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Reviewed Interim Results for the six monhts ended 31 December 2012
Southern Electricity Company Limited
(Registration Number 1997/006894/06)
JSE Share Code: SLO ISIN: ZAE000041919
(“SELCo” or “the Group”)
REVIEWED INTERIM RESULTS OF SOUTHERN ELECTRICITY COMPANY LIMITED FOR THE SIX MONTHS
ENDED 31 DECEMBER 2012
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME OF SOUTHERN ELECTRICITY
COMPANY LIMITED FOR THE SIX MONTHS ENDED 31 DECEMBER 2012
Reviewed Reviewed Audited
6 months 6 months 12 months
31-Dec-12 31-Dec-11 30-Jun-12
(R'000) (R'000) (R'000)
Revenue 36 706 28 726 61 779
Cost of sales (25 429) (20 717) (37 465)
Gross profit 11 277 8 009 24 314
Other income - - 31
Operating expenses (10 662) (10 160) (25 287)
Profit/ (loss) before interest and tax 615 (2 151) (942)
Investment revenue 79 1 27
Fair value adjustments - - (6 250)
Finance costs (130) (549) (848)
Profit/ (loss) before taxation 564 (2 700) (8 013)
Taxation (108) 473 919
Profit/ (loss) for the period 456 (2 227) (7 094)
Other comprehensive income - - -
Total comprehensive profit/ (loss) for the period 456 (2 227) (7 094)
Attributable to:
Owners of the parent 456 (2 227) (7 094)
Earnings per share:
Earnings & Diluted loss per ordinary share (cents) 0.83 (4.05) (12.91)
Headline & diluted headline loss per share (cents) 0.83 (4.05) (12.91)
Weighted average number of shares 54 948 173 54 948 173 54 948 173
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION OF SOUTHERN ELECTRICITY
COMPANY LIMITED AT 31 DECEMBER 2012
Reviewed Reviewed Audited
6 months 6 months 12 months
31-Dec-12 31-Dec-11 30-Jun-12
(R'000) (R'000) (R'000)
ASSETS
Non-current assets 16 166 24 419 17 185
Investment property 6 750 13 000 6 750
Property plant and equipment 5 265 6 136 5 718
Intangible assets 4 151 5 283 4 717
Current assets 23 951 13 614 16 749
Inventories 3 430 2 812 3 665
Other loans receivable 9 3 9
Current tax receivable 300 1 871 300
Trade and other receivables 12 278 5 770 9 794
Cash and cash equivalents 7 934 3 158 2 981
Total assets 40 117 38 033 33 934
EQUITY AND LIABILITIES
Equity 17 698 22 109 17 242
Share capital 10 163 10 163 10 163
Non-distributable reserve 16 16 16
Retained income 7 519 11 930 7 063
Liabilities
Non-current liabilities 7 295 8 459 7 718
Other financial liabilities 2 381 2 559 2 469
Finance lease obligation 532 446 560
Deferred tax 4 382 5 454 4 689
Current liabilities 15 124 7 465 8 974
Other financial liabilities 6 821 2 060 3 117
Finance lease obligation 354 221 295
Taxation payable 422 - 7
Trade and other payables 7 325 4 793 5 150
Provisions 202 391 405
Total Liabilities 22 419 15 924 16 692
Total equity and liabilities 40 117 38 033 33 934
CONDENSED STATEMENT OF CHANGES IN EQUITY OF SOUTHERN ELECTRICITY COMPANY LIMITED
FOR THE SIX MONTHS ENDED 31 DECEMBER 2012
Reviewed Reviewed Audited
6 months 6 months 12 months
31-Dec-12 31-Dec-11 30-Jun-12
(R'000) (R'000) (R'000)
Balance at beginning of period 17 242 24 336 24 336
Total comprehensive income 456 (2 227) (7 094)
Balance at end of period 17 698 22 109 17 242
CONDENSED CONSOLIDATED CASH FLOW STATEMENT OF SOUTHERN ELECTRICITY COMPANY
LIMITED FOR THE SIX MONTHS ENDED 31 DECEMBER 2012
Reviewed Reviewed Audited
6 months 6 months 12 months
31-Dec-12 31-Dec-11 30-Jun-12
(R'000) (R'000) (R'000)
Cash flows from operating activities 1 537 1 650 701
Cash receipts from customers 34 223 31 180 60 210
Cash paid to suppliers and employees (32 635) (28 982) (59 947)
Cash generated by operating activities 1 588 2 198 263
Interest income 79 1 27
Finance costs (130) (549) (848)
Taxation received - - 1 259
Cash flow from investing activities (230) (232) (610)
Property plant and equipment acquired (230) (232) (909)
Sale of Property plant and equipment - - 299
Movement in related parties - - -
Cash flow from financing activities 3 646 (1 078) 71
Movement in borrowings 31 135 323
Movement other financial liabilities - (1 213) (246)
Proceeds from other financial liabilities 3 615 - -
Advance of other loans - - (6)
Total cash movement for the period 4 953 340 162
Cash and cash equivalents at the beginning
of the period 2 980 2 818 2 818
Cash and cash equivalents at end of period 7 933 3 158 2 980
Notes
Basis of preparation
The condensed consolidated interim financial statements have been prepared in accordance with
IAS 34 Interim Financial Reporting and the SAICA Financial Reporting Guides as issued by the
Accounting Practices Committee, and in compliance with the South African Companies Act, 2008.
