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Dta - Delta Emd Limited - Audited Group Results And Dividend Declaration For

Release Date: 27/03/2012 11:35:52      Code(s): DTA
DTA - Delta EMD Limited - Audited group results and dividend declaration for    
the year ended 27 December 2011                                                 
DELTA EMD LIMITED                                                               
Registration number: 1919/006020/06                                             
Share code: DTA      ISIN: ZAE000132817                                         
("Delta EMD" or "the Group")                                                    
AUDITED GROUP RESULTS AND DIVIDEND DECLARATION FOR THE YEAR ENDED 27 DECEMBER   
2011                                                                            
CONDENSED GROUP STATEMENT OF COMPREHENSIVE INCOME                               
                                                  Audited     Audited           
                                                  year to     year to           
December    December          
                                                  2011        2010              
                                           Note   R`000       R`000             
Revenue                                            366 812     378 661          
Gross profit                                       127 797     153 623          
Investment income                                  3 955       9 918            
Distribution expenses                              (29 948)    (27 685)         
Administrative expenses                            (31 829)    (43 160)         
Closure costs reversal                             -           52 049           
Profit on sale of land                             -           80 520           
Other expenses                                     (23 455)    (47 391)         
Impairment raised                                  -           (13)             
Net foreign exchange (losses)/gains                (552)       249              
Profit before taxation                             45 968      178 110          
Taxation                                           9 489       (56 739)         
Normal taxation                                    (14 505)    (16 524)         
Secondary taxation on companies                    -           (18 709)         
Capital gains taxation reversed/(raised)           23 994      (21 506)         
Profit for the year                                55 457      121 371          
Other comprehensive income                                                      
Increase/(decrease) in foreign currency            4 850       (1 228)          
translation reserve                                                             
Proceeds on disposal of treasury shares            -           181              
Total comprehensive income for the year            60 307      120 324          
Attributable to equity holders of parent                                        
company                                                                         
Profit for the year                                55 457      121 371          
Total comprehensive income for the year            60 307      120 324          
Headline earnings attributable to ordinary  1      31 703      69 046           
shareholders                                                                    
Number of shares in issue (`000)                   49 166      49 166           
Weighted number of shares in issue (`000)          49 166      49 150           
Dilutive number of shares in issue (`000)          49 166      49 166           
Attributable earnings per share (cents)                                         
- basic                                            112,8       246,9            
- diluted                                          112,8       246,9            
Dividend per share - ordinary (cents)              -           80,0             
Dividend per share - special (cents)               -           300,0            
CONDENSED GROUP STATEMENT OF FINANCIAL POSITION                                 
                                                  Audited     Audited           
year to     year to           
                                                  December    December          
                                                  2011        2010              
                                                  R`000       R`000             
ASSETS                                                                          
Non-current assets                                                              
Property, plant and equipment                      269 285     273 438          
Other non-current assets                           4 447       5 971            
Current assets                                                                  
- Inventories                                      115 033     102 251          
- Trade and other receivables                      146 827     97 522           
- Taxation overpaid                                -           4 097            
Bank balances and cash                             118 996     112 964          
Non-current assets held for sale                   12 067      9 979            
Total assets                                       666 655     606 222          
EQUITY AND LIABILITIES                                                          
Total shareholders` funds                          516 793     456 486          
Non-current liabilities                                                         
Deferred taxation liabilities                      49 690      52 263           
Other non-current liabilities                      7 262       7 981            
Current liabilities                                                             
- Trade and other payables                         70 116      62 790           
- Foreign exchange contracts liability             11 937      -                
- Short-term provisions                            2 500       4 882            
- Taxation                                         8 357       21 820           
Total equity and liabilities                       666 655     606 222          
Net asset value per share (cents)                  1 051       928              
CONDENSED GROUP STATEMENT OF CASH FLOWS                                         
Audited     Audited           
                                                  year to     year to           
                                                  December    December          
                                                  2011        2010              
R`000       R`000             
Cash generated by trading                          61 415      61 798           
(Increase)/decrease in working capital             (43 144)    36 066           
Cash generated by operations                       18 271      97 864           
Interest received                                  3 955       9 918            
Taxation paid - normal                             (4 631)     (71 112)         
Taxation paid - secondary tax on companies         -           (18 709)         
Cash inflow from operating activities              17 595      17 961           
Replacement capital expenditure                    (18 456)    (12 405)         
Decrease/(increase) in non-current asset           1 524       (4 920)          
Proceeds on disposal of property, plant and        153         80 634           
equipment                                                                       
Net cash inflow before financing activities        816         81 270           
Dividend paid - ordinary                           -           (39 313)         
