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TRANS HEX - AUDITED RESULTS FOR THE YEAR ENDED 31 MARCH 1998

Release Date: 01/06/1998 16:03
Code(s): TSX
Wrap Text
TRANS HEX GROUP LIMITED
REG. NO. 63/07579/06
AUDITED RESULTS
FOR THE YEAR ENDED 31 MARCH 1998
CONSOLIDATED INCOME STATEMENT

% CHANGE 1998 1997 R'000 R'000 TURNOVER - DIAMONDS 29 293 804 227 479 - LIME 17 39 665 33 851 NET OPERATING INCOME 18 132 656 112 211 DIVIDEND RECEIVED 500 1 500 INTEREST PAID (3 317) (1 583) DEPRECIATION (40 365) (29 850) EXCEPTIONAL ITEMS (NOTE 1) (1 347) 3 628 NET INCOME BEFORE TAXATION 3 88 127 85 906 TAXATION 31 752 28 861 NET INCOME AFTER TAXATION 56 375 57 045 EQUITY ACCOUNTED INCOME (637) 2 241 NET ATTRIBUTABLE INCOME (6) 55 738 59 286 EARNINGS PER SHARE (CENTS)
- BEFORE EXCEPTIONAL ITEMS (0,2) 374,0 374,8 - AFTER EXCEPTIONAL ITEMS 369,9 393,5 DIVIDEND PER SHARE (CENTS)
- INTERIM 10 44,0 40,0 - FINAL 2 66,0 65,0 5 110,0 105,0 ABRIDGED CONSOLIDATED BALANCE SHEET
1998 1997 R'000 R'000 CAPITAL EMPLOYED
TOTAL SHAREHOLDERS' INTERESTS 251 187 212 311 DEFERRED LIABILITIES 41 649 36 387 292 836 248 698 EMPLOYMENT OF CAPITAL
FIXED ASSETS 185 374 158 448 INVESTMENTS AND LOANS (NOTE 2) 78 208 62 944 NET CURRENT ASSETS 29 254 27 306 CURRENT ASSETS 89 263 83 127 LESS: CURRENT LIABILITIES 60 009 55 821 292 836 248 698 NET ASSET VALUE PER SHARE (CENTS) 1 667 1 409 ABRIDGED CONSOLIDATED CASH FLOW STATEMENT
1998 1997 R'000 R'000 CASH AVAILABLE FROM OPERATING ACTIVITIES 129 041 114 515 MOVEMENT IN WORKING CAPITAL 7 750 5 177 TAXATION PAID (14 553) (21 595) DIVIDEND PAID (16 424) (13 109) CASH RETAINED FROM OPERATING ACTIVITIES 105 814 84 988 CASH EMPLOYED (85 311) (96 728) FIXED ASSETS (69 148) (73 142) INVESTMENTS AND LOANS (16 163) (23 586) NET CASH FLOW FOR THE YEAR 20 503 (11 740) NOTES 1. EXCEPTIONAL ITEMS
AMOUNT AMOUNT
PER AFTER
INCOME TAXATION
STATEMENT TAXATION 1998 1997 R'000 R'000 R'000 R'000 RATIONALISATION OF LIME DIVISION AND RELATED
INTERESTS (3 818) (307) (3 511) (541) PROFIT ON SALE OF INTEREST IN BONTEBOK
LIME ACTIVITIES - - - (1 280) PROFIT ON SALE OF
GRANITE QUARRY - - - (991) PROVISION FOR CLOSURE OF PROJECTS AS A RESULT OF THE DECREASE IN DIAMOND PRICES - WRITE OFF FIXED ASSETS