The condensed consolidated interim financial statements are prepared on the historical cost basis,
with the exception of certain financial instruments which are measured at fair value. The results of
the interim period are not necessarily indicative of the results for the entire year, and these
unaudited financial statements should be read in conjunction with the audited financial statements
for the year ended 30 June 2012.
The preparation of condensed consolidated interim financial statements requires the use of
estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure
of contingent assets and liabilities at the date of the condensed consolidated interim financial
statements and the reported amounts of revenue and expenses during the reporting periods.
Although these estimates are based on management’s best knowledge of current events and actions
that the group may undertake in the future, actual results may differ from those estimates.
The accounting policies and methods of computation applied are in accordance with International
Financial Reporting Standards (“IFRS”) and are consistent with those applied in the annual financial
statements for the year ended 30 June 2012.
The review has been conducted in accordance with International Standards on Review Engagements
2410, Review of Interim Financial Information Performed by the Independent Auditor, Middel &
Partners, and their unmodified review opinion is available for inspection at the Company’s registered
office.
Review for the reporting period
The gross profit margin for the 6 months ended 31 December 2012 has increased from 28% (2011)
to 31% (2012), which is still somewhat on the low side when compared to international utility
practice. One must however bear in mind that SELCo is a small operation - which indicates the
business has to be increased to achieve economies of scale and scope. The total comprehensive
profit for the period under review amounted to R456 000 compared to a comprehensive loss of R2
227 000 for the corresponding six month period in 2011. Details of the earnings per ordinary share
are reflected in the Condensed Consolidated Statement of Comprehensive Income.
The group achieved earnings of 0.83 cents per share compared to a loss of 4.05 cents in the
corresponding six month period in 2011.
This increase can largely be ascribed to the fact that the electricity rates increase was passed
timeously for implementation by the Electricity Control Board of Namibia and this contributed to the
increase of SELCo’s earnings for the period.
Outlook
SELCo’s business in Namibia demonstrates a profitable and sustainable business model in the
electricity distribution industry which size and volumes have to be increased. Management
continues to vigorously explore opportunities to apply the business model in other aspects of the
electricity distribution business in Southern Namibia as well as considering suitable acquisitions.
Directorate
Mr Brian Hlongwa resigned from the Board with effect 19 February 2013. The board thanks him for
his contribution and wishes him well for his future endeavours. Mr Eckhard Cloete was appointed as
Chairman with effect from 19 February 2013. Mrs Pinky Mopedi was appointed as Independent Non-
Executive Director and member of the Audit Committee with effect 8 March 2013. Mrs Mopedi
holds a Primary Teachers diploma and has been active in Local Government in South Africa for many
years, where she served and chaired on various Governmental Associations, Committees and
Councils. The board is confident that her expertise will bring additional strategic input to the
business.
Segmental Analysis
The group engages in only one business activity providing only one product or service as a vertically
integrated electricity distributor. The rental income and management fees received within the
group are insignificant and the group therefore only reports as one operating segment. The group’s
business is currently limited to Southern Namibia.
The numbers reported to the chief operating decision maker are made in accordance with IFRS and
can therefore be read directly from the annual financial statements.
Subsequent Events
The only subsequent events to 31 December 2012 were the changes to the Board,i.e. the resignation
of Mr Hlongwa, the appointment of Mr Cloete as Chairman and the appointment of Mrs Mopedi.
Dividend
No dividend has been declared for the six month period ended 31 December 2012
Earnings and headline earnings per share:
Reviewed Reviewed Audited
6 months 6 months 12 months
31-Dec-12 31-Dec-11 30-Jun-12
cents cents cents
Earnings and diluted earnings per share 0.83 (4.05) (12.91)
Headline and diluted headline earnings 0.83 (4.05) (12.91)
per share
Basic attributable earnings per share are calculated by dividing the profit or loss attributable to the
ordinary equity holders of the parent by the weighted average number of ordinary shares in issue
during the period.
Diluted earnings per share are equal to basic earnings per share because there are no dilutive
potential shares in issue.
The calculation of earnings and diluted earnings per ordinary share is based on a profit for the group
of R456 000 (2011: R2 227 000) on weighted average ordinary shares of 54 948 173 (2011: 54 948
173) for the period. There are no reconciling items to headline earnings.
By order of the board
27 March 2013
DIRECTORS: EE Cloete* (Chairman), PM Bester (CEO), I Bosch, S Goliath*#, WB Mahlangu *, P
Mopedi * *Non Executive #Namibian
COMPANY SECRETARY AND REGISTERED OFFICE: RMMS Consulting (Pty) Ltd, 99 Fascia Street,
Silvertondale, 0184 TRANSFER SECRETARIES: Link Market Services South Africa (Pty) Limited, PO Box
4844, Johannesburg, 2000 SPONSOR: Grindrod Bank Limited, PO Box 78011, Sandton, 2146
AUDITORS: Middel & Partners
Date: 28/03/2013 07:05:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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