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SLO - Southern Electricity Company Limited - Reviewed interim results of
Southern Electricity Company Limited for the six months ended 31 December
2011
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 2011
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE SIX MONTHS
ENDED 31 DECEMBER 2011
Reviewed Reviewed Audited
6 months 6 months 12 months
ended ended ended
31 Dec 31 Dec 30 Jun
2011 2010 2011
(R`000) (R`000) (R`000)
Revenue 28 726 27 164 54 110
Cost of sales (20 717) (16 447) (31 435)
Gross profit 8 009 10 717 22 675
Other income - 33 9
Operating expenses 10 160 10 586 (21 748)
(Loss)/profit before interest (2 152) 164 936
and tax
Investment revenue 1 14 32
Finance costs (549) (148) (286)
(Loss)/profit before taxation (2 700) 30 682
Taxation 473 (659) (732)
(Loss)/profit for the year (2 227) (629) (50)
Other comprehensive income - - -
Total comprehensive loss for (2 227) (629) (50)
the period
Attributable to:
Owners of the parent (2 227) (629) (50)
Earnings per share (cents):
Loss and diluted loss per (4,05) (1,14) (0,09)
ordinary share (cents)
Headline and diluted headline (4,05) (1,14) (0,09)
loss per share
Weighted average number of 54 948 173 54 945 373 54 948
shares 173
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2011
Reviewed Reviewed Audited
6 months 6 months 12 months
ended ended ended
31 Dec 31 Dec 30 Jun
2011 2010 2011
(R`000) (R`000) (R`000)
ASSETS
Non-current assets 24 419 26 705 25 449
Investment property 13 000 13 000 13 000
Property, plant and 6 136 7 290 6 600
equipment
Intangible assets 5 283 6 415 5 849
Current assets 13 614 16 446 15 599
Inventories 2 812 1 217 2 682
Other loans receivable 3 - 3
Current tax receivable 1 871 1 426 1 871
Trade and other receivables 5 770 7 831 8 225
Cash and cash equivalents 3 158 5 972 2 818
Total assets 38 033 43 151 41 048
EQUITY AND LIABILITIES
Equity 22 109 23 757 24 336
Share capital 10 163 10 163 10 163
Non-distributable reserve 16 16 16
Retained income 11 930 13 578 14 157
Liabilities
Non-current liabilities 8 459 9 076 8 940
Other financial liabilities 2 559 3 221 2 655
Finance lease obligation 446 - 354
Deferred tax 5 454 5 855 5 931
Current liabilities 7 465 10 318 7 772
Other financial liabilities 2 060 6 042 3 177
Finance lease obligation 221 322 177
Trade and other payables 4 793 3 852 4 319
Provisions 391 102 99
Total liabilities 15 924 19 394 16 712
Total equity and liabilities 38 033 43 151 41 048
CONDENSED STATEMENT OF CHANGES IN EQUITY FOR THE SIX MONTHS ENDED 31 DECEMBER
2011
Reviewed Reviewed Audited
6 months 6 months 12 months
ended ended ended
31 Dec 31 Dec 30 Jun
2011 2010 2011
(R`000) (R`000) (R`000)
Balance at beginning of 24 336 24 386 24 386
period
Total comprehensive income (2 227) (629) (50)
Balance at end of period 22 109 23 757 24 336
CONDENSED CONSOLIDATED CASH FLOW STATEMENT FOR THE SIX MONTHS ENDED 31
DECEMBER 2011
Reviewed Reviewed Audited
6 months 6 months 12 months
ended ended ended
31 Dec 31 Dec 30 Jun
2011 2010 2011
(R`000) (R`000) (R`000)
Cash flows from operating 1 650 (541) (505)
activities
Cash receipts from customers 31 180 24 192 52 273
Cash paid to suppliers and (28 982) (24 634) (52 082)
employees
Cash generated/(used) by 2 198 (442) 191
operating activities
Interest income 1 14 32
Finance costs (549) (113) (286)
Taxation paid - - (442)
Cash flow from investing (232) 140 -
activities
Property, plant and (232) - -
equipment acquired
Movement in related parties - 140 -
Cash flow from financing (1 078) 3 039 (11)
activities
Movement in borrowings 135 (179) (293)
Repayment of other financial (1 213) - (500)
liabilities
Proceeds from other - 1 718 785
financial liabilities
Advance of other loans - 1 500 (3)
Total cash movement for the 340 2 638 (516)
period
Cash and cash equivalents at 2 818 3 334 3 334
beginning of period
Cash and cash equivalents at 3 158 5 972 2 818
end of period
COMMENTARY
Review for the reporting period
The gross profit margin for the 6 months ended 31 December 2011 has decreased
from 39% (2010) to 28% (2011). The total comprehensive loss for the period
under review amounted to R2 227 000 compared to a restated comprehensive loss
of R620 000 for the corresponding six month period in 2010. Details of the
earnings per ordinary share are reflected in the Condensed Consolidated
Statement of Comprehensive Income.