TO NET REALISABLE VALUE 4 595 836 3 759 - - MINING RIGHTS 1 067 - 1 067 - - MINING PLANT AND
EQUIPMENT 3 528 836 2 692 - - REHABILITATION
COMMITMENT 570 200 370 - 1 347 729 618 (2 812) 2. INVESTMENTS AND LOANS
1998 1997 R'000 R'000 LISTED INVESTMENTS AT COST*
SHARES 68 477 55 172 LOAN 6 631 3 744 75 108 58 916 MARKET VALUE (LOAN INCLUDED) 23 246 84 484 UNLISTED INVESTMENT AND LOAN AT CARRYING
VALUE (ALSO DIRECTORS' VALUATION) 969 1 727 * THE GROUP'S INTEREST IN TRANS HEX INTERNATIONAL LIMITED IS NOT ACCOUNTED FOR IN THE CONSOLIDATED STATEMENTS. THE ACCOUNTING POLICY OF THE INTERNATIONAL COMPANY COMPLIES WITH THE CANADIAN REQUIREMENTS FOR EXPLORATION COMPANIES WHICH DIFFERS FROM THAT OF TRANS HEX GROUP LIMITED. 3. CAPITAL COMMITMENTS
1998 1997 R'000 R'000 INCOMPLETED CONTRACTS FOR CAPITAL
EXPENDITURE 854 17 095 CAPITAL EXPENDITURE AUTHORISED BUT NOT
YET CONTRACTED 26 364 44 425 27 218 61 520 THESE COMMITMENTS OF THE GROUP WILL BE FINANCED OUT OF OWN RESOURCES OR BORROWED FUNDS. COMMENTS FINANCIAL RESULTS
GIVEN THE DEPRESSED STATE OF THE INTERNATIONAL DIAMOND MARKET, WHICH HAS PREVAILED FOR MOST OF THE FINANCIAL YEAR, COUPLED WITH THE RELATIVE STABILITY OF THE RAND/DOLLAR EXCHANGE RATE, THE GROUP'S FINANCIAL RESULTS ARE CONSIDERED A SOLID PERFORMANCE. ENCOURAGING EXPLORATION RESULTS COMPLETED AN OVERALL SATISFACTORY FINANCIAL YEAR. THE EARNINGS PER SHARE BEFORE EXCEPTIONAL ITEMS WAS 374,0 CENTS COMPARED WITH THE 374,8 CENTS OF THE PREVIOUS YEAR.
SOUTH AFRICAN MINE DEVELOPMENT AND EXPLORATION COSTS FOR THE YEAR AMOUNTED TO R17,6-MILLION, WHICH IS TWO PERCENT HIGHER THAN THE PREVIOUS FINANCIAL YEAR. SOUTH AFRICA OPERATIONS AND EXPLORATION DIAMONDS
PRODUCTION LEVELS FROM ALL ON-GOING OPERATIONS CLOSELY APPROXIMATED 1997 LEVELS. TOTAL CARAT PRODUCTION HOWEVER DROPPED TO 143 000 CARATS (1997 : 188 000 CARATS) AS A RESULT OF DOKOLWAYO, BELLSBANK AND NEW ELANDS WHICH WERE ALL TERMINATED DURING THE 1997 FINANCIAL YEAR. TOTAL TURNOVER, INCREASED FROM R227-MILLION (1997) TO R294-MILLION (1998). THIS INCREASE WAS CAUSED BY A COMBINATION OF THE DECLINE IN THE VALUE OF THE RAND AGAINST THE US DOLLAR AND THE FACT THAT THE AVERAGE PRICE PER CARAT OF ALL DIAMONDS SOLD ROSE AS A RESULT OF THE ABSENCE OF THE LOWER QUALITY DIAMONDS FROM DOKOLWAYO, BELLSBANK AND SO VER.
