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Delta Emd Limited - Unaudited Condensed Results For The Six Months Ended 27 June 2015

Release Date: 03/09/2015 07:10:00      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 CONDENSED RESULTS
FOR THE SIX MONTHS ENDED 27 JUNE 2015

CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

                                                                           Unaudited        Unaudited     Audited
                                                                          six months       six months     year to
                                                                             to June          to June    December
                                                                                2015             2014        2014
                                                                Note           R'000            R'000       R'000
Revenue                                                                       15 211          120 265     283 922
Gross profit                                                                   2 988           43 068     119 671
Net investment income                                                          6 400            2 958       6 859
Under recovery of manufacturing overheads                                          ?         (12 382)    (12 258)
Distribution expenses                                                        (1 865)         (11 381)    (25 668)
Administrative expenses                                                      (9 759)         (30 795)    (70 717)
Expenses related to discontinuation of business                              (8 601)         (89 470)   (175 283)
Other                                                                             85          (1 915)     (3 152)
Profit on sale of assets                                                         896                8      23 257
Impairment raised                                                                  ?                ?    (33 085)
Net foreign exchange gains                                                       966            1 719       7 264
Loss before taxation                                                         (8 890)         (98 190)   (163 112)
Taxation                                                                           ?            (928)      10 193
Loss for the period                                                          (8 890)         (99 118)   (152 919)
Other comprehensive income
Increase in foreign currency translation reserve                                   ?            1 308         430
Reversal of prior year foreign currency translation reserve                    4 650                ?           ?
Total comprehensive loss for the period                                      (4 240)         (97 810)   (152 489)
Attributable to equity holders of parent company
Loss for the period                                                          (8 890)         (99 118)   (152 919)
Total comprehensive loss for the period                                      (4 240)         (97 810)   (152 489)
Headline loss attributable to ordinary shareholders                1         (9 535)         (99 126)   (145 843)
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 and diluted                                                           (18,0)          (201,6)     (311,0)
Dividend per share (cents)                                                     250,0                ?           ?

CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

                                                                           Unaudited        Unaudited     Audited
                                                                          six months       six months     year to
                                                                             to June          to June    December
                                                                                2015             2014        2014
                                                                               R'000            R'000       R'000
ASSETS
Non-current assets
Property, plant and equipment                                                      ?          128 016      53 774
Other non-current asset                                                            ?            2 754           ?
Current assets
? Inventories                                                                  2 403          111 972      14 676
? Trade and other receivables                                                  8 470           53 953      78 315
? Bank balances and cash                                                     241 171          134 001     227 378
? Taxation receivable                                                            101                ?         101
Non-current assets held for sale                                              11 810           17 485      45 466
Total assets                                                                 263 955          448 181     419 710
EQUITY AND LIABILITIES
Total shareholders' funds                                                    160 166          346 468     291 970
Non-current liabilities
Deferred taxation liabilities                                                      ?           10 988           ?
Non-current provisions                                                         6 168            7 427       5 228
Current liabilities
? Trade and other payables                                                     5 549           83 256      25 301
? Short-term provisions                                                       92 064                ?      97 065
? Taxation payable                                                                 8               42           8
Non-current liabilities held for sale                                              ?                ?         138
Total equity and liabilities                                                 263 955          448 181     419 710
Net asset value per share (cents)                                                326              705         594

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

                                                                           Unaudited        Unaudited     Audited
                                                                           six month       six months     year to
                                                                             to June          to June    December
                                                                                2015             2014        2014
                                                                               R'000            R'000       R'000
Cash (utilised) by trading                                                  (20 077)         (98 549)    (57 994)
Decrease in working capital                                                   62 230          120 344     135 511
Cash generated by operations                                                  42 153           21 795      77 517
Net investment income                                                          6 400            2 958       6 859
Taxation paid                                                                      ?          (7 704)     (7 705)
Cash inflow from operating activities                                         48 553           17 049      76 671
Replacement capital expenditure                                                    ?          (3 981)     (3 875)
Decrease in non-current asset                                                      ?            (480)       2 274
Proceeds on sale of assets                                                    88 163               26      30 999
Net cash inflow before financing activities                                  136 716           12 614     106 069
Dividend paid ? ordinary                                                   (122 914)                ?           ?
Net increase in cash and cash equivalents                                     13 802           12 614     106 069
Cash and cash equivalents at beginning of period                             227 378          121 128     121 128
Currency translation of cash in foreign subsidiary                               (9)              259         181
Cash and cash equivalents at end of period                                   241 171          134 001     227 378

