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THE YORK TIMBER ORGANISATION LIMITED
REG. NO. 01/04990/06
INTERIM REPORT FOR THE SIX MONTHS ENDED 30 JUNE 1998
GROUP INCOME STATEMENT
UNAUDITED AUDITED
6 MONTHS YEAR
ENDED ENDED
30 JUNE 31 DEC.
1998 1997 1997
R000 R000 R000
TURNOVER 28 122 27 811 57 325
NET OPERATING INCOME 1 855 2 994 7 115
INTEREST (1 086) (1 303) (1 801)
NET INCOME BEFORE TAXATION 769 1 691 5 314
TAXATION (21) (23) (291)
- NORMAL - - (52)
- SECONDARY TAX ON COMPANIES (21) (23) (108)
- PRIOR YEARS - - (2)
- DEFERRED - - (129)
NET INCOME AFTER TAXATION 748 1 668 5 023
ATTRIBUTABLE TO OUTSIDE SHAREHOLDERS (175) (182) (368)
NET INCOME 573 1 486 4 655
TRANSFER FROM NON-DISTRIBUTABLE
RESERVES 420 240 774
AMOUNT AVAILABLE FOR DISTRIBUTION 993 1 726 5 429
RETAINED INCOME FROM PRIOR YEARS 9 834 6 001 6 001
10 827 7 727 11 430
DIVIDEND AND SHARE
CAPITALISATION ISSUE - - 1 596
- CASH PORTION - - 500
- BONUS SHARE PORTION - - 1 096
RETAINED INCOME AT END OF PERIOD 10 827 7 727 9 834
EARNINGS PER SHARE - CENTS 5,2 14,0 43,8
GROUP BALANCE SHEET
UNAUDITED AUDITED
30 JUNE 31 DEC.
1998 1997 1997
R000 R000 R000
SOURCE OF CAPITAL
SHARE CAPITAL 3 612 2 513 2 513
SHARE ELECTION RESERVE - - 1 096
NON-DISTRIBUTABLE RESERVES 18 604 11 436 19 023
DISTRIBUTABLE RESERVE
- RETAINED INCOME 10 827 7 727 9 834
SHAREHOLDERS` FUNDS 33 043 21 676 32 466
OUTSIDE SHAREHOLDER'S INTEREST
IN SUBSIDIARY 3 000 3 000 3 000
TOTAL SHAREHOLDERS` FUNDS 36 043 24 676 35 466
LONG-TERM BORROWINGS 19 932 15 862 16 896
55 975 40 538 52 362
EMPLOYMENT OF CAPITAL
FIXED ASSETS 36 346 29 708 37 195
LONG-TERM RIGHTS TO SAWLOGS 931 931 931
OTHER INVESTMENTS 1 132 25 1 132
LONG-TERM RECEIVABLE 3 771 1 276 3 771
SINKING FUND 2 061 2 062 2 061
44 241 34 002 45 090
CURRENT ASSETS 31 591 22 079 23 918
- STOCK 8 385 6 129 7 166
- DEBTORS 18 183 15 177 11 966
- CASH 5 023 773 4 786
CURRENT LIABILITIES 19 857 15 543 16 646
- CREDITORS 17 818 12 277 13 991
- TAXATION 103 22 213
- SHORT-TERM BORROWINGS 1 936 3 244 1 942
- SHAREHOLDERS FOR DIVIDEND - - 500
NET CURRENT ASSETS 11 734 6 536 7 272
55 975 40 538 52 362
NOTES:
1. SHARES IN ISSUE: 11 040 497 (1997: 10 637 485).
2. CAPITAL COMMITMENTS: - AUTHORISED: NIL (1997: NIL)
- COMMITTED: NIL (1997: NIL)
3. NET ASSET VALUE PER SHARE: 326 CENTS (1997: 232 CENTS).
4. GEARING: 32% (1997: 43%).
5. CURRENT RATIO: 1,59 (1997: 1,28).
INTERIM REPORT TO OUR SHAREHOLDERS FOR THE HALF-YEAR TO 30 JUNE 1998
CONDITIONS IN THE TIMBER INDUSTRY REACHED A NADIR DURING THE FIRST HALF OF
1998. WE DID WELL TO MAINTAIN SALES, BOTH IN VOLUME AND VALUE, AT LEVELS OF THE
SAME PERIOD LAST YEAR. THE IMPACT ON MARGINS OF DEPRESSED SAWN TIMBER PRICES
AND INCREASED LABOUR COSTS WAS TEMPERED BY IMPROVED EFFICIENCIES. OUR RECENT
INVESTMENT IN NEW TECHNOLOGIES, WHICH GENERATED ENHANCED PRODUCTION YIELDS,
STOOD US IN GOOD STEAD.
IN THE RESULTS, NET INCOME FOR THE FIRST HALF OF 1998 AMOUNTED TO R573 000
COMPARED TO R1 486 000 FOR THE SAME PERIOD LAST YEAR. THESE FIGURES EQUATE TO
EARNINGS PER SHARE OF 5,2 CENTS AND 14,0 CENTS, RESPECTIVELY. WITH R5,02
MILLION CASH IN THE BANK (1997: R0,77 MILLION), THE GROUP'S GEARING HAS
IMPROVED TO 32% FROM 43% OF A YEAR AGO.
