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Delta Emd Limited - Unaudited Group Results For The Six Months Ended 27 June 2014

Release Date: 22/08/2014 10:38:00      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")

UNAUDITED GROUP RESULTS
FOR THE SIX MONTHS ENDED 27 JUNE 2014

CONDENSED GROUP STATEMENT OF COMPREHENSIVE INCOME                               
                                                               Unaudited      Unaudited       Audited      
                                                              six months     six months       year to      
                                                                 to June        to June      December      
                                                                    2014           2013          2013      
                                                      Note         R'000          R'000         R'000      
Revenue                                                          120 265        171 031       375 187      
Gross profit                                                      43 068         62 408       129 220      
Investment income                                                  2 958          3 226         6 073      
Under recovery of manufacturing overheads                       (12 382)       (17 309)      (29 422)      
Distribution expenses                                           (11 381)       (15 997)      (34 469)      
Administrative expenses                                         (30 795)       (19 215)      (39 214)      
Expenses related to shut down of business                       (89 470)              -             -      
Other                                                            (1 915)        (3 245)       (8 799)      
Profit on sale of assets                                               8              -            46      
Impairment raised on fixed assets                                      -              -     (121 655)      
Net foreign exchange gains/(losses)                                1 719          4 158         4 535      
(Loss)/profit before taxation                                   (98 190)         14 025      (93 685)      
Taxation                                                           (928)        (4 732)        24 568      
Normal taxation                                                    (928)        (4 732)        24 568      
(Loss)/profit for the period                                    (99 118)          9 293      (69 117)      
Other comprehensive income                                                                                 
Increase in foreign currency translation reserve                   1 308            761           924      
Total comprehensive (loss)/profit for the period                (97 810)         10 054      (68 193)      
Attributable to equity holders of parent company                                                           
(Loss)/profit for the period                                    (99 118)          9 293      (69 117)      
Total comprehensive (loss)/income for the period                (97 810)         10 054      (68 193)      
Headline earnings attributable to ordinary                                                                 
shareholders                                             1      (99 126)          9 293        18 538      
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      
Attributable earnings per share (cents)                                                                    
-  basic                                                         (201,6)           18,9       (140,6)      
-  diluted                                                       (201,6)           18,9       (140,6)      
Dividend per share (cents)                                             -           25,0          25,0      


CONDENSED GROUP STATEMENT OF FINANCIAL POSITION                                     
                                                               Unaudited      Unaudited       Audited      
                                                              six months     six months       year to      
                                                                 to June        to June      December      
                                                                    2014           2013          2013      
                                                                   R'000          R'000         R'000      
ASSETS                                                                                                     
Non-current assets                                                                                         
Property, plant and equipment                                    128 016        255 271       132 774      
Other non-current assets                                           2 754          3 707         2 274      
Current assets                                                                                             
-  Inventories                                                   111 972        147 063       161 672      
-  Trade and other receivables                                    53 953         88 845       112 507      
Bank balances and cash                                           134 001        148 901       121 128      
Non-current assets held for sale                                  17 485         13 400        13 182      
Total assets                                                     448 181        657 187       543 537      
EQUITY AND LIABILITIES                                                                                     
Total shareholders' funds                                        346 468        522 208       444 278      
Non-current liabilities                                                                                    
Deferred taxation liabilities                                     10 988         45 264        10 060      
Other non-current liabilities                                      7 427          8 401         7 294      
Current liabilities                                                                                        
-  Trade and other payables                                       83 256         70 844        71 160      
-  Short-term provisions                                               -          3 727         3 000      
-  Taxation payable                                                   42          6 743         7 745      
Total equity and liabilities                                     448 181        657 187       543 537      
Net asset value per share (cents)                                    705          1 062           904  


CONDENSED GROUP STATEMENT OF CASH FLOWS                              
                                                               Unaudited      Unaudited       Audited      
                                                              six months     six months       year to      
                                                                 to June        to June      December      
                                                                    2014           2013          2013      
                                                                   R'000          R'000         R'000      
Cash (utilised)/generated by trading                            (98 549)         22 707        42 313      
Decrease/(Increase) in working capital                           120 344        (1 556)      (39 182)      
Cash generated by operations                                      21 795         21 151         3 131      
Net interest received                                              2 958          3 226         6 073      
Taxation paid - normal                                           (7 704)        (9 992)      (14 890)      
Cash inflow/(outflow) from operating activities                   17 049         14 385       (5 686)      
Replacement capital expenditure                                  (3 981)        (6 636)      (15 844)      
(Increase)/decrease in non-current asset                           (480)          (416)         1 017      
Proceeds on disposal of land, property, plant and equipment           26              -            53      
Net cash inflow/(outflow) before financing activities             12 614          7 333      (20 460)      
Dividend paid - ordinary                                               -       (12 291)      (12 291)      
Net increase/(decrease) in cash and cash equivalents              12 614        (4 958)      (32 751)      
Cash and cash equivalents at beginning of period                 121 128        153 622       153 622      
Currency translation of cash in foreign subsidiary                   259            237           257      
Cash and cash equivalents at end of period                       134 001        148 901       121 128      


