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Delta Emd Limited - Unaudited Group Results For The Six Months Ended 27 June 2013

Release Date: 22/08/2013 13:00:00      Code(s): DTA     
DELTA EMD LIMITED
Registration number: 1919/006020/06
Income tax number: 9375057719
Share code: DTA ZAE000132817
("Delta EMD" or "the Group")

UNAUDITED GROUP RESULTS 
FOR THE SIX MONTHS ENDED 27 JUNE 2013

CONDENSED GROUP STATEMENT OF COMPREHENSIVE INCOME
                                                                    Unaudited      Unaudited       Audited
                                                                   six months     six months       year to
                                                                      to June        to June      December
                                                                         2013           2012          2012
                                                           Note         R'000          R'000         R'000
Revenue                                                               171 031        172 534       365 459
Gross profit                                                           62 408         53 147      117 821
Investment income                                                       3 226          2 720         6 226
Under recovery of manufacturing overheads                             (17 309)       (14 511)      (25 393)
Distribution expenses                                                 (15 997)       (15 792)      (32 034)
Administrative expenses                                               (19 215)       (17 022)      (31 282)
Other                                                                  (3 245)                     (4 006)
Impairment raised                                                                                   (659)
Net foreign exchange gains/(losses)                                     4 158         (3 545)       (3 808)
Profit before taxation                                                 14 025          4 996        26 865
Taxation                                                               (4 732)        (2 880)       (9 742)
 Normal taxation                                                       (4 732)        (1 651)       (8 513)
 Secondary taxation on companies                                                     (1 229)       (1 229)

Profit for the period                                                   9 293          2 115        17 123
Other comprehensive income
 Increase in foreign currency translation reserve                         761            621         1 746
Total comprehensive income for the period                              10 054          2 736        18 869
Attributable to equity holders of parent company
Profit for the period                                                   9 293          2 115        17 123
Total comprehensive income for the period                              10 054          2 736        18 869
Headline earnings attributable to
 ordinary shareholders                                        1         9 293          2 118        17 782
Number of shares in issue ('000)                                       49 166         49 166        49 166
Weighted number of shares in issue ('000)                              49 166         49 166        49 166
Dilutive number of shares in issue ('000)                              49 166         49 166        49 166
Attributable earnings per share (cents)
 basic                                                                  18,9            4,3          34,8
 diluted                                                                18,9            4,3          34,8
Dividend per share (cents)                                               25,0           25,0          25,0

CONDENSED GROUP STATEMENT OF FINANCIAL POSITION
                                                                    Unaudited     Unaudited       Audited
                                                                   six months    six months       year to
                                                                      to June       to June      December
                                                                         2013          2012          2012
                                                                        R'000         R'000         R'000
ASSETS
Non-current assets
Property, plant and equipment                                         255 271       261 459       260 251
Other non-current assets                                                3 707         4 849         3 291
Current assets
 Inventories                                                         147 063       116 971       121 142
 Trade and other receivables                                          88 845       107 279       105 037
 Bank balances and cash                                              148 901       132 558       153 622
Non-current assets held for sale                                       13 400        12 288        12 871
Total assets                                                          657 187       635 405       656 214
EQUITY AND LIABILITIES
Total shareholders' funds                                             522 208       507 238       524 446
Non-current liabilities
Deferred taxation liabilities                                          45 264        46 951        46 191
Other non-current liabilities                                           8 401         7 685         8 108
Current liabilities
 Trade and other payables                                             70 844        63 583        62 669
 Short-term provisions                                                 3 727         2 500         3 727
 Taxation payable                                                      6 743         7 447        11 073
Total equity and liabilities                                          657 187       635 405       656 214
Net asset value per share (cents)                                       1 062         1 032         1 067

CONDENSED GROUP STATEMENT OF CASH FLOWS
                                                                    Unaudited     Unaudited        Audited
                                                                   six months    six months        year to
                                                                      to June       to June       December
                                                                         2013          2012           2012
                                                                        R'000         R'000          R'000
Cash generated by trading                                              22 707        13 557         45 821
(Increase)/decrease in working capital                                 (1 556)       19 098         17 288
Cash generated by operations                                           21 151        32 655         63 109
Net interest received                                                   3 226         2 720          6 226
Taxation paid  normal                                                 (9 992)       (6 530)        (9 296)
Taxation paid  secondary tax on companies                                                        (1 229)
Cash inflow from operating activities                                  14 385        28 845         58 810
Replacement capital expenditure                                        (6 636)       (3 033)       (14 074)
(Increase)/decrease in non-current asset                                 (416)         (402)         1 156
Net cash inflow before financing activities                             7 333        25 410         45 892
Dividend paid  ordinary                                              (12 291)      (12 291)       (12 291)
Net (decrease)/increase in cash and cash equivalents                   (4 958)       13 119         33 601
Cash and cash equivalents at beginning of period                      153 622       118 996        118 996
Currency translation of cash in foreign subsidiary                        237           444          1 025
Cash and cash equivalents at end of period                            148 901       132 559        153 622

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 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
Total comprehensive income for the period                                           16 133        16 133
Creation of foreign currency translation reserve                       2 675         (2 675)            
Prior year unclaimed dividend reversed                                               1 075         1 075
Balance at 27 December 2012                               4 856         3 296        516 294       524 446
Total comprehensive income for the period                                           10 054        10 054
Creation of foreign currency translation reserve                         761           (761)            
Dividend paid                                                                      (12 291)      (12 291)
Balance at 27 June 2013                                   4 856         4 057        513 295       522 208

NOTES
                                                                Unaudited     Unaudited      Audited
                                                               six months    six months      year to
                                                                  to June       to June     December
                                                                     2013          2012         2012
                                                                    R'000         R'000        R'000
1.   Reconciliation between attributable earnings
     and headline earnings
     Attributable earnings after taxation                           9 293         2 115       17 123
     Impairment raised                                                                         659
     Profit on disposal of fixed assets                                              3            
     Taxation effect                                                                             
     Headline earnings attributable to ordinary shareholders        9 293         2 118       17 782
     Attributable headline earnings per share (cents)
      basic                                                         18,9           4,3         36,2
      diluted                                                       18,9           4,3         36,2

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 2013 comprise the company and its subsidiaries (the 'Group').

    The Group's principal accounting policies and methods of computation in the unaudited Group results 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 IFRS Interpretations
    Committee (IFRIC) containing the information required by International Accounting Standards (IAS) 34, the Companies Act of
    South Africa, as well as SAICA Financial Reporting Guides as issued by the Accounting Practices Committee and Financial
    Reporting Pronouncements as issued by Financial Reporting Standards Council.

3.  Unaudited results

    This report has not been audited or reviewed.
                                                                                Unaudited           Unaudited             Audited
                                                                               six months          six months             year to
                                                                                  to June             to June            December
                                                                                     2013                2012                2012
                                                                                    R'000               R'000               R'000

4.    Commitments
      Capital commitments  authorised but not contracted                                              3 150               6 475
      Capital commitments  contracted                                              3 943               8 422               4 975
                                                                                    3 943              11 572              11 450
      Operating lease commitment                                                    3 160               3 412               3 471

COMMENTARY
Market conditions in the global electrolytic manganese dioxide (EMD) market remained soft during the six-month period
ended 27 June 2013 (the "period"). Market demand continued to fall short of global supply, and selling prices remained under
pressure.

The Group's lower than planned sales volumes were offset by an improved sales mix and by a higher average Rand-
denominated selling price. Improved operating margins provided improved earnings.

PERFORMANCE OF THE GROUP'S EMD BUSINESS
Revenue for the period totaled R171 million and was in line with revenue for the period ended 27 June 2012 (the "comparable
period") (2012: R172,5 million). A reduction in sales volumes was offset by an improved sales mix and by a higher average
Rand-denominated selling price.

Average per unit production costs for the period increased over the comparable period. Input cost increases were partly offset
by operational improvements, and operating inefficiencies continued due in part to production volumes falling well short of
capacity. Administration costs increased due to inflation, as well as due to increased expenditures on product and market
development. Additional expenses were also incurred responding to regulatory reviews of the outstanding EU and Japanese
anti-dumping duties.

The Group's higher average selling price resulted from an improved sales mix, more favourable foreign exchange rates, and
some selling price increases, and resulted in improved operating margins.

Trading profit for the period improved to R9,8 million (2012: R5,8 million).

The revaluation of US Dollar debtors provided a foreign exchange gain of R4,2 million (2012: a loss of R3,6 million), and interest
received increased to R3,2 million (2012: R2,7 million). Profit before tax was R14,0 million (2012: R5,0 million), and the Group's
taxation charge for the period was R4,7 million (2012: R2,9 million).

Attributable earnings for the period totaled R9,3 million (2012: R2,1 million), and earnings and headline earnings per share
were 18,9 cents (2012: 4,3 cents).

Net cash generated by operations for the period totaled R21,2 million (2012: R32,7 million). Working capital increased
during the period by R1,6 million (2012: a R19,1 million decrease), and capital expenditures for the period totaled R6,6 million
(2012: R3,0 million). Dividend payments during the period totaled R12,3 million (2012: R12,3 million).

Cash balances as at 27 June 2013 totaled R148,9 million (December 2012: R153,6 million).

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

PROSPECTS
The Group's second half sales volumes are forecast to increase over the period's sales volumes in line with historic seasonality,
whilst selling prices are expected to remain under pressure.

The Group's challenge remains to achieve the best possible sales volumes and mix in soft market conditions and to diversify
its customer base. Production volumes are expected to remain at levels similar to the period and input costs are expected to
continue to increase, resulting in continued poor recovery of manufacturing overheads and continued pressure on margins.

The Group continues to assess its strategic position, as well as the adequacy of the returns that might be possible from the
investments required to sustain the business.

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

DIRECTORATE
Mr Lionel Bird retired as independent non-executive director and Chairman of the Audit and Risk Committee on 3 May 2013.
Mr Luigi Matteucci was appointed as Chairman of the Audit and Risk Committee on 3 May 2013.

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 Chief Financial Officer of the Group.

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

21 August 2013
Johannesburg

DELTA EMD LIMITED
Registration number: 1919/006020/06
Income tax number: 9375057719
Share code: DTA 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: AC Hicks, BR Wright, L Matteucci
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: 22/08/2013 01:00:00 Supplied by www.sharenet.co.za                     
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