THE FOREST PRODUCTS INDUSTRY FACES UNCERTAINTY FROM TWO DEVELOPMENTS OF
MOMENTOUS SIGNIFICANCE: THE FAR REACHING LEGISLATION CURRENTLY BEFORE
PARLIAMENT AND THE PROTRACTED PRIVATISATION OF SAFCOL.
THE NATIONAL FORESTS BILL MAY UNSETTLE ENTITLEMENTS UNDER LONG-TERM SAWLOG
CONTRACTS THAT ARE BINDING ON THE STATE - ESPECIALLY SECURITY OF TENURE AND LOG
QUOTAS. THERE IS PROVISION FOR COMPENSATION, ALBEIT LIMITED. IN RESPONSE TO
COMPELLING REPRESENTATIONS TO PARLIAMENT, IMPORTANT AMENDMENTS TO THE BILL HAVE
BEEN CONCEDED. SIGNIFICANTLY, THE MINISTER OF WATER AFFAIRS AND FORESTRY HAS
PUBLICLY UNDERTAKEN TO APPLY THE PROVISIONS IN A FAIR WAY, FOLLOWING THE
LETTER AND THE SPIRIT OF THE LAW . CONSTITUTIONAL RIGHTS, WE ARE ASSURED, WILL
BE RESPECTED.
THE PRIVATISATION OF SAFCOL CONTINUES TO STIR SPECULATION. IF OR WHEN IT
EVENTUALLY COMES ABOUT, IT MAY WELL BE REGARDED AS THE SINGLE MOST IMPORTANT
EVENT IN THE HISTORY OF THE INDUSTRY. YORKCOR, IN CONCERT WITH ITS STRATEGIC
ALLY, MADIBA MILLS, TOOK INITIATIVES TO ASSEMBLE A CONSORTIUM TO BID FOR THE
SAFCOL OPPORTUNITY.
A NUMBER OF FACTORS HAVE BEEN COMPLICATING PROGRESS: THE DELAY IN RELEASING A
COMPREHENSIVE PROSPECTUS; THE IMPLICATIONS OF NEW LEGISLATION, ESPECIALLY THAT
CONCERNING FORESTRY AND LABOUR MATTERS; INDICATIONS OF A GROWING LIST OF
CONSTRAINTS AND PRE-CONDITIONS TO BE IMPOSED ON THE ACQUIRER; AND THE
WITHDRAWAL FROM THE CONTEST OF A HIGHLY RESPECTED WORLD-CLASS AMERICAN
CORPORATION AFTER THE INVESTMENT OF SOME YEARS OF DILIGENT PREPARATION.
WE ARE PLEASED WITH EXPORT ORDERS FOR NEW PRODUCTS FROM NEW MARKETS, ESPECIALLY
FROM THE USA. HOPEFULLY, THESE NEW INITIATIVES WILL SOON MAKE GOOD THE SHARP
DECLINE IN BUSINESS FROM THE PACIFIC RIM. CONDITIONS IN THE DOMESTIC TIMBER
MARKETS, HOWEVER, ARE NOT EXPECTED TO IMPROVE IN THE SECOND HALF OF 1998 AND IN
THE LIGHT OF SO MUCH UNCERTAINTY, IT WOULD NOT BE APPROPRIATE TO PREDICT
RESULTS FOR THE SECOND HALF OF THE FINANCIAL YEAR. AS REGARDS DIVIDENDS,
YORKCOR'S POLICY IS TO CONSIDER DIVIDEND DECLARATIONS ONCE A YEAR, AT THE END
OF THE YEAR.
YEAR 2000
WE HAVE TAKEN ACTION TO ENSURE YEAR 2000 COMPLIANCE. NO SIGNIFICANT OPERATIONAL
DIFFICULTIES OR LIABILITY RISKS ARE ANTICIPATED.
SOLLY TUCKER
CHAIRMAN
PRETORIA
28 AUGUST 1998
REGISTERED OFFICE
5TH FLOOR, YORKCOR PARK
86 WATERMEYER STREET
VAL DE GRACE, PRETORIA, 0184
PO BOX 380, PRETORIA, 0001
TRANSFER SECRETARIES
CONSOLIDATED SHARE REGISTRARS LIMITED
40 COMMISSIONER STREET
JOHANNESBURG, 2001
PO BOX 61051
MARSHALLTOWN, 2107
PRESS RELEASE - YORKCOR POSTS INTERIM RESULTS
THE YORK TIMBER ORGANISATION LIMITED (YORKCOR) HAS POSTED ITS RESULTS FOR THE
HALF-YEAR TO 30 JUNE 1998.
