      (5 366)      (13 056)     
Proceeds on disposal of land,                                                   
property, plant and equipment              6 440        2 073         2 313     
Net cash inflow before                                                          
financing activities                      36 006      221 515       227 586     
Dividend paid - normal                  (39 313)            -             -     
- special                                      -     (98 162)     (245 586)     
Proceeds on disposal of treasury shares        -          701         1 509     
Net (decrease)/increase in cash and                                             
cash equivalents                         (3 307)      124 054      (16 491)     
Cash and cash equivalents at beginning                                          
of period                                216 846      230 077       230 077     
Currency translation of cash in                                                 
foreign subsidiary                         (430)      (2 877)         3 260     
Cash and cash equivalents at end                                                
of period                                213 109      351 254       216 846     
Group Statement of Changes in Equity                                            
                                        Share         Foreign                   
capital        currency                   
                                          and     translation     Treasury      
                                      premium         reserve       shares      
                                        R`000           R`000        R`000      
Balance at 27 December 2008              4 856          56 254      (1 135)     
Total comprehensive income for the period    -        (30 696)          954     
Dividend paid - special                      -               -            -     
Balance at 27 December 2009              4 856          25 558        (181)     
Total comprehensive income for the period    -         (1 898)            -     
Dividend paid                                -               -            -     
Balance at 27 June 2010                  4 856          23 660        (181)     
                                                     Accumu-                    
lated                    
                                                      profit         Total      
                                                       R`000         R`000      
Balance at 27 December 2008                           535 425       595 400     
Total comprehensive income for the period             202 892       173 150     
Dividend paid - special                             (245 586)     (245 586)     
Balance at 27 December 2009                           492 731       522 964     
Total comprehensive income for the period             138 411       136 513     
Dividend paid                                        (39 313)      (39 313)     
Balance at 27 June 2010                               591 829       620 164     
Notes                                                                           
                                                   Unaudited       Audited      
six months to     year to      
                                                     June         December      
                                               2010       2009        2009      
                                              R`000      R`000       R`000      
1. Reconciliation between attributable                                          
earnings and headline earnings                                                  
Attributable earnings after taxation         138 411     58 348     167 689     
Impairment (overprovided)                      (316)      (627)     (7 155)     
Profit on disposal of fixed assets          (80 450)      (881)     (1 695)     
Taxation effect                               24 135          -           -     
Headline earnings attributable to                                               
ordinary shareholders                         81 780     56 840     158 839     
Attributable headline earnings per                                              
share (cents)                                                                   
- basic                                        166.4      115.9       323.6     
- diluted                                      166.4      115.9       323.5     
2. Basis of presentation                                                        
The Group is a company domiciled in South Africa. The unaudited condensed       
consolidated interim financial results at and for the half-year ended 27 June   
2010 comprise the company and its subsidiaries (the `Group`).                   
The Group`s principal accounting policies have been applied consistently over   
the current and prior financial years.                                          
The Group`s condensed consolidated interim financial results have been prepared 
in accordance with the recognition and measurement criteria of International    
Financial Reporting Standards (IFRS), interpretations issued by the             
International Financial Reporting Interpretations Committee (IFRIC) and the     
presentation and disclosure requirements of International Accounting Standard   
(IAS) 34: Interim Financial Reporting, the Companies Act of South Africa, as    
well as the AC 500 standards as issued by the Accounting Practices Board or its 
successor.                                                                      
2.1 New accounting policies adopted                                             
The Group has adopted IAS 1 Presentation of Financial Statetments (Revised)     
(IAS 1). This standard requires the preparation of a "Statement of              
Comprehensive Income" which replaces the income statement. It had no impact on  
the recognition and measurement of assets and liabilities and consequently had  
no impact on profit or loss or equity for the period.                           
2010       2009       2009      
                                               R`000      R`000      R`000      
3. Commitments                                                                  
Capital commitments - authorised but not                                        
contracted                                      8 285      1 705      6 442     
Capital commitments - contracted                3 890     10 827      5 194     
                                              12 175     12 532     11 636      
Operating lease commitment                        609        797      1 207     
Other                                               -      1 156          -     
Comment on results                                                              
HALF-YEAR RESULTS                                                               
The gain realised on the sale of the Group`s Kooragang Island residue disposal  
site, together with a write back of the remaining rehabilitation provision for  
that site, provided exceptional earnings of R108.3 million. Inclusive of those  
exceptional earnings, the Group`s earnings for the half-year totalled R138.4    
million (2009: R58.3 million), and the Group`s headline earnings, which exclude 
the gain realised on the sale of the Kooragang Island residue disposal site,    
totalled R81.8 million (2009: R56.8 million).                                   
The Group`s earnings per share for the half-year were 281.6 cents (2009: 118.9  
cents), and headline earnings per share for the half-year were 166.4 cents      
(2009: 115.9 cents).                                                            
First half sales volumes were not enhanced by the one-off sales enjoyed during  
the same period last year and were further reduced by relatively soft market    
demand and Delta EMD`s less attractive Rand denominated selling prices.         
Gross sales revenue reduced to R198.9 million due to reduced sales volumes and  
lower average selling prices, which resulted from a less favourable sales mix.  
Operating profit, inclusive of the R132.4 million profit related to the         
disposal of the Kooragang Island residue disposal site, totalled R164.4 million 
(2009: R86.7 million). The Group`s operating profit also includes R3.21 million 
of ongoing overhead costs associated with the Group`s former Australian         
operation (2009: R6.24 million), which continue to be reduced.                  