The group achieved a loss of 4.05 cents per share compared to a loss of 1.14
cents in the corresponding six month period in 2010.
This decrease can largely be ascribed to the fact that the electricity rates
increase was only passed for implementation with effect from November 2011 by
the Electricity Control Board of Namibia, while SELCo had to pay increased
rates to its bulk supplier, NamPower, with effect from July 2011.
Outlook
SELCo`s business in Namibia demonstrates a profitable and sustainable
business model in the electricity distribution industry. Management continues
to explore opportunities to apply the business model in other aspects of the
electricity distribution business in Southern Namibia.
Directorate
Mr Hugo van Zyl resigned from the board with effect 31 October 2011. The
board thanks him for his valuable contributions and wishes him well for his
future endeavours. Mr Stephanus Goliath was appointed as a non-executive
director and member of the Audit Committee of SELCo with effect from 1 March
2012. Mr Goliath obtained a BA UED degree from the University of the North in
1971. He held various teaching positions in secondary schools, with the
longest being served in Tses, Southern Namibia, up to 1986, where he moved
through the ranks from teacher to senior teacher to principal. Thereafter he
accepted the position as principal of the ECS Private School in Berseba (1986-
1989). In 1990 he entered politics, resulting in his appointment by the
President of Namibia to serve the Karas Region in Southern Namibia as
governor for more than a decade. The board would like to welcome Mr Goliath
and is confident that his insight, wisdom and experience will be of great
advantage to SELCo in years to come. The board also views it as valuable to
have a Namibian voice on board, given that the group`s main business is
conducted in Namibia.
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 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 event subsequent to the 31 December 2011 was the appointment to the
board of Mr Goliath.
Basis of preparation
The condensed consolidated interim financial statements have been prepared in
accordance with IAS 34 Interim Financial Reporting and the AC 500 series, 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 2011.
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 2011.
Middel & Partners, the group`s independent auditor, has reviewed the interim
financial statements contained in this interim report and has expressed an
unqualified review opinion on the interim financial statements. Their review
report is available for inspection at the Company`s registered office.
Dividend
No dividend has been declared for the six month period ended 31 December
2011.
Earnings and headline earnings per share
Reviewed Reviewed Audited
as at as at as at
31 Dec 31 Dec 30 Jun
2011 2010 2011
cents cents cents
Earnings and diluted earnings per share (4,05) (1,14) (0,09)
Headline and diluted headline earnings (4,05) (1,14) (0,09)
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 is 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 loss for the group of (R2 227 000) (2010: R629 000) on weighted average
ordinary shares of 54 948 173 (2010: 54 945 373) for the period. There are no
reconciling items to headline earnings.
By order of the board
29 March 2012
DIRECTORS: B Hlongwa* (Chairman), PM Bester (CEO), I Bosch, EE Cloete*, S
Goliath*#, WB Mahlangu*
* 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: 29/03/2012 15:00:01 Supplied by www.sharenet.co.za
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