Dividend paid - special                            -           (147 489)        
Proceeds on disposal of treasury shares            -           312              
Net increase/(decrease) in cash and cash           816         (105 220)        
equivalents                                                                     
Cash and cash equivalents at beginning of year     112 964     216 846          
Translation of cash in foreign subsidiary          5 216       1 338            
Cash and cash equivalents at end of year           118 996     112 964          
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 2009       4 856         25 558       (181)              
Total comprehensive income for    -             (1 228)      181                
the year                                                                        
Realisationof foreign currency    -             (27 630)     -                  
translation reserve                                                             
Dividend paid - ordinary          -             -            -                  
Dividend paid - special           -             -            -                  
Balance at 27 December 2010       4 856         (3 300)      -                  
Total comprehensive income for    -             -            -                  
the year                                                                        
Foreign currency translation      -             4 850        -                  
reserve                                                                         
Balance at 27 December 2011       4 856         1 550        -                  

                                 Accumu-                                        
                                 lated                                          
                                 profit        Total                            
R`000         R`000                            
Balance at 27 December 2009       492 731       522 964                         
Total comprehensive income for    121 371       120 324                         
the year                                                                        
Realisationof foreign currency    27 630        -                               
translation reserve                                                             
Dividend paid - ordinary          (39 313)      (39 313)                        
Dividend paid - special           (147 489)     (147 489)                       
Balance at 27 December 2010       454 930       456 486                         
Total comprehensive income for    60 307        60 307                          
the year                                                                        
Foreign currency translation      (4 850)       -                               
reserve                                                                         
Balance at 27 December 2011       510 387       516 793                         
NOTES                                                                           
                                               Audited      Audited             
year to      year to             
                                               December     December            
                                               2011         2010                
                                               R`000        R`000               
1. Reconciliation between attributable                                          
earnings and headline earnings                                                  
Attributable earnings after taxation            55 457       121 371            
Impairment raised                               -            13                 
Profit on disposal of fixed assets              240          (73 844)           
Taxation effect                                 (23 994)     21 506             
Headline earnings attributable to ordinary      31 703       69 046             
shareholders                                                                    
Attributable headline earnings per share                                        
(cents)                                                                         
- basic                                         64,5         140,5              
- diluted                                       64,5         140,4              
2. Basis of presentation                                                        
The Group is domiciled in South Africa. The audited condensed consolidated      
financial results at and for the year ended 27 December 2011 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 financial results have been prepared in      
accordance with the framework concepts and measurement and recognition          
requirements of International Financial Reporting Standards (IFRS) of the       
International Accounting Standards Board, 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.                                                                  
The auditors, Deloitte & Touche, have issued their unmodified opinion on the    
Group`s financial statements for the year ended 27 December 2011. The audit     
was conducted in accordance with International Standards on Auditing. This      
abridged report has been derived from the Group financial statements and is     
consistent in all material respects, with the Group financial statements. A     
copy of their audit report is available for inspection at the company`s         
registered office. Any reference to future financial performance included in    
this announcement, has not been reviewed or reported on by the company`s        
auditors.                                                                       
2011            2010                
                                            R`000           R`000               
3. Commitments                                                                  
Capital commitments - authorised but not     4 377           1 959              
contracted                                                                      
Capital commitments - contracted             1 625           11 737             
                                            6 002           13 696              
Operating lease commitments                  4 068           4 720              
COMMENTARY                                                                      
Delta EMD`s full-year trading results for the year ended 27 December 2011       
exceeded earlier expectations following improved second-half trading.           
The Group`s full-year results also were enhanced by a favourable Australian     
tax ruling relating to the 2010 sale of the Group`s Australian residue          
disposal site.                                                                  
PERFORMANCE OF THE GROUP`S SOUTH AFRICAN EMD BUSINESS                           
Global demand for alkaline grade EMD remained flat during the year, and market  
prices remained under pressure with major global battery producers continuing   
to source most of their EMD requirements locally. Nonetheless Delta EMD         
secured additional volumes during the second half of the year by providing      
competitive US dollar selling prices in select geographies.                     
Sales revenue for the year ended 27 December 2011 reduced to R366,8 million     
from R378,7 million for the comparable 2010 period, with a modest decline in    
sales volumes. Most of the decline resulted from the absence during 2011 of     
the high margin lithium manganese sales made during early 2010. Premium-grade   
EMD sales volumes recovered during the second half of the year, resulting in a  
slightly improved full-year sales mix when compared to 2010.                    
2011 EMD market prices were lower than during 2010, and the Group`s average US  
dollar selling price reduced from 2010 levels. The weakening of the Rand in     
the last quarter of 2011 partially offset the lower US dollar selling prices,   
resulting in the Group`s 2011 average Rand-denominated selling price being      
only slightly below the average Rand-denominated selling price achieved for     
the comparable period in 2010.                                                  
Manufacturing efficiencies were improved significantly during 2011 compared     
with 2010. Nonetheless the cost of sales per ton increased as a result of       
substantially higher input costs, particularly for electrical power and key     
raw materials. Administration costs were reduced to R31,8 million (2010: R43,2  
million).                                                                       
Improved manufacturing efficiencies and reduced administrative expenses         
allowed operating profit for the year ended 27 December 2011 to be improved to  
R49,5 million (2010: R43,4 million).                                            
GROUP RESULTS                                                                   
The Group`s profit before tax of R46 million for the year ended 27 December     
2011 includes R3 million of costs incurred in Australia relating to the former  
plant site which is held for sale. The Group`s profit before tax of R178,1      
million for the comparable period last year included a R132,5 million profit    
related to the sale of the Australian residue disposal site and holding costs   
of R7,8 million for the Australian assets held for sale.                        
Interest received totalled R4 million and was lower than the R9,9 million       
received in the comparable 2010 period, due to lower interest rates and         
reduced cash balances after payment of a special dividend in the second half    
of 2010.                                                                        
The Group secured a favourable Australian private tax ruling on the 2010 sale   
of Group assets in Australia. Consequently the AUD3,2 million taxation charge   
raised in the Group`s 2010 accounts related to the sale of the Group`s          
Australian residue disposalsite has been reversed in the Group`s 2011           
accounts, and the Group has a net taxation credit of R9,5 million for the       
year.                                                                           
Attributable earnings after taxation totalled R55,5 million for the year        
(2010: R121,4 million).                                                         
The Group`s earnings per share for the year ended 27 December 2011 were 112,8   
cents (2010: 246,9 cents), and the Group`s headline earnings per share for the  
year were 64,5 cents (2010: 140,5 cents).                                       
The Group`s net cash inflow from trading for the year ended 27 December 2011    
totalled R61,4 million (2010: R61,8 million).Working capital increased during   
the year by R43,1 million, and the Group`s capital expenditures for the year    
totalled R18,5 million (2010: R12,4 million). The Group`s year-end cash         
balances totalled R119 million (2010: R113 million).                            
PROSPECTS                                                                       
We do not expect significant growth in the EMD markets we serve during 2012,    
and we expect continued price competition. The attractiveness of our Rand-      
denominated selling prices, and the margins we realise on products sold with    
US dollar prices, will continue to be affected by foreign exchange movements.   
Whilst major battery producers are expected to continue to favour local         
supply, Delta EMD remains an attractive secondary supplier, particularly as     
our product quality and performance continues to improve. Efforts also          
continue to improve our market positions in geographies not subject to anti-    
dumping duties and in the high grade EMD market segments. We are pleased with   
the progress made during 2011 and expect to build upon it during 2012.          
DISPOSAL OF THE GROUP`S AUSTRALIAN PLANT SITE                                   
The Group has received interest from a potential buyer for the purchase of the  
remaining plant site in Australia and efforts to sell the site continue.        
DIVIDEND                                                                        
The Group is pleased to announce the declaration of a final dividend of 25      
cents per share, which represents an appropriate payout from the Group`s        
underlying 2011 earnings. It shall be paid from existing cash balances.         
The salient dates are as follows:                                               
Last day for trading to qualify and participate   Friday, 13 April 2012         
in the final dividend (and change of address of                                 
dividend instructions)                                                          
Trading "ex dividend" commences                   Monday, 16 April 2012         
Record date                                       Friday, 20 April 2012         
Dividend payment date                             Monday, 23 April 2012         
Share certificates may not be dematerialised or rematerialised between Monday,  
16 April 2012 and Friday, 20 April 2012, both days inclusive.                   
PREPARER OF FINANCIAL STATEMENTS                                                
These condensed consolidated financial statements have been prepared under the  
supervision of JS Seymore, CA(SA), in his capacity as Financial Director of     
the Group.                                                                      
TG Atkinson    P Baijnath                                                       
(Chairman)     (Chief Executive Officer)                                        
27 March 2012                                                                   
Johannesburg                                                                    
Registered Office                                                               
15 Heyneke Street, Industrial Site, Nelspruit, 1200                             
Transfer Secretaries                                                            
Computershare Investor Services (Proprietary) Limited                           
70 Marshall Street, Johannesburg, 2001                                          
PO Box 61051, 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 (Financial Director)                                          
*USA                                                                            
Sponsor:                                                                        
Rand Merchant Bank (A division of FirstRand Bank Limited)                       
Date: 27/03/2012 11:35:51 Supplied by www.sharenet.co.za                     
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