Interest income for the half-year totalled R5.7 million (2009: R9.8 million),   
and profit before taxation totalled R170.1 million (2009: R96.5 million). The   
Group`s first half taxation charge totalled R31.7 million (2009: R38.1 million) 
and included a R3.9 million secondary taxation charge in respect of the Group`s 
2009 final dividend (2009: R9.8 million).                                       
The Group`s cash balances reduced to R213.1 million from the 2009 year-end cash 
balances of R216.8 million, after payment of R39.3 million of dividends and     
R49.6 million of taxation.                                                      
PERFORMANCE OF THE DELTA EMD BUSINESS                                           
Poor global economic conditions resulted in lower demand for alkaline batteries 
and a contraction of the global alkaline grade EMD market. The majority of      
Delta EMD`s sales were made in Rand denominated selling prices and the          
continued strengthening of the Rand against the US Dollar, Euro and Yen reduced 
Delta EMD`s price competitiveness and our alkaline grade market share.          
Contribution during the period reduced as a result of lower sales volumes, the  
lower average selling prices that resulted from a less favourable sales mix,    
and higher costs of sales. Increased energy costs, reduced production levels    
and additional planned maintenance contributed to the higher costs of sales.    
Production levels were reduced during the first half as planned to maintain     
desired stock levels, to allow for equipment maintenance, and to prepare for    
the production of a new premium grade product. Reduced production resulted in a 
substantial under-recovery of manufacturing overheads, which further reduced    
Delta EMD`s operating profit.                                                   
Operating cash flows remained favourable with effective management of working   
capital and well managed capital expenditures.                                  
PROSPECTS                                                                       
Delta EMD`s second half sales volumes are expected to be broadly in line with   
first half sales volumes, as a recovery in demand for alkaline grade EMD is not 
expected until 2011, and absent a weakening of the Rand, Delta EMD`s Rand       
denominated selling prices are likely to remain less competitive. Sales volumes 
are expected to be sustained through additional sales of lower grade EMD,       
resulting in a less favourable sales mix and lower average selling prices.      
Delta EMD`s operating profit for the second half is expected to be broadly in   
line with first half levels due to better recovery of manufacturing overheads.  
Increased production during the second half is expected to require some         
additional working capital.                                                     
Delta EMD`s development of a premium alkaline grade product continues           
successfully and is expected to present additional market opportunities during  
2011.                                                                           
The above forecast has not been reviewed and reported on by the company`s       
external auditors.                                                              
DISPOSAL OF THE GROUP`S REMAINING AUSTRALIAN PLANT SITE                         
The demolition of structures and equipment on the Group`s former Australian     
plant site is expected to conclude during the year, and efforts to market the   
site continue. An environmental assessment was completed successfully during    
2009 and no further remediation or rehabilitation of the site will be required  
for future use of the site for commercial or industrial purposes.               
DISPOSAL OF THE DELTA EMD BUSINESS                                              
As previously advised, the Group has commenced a process intended to realise    
value from the Delta EMD business, the Group`s last remaining operation. The    
disposal process is ongoing, having been slowed somewhat by more difficult      
market and trading conditions.                                                  
DIRECTORATE                                                                     
As announced on 3 May 2010, Mr Chris Jacobs has resigned as a non-executive     
director from the board of Delta EMD with effect from 29 April 2010.            
SPECIAL DIVIDEND                                                                
Following the disposal of the Kooragang Island site and the resolution of the   
2005 tax matter, previously noted as a contingent liability, the board is       
pleased to announce a special dividend of 300 cents per share.                  
The salient dates for the payment of the special dividend will be as follows:   
                                                                        2010    
Last date to trade to qualify for the special dividend   Thursday, 16 September 
Shares to commence trading ex-dividend on the JSE                               
Limited                                                  Friday, 17 September   
Record date                                              Thursday, 23 September 
Payment date                                             Monday, 27 September   
The special dividend is declared in the currency of the Republic of South       
Africa. Share certificates may not be dematerialised or rematerialised between  
Friday, 17 September 2010 and Thursday, 23 September 2010, both days inclusive. 
The Group also anticipates the payment of a final dividend, representing an     
appropriate payout from the Group`s underlying 2010 earnings following          
publication of the Group`s 2010 annual results, as well as possibly a special   
dividend from any surplus cash realised through the eventual sale of the        
Australian plant site.                                                          
TG Atkinson                                                       P Baijnath    
Chairman                                             Chief Executive Officer    
Johannesburg                                                                    
17 August 2010                                                                  
Registered office                     Transfer secretaries                      
15 Heyneke Street                     Computershare Investor                    
Industrial Site                       Services (Proprietary) Limited            
Nelspruit                             70 Marshall Street, Johannesburg, 2001    
1200                                  Marshalltown, 2107                        
Directors                                                                       
Independent non-executive                                                       
LB Bird, AC Hicks, BR Wright                                                    
Non-executive                                                                   
TG Atkinson* (Chairman)                                                         
Executive                                                                       
P Baijnath (Chief Executive Officer), JS Seymore (CA)SA *USA                    
Sponsor                                                                         
RAND MERCHANT BANK                                                              
A division of FirstRand Bank Limited                                            
Date: 17/08/2010 12:45:02 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.