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Interim Results for Half Year ended 30 September 2016
The Development Bank of Southern Africa
(Registration number 1600157FN)
JSE Company code: BIDBS
Reviewed interim results for the half year ended 30 September 2016
Preparation of this report
The Chief Financial Officer, Kameshni Naidoo CA (SA) was responsible for the
preparation of the interim results.
Basis of preparation
Accounting policies adopted and methods of computation are consistent with those
applied to the annual financial statements at 31 March 2016. The condensed
interim financial statements are prepared on the historical cost basis except
that the following assets and liabilities are stated at their fair value:
derivative financial instruments, financial instruments at fair value through
profit and loss, available-for-sale financial assets, land and buildings, post-
retirement medical benefit and funeral benefit obligations measured at actuarial
values. The interim financial statements are in conformity with IAS 34, Interim
Financial Reporting. The preparation of interim financial statement 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.
Key financial performance
- Total assets declined by 1.1% from 31 March 2016
- Development bonds and loan book net growth of 0.4% from 31 March 2016
- Profit for the interim period R1.04bn
- Included in profit is foreign exchange loss amounting to R474m
- Cash flow from operations R1.8bn
Six months overview
The DBSA generated a profit of R1.04bn, a 27% decrease from the profit reported
as at 30 September 2015. The decrease in profit was primarily due to foreign
exchange losses amounting to R474m as well as the revaluation losses on
financial instruments which amounted to R131m. Total assets declined by 1.1%
from R82.3bn (March 2016) to R81.4bn (Sept 2016). This was due to a sale of O3b
Networks equity investment and excess cash surplus which was used to fund
disbursements.
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Independent review of results by Auditors
The condensed interim financial results of DBSA for the six months ended 30
September 2016 have been reviewed by the Bank’s auditor, Nkonki Inc. In their
review report, which is available for inspection at the Company's registered
office, Nkonki Inc. stated that the review was conducted in accordance with
International Standard on Review Engagements 2410, Review of Interim Information
Performed by the Independent Auditor of the Entity, and have expressed an
unmodified conclusion on the condensed interim financial statements.
Outlook
The success to the year ending 31 March 2017 hinges on the DBSA’s ability to
continue delivering on its mandate, within the uncertain economic environment.
The responsive initiatives that have been put in place would see the targeted
results been achieved.
Condensed Income Statement for the six months ended 30 September 2016
Six months Six months
in thousands of rand ended ended
30 Sept 2016 30 Sept 2015
Reviewed Reviewed
Net interest income 1 777 647 1 406 102
Other income 673 471 235 873
Net foreign exchange (loss)/gain (473 714) 680 261
Grants (7 299) (6 858)
Net impairment loss on financial assets (442 768) (453 978)
Personnel expenses (335 149) (320 436)
Other expenses (133 642) (96 020)
Depreciation and amortisation (17 688) (15 299)
Profit for the period 1 040 858 1 429 645
Condensed Statement of Comprehensive Income for the
six months ended 30 September 2016
Six months Six months
ended ended
30 Sept 2016 30 Sept 2015
Reviewed Reviewed
Profit for the period 1 040 858 1 429 645
Other comprehensive profit/(loss) 69 375 (56 243)
Total comprehensive income 1 110 233 1 373 402
2
Statement of Financial Position as at 30 September 2016
As at As at
in thousands of rand 30 Sept 31 March
2016 2016
Reviewed Audited
Assets
Cash and cash equivalents 1 806 468 2 084 565
Other receivables 124 084 138 533
Investment securities 1 021 167 1 265 218
Derivative assets held for risk management 1 020 910 1 163 533
Post-retirement medical benefits investment 46 126 49 978
Equity investments 5 853 128 6 278 575
Development bonds 1 290 490 1 290 296
Development loans 69 744 654 69 494 954
Property and equipment 493 125 501 202
Intangible assets 74 300 79 142
Total assets 81 474 452 82 345 996
Liabilities
Other payables 887 339 894 795
Provisions 144 513 152 533
Liability for funeral benefits 3 100 3 100
Liability for post-retirement medical benefits 88 508 239 289
Funding: debt securities 33 310 064 35 271 135
Funding: lines of credit 16 541 288 16 371 534
Derivative liabilities held for risk management 124 349 148 551
Total liabilities 51 099 161 53 080 937
Equity
Share capital 200 000 200 000
Retained earnings 15 632 263 14 544 861
Permanent government funding 11 692 344 11 692 344
Revaluation reserve on land and buildings 269 256 269 256
Hedging reserve 192 796 123 050
Reserve for general loan risks 2 389 814 2 436 358
Fair value reserve (1 182) (810)
Total equity 30 375 291 29 265 059
Total liabilities and equity 81 474 452 82 345 996
3
Condensed statement of changes in equity for the six months period ended 30 September
2016
Six months Six months
in thousands of rand ended ended
30 Sept 2016 30 Sept
Reviewed 2015
Reviewed
Balance at beginning of the year 29 265 059 23 682 685
National Treasury capital injection 1 000 000
Profit for period 1 040 858 1 429 645
Net unrealized gain on cash flow hedges 69 746 (55 608)
Change in value of available for sale financial assets (372) (635)
Total equity at end of the period 30 375 291 26 056 087
Condensed statement of cash flow for the six months period ended 30 September 2016
Six months ended Six months
30 Sept 2016 ended
Reviewed 30 Sept 2015
Reviewed
Cash flows generated from operating activities 1 856 545 1 178 393
Cash flows used in development activities (1 084 132) (6 009 365)
Cash flows (used in)/generated from investing
activities (329 787) 505 971
Cash flows (used in)/ generated from financing
activities (705 321) 4 193 794
Effect of exchange rate movement on cash balances (15 403) 24 969
Net decrease in cash and cash equivalents (278 098) (106 237)
Cash and cash equivalents at the beginning of the
year 2 084 565 3 901 663
Cash and cash equivalents at the end of the period 1 806 468 3 795 426
25 November 2016
Debt sponsor: The Standard Bank of South Africa Limited
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