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TRANS HEX GROUP LIMITED
REG. NO. 1963/007579/06
AUDITED RESULTS FOR THE YEAR ENDED 31 MARCH 2000
DIAMOND TURNOVER UP 29,0%
HEADLINE EARNINGS UP 31,4%
NET INCOME (AFTER TAX) UP 119,9%
DIVIDEND UP 15,8%
CONSOLIDATED INCOME STATEMENT
% 2000 1999
INCREASE R'000 R'000
SALES REVENUE 366 476 315 743
COST OF SALES 229 707 213 198
DEPRECIATION OF MINING ASSETS 33 256 30 293
ROYALTIES: NAMAQUALAND DIAMOND FUND TRUST 12 451 9 269
OTHER COSTS 184 000 173 636
MINING INCOME 33,4 136 769 102 545
NET FINANCIAL INCOME (NOTE 1) 1 719 (2 010)
EXPLORATION COSTS (20 163) (21 258)
EXCEPTIONAL ITEMS (NOTE 3) (6 072) (29 316)
NET INCOME BEFORE TAXATION 124,7 112 253 49 961
TAXATION 154,2 36 936 15 709
NET INCOME AFTER TAXATION 119,9 75 317 34 252
OUTSIDE SHAREHOLDERS' INTEREST 2 647 3 290
EQUITY ACCOUNT ADJUSTMENT (487) (284)
ATTRIBUTABLE INCOME 107,9 77 477 37 258
EARNINGS PER SHARE (CENTS)
- BASIC 97,9 122,3 61,8
- HEADLINE 31,4 126,1 96,0
DIVIDEND PER SHARE (CENTS)
- INTERIM 12,0 11,0
- FINAL 21,0 17,5
15,8 33,0 28,5
TOTAL NUMBER OF SHARES IN ISSUE ('000) 82 122 60 270
WEIGHTED AVERAGE ISSUED SHARES ('000) 63 354 60 270
ABRIDGED AUDITED CONSOLIDATED BALANCE SHEET
% 2000 1999
INCREASE R'000 R'000
ASSETS
FIXED ASSETS 413 655 243 408
INVESTMENTS AND LOANS (NOTE 4) 36 411 7 567
CURRENT ASSETS 188 436 108 905
CASH RESOURCES 101 387 42 994
OTHER 87 049 65 911
638 502 359 880
EQUITY AND LIABILITIES
TOTAL SHAREHOLDERS' INTERESTS 456 414 255 369
OUTSIDE SHAREHOLDERS' INTERESTS 2 123 1 459
DEFERRED LIABILITIES 92 132 54 432
CURRENT LIABILITIES 87 833 48 620
638 502 359 880
NET ASSET VALUE PER SHARE (CENTS) 556 424
RECONCILIATION OF AUDITED CONSOLIDATED ABRIDGED BALANCE SHEET
COMBINING TRANS HEX GROUP LTD (TRANS HEX), BENGUELA CONCESSIONS LIMITED
(BENCO) AND GEM DIAMOND MINING CORPORATION LIMITED (GEM)
AT 31 MARCH 2000
TRANS HEX BENCO GEM TOTAL
R'000 R'000 R'000 R'000
ASSETS
FIXED ASSETS 298 008 52 096 63 551 413 655
INVESTMENTS AND LOANS 36 406 5 - 36 411
CURRENT ASSETS 142 987 18 589 26 860 188 436
CASH RESOURCES 73 817 12 481 15 089 101 387
OTHER 69 170 6 108 11 771 87 049
477 401 70 690 90 411 638 502
EQUITIES AND LIABILITIES
TOTAL SHAREHOLDERS' INTEREST 341 900 54 051 60 463 456 414
OUTSIDE SHAREHOLDERS' INTEREST 2 123 - - 2 123
DEFERRED LIABILITIES 83 562 - 8 570 92 132
CURRENT LIABILITIES 49 816 16 639 21 378 87 833
477 401 70 690 90 411 638 502
NUMBER OF SHARES ('000) 64 381 8 580 9 161 82 122
NET ASSET VALUE PER SHARE (CENTS) 531 630 660 556
ABRIDGED AUDITED CONSOLIDATED CASH FLOW STATEMENT
2000 1999
R'000 R'000
CASH AVAILABLE FROM OPERATING ACTIVITIES 156 602 112 186
MOVEMENT IN WORKING CAPITAL 5 345 (8 163)
TAXATION PAID (20 747) (26 097)
DIVIDEND PAID (18 273) (16 574)
CASH RETAINED FROM OPERATING ACTIVITIES 122 927 61 352
CASH EMPLOYED (92 104) (61 002)
FIXED ASSETS (102 730) (60 282)
INVESTMENTS AND LOANS 10 626 (720)
NET CASH FLOW ON ACQUISITION OF SUBSIDIARIES 27 570 -
NET CASH FLOW FOR THE YEAR 58 393 350
NOTES 2000 1999
R'000 R'000
1. NET FINANCIAL INCOME
NET FINANCIAL INCOME CONSISTS MAINLY OF THE FOLLOWING
PRINCIPAL CATEGORIES:
DIVIDEND RECEIVED 800 400
INTEREST RECEIVED 4 690 2 228
INTEREST PAID (3 916) (5 578)
NET FOREIGN EXCHANGE GAIN 145 940
1 719 (2 010)
2. RECONCILIATION OF HEADLINE EARNINGS
ATTRIBUTABLE INCOME 77 477 37 258
EXCEPTIONAL ITEMS (NOTE 3) 2 417 20 618
HEADLINE EARNINGS 79 894 57 876
AMOUNT AMOUNT AMOUNT
PER INCOME AFTER AFTER
STATEMENT TAXATION TAXATION TAXATION
2000 2000 2000 1999
R'000 R'000 R'000 R'000
3. EXCEPTIONAL ITEMS
RATIONALISATION OF LIME DIVISION
AND RELATED INTERESTS* (15 246) (3 655) (11 591) (19 178)
PROVISION FOR WRITE OFF OF FIXED ASSETS
TO NET REALISABLE VALUE - - - (2 000)
PROFIT ON SALE OF INVESTMENTS 9 174 - 9 174 -
(6 072) (3 655) (2 417) (21 178)
ATTRIBUTABLE TO OTHER MEMBERS - - - 560
(6 072) (3 655) (2 417) (20 618)
* (INCLUDING DEPRECIATION OF R3 433 000)
2000 1999
R'000 R'000
4. INVESTMENTS AND LOANS
LISTED INVESTMENTS AT COST
SHARES 29 005 605
MARKET VALUE 27 512 4 950
UNLISTED INVESTMENTS AND LOANS
AT CARRYING VALUE
ASSOCIATED COMPANY 162 651
TRANS HEX REHABILITATION FUND 5 712 4 280
LOAN TO TRANS HEX GROUP TRUST TO
FINANCE THE SHARE PURCHASE SCHEME 1 532 2 031
7 406 6 962
DIRECTORS' VALUATION 7 406 6 962
5. CAPITAL COMMITMENTS (INCLUDING AMOUNTS
AUTHORISED, BUT NOT YET CONTRACTED) 189 910 39 430
THESE COMMITMENTS WILL BE FUNDED OUT OF OWN RESOURCES OR BORROWED FUNDS.
COMMENTS
FINANCIAