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Delta Emd Limited - Unaudited Group Results For The Six Months Ended 27 June 2012

Release Date: 15/08/2012 11:45:00      Code(s): DTA     
DELTA EMD 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 2012

CONDENSED GROUP STATEMENT OF COMPREHENSIVE INCOME


                                                           Unaudited    Unaudited    Audited   
                                                          Six months   Six months    Year to   
                                                             to June      to June   December   
                                                                2012         2011       2011   
                                                   Note        R'000        R'000      R'000   
Revenue                                                      172 534      129 653    366 812   
Gross profit                                                  53 147       42 141    127 797   
Underrecovery of manufacturing overheads                    (14 511)      (8 854)   (23 455)   
Distribution expenses                                       (15 792)     (10 286)   (29 948)   
Administrative expenses                                     (17 022)     (21 314)   (31 829)   
Investment income                                              2 720        2 112      3 955   
Net foreign exchange (losses)/gains                          (3 545)          711      (552)   
Profit before taxation                                         4 996        4 510     45 968   
Taxation                                                     (2 880)      (1 984)      9 489   
Normal taxation                                              (1 651)      (1 984)   (14 505)   
Secondary taxation on companies                              (1 229)                         
Capital gains taxation reversed                                                     23 994   
Profit for the period                                          2 115        2 526     55 457   
Other comprehensive income                                                                     
Increase in foreign currency translation reserve                 621          690      4 850   
Total comprehensive income for the period                      2 736        3 216     60 307   
Attributable to equity holders of                                                              
parent company                                                                                 
Profit for the period                                          2 115        2 526     55 457   
Total comprehensive income for the period                      2 736        3 216     60 307   
Headline earnings attributable to                                                              
ordinary shareholders                                 1        2 118        2 625     31 703   
Number of shares in issue ('000)                              49 166       49 166     49 166   
Weighted number of shares in issue ('000)                     49 166       49 150     49 150   
Dilutive number of shares in issue ('000)                     49 166       49 166     49 166   
Attributable earnings per share (cents)                                                        
  basic                                                         4,3          5,1      112,8   
  diluted                                                       4,3          5,1      112,8   
Dividend per share (cents)                                      25,0                         
Special dividend per share (cents)                                                          


CONDENSED GROUP STATEMENT OF FINANCIAL POSITION   
           
                                                           Unaudited    Unaudited    Audited   
                                                          Six months   Six months    Year to   
                                                             to June      to June   December   
                                                                2012         2011       2011   
                                                               R'000        R'000      R'000   
ASSETS                                                                         
Non-current assets                                                             
Property, plant and equipment                                261 459      270 642    269 285   
Other non-current asset                                        4 849        6 470      4 447   
Current assets                                                                 
  Inventories                                               116 971      130 221    115 033   
  Trade and other receivables                               107 279       84 129    146 827   
  Taxation overpaid                                                         133             
Bank balances and cash                                       132 559      104 478    118 996   
Non-current assets held for sale                              12 288       10 487     12 067   
Total assets                                                 635 405      606 560    666 655   
EQUITY AND LIABILITIES                                                         
Total shareholders' funds                                    507 238      459 702    516 793   
Non-current liabilities                                                        
Deferred taxation liabilities                                 46 951       50 288     49 690   
Other non-current liabilities                                  7 685        8 380      7 262   
Current liabilities                                                            
  Trade and other payables                                   63 583       62 663     70 116   
  Foreign exchange contracts liability                                             11 937   
  Short-term provisions                                       2 500        2 500      2 500   
  Taxation payable                                            7 447       23 027      8 357   
Total equity and liabilities                                 635 405      606 560    666 655   
Net asset value per share (cents)                              1 032          935      1 051   


CONDENSED GROUP STATEMENT OF CASH FLOWS   
                        
                                                         Unaudited    Unaudited    Audited   
                                                        Six months   Six months    Year to   
                                                           to June      to June   December   
                                                              2012         2011       2011   
                                                             R'000        R'000      R'000   
Cash generated by trading                                   13 557       11 355     61 415   
Decrease/(increase) in working capital                      19 098     (14 766)   (43 144)   
Cash generated by/(utilised in) operations                  32 655      (3 411)     18 271   
Net interest received                                        2 720        2 112      3 955   
Taxation paid  normal                                     (6 530)                (4 631)   
Cash inflow/(outflow) from operating activities             28 845      (1 299)     17 595   
Replacement capital expenditure                            (3 033)      (8 361)   (18 456)   
(Increase)/decrease in non-current asset                     (402)        (499)      1 524   
Proceeds on disposal of property, plant and equipment                      152        153   
Net cash inflow/(outflow) before financing activities       25 410     (10 007)        816   
Dividend paid  ordinary                                  (12 291)                         
Net increase/(decrease) in cash                                                              
and cash equivalents                                        13 119     (10 007)        816   
Cash and cash equivalents                                                                    
at beginning of period                                     118 996      112 964    112 964   
Currency translation of cash in foreign subsidiary             444        1 521      5 216   
Cash and cash equivalents at end of period                 132 559      104 478    118 996   