EXPLORATION ACTIVITIES AT VARIOUS SITES ALONG THE ORANGE RIVER CONTINUED, WITH ENCOURAGING RESULTS REPORTED FROM BAKEN, AT WHICH PROVEN ORE RESERVES HAVE BEEN INCREASED TO EIGHT-AND-A-HALF YEARS AT CURRENT PRODUCTION LEVELS. SPECTACULAR PRELIMINARY RESULTS WERE ATTAINED AT NXODAP AND SATISFACTORY RESULTS FROM BLOEDDRIF AND REUNING SOUTH. LIME
THE RE-ENGINEERED SECTIONS OF THE CALCINING FACILITY AT VREDENDAL WERE COMMISSIONED IN FEBRUARY AND PRODUCTION VOLUMES AND QUALITIES ARE STEADILY IMPROVING. THE REMAINING PRODUCTIONS, SALES AND PROFITS FROM BOTH VREDENDAL AND LANGVLEI (ROBERTSON) ALL INCREASED MARKEDLY ABOVE 1997 LEVELS. INTERNATIONAL EXPLORATION INTERESTS
THE PLANNING OF BULK SAMPLING OF THE 30-MILLION CUBIC METRE GRAVEL RESOURCE OF THE NORTHBANK PROJECT LOCATED IN BLOCK 9, ADJACENT TO THE ORANGE RIVER IN NAMIBIA CONTINUED SMOOTHLY. PARTICIPATION IN THREE CONCESSIONS IN NORTH-EAST ANGOLA HAVE BEEN SECURED. AN OFFICE HAS BEEN ESTABLISHED IN LUANDA AND FIELD WORK COMMENCED. A PROSPECTIVE TARGET IN THE MINAS GERAIS STATE OF BRAZIL HAS BEEN SECURED IN A JOINT VENTURE WITH VERENA MINERALS. TRANS HEX INTERNATIONAL LTD. (THI) CONCLUDED UNSUCCESSFUL EXPLORATION PROGRAMS IN INDONESIA, CENTRAL AFRICAN REPUBLIC AND IN THE TOCANTINS STATE OF BRAZIL. TRANS HEX GROUP NOW HOLDS SOME 72 PERCENT OF THI. PROSPECTS
GIVEN NO FURTHER PRICE DECLINES, DIAMOND PRODUCTION FOR THE 1999 FINANCIAL YEAR IS PLANNED TO REMAIN AT 1998 LEVELS. EXPLORATION EXPENDITURE HAS ALREADY BEEN CURTAILED IN THE LIGHT OF THE DEPRESSED MARKET CONDITIONS AND WILL AGAIN BE REVIEWED IN THE SECOND FISCAL QUARTER BASED ON PREVAILING PRICES AND THE RESULTS OF EXPLORATION. UNLESS THE DIAMOND MARKET IMPROVES, FURTHER
CURTAILMENT OF EXPLORATION MAY UNFORTUNATELY EVENTUATE IN ALL AREAS OTHER THAN THE BAKEN PALAEOCHANNEL.
FINANCIAL PROJECTIONS ARE THUS LARGELY DEPENDANT ON THE STATE OF THE DIAMOND MARKET AND MOVEMENTS IN THE RAND/DOLLAR EXCHANGE RATE.
THE LIME DIVISION HAS BUDGETED MODEST PRODUCTION AND SALES INCREASES TO THE 1998 LEVELS AND THE VREDENDAL CALCINING FACILITY WILL BE THE SUBJECT OF A STRATEGIC DECISION IN MID YEAR.
THE FORTHCOMING YEAR IS NOT FORECAST TO BE AN EASY ONE AND ALL EFFORTS ARE IN PLACE TO STRICTLY CONTAIN COSTS. EXPLORATION EXPENDITURE WILL BE REDUCED, BUT THE ENCOURAGING EXPLORATION RESULTS OVER THE PAST YEAR MAKE IT IMPERATIVE THAT EXPLORATION WORK BE CONTINUED AT A SUBSTANTIAL LEVEL DESPITE THE NEGATIVE EFFECT THIS MAY TEMPORARILY HAVE ON GROUP EARNINGS.
THE EXTENSION OF PROVEN RESERVES IS VITAL FOR THE FUTURE GROWTH OF THE GROUP. DIVIDEND
A FINAL DIVIDEND OF 66 CENTS PER SHARE (1997 : 65 CENTS) HAS BEEN DECLARED, PAYABLE ON JULY 3, 1998 TO ORDINARY SHAREHOLDERS REGISTERED IN THE BOOKS OF THE COMPANY AT CLOSE OF BUSINESS ON JUNE 19, 1998.
THE ANNUAL REPORT WILL BE MAILED TO ALL SHAREHOLDERS BY THE END OF JUNE 1998. BY ORDER OF THE BOARD E DE LA H HERTZOG CHAIRMAN DM HOOGENHOUT GROUP MANAGING DIRECTOR PAROW 1 JUNE 1998 REGISTERED OFFICE 405 VOORTREKKER ROAD PAROW TRANSFER SECRETARIES OPTIMUM REGISTRARS (PTY) LTD 40 COMMISSIONER STREET (P O BOX 62391) MARSHALLTOWN

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