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Reviewed interim results for the six months ended 30 September 2013
The Development Bank of Southern Africa
Reviewed interim results for the six months ended 30 September 2013
Preparation of this report
The following individuals were responsible for the preparation of the
reviewed interim results:
Boitumelo Mosako CA (SA), General Manager: Finance
Kameshni Naidoo CA (SA), Chief Financial Officer
Introduction
The Development Bank is a leading Development Finance Institution (DFI) in
Africa, playing the roles of Financier, Advisor, Partner, Implementer and
Integrator. The Bank maximises its contribution to sustainable development
in the region by mobilising financial, knowledge and human resources to
support Government and other development role-players in improving the
quality of life of people in the region through funding infrastructure
projects; accelerating the sustainable reduction of poverty and inequity; and
promoting broad-based economic growth and regional economic integration.”
Key Highlights
- Total asset growth of 9.5% from 31 March 2013
- Development bonds and loan book net growth of 14% from 31 March 2013
- Profit for the interim period R629m
- Cash flow from operations R1.035bn
- Capital Injection received from National Treasury of R2.4bn
Six months overview
The DBSA generated a profit of R629 million, a significant turnaround from
the loss position reported as at 31 March 2013. In addition, the DBSA
completed the organization review process that focused on improving the
impact and effectiveness of the Bank. The DBSA continues to implement its new
strategy and had a net 14% growth in development bonds and loan book assets
since 31 March 2013. Total assets grew by 9.5% from R54bn to R59 billion and
impairment charge for the interim period amounting R279 million (2012:
R1.454bn) is significantly lower when compared to the prior comparative
interim period. The National Treasury in support of the new strategy and
growth prospects provided a capital injection of R2.4bn during the period
under review, being the first tranche of the R7.9bn capital injection
commitment.
Outlook
Whilst the financial position of the Bank remains strong, the DBSA expects
strong growth in development assets to continue and should this be achieved,
this will vastly improve the Bank’s developmental reach as it continues to
play a leading role in taking forward national and continental development
objectives.
Basis of preparation
Accounting policies adopted and methods of computation are consistent with
those applied to the annual financial statements at 31 March 2013. 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.
Independent Review of results by Auditors
The condensed interim financial results of DBSA for the six months ended 30
September 2013 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 their 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.
Condensed income statement
Six months Six months
ended ended
30 Sept 2013 30 Sept 2012
Reviewed Reviewed
R'000 R'000
Net interest income 913 713 817 333
Other income/ (loss) 362 814 (59 866)
Grants (13 864) (612)
Net impairment on financial assets (278 723) (1 453 712)
Personnel expenses (260 914) (269 372)
Other expenses (84 151) (76 040)
Depreciation & amortisation (9 341) (9 930)
Grant to Development Fund - (96 000)
Profit/ (loss) for the period 629 534 (1 148 199)
Condensed statement of comprehensive income
Six months Six months
ended ended
30 Sept 2013 30 Sept 2012
Reviewed Reviewed
R'000 R'000
Profit/ (Loss) for the period 629 534 (1 148 199)
Other comprehensive loss (222) (4 772)
Total comprehensive income 629 312 (1 152 971)
Condensed statement of financial position
As at As at
30 September 31 March
2013 2013
Reviewed Audited
R'000 R'000
Assets
Cash and cash equivalents 1 220 865 1 252 142
Other receivables 153 935 123 443
Investment securities 2 270 553 3 435 922
Derivative assets held for risk management 1 346 395 1 422 719
Post retirement medical benefits investment 63 893 64 848
Home ownership scheme loans 8 329 8 932
Equity investments 4 844 058 4 455 721
Development Bonds 772 875 -
Development Loans 47 847 927 42 619 769
Property, plant and equipment 465 912 470 298
Intangible assets 81 544 86 499
Total assets 59 076 286 53 940 293
Liabilities
Other payables 704 181 771 651
Provisions 94 904 151 009
Liability for funeral benefits 4 300 4 300
Liability for post retirement medical benefits 148 421 148 421
Debt securities 26 584 821 25 790 079
Medium to long term funding lines of credit 11 728 989 10 081 507
Funding under repurchase agreements - 201 752
Derivative liabilities held for risk management 75 633 85 849
Total liabilities 39 341 249 37 234 568
Equity
Share capital 200 000 200 000
Retained earnings 11 282 094 11 031 631
Permanent government funding 6 192 344 3 792 344
Revaluation reserve on land & buildings 253 487 253 487
Hedging reserve 49 856 40 617
Reserve for general loan risks 1 750 797 1 371 726
Fair value reserve 6 459 15 920
Total equity 19 735 037 16 705 725
Total equity and liabilities 59 076 286 53 940 293
Condensed statement of changes in equity
Six months Six months
ended ended
30 Sept 30 Sept
2013 2012
Reviewed Reviewed
R'000 R'000
Balance at beginning of the period 16 705 725 17 527 572
National Treasury capital injection 2 400 000 -
Profit/(loss)and total comprehensive income
for the period 629 312 (1 152 971)
Total equity at end of the period 19 735 037 16 374 601
Condensed statement of cash flow
Six months Six months
ended ended
30 Sept 30 Sept
2013 2012
Reviewed Reviewed
R'000 R'000
Cash flows generated from operating activities 1 035 064 29 954
Cash flows used in development activities (5 828 290) (923 759)
Cash flows generated from/(used in) investing
activities 635 259 (2 266 022)
Cash flows generated from financing activities 4 252 896 1 631 230
Effect of exchange rate movement on cash balances (126 206) (71 985)
Net increase/decrease) in cash and cash
equivalents (31 277) (1 600 582)
Cash and cash equivalents
at the beginning of the period 1 252 142 2 113 154
Cash and cash equivalents
at the end of the period 1 220 865 512 572
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