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SCL - SacOil - Reviewed Provisional Results and Further Cautionary Announcement
for the year ended 28 February 2010
SacOil Holdings Limited
(Formerly SA Mineral Resources Corporation Limited)
(Incorporated in the Republic of South Africa)
(Registration number 1993/000460/06)
JSE code: SCL
ISIN: ZAE000127460
("SacOil" or "the company" or "the group")
Reviewed Provisional Results and Further Cautionary Announcement for the year
ended 28 February 2010
Consolidated Statement of Comprehensive Income
Reviewed Audited
Group Group
Twelve months Eight months
to 28 February to 28 February
2010 2009
R`000 R`000
Revenue 31 724 20 802
Cost of sales (20 210) (16 395)
Gross profit 11 514 4 407
Operating costs (10 144) (7 850)
Profit/(loss) from operations 1 370 (3 443)
Share-based payment expense - (23 753)
Fair value gain on revaluation of property,
plant and equipment 3 195 -
Impairment loss (3 016) (383)
Investment income 731 557
Interest paid (13) (93)
Profit/(loss) before tax 2 267 (27 115)
Taxation - -
Profit/(loss) for the year 2 267 (27 115)
Weighted average number of shares (`000) 313 292 313 292
Earnings/(loss) per share (cents) 0.72 (8.65)
Diluted earnings/(loss) per share (cents) 0.72 (8.64)
Headline earnings/(loss) per share (cents) 0.95 (8.65)
Diluted headline earnings/(loss) per share (cents) 0.95 (8.64)
Reconciliation of headline
earnings/(loss):
Profit/(loss) attributable to shareholders 2 267 (27 115)
Impairment loss on revaluation of
financial assets held for sale 3 016 -
Fair value gain on revaluation of
property, plant and equipment - net of tax (2 301) -
Headline earnings/(loss) 2 982 (27 115)
Headline earnings/(loss) per share (cents) 0.95 (8.65)
Diluted headline earnings/(loss) per
share (cents) 0.95 (8.64)
Consolidated Statement of Financial Position
28 February 28 February
2010 2009
R`000 R`000
ASSETS
Non-current assets 8 535 7 709
Property, plant and equipment 7 640 4 838
Deferred tax asset 895 -
Loans receivable - 2 871
Current assets 40 942 40 369
Loans receivable 27 867 27 867
Inventory 2 305 2 048
Trade accounts receivable 3 558 2 628
Sundry accounts receivable 214 970
Cash and cash equivalents 6 998 6 856
Total assets 49 477 48 078
EQUITY AND LIABILITIES
Equity attributable to equity holders 43332 41 065
Stated capital 83726 83 726
Share-based payment reserve 23754 23 754
Revaluation reserves 2301 -
Accumulated loss (66 449) (66 415)
Non-current liabilities 934 706
Liability under instalment sale agreement 108 -
Provision for environmental rehabilitation 826 706
Current liabilities 5 211 6 308
Trade accounts payable 1 330 3 537
Liability under instalment sale agreement 138
Deferred tax liability 895 -
Loans payable 2 503 2 503
Sundry accounts payable 345 268
Total equity and liabilities 49 477 48 078
Number of shares in issue (`000) 313 292 313 292
Net asset value per share (cents) 13.83 13.11
Consolidated Statement of Cash Flows
Twelve months Eight months
to 28 February to 28 February
2010 2009
R`000 R`000
Cash generated from/(utilised in) operations 2 146 (2 950)
Cash (utilised in)/generated from
movements in working capital (2 421) 796
Increase in inventories (257) (594)
(Increase)/decrease in accounts receivable (172) 2 053
Decrease in accounts payable (1 992) (663)
Cash utilised in operating activities (275) (2 154)
Investment income 731 493
Interest paid (13) (93)
Net cash flows from operating activities 443 (1 754)
Net cash flows from investing activities (263) (19)
Net cash flows from financing activities (38) (3 190)
Net (increase)/decrease in cash
and cash equivalents 142 (4 963)
Cash and cash equivalents
at the beginning of the period 6 856 11 819
Cash and cash equivalents
at the end of the period 6 998 6 856
Consolidated Statement of Changes in Equity
Twelve months Eight months
to 28 February to 28 February
2010 2009
R`000 R`000
Stated capital
Opening balance 83 726 83 726
Closing balance 83 726 83 726
Accumulated loss
Opening balance (66 415) (39 300)
Total comprehensive profit/(loss) for the
year 2 267 (27 115)
Transfer to revaluation reserves - net of
tax (2 301) -
Closing balance (66 449) (66 415)
Revaluation reserves
Opening balance - -
Revaluation reserves - net of deferred tax 2 301 -
Closing balance 2 301 -
Share-based payment reserve
Opening balance 23 754 -
Share-based payment expense - 23 754
Closing balance 23 754 23 754
NOTES
1. Basis of preparation
The annual financial statements of the group for the year ended 28 February
2010 have been prepared in accordance with the group`s accounting policies,
which comply with International Financial Reporting Standards, IAS 34, as well
as the AC 500 standards as issued by the Accounting Practices Board or its
successor, the Listings Requirements of the JSE Limited and the Companies Act
of South Africa and are consistent with those of the previous period, except
for a change in the subsequent measurement model of property, plant and
equipment from a cost model to a revaluation model. These financial statements
have been prepared on a going concern basis.