CONDENSED CONSOLIDATED 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 2013                                      4 856         4 220          435 202     444 278
Total comprehensive loss for the period                                        1 308         (99 118)    (97 810)
Balance at 27 June 2014                                          4 856         5 528          336 084     346 468
Total comprehensive loss for the period                                        (878)         (53 801)    (54 679)
Prior year unclaimed dividend reversed                                                            181         181
Balance at 27 December 2014                                      4 856         4 650          282 464     291 970
Loss for the period                                                                           (8 890)     (8 890)
Reversal of prior year foreign currency translation reserve                  (4 650)            4 650           ?
Dividend paid                                                                      ?        (122 914)   (122 914)
Balance at 27 June 2015                                          4 856             ?          155 310     160 166

NOTES
                                                                           Unaudited        Unaudited     Audited
                                                                          six months       six months     year to
                                                                             to June          to June    December
                                                                                2015             2014        2014
                                                                               R'000            R'000       R'000
1.   Reconciliation between attributable loss and headline loss
     Attributable loss after taxation                                        (8 890)         (99 118)   (152 919)
     Impairment raised                                                             ?                ?      33 085
     Profit on sale of fixed assets                                            (896)              (8)    (23 257)
     Taxation effect raised/(reversed)                                           251                ?     (2 752)
     Headline earnings attributable to ordinary shareholders                 (9 535)         (99 126)   (145 843)
     Attributable headline loss per share
     ? basic and diluted                                                      (19,4)          (201,6)     (296,6)

2.   Basis of presentation
     The Group is domiciled in South Africa. The unaudited condensed consolidated financial results at and for the period ended 27 June 2015
     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.

     On 5 March 2014 the company announced that the board of directors had taken the decision, subject to approval by the company's
     shareholders, to discontinue the operations in a phased and orderly manner during 2014 and to realise value for the company's assets
     during 2014 and 2015. The decision was approved at the Annual General Meeting of the company held on 9 May 2014. The company will
     be wound down and deregistered in due course. The above information highlights that the going concern principle is not applicable in the
     preparation of the company's financial statements. When the company ceases trading the directors are of the opinion that the company will
     be in a position to discharge all of its liabilities, due to the company's cash resources and to recover the assets at their carrying amounts.
     The effect, if any, of preparing the financial statements, other than on the going concern basis will be negligible. Consequently the financial
     statements have been prepared on a basis consistent with International Financial Reporting Standards which among other things, requires
     writing assets down to their recoverable amounts. It also requires recognising a liability for contractual commitments that may have become
     onerous as a consequence of the decision to cease trading.

     The Group's condensed consolidated financial results have been prepared in accordance with the requirements of the JSE Limited Listings
     Requirements for interim reports, and the requirements of the Companies Act applicable to condensed financial statements. The Listings
     Requirements require interim reports to be prepared in accordance with the framework concepts and the measurement and recognition
     requirements of International Financial Reporting Standards (IFRS), the SAICA Financial Reporting Guides as issued by the Accounting
     Practices Committee, Financial Pronouncements as issued by the Financial Reporting Standards Council as well as, requirements by
     IAS 34 Interim Financial Reporting.

                                                                             2015           2014             2014
                                                                            R'000          R'000            R'000
3.   Commitments                                                                ?
     Capital commitments ? authorised but not contracted                        ?              ?                ?
     Capital commitments ? contracted                                           ?          2 675                ?
                                                                                ?          2 675                ?
     Operating lease commitment                                                89          1 860            2 368

COMMENTARY ? Unaudited
The Group's results for the period ended 27 June 2015 (the "period") reflect the actions taken with respect to the discontinuation of
the business, which include the sale of final product inventory and the expenses incurred or accrued relating to the discontinuation.
The results also include the sale of certain assets which were finalised during the period.