IN THE RESULTS, NET INCOME FOR THE FIRST HALF OF 1998 AMOUNTED TO
R0,573-MILLION COMPARED TO R1,486-MILLION FOR THE SAME PERIOD OF 1997. THESE
FIGURES EQUATE TO EARNINGS PER SHARE OF 5,2C AND 14,0C RESPECTIVELY. WITH
R5,02-MILLION IN CASH IN THE BANK (1997: R0,77-MILLION, THE COMPANY'S GEARING
HAS IMPROVED TO 32% FROM 43% A YEAR AGO.
ACCORDING TO YORKCOR CHAIRMAN SOLLY TUCKER, CONDITIONS IN THE TIMBER INDUSTRY
SLUMPED DURING THE FIRST HALF OF 1998. AGAINST THIS BACKDROP, HE COMMENTS: "WE
DID WELL TO MAINTAIN SALES, BOTH IN VOLUME AND VALUE, AT LEVELS OF THE SAME
PERIOD LAST YEAR. THE IMPACT ON MARGINS OF DEPRESSED SAWN TIMBER PRICES AND
INCREASED LABOUR COSTS WAS TEMPERED BY IMPROVED EFFICIENCIES. OUR RECENT
INVESTMENT IN NEW TECHNOLOGIES, WHICH GENERATED ENHANCED PRODUCTION YIELDS,
STOOD US IN GOOD STEAD."
TUCKER POINTS OUT THAT THE FOREST PRODUCTS INDUSTRY FACES UNCERTAINTY FROM TWO
DEVELOPMENTS OF MOMENTOUS SIGNIFICANCE: THE FAR-REACHING LEGISLATION CURRENTLY
BEFORE PARLIAMENT AND THE PROTRACTED PRIVATISATION OF THE SOUTH AFRICAN
FORESTRY COMPANY LIMITED (SAFCOL).
"THE NATIONAL FORESTS BILL MAY UNSETTLE ENTITLEMENTS UNDER LONG-TERM SAWLOG
CONTRACTS THAT ARE BINDING ON THE STATE - ESPECIALLY SECURITY OF TENURE AND LOG
QUOTAS. THERE IS PROVISION FOR COMPENSATION, ALBEIT LIMITED. IN RESPONSE TO
COMPELLING REPRESENTATIONS TO PARLIAMENT, IMPORTANT AMENDMENTS TO THE BILL HAVE
BEEN CONCEDED. SIGNIFICANTLY, THE MINISTER OF WATER AFFAIRS AND FORESTRY HAS
PUBLICLY UNDERTAKEN TO APPLY THE PROVISION IN A FAIR WAY, FOLLOWING THE LETTER
AND THE SPIRIT OF THE LAW. CONSTITUTIONAL RIGHTS, WE ARE ASSURED, WILL BE
RESPECTED," SAYS TUCKER.
"THE PRIVATISATION OF SAFCOL CONTINUES TO STIR SPECULATION. IF OR WHEN IT
EVENTUALLY COMES ABOUT, IT MAY WELL BE REGARDED AS THE SINGLE MOST IMPORTANT
EVENT IN THE HISTORY OF THE INDUSTRY. YORKCOR, IN CONCERT WITH ITS STRATEGIC
ALLY, MADIBA MILLS, TOOK INITIATIVES TO ASSEMBLE A CONSORTIUM TO BID FOR THE
SAFCOL OPPORTUNITY. A NUMBER OF FACTORS HAVE BEEN COMPLICATING PROGRESS: THE
DELAY IN RELEASING A COMPREHENSIVE PROSPECTUS; THE IMPLICATIONS OF NEW
LEGISLATION, ESPECIALLY THAT CONCERNING FORESTRY AND LABOUR MATTERS;
INDICATIONS OF A GROWING LIST OF CONSTRAINTS AND PRECONDITIONS TO BE IMPOSED ON
THE ACQUIRER; AND THE WITHDRAWAL FROM THE CONTEST OF A HIGHLY RESPECTED WORLD
CLASS AMERICAN CORPORATION AFTER THE INVESTMENT OF SOME YEARS OF DILIGENT
PREPARATION.
"WE ARE PLEASED WITH EXPORT ORDERS FOR NEW PRODUCTS FROM NEW MARKETS,
ESPECIALLY FROM THE USA," SAYS TUCKER. "HOPEFULLY, THESE NEW INITIATIVES WILL
SOON MAKE GOOD THE SHARP DECLINE IN BUSINESS FROM THE PACIFIC RIM."
CONDITIONS IN THE DOMESTIC TIMBER MARKETS, HOWEVER, ARE NOT EXPECTED TO IMPROVE
IN THE SECOND HALF OF 1998 AND, IN THE LIGHT OF SO MUCH UNCERTAINTY, CONCLUDES
TUCKER, IT WOULD NOT BE APPROPRIATE TO PREDICT RESULTS FOR THE SECOND HALF OF
THE FINANCIAL YEAR. AS REGARDS DIVIDENDS, HE STATES YORKCOR'S POLICY IS TO
CONSIDER DIVIDEND DECLARATIONS ONCE A YEAR, AT THE END OF THE YEAR.
ENDS
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