All monetary information and figures presented in these financial statements
are stated in thousands of Rand (R`000), unless otherwise indicated.
2. Auditors` report
The provisional financial statements have been reviewed by the company`s
auditors, Moore Stephens MWM. Their unmodified review opinion is available for
inspection at the company`s registered office.
3. Change of year-end
Further to a change in the company`s year-end for the 2009 financial year,
readers are made aware that the comparative financial information in these
financial statements represents an eight-month period to 28 February 2009,
hence affecting the year-on-year comparability of the financial information.
4. Comments on the results
Earnings of 0.72 (2009: loss of 8.65) cents, diluted earnings of 0.72 (2009:
loss of 8.64) cents, headline earnings of 0.95 (2009: loss of 8.65) cents,
diluted headline earnings of 0.95 (2009: loss of 8.64) cents and a net asset
value of 13.83 (2009: 13.11) cents per share were reported. Included in
earnings are an impairment of R3.0 million of the seed funding granted to
Pioneer Coal Limited ("Pioneer Coal") and a revaluation surplus on the
revaluation of property, plant and equipment in an amount of R3.2 million.
A deferred tax liability was recognised on the revaluation surplus in an amount
of R0.9 million.
The Greenhills plant increased gross profit by 161%. This is mainly
attributable to the company`s initiative to improve the overall management of
the plant. Tighter financial controls, accurate stock recording and stock
movement control, an improved ordering system and regular reviews of the cost
of raw materials are all contributing factors to the improved results.
The company was able to minimise the lag effect of cost increases to customers
through regular reviews of selling prices thus ensuring that gross margins are
increased. As a result of improving margins, the Greenhills plant is now
trading profitably as is the company after the deduction of head office and
corporate expenses.
Pioneer Coal Limited, a newly formed company, issued 313 291 612 ordinary
shares to SacOil at a price of R0.001 per share during December 2008. During
the period under review and in compliance with the revised IFRS 3,
pre-acquisition and start-up costs in an amount of R3.0 million, which had been
capitalised previously, have now been impaired through the statement of
comprehensive income for Pioneer Coal.
Shareholders are also advised that the agreements by Pioneer Coal to acquire
all the shares and loan accounts in Mudengu Resources Holdings (Proprietary)
Limited, Bono Lithihi Investments Group (Proprietary) Limited and Solar
Spectrum Trading 365 (Proprietary) Limited have lapsed and are of no further
interest to Pioneer Coal.
The directors of Pioneer Coal continue to evaluate numerous value-adding coal
acquisitions that will enhance shareholder value for SacOil shareholders and
will inform the shareholders in due course of any new transactions. Once
Pioneer Coal makes a suitable acquisition, such shares will be distributed to
SacOil`s shareholders by way of an unbundling. It remains the intention of the
SacOil board of directors to separate its coal assets from its oil and gas
assets. This will enable SacOil shareholders to attribute separate values to
their respective interests.
5. Dividend
The board has resolved not to declare any dividend to shareholders for the
period under review.
6. Investment in South Africa Congo Oil Company (Proprietary) Limited
Further to previous announcements, the last of which was published on 11 March
2010, regarding the company`s investment in South Africa Congo Oil Company
(Pty) Limited ("the Transaction"), the date for fulfilment of the conditions
precedent to the agreements referred to therein has been extended to 31 May
2010. The last condition outstanding is the receipt of a Presidential Decree
from the President of the Democratic Republic of the Congo. The directors
continue to pursue the Decree and follow up on a regular basis with the
Presidential Office. The directors are currently considering a potential
restructure of the Transaction and shareholders will be advised of the same in
the near future.
