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Delta Emd Limited - Audited Group Results And Cash Dividend Declaration For The Year Ended 27 December 2012

Release Date: 14/02/2013 16:00:00      Code(s): DTA     
DELTA EMD LIMITED
Registration number: 1919/006020/06
Income tax number: 9375057719
Share code: DTA      ISIN: ZAE000132817
("Delta EMD" or "the Group")

AUDITED GROUP RESULTS AND CASH DIVIDEND DECLARATION
FOR THE YEAR ENDED 27 DECEMBER 2012

CONDENSED GROUP STATEMENT OF COMPREHENSIVE INCOME
                                                                   Audited       Audited
                                                                   year to       year to
                                                                  December      December
                                                                      2012          2011
                                                         Note        R'000         R'000

Revenue                                                            365 459       366 812
Gross profit                                                       117 821       127 797
Investment income                                                    6 226         3 955
Under recovery of manufacturing overheads                         (25 393)      (18 971)
Distribution expenses                                             (32 034)      (29 948)
Administrative expenses                                           (31 282)      (31 829)
Other                                                              (4 006)       (4 244)
Loss on sale of assets                                                            (137)
Impairment raised                                                    (659)         (103)
Net foreign exchange losses                                        (3 808)         (552)
Profit before taxation                                              26 865        45 968
Taxation                                                           (9 742)         9 489
 Normal taxation                                                   (8 513)      (14 505)
 Secondary taxation on companies                                   (1 229)             
 Capital gains taxation reversed                                                 23 994

Profit for the year                                                 17 123        55 457
Other comprehensive income
 Increase in foreign currency translation reserve                    1 746         4 850
Total comprehensive income for the year                             18 869        60 307
Attributable to equity holders of parent company
Profit for the year                                                 17 123        55 457
Total comprehensive income for the year                             18 869        60 307
Headline earnings attributable to ordinary shareholders     1       17 782        31 703
Number of shares in issue ('000)                                    49 166        49 166
Weighted number of shares in issue ('000)                           49 166        49 166
Dilutive number of shares in issue ('000)                           49 166        49 166
Attributable earnings per share (cents)
 basic                                                               34,8         112,8
 diluted                                                             34,8         112,8
Dividend per share (cents)                                            25,0             

CONDENSED GROUP STATEMENT OF FINANCIAL POSITION
                                                                   Audited       Audited
                                                                   year to       year to
                                                                  December      December
                                                                      2012          2011
                                                                     R'000         R'000
ASSETS
Non-current assets
Property, plant and equipment                                      260 251       269 285
Other non-current assets                                             3 291         4 447
Current assets
 Inventories                                                      121 142       115 033
 Trade and other receivables                                      105 037       146 827
 Bank balances and cash                                           153 622       118 996
Non-current assets held for sale                                    12 871        12 067
Total assets                                                       656 214       666 655
EQUITY AND LIABILITIES
Total shareholders' funds                                          524 446       516 793
Non-current liabilities
Deferred taxation liabilities                                       46 191        49 690
Other non-current liabilities                                        8 108         7 262
Current liabilities
 Trade and other payables                                          62 669        70 116
 Foreign exchange contracts liability                                           11 937
 Short-term provisions                                              3 727         2 500
 Taxation payable                                                  11 073         8 357
Total equity and liabilities                                       656 214       666 655
Net asset value per share (cents)                                    1 067         1 051

CONDENSED GROUP STATEMENT OF CASH FLOWS
                                                                   Audited       Audited
                                                                   year to       year to
                                                                  December      December
                                                                      2012          2011
                                                                     R'000         R'000

Cash generated by trading                                           45 821        61 415
Decrease/(Increase) in working capital                              17 288      (43 144)
Cash generated by operations                                        63 109        18 271
Net interest received                                                6 226         3 955
Taxation paid  normal                                             (9 296)       (4 631)
Taxation paid  secondary tax on companies                         (1 229)             
Cash inflow from operating activities                               58 810        17 595
Replacement capital expenditure                                   (14 074)      (18 456)
Decrease in non-current assets                                       1 156         1 524
Proceeds on sale of assets                                                          153
Net cash inflow before financing activities                         45 892           816
Dividend paid  ordinary                                          (12 291)             
Net increase in cash and cash equivalents                           33 601           816
Cash and cash equivalents at beginning of the year                 118 996       112 964
Currency translation of cash in foreign subsidiary                   1 025         5 216
Cash and cash equivalents at end of the year                       153 622       118 996

CONDENSED GROUP STATEMENT OF CHANGES IN EQUITY

                                              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 year                               60 307       60 307
Foreign currency translation reserve                       4 850      (4 850)            
Balance at 27 December 2011                   4 856         1 550      510 387      516 793
Total comprehensive income for the year                               18 869       18 869
Foreign currency translation reserve                       1 746      (1 746)            
Dividend paid  ordinary                                            (12 291)     (12 291)
Prior years unclaimed dividends reversed                               1 075        1 075
Balance at 27 December 2012                   4 856         3 296      516 294      524 446

NOTES
                                                                            Audited      Audited
                                                                            year to      year to
                                                                           December     December
                                                                               2012         2011
                                                                              R'000        R'000
1.   Reconciliation between attributable earnings and headline earnings
     Attributable earnings after taxation                                    17 123       55 457
     Impairment raised                                                          659          103
     Loss on sale of assets                                                                 137
     Capital gains taxation reversed                                                   (23 994)
     Headline earnings attributable to ordinary shareholders                 17 782       31 703
     Attributable headline earnings per share (cents)
      basic                                                                   36,2         64,5
      diluted                                                                 36,2         64,5

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 2012 comprise the Company and its subsidiaries (the Group) and have been audited in compliance with
    section 29(1)(e) of the Companies Act of South Africa.

    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 recognition and measurement
    criteria of International Financial Reporting Standards (IFRS), interpretations issued by the IFRS Interpretations Committee
    (IFRIC) containing the information required by International Accounting Standard (IAS) 34, the Companies Act of South Africa,
    as well as the SAICA Financial Reporting Guides as issued by the Accounting Practices Committee and Financial Reporting
    Pronouncements as issued by Financial Reporting Standards Council.

    The auditors, Deloitte & Touche, have issued their unmodified opinion on the Group's financial statements for the year ended
    27 December 2012. 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.

                                                            2012     2011
                                                           R'000    R'000
3.   Commitments
     Capital commitments  authorised but not contracted    6 475   4 247
     Capital commitments  contracted                       4 975   1 645
                                                           11 450   5 892
     Operating lease commitment                             3 471   4 068

COMMENTARY
During the year, the global market for electrolytic manganese dioxide (EMD) remained soft and was price competitive. Certain local input
costs increased significantly. Consequently the Group's margins declined in comparison with the prior year.

Market demand remained soft as general economic conditions limited consumer spending. Demand for EMD also was impacted by
migration to embedded rechargeable batteries and to smaller batteries that require less EMD. Market demand continued to fall short of
supply, affording battery producers more attractive prices.

The Group's volumes sold and volumes produced for the year fell short of capacity resulting in under recovery of manufacturing overheads,
and operational improvements were more than offset by certain input cost increases that exceeded inflation.

PERFORMANCE OF THE GROUP'S EMD BUSINESS
Revenue for the year totaled R365,5 million, and was in line with the prior year (2011: R366,8 million).

Sales volumes and sales mix for the year were in line with the prior year. The majority of sales were made in Rand-denominated selling
prices, which were slightly higher than the prior year. The average Rand selling price realised during the year on US dollar-denominated
sales was marginally lower than the prior year, due to reduced US dollar selling prices and notwithstanding a weaker Rand.

Average per unit production cost for the year increased from the prior year, due to substantial input cost increases, particularly for
electricity, which were only in part offset by operational improvements.

Administration costs were in line with the prior year.

Trading profit for the year totaled R29,1 million and fell short of the prior year (2011: R44,7 million), due to reduced margins and under
recovery of manufacturing overheads.

Interest received increased to R6,2 million (2011: R4,0 million), and the Group's taxation charge for the year was R9,7 million (2011: a tax
credit of R9,5 million).

Attributable earnings for the year totaled R17,1 million (2011: R55,5 million), and earnings per share was 34,8 cents (2011: 112,8 cents).
Headline earnings per share for the year was 36,2 cents (2011: 64,5 cents).

Net cash generated by operations for the year totaled R63,1 million (2011: R18,3 million). Working capital decreased during the year by
R17,3 million (2011 increase R43,1 million), and capital expenditure for the year totaled R14,1 million (2011: R18,5 million).

Year end cash balances increased to R153,6 million (2011: R119,0 million).

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

PROSPECTS
We do not expect short-term growth in the global EMD market and therefore expect current market conditions to continue.

Efforts to sell more material into developing markets in South East Asia continue, as do our efforts to commercialise a higher grade
material.

Recent movements in foreign exchange rates enhance the competitiveness of our Rand-denominated selling prices, and improve the
margins we realise on products sold in US dollar prices. Such movements, however, can reverse.

We continue our research and development efforts toward the production and sale of manganese-based materials for use in electric
vehicle batteries, a potential new market.

DIRECTORATE
As announced on 3 October 2012, Mr Luigi Matteucci joined the Board as an independent non-executive director with effect from
15 October 2012. Mr Matteucci has also been appointed a member of the Audit and Risk Committee.

CASH DIVIDEND
The Group is pleased to announce the declaration of a final gross cash dividend of 25 cents (21,25 cents net of dividend withholding tax)
per ordinary share for the year ended 27 December 2012.

The dividend has been declared from income reserves and no secondary tax on companies' credits has been used. A dividend withholding
tax of 15% will be applicable to all shareholders who are not exempt.

The issued share capital at the declaration date is 49 165 553 ordinary shares.

The salient dates are as follows:
Last day for trading to qualify and participate in the final dividend
(and change of address of dividend instructions)                                                                Friday, 8 March 2013
Trading "ex dividend" commences                                                                                Monday, 11 March 2013
Record date                                                                                                    Friday, 15 March 2013
Dividend payment date                                                                                          Monday, 18 March 2013

Share certificates may not be dematerialised or rematerialised between Monday, 11 March 2013 and Friday, 15 March 2013, 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
Chief Financial Officer of the Group.

TG Atkinson                                                             P Baijnath
(Chairman)                                                              (Chief Executive Officer)

14 February 2013
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, L Matteucci, BR Wright
Non-executive: TG Atkinson* (Chairman) *USA
Executive: P Baijnath (Chief Executive Officer), JS Seymore, CA(SA) (Chief Financial Officer)

Sponsor: Rand Merchant Bank (A division of FirstRand Bank Limited)
Date: 14/02/2013 04:00:00 Supplied by www.sharenet.co.za                     
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