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Unaudited interim results for the half year ended 30-Sept-17 - BILB
THE LAND AND AGRICULTURAL DEVELOPMENT BANK OF SOUTH AFRICA
(JSE Code: BILB)
(“the Land Bank”)
Land and Agricultural Development Bank of South Africa: Unaudited Interim results for the
half year ended 30 September 2017
Preparation of this report
The Chief Financial Officer, Bennie van Rooy CA (SA) was responsible for the preparation of the
unaudited interim results.
Basis of preparation
The condensed consolidated financial statements have been prepared, based on certain guidelines
contained in International Financial Reporting Standards (IFRS) and the interpretations issued by the
International Financial Reporting Interpretations Committee (IFRIC), by applying the accrual basis of
accounting, the going concern principle and using the historical cost basis except where specifically
indicated otherwise in the accounting policies. Accounting policies adopted and methods of computation
are consistent with those applied to the annual financial statements at 31 March 2017.
The preparation of interim financial statements requires management to make judgments, estimates
and assumptions that affect the application of accounting policies and reported amounts of assets and
liabilities, income and expenses. Actual results may differ from these estimates.
The key Group performance highlights are as follows:
FY2018H1 FY2017H1
Unaudited Unaudited
Statement of Profit and Loss and Other Comprehensive Income
Profit before Other Comprehensive Income (R’000) 57 252 33 318
Net interest margin (%) 3.0% 3.0%
Statement of Financial Position
Total Assets (R’000) 45 523 134 41 214 485
Gross Loans and Advances (R’000) 41 983 063 39 207 169
Non-performing Loans (%) 5.8% 8.7%
Total Capital Adequacy Ratio (%) 17.3* 17.9%
Liquidity Coverage Ratio (%) 339.6%* 65.9%
Net Stable Funding Ratio (%) 107.1%* 84.8%
* Independently validated
Six months review
The Land and Agricultural Development Bank of South Africa (“Land Bank”) has notwithstanding a
difficult trading environment, exacerbated by continuous adverse weather conditions in certain parts of
the country, generated strong financial results.
The Group generated profit before other comprehensive income of R57.3 million, a 71.8% increase
from the profit reported at 30 September 2016. The increase is attributable largely to improved net
interest income which at R632.2 million increased by R18.6 million or 3.0% from the comparative period,
lower impairment charges- down by R35.5 million or 19.4%, and an increase in other income- mainly
represented by investment income which increased by R23.5 million, or 46.5%.
The asset quality of the Bank’s loan book continues to improve with non-performing loans down to 5.8%
from 8.7% for the comparative period, and 7.1% as reported for FY2017. Funding initiatives have been
very positive during FY2018H1 with strong Debt and Capital Market support received during the period
under review. As of FY2018H1, the Land Bank’s reliance on short-term funding with an effective time
to maturity of less than 12 months, reduced to 49%, which is below its medium-term target of 50% set
for 31 March 2018. Cash and liquidity levels remain healthy with access to cash of R2.57 billion and
further liquidity through R2.15 billion committed and R0.5 billion uncommitted facilities.
The two Insurance subsidiaries, Land Bank Life Insurance and Land Bank Insurance, generated
satisfactory results.
Unaudited Results
The condensed interim financial results of the Land Bank for the six months ended 30 September 2017
are unaudited and have not been reviewed by an independent auditor.
Outlook
The financial success for the year ending 31 March 2018 hinges on the Land Bank’s ability to continue
delivering on its mandate, within the uncertain economic environment and unpredictable weather
conditions possibly impacting on the results.
Condensed consolidated Statement of Profit and Loss and Other Comprehensive Income for
the six months ended 30 September 2017
FY2018H1 FY2017H1
R’000 R’000 Var
Unaudited Unaudited %
Net interest Income 632 230 613 611 3.0%
Operating income from Banking Activities 352 660 328 481 7.4%
Net insurance (loss)/ income (3 185) 5 779 (+100%)
Total Operating Income 349 475 334 260 4.6%
Operating Expenses (307 185) (289 978) (5.9%)
Other Income 74 039 50 552 46.5%
Net Profit before Other Comprehensive Income 57 252 33 318 71.8%
Other Comprehensive Income (4 531) (9 368) 51.6%
Net Profit after Other Comprehensive Income 52 721 23 950 +100%
Condensed consolidated Statement of Financial Position as at 30 September 2017
FY2018H1 FY2017
R’000 R’000 Var
Unaudited Audited %
Assets
Cash and cash equivalents 2 570 751 1 502 331 71.1%
Investments 2 408 659 1 860 074 29.5%
Net Loans and Advances 39 665 982 40 975 554 (3.2%)
Short-term Insurance Assets 82 218 178 527 (53.9%)
Long-term Insurance Assets 13 031 12 098 7.7%
Other Assets 782 493 913 252 (14.3%)
Total Assets 45 523 134 45 441 836 0.2%
Equity and Liabilities
Equity 6 507 479 6 454 844 0.8%
Funding Liabilities 38 081 923 37 839 610 0.6%
Short-term Insurance Liabilities 147 098 260 264 (43.5%)
Long-term Insurance Liabilities 54 918 54 762 0.3%
Other liabilities 731 716 832 356 (12.1%)
Total Equity and Liabilities 45 523 134 45 441 836 0.2%
Subsequent events
With effect from 9 October 2017, the Land Bank appointed a new Company Secretary, Mr. Mashumi
Mzaidume. Furthermore, as per our SENS announcement, dated 22 September 2017, Messrs. Willie
Jacobs, Executive Manager: Agricultural Economics and Jerome Mthembu, Executive Manager Legal
Services resigned with effect from 30 November and 31 December 2017 respectively.
From a funding perspective post 30 September 2017, the Land Bank issued a listed R805 million 7 year
Fixed Rate note, while the remaining $100 million under the Bank’s MIGA backed loan becomes
available no later than 06 December 2017.
Changes to the Board
As indicated in our Sens announcement, dated 15 August 2017, Mr Mohammad Karaan resigned as
Board member with effect from 31 August 2017.
27 November 2017
Enquiries
Land and Agricultural Development Bank of South Africa
TP Nchocho, Chief Executive Officer
Bennie van Rooy, Chief Financial Officer
Tabby Tsengiwe – Tel: 012 686 0921
Debt Sponsor
The Standard Bank of South Africa Limited
Date: 27/11/2017 01:20:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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