7. Post-balance sheet events
Investment in the exploration permit Gas potential Chaal Permit Area, Tunisia:
As announced on 11 May 2010, a farm-out agreement was reached on 10 May 2010
("the Agreement") in terms of which SacOil will, subject to specified
conditions precedent set out in the Agreement, acquire a 55% participating
interest in the Chaal Permit Area ("the Acquisition").
The Chaal Permit Area is potentially one of Tunisia`s most significant future
gas resources.
Chaal is a potential world-class gas condensate discovery located onshore
central Tunisia some 25 kms to the west of Tunisia`s second largest city, Sfax.
Candax Energy Inc. ("Candax"), together with its partners and the Tunisian
Government, are actively pursuing the deep gas resources at Chaal and in the
Triassic reservoirs lying beneath the producing fields in the south of the
country.
The Chaal field covers approximately 1 200 square kilometres. Gas condensate
was discovered there in the early 1960s. In 2006 a further well was drilled
(the Chaal 1 Well) and encountered significant gas shows. The Chaal permit is
within close proximity of established excess capacity gas pipeline
infrastructure and gas markets (both local and international) where excess
demand exists.
Prior to the implementation of the transactions contemplated in the Agreement,
the participants in the Chaal Permit Area ("the Participants") and their
respective interests ("Participating Interests") are:
Falcan Chaal Petroleum Limited ("Falcan"), a company registered in Barbados
and wholly owned by Candax, a company listed on the Toronto Stock Exchange
(60%);
Societe de Maintenance d`Installations Petrolieres ("SMIP"), a Tunisian
company (20%); and
MCX North Africa Co., Limited ("Mitsubishi"), a company wholly owned by
Mitsubishi Corporation, a public company registered in Japan (20%).
Following the implementation of the transactions contemplated in the Agreement
(with Falcan and SMIP having assigned part of their respective interests to
SacOil), the Participants and their Participating Interests would be:
SacOil 55.00%
Falcan 18.75%
SMIP 6.25%
Mitsubishi 20.00%
Shareholders are referred to an announcement published on 11 May 2010 for full
details of the Acquisition.
8. Greenhills plant
SacOil has positioned itself to grow the manganese business at its Manganese
plant near Graskop, Mpumalanga better known as the Greenhills plant, and
continues to actively seek new markets for its products, being that of
manufacturing manganese sulphate powder, manganese sulphate solution and
manganese oxide. The directors believe that the plant will be in a position to
maintain local and international sales volumes. A weaker Rand will facilitate
increased exports. The directors are also in the process of evaluating the
current condition of the property, plant and equipment. Following the
implementation of a modest rehabilitation and expansion plan, the plant will be
able to achieve increased production capacity. Having improved the performance
of the plant the directors are also seeking value-adding and complementary
acquisition opportunities for the Greenhills plant.
9. Future direction
The company`s main focus is Oil and Gas. The investment in the exploration
permit Gas potential Chaal Permit Area, Tunisia, will enable the company to add
to its current financial and technical resources. The directors are also in the
process of evaluating other value-adding acquisitions which will enhance
shareholder value.
10. Further cautionary announcement
Further to a cautionary announcement made on 11 May 2010, SacOil shareholders
are advised to continue to exercise caution when dealing in their SacOil
securities until a further announcement is made with regards to the investment
in the exploration permit Gas potential Chaal Permit Area, Tunisia.
By order of the board
Melinda van den Berg
Fusion Corporate Secretarial Services (Proprietary) Limited
Company secretary
21 May 2010
Directors: R J Linnell (Chairman), C Bird*,
G S Moseneke, R T Vela*, (*British)
Registered office: 119 Rosen Office Park, 37 Invicta Road,
Midrand, 1685
Registered postal address: PO Box 8439, Halfway House, 1685
Transfer secretaries: Link Market Services South Africa (Proprietary)
Limited
Corporate finance advisers: Lonsa Corporate Finance (Proprietary) Limited
Corporate legal advisers: Deneys Reitz Inc.
Sponsor: Sasfin Capital (A division of Sasfin Bank Limited)
Company secretary: Melinda van den Berg - Fusion Corporate
Secretarial Services (Proprietary) Limited
Date: 21/05/2010 15:40:08 Supplied by www.sharenet.co.za
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