Revenue totalled R15,2 million for the period (2014: R120,3 million) and included the sale of all remaining product inventory.

The amount which will eventually be incurred in connection with the decontamination, demolition and remediation of the Nelspruit plant
remains dependent upon approval of the decommissioning plan as submitted to the Department of Environmental Affairs. Regulatory
review of the plan proposed for the decontamination and remediation of the Nelspruit plant site is proceeding as planned and approval
of the plan is expected to be granted during 2015.

Net expenses relating to the discontinuation of the business totalled R8,6 million for the period (2014: R89,5 million), including
retrenchments, retention incentives, a lease termination, and sundry revenue from the sale of waste materials.

Agreements for the sale and salvage of the majority of the Nelspruit plant and equipment, with a book value of R35,2 million, were
concluded during the period. All suspensive conditions for these agreements were fulfilled by 27 June 2015.

Assets classified as non-current assets held for sale (net book value: R11,8 million) include the Nelspruit plant site land and the research
and development plant and laboratory. The sale of the research and development plant and laboratory (net book value R5,0 million)
was concluded in August at net book value.

The R92,1 million short-term provisions (December 2014: R97,1 million) relate to provisions for remaining retrenchment costs
(R9,1 million), incentives (R22,7 million), an estimated settlement related to the former use of a landfill site (R22,3 million), an
estimate for the decontamination, demolition and remediation of the Nelspruit plant site (R31,7 million), and settlement of lease
termination (R6,3 million).

The Group's period-end cash balance increased by R13,8 million to R241,2 million (December 2014: R227,4 million).

Net cash utilised by operations for the period totalled R20,1 million (2014: R98,5 million). Working capital decreased during the period by
R62,2 million (2014: R120,3 million), and proceeds from sales of assets totalled R88,2 million (2014: Nil), and included Nelspruit plant
and equipment.

Net investment income received totalled R6,4 million (2014: R3,0 million).

Loss for the period totalled R8,9 million (2014: R99,1 million), and the loss per share was 18,0 cents (2014: 201,6 cents). Headline loss
per share for the period was 19,4 cents (2014: 201,6 cents).

PROSPECT
The salvaging of plant and equipment from the Nelspruit site continues and will be followed by demolition of remaining structures.
Resolution of the Company's remaining environmental responsibilities awaits regulatory reviews and approvals and completion of
required remediation. The Company has resolved most outstanding commercial and contractual obligations, and continues to market
the Nelspruit plant site. The Board intends to declare appropriate dividends to shareholders when the resolution of the matters is
reasonably certain.

DIRECTORATE
On 14 May 2015 the following changes to the Board of Directors were made:
Mr Praveen Baijnath resigned as Chief Executive Officer.
Mr Baijnath was appointed a Non-independent, Non-executive Director.
Mr Johan Seymore, the Chief Financial Officer and Executive Director of the Board, has been appointed Acting Chief Executive Officer
and has resigned as Chief Financial Officer and Company Secretary.
Mrs Emma Nel has been appointed Acting Chief Financial Officer and Company Secretary.

PREPARER OF FINANCIAL STATEMENTS
These condensed consolidated financial statements have been prepared under the supervision of E Nel CA(SA) in her capacity as
Acting Chief Financial Officer of the Group.

TG Atkinson                                                         J Seymore
(Chairman)                                                          (Acting Chief Executive Officer)

Johannesburg
2 September 2015

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, P Baijnath
Executive: JS Seymore, CA(SA) (Acting Chief Executive Officer), EJ Nel CA(SA) (Acting Chief Financial Officer)

Sponsor: Rand Merchant Bank (A division of FirstRand Bank Limited)                                        Released on 3 September 2015
Date: 03/09/2015 07:10:00 Supplied by www.sharenet.co.za                     
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