GROUP STATEMENT OF CHANGES IN EQUITY                                             
                                                                    Share       Foreign                               
                                                                  capital      currency                               
                                                                      and   translation   Accumulated                  
                                                                  premium       reserve        profit       Total      
                                                                    R'000         R'000         R'000       R'000      
Balance at 27 December 2012                                         4 856         3 296       516 294     524 446      
Total comprehensive loss for the year                                   -           924      (69 117)    (68 193)      
Dividend paid                                                           -             -      (12 291)    (12 291)      
Prior year unclaimed dividend reversed                                  -             -           316         316      
Balance at 27 December 2013                                         4 856         4 220       435 202     444 278      
Total comprehensive loss for the period                                 -             -      (97 810)    (97 810)      
Balance at 27 June 2014                                             4 856         4 220       337 392     346 468      


NOTES                                                                                             
                                                                Unaudited     Unaudited      Audited      
                                                               six months    six months      year to      
                                                                  to June       to June     December      
                                                                     2014          2013         2013      
                                                                    R'000         R'000        R'000      
1.  Reconciliation between attributable earnings                                                         
and headline earnings                                                                                     
Attributable (loss)/earnings after taxation                      (99 118)         9 293     (69 117)      
Impairment raised                                                       -             -      121 655      
Profit on disposal of fixed assets                                    (8)             -         (46)      
Taxation effect (reversed)/raised                                       -             -     (33 954)      
Headline earnings attributable to ordinary shareholders          (99 126)         2 118       18 538      
Attributable headline earnings per share (cents)                                                          
-  basic                                                          (201,6)          18,9         37,7      
-  diluted                                                        (201,6)          18,9         37,7      


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 2014 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
    accounting policies are continuously reviewed to ensure they are applicable and the correct policies to apply to the discontinuation
    of the business.

    The Group's condensed consolidated interim financial results have been prepared in accordance with the framework concepts
    and measurement and recognition requirements 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.

3.  Unaudited results
    The report has not been audited or reviewed.
                                                                                   2014         2013
                                                                                  R'000        R'000
4.  Commitments
    Capital commitments - authorised but not contracted                               -            -
    Capital commitments - contracted                                              2 675        3 943
                                                                                  2 675        3 943
    Operating lease commitment                                                    1 860        3 160

COMMENTARY
Shareholders are referred to the statement released on SENS on 9 May 2014 wherein shareholders were advised that a
resolution to discontinue the business during 2014 and to realise value for the Company's assets during 2014 and 2015, was
approved at the annual general meeting held on 9 May 2014.

The Group's underlying trading results for the six-month period ended 27 June 2014 (the "period") reflect reduced production
and sales volumes, as well as certain expenses incurred or accrued relating to the discontinuation of the business.
Good progress has been made with respect to the discontinuation work plan.

PERFORMANCE FOR THE SIX MONTHS ENDED 27 JUNE 2014
The Group's trading results for the period are lower than for the period ended 27 June 2013 ("comparable period"), due to
lower sales volumes, reduced production volumes, and the additional costs detailed below.
Revenue for the period totalled R120,3 million (2013: R171,0 million).

The Group's average selling price was higher than for the comparable period. Per unit production costs for the period were
higher due to increased input costs.

The R12,3 million (2013: R17,3 million) of manufacturing overhead under recovery reflected in the statement of comprehensive
income relates to the first four months of the period after which electrolytic production was discontinued. All manufacturing
overhead costs thereafter were accounted for in administration expenses.

The period's results includes R89,5 million of expenses relating to the discontinuation, including a R30,0 million provision for
impairment of inventory, a R40,3 million provision for retrenchment expenses, a R6,0 million provision for retention incentives,
as well as R3,5 million paid to advisors and R1,2 million for employee support and outplacement.

Loss before tax was R98,2 million (2013: Profit before tax R14,0 million), and the Group's taxation charge for the period was
R1,0 million (2013: R4,7 million).

Attributable loss for the period totalled R99,1 million (2013: Profit R9,3 million), and loss and headline loss per share were
201,6 cents (2013: earnings and headline earnings per share 18,9 cents).

Assets held for sale increased to R17,5 million (2013: R13,4 million) and only include the former Australia plant site and
non-production property located in Nelspruit. Fixed assets are classified as assets held for sale only when they are
available for immediate transfer of ownership. The majority of the Group's assets require decommissioning before they will
be available for sale.

Net cash inflow before financing activities for the period totalled R12,6 million (2013: R7,3 million) and cash balances as at
27 June 2014 totalled R134,0 million (December 2013: R121,1 million). The reported reduction of working capital includes
significant additional provisions. The net reduction of working capital during the period resulted in the release of R43,4 million
of cash, a substantial portion of which was utilised to fund the expenses relating to the discontinuation of the business.

FORWARD LOOK
The sale of finished goods will continue during the second half with volumes similar to the first half. Product finishing will
continue during the second half, however all manufacturing overheads will be accounted for as administration expenses.
We anticipate further reductions in working capital and that the cash realised from those reductions will be utilised in part to
fund the further expenses relating to the discontinuation of the business.

The marketing of assets held for sale is in progress and efforts to sell the Group's former plant site in Australia continue. The
Group's fixed assets will be available for sale when required regulatory approvals are in hand, and decommissioning has been
completed. Satisfactory progress is being made with respect to both; however the value to be realised from these assets
remains uncertain. Similarly the expenses to be incurred decommissioning, demolishing and rehabilitating the plant sites also
remain uncertain and no provisions have been made for these expenses.

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)

Nelspruit
21 August 2014

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)                             

Released on 22 August 2014


Date: 22/08/2014 10:38:00 Supplied by www.sharenet.co.za                     
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