GROUP STATEMENT OF CHANGES IN EQUITTY    
                     
                                                           Share       Foreign                         
                                                         capital      currency    Accumu-              
                                                             and   translation      lated              
                                                         premium       reserve     profit      Total   
                                                           R'000         R'000      R'000      R'000   
Balance at 27 December 2010                                4 856       (3 300)    454 930    456 486   
Total comprehensive income for the period                                         3 216      3 216   
Realisation of foreign currency translation reserve                       690      (690)             
Balance at 27 June 2011                                    4 856       (2 610)    457 456    459 702   
Total comprehensive income for the period                                        57 091     57 091   
Realisation of foreign currency translation reserve                     4 160    (4 160)             
Balance at 27 December 2011                                4 856         1 550    510 387    516 793   
Total comprehensive income for the period                                         2 736      2 736   
Realisation of foreign currency translation reserve                     (929)      (929)             
Dividend paid                                                                  (12 291)   (12 291)   
Balance at 27 June 2012                                    4 856           621    501 761    507 238   


NOTES                                                                                          
                                                           Unaudited    Unaudited    Audited   
                                                          Six months   Six months    Year to   
                                                             to June      to June   December   
                                                                2012         2011       2011   
                                                               R'000        R'000      R'000   
1.   Reconciliation between attributable earnings                                              
and headline earnings                                                                          
Attributable earnings after taxation                           2 115        2 526     55 457   
Profit on disposal of fixed assets                                 3          137        240   
Taxation effect (reversed)                                                  (38)   (23 994)   
Headline earnings attributable to ordinary shareholders        2 118        2 625     31 703   
Attributable headline earnings per share (cents)                                               
  basic                                                         4,3          5,3       64,5   
  diluted                                                       4,3          5,3       64,5   


2.   Basis of presentation
     The Group is domiciled in South Africa. The unaudited condensed consolidated interim financial results at and for the
     half-year ended 27 June 2012 comprise the company and its subsidiaries (the 'Group').
     The Group's principal accounting policies have been applied consistently over the current and prior financial periods/
     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 in compliance with International Accounting
     Standard (IAS) 34 as well as the AC 500 standards as issued by the Accounting Practices Board or its successor.

                                                       Unaudited    Unaudited    Audited   
                                                      Six months   Six months    Year to   
                                                         to June      to June   December   
                                                            2012         2011       2011   
                                                           R'000        R'000      R'000   
3.   Commitments                                                                           
Capital commitments  authorised but not contracted        3 150        1 484      4 377   
Capital commitments  contracted                           8 422        2 157      1 625   
                                                          11 572        3 641      6 002   
Operating lease commitment                                 3 412        4 626      4 068   


COMMENTARY
Delta EMD's financial performance for the half-year ended 27 June 2012 (the "period") reflects limited demand for
electrolytic manganese dioxide from global battery producers and higher input costs. Volumes produced and sold
by the Group's South African EMD production facility remain below capacity, price competition continues, and input
costs increased.

GROUP RESULTS
The Group's revenue for the period totaled R173 million, and was 32% higher than for the half-year ended
27 June 2011 (the "prior period"). Sales volumes improved, particularly of higher grade EMD. The majority of the
Group's sales during the period were made in Rand-denominated selling prices. The period's average Rand-
denominated selling price was in-line with the prior period.

The Group suffered from higher per unit production costs during the period due largely to higher energy-related input
costs and lower efficiencies. These higher input costs could not be recovered from selling price increases and the
Group's margins for the period were lower than for the prior period.

The Group's profit before taxation was adversely affected by an under recovery of manufacturing overheads of
R15 million due to limited production volumes, and by foreign exchange losses of R4 million related to US dollar sales
made during 2011.The Group's profit before tax for the period totaled R5 million and was in-line with the prior period.
Attributable earnings after taxation for the period totaled R2 million (2011: R3 million).

The Group's earnings per share for the period were 4,3 cents (2011: 5,1 cents), and headline earnings per share
were 4,3 cents (2011: 5,3 cents).

The Group's net cash inflow from trading for the period totaled R14 million (2011: R11 million). Working capital
decreased by R19 million due to a decrease in trade debtors, and the Group's capital expenditures for the period
totaled R3 million (2011: R8 million). The Group's period-end cash balance, after a R12 million dividend payment,
increased to R133 million from the December 2011 cash balance of R119 million.

DISPOSAL OF THE GROUP'S AUSTRALIAN PLANT SITE
Marketing efforts to sell the Group's former plant site in Australia continue.

PROSPECTS
The Group's second half sales volumes are expected to improve over the first half of 2012, whilst selling prices are
expected to remain under pressure. The Group's challenge remains to achieve the best possible sales mix in soft
market conditions. Production volumes are also expected to increase which should provide improved manufacturing
overhead recoveries. The majority of the Group's second half sales are expected to be Rand-denominated sales,
reducing the impact of foreign exchange movements.

Any reference to future financial performance included in this announcement has not been reviewed or reported on
by the Group's auditors.

DIVIDEND
No interim dividend has been declared.

PREPARER OF FINANCIAL STATEMENTS
These condensed consolidated financial statements have been prepared under the supervision of JS Seymore,
CA(SA), in his capacity as Finance Director of the Group.

TG Atkinson                                                 P Baijnath
(Chairman)                                                  (Chief Executive Officer)
15 August 2012
Johannesburg

DELTA EMD LIMITED
Registration number: 1919/006020/06
Share code: DTA      ISIN: ZAE000132817
("Delta EMD" or "the Group")

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 (Finance Director)
*USA

Sponsor:
Rand Merchant Bank (A division of FirstRand Bank Limited)



Date: 15/08/2012 11:45:00 Supplied by www.sharenet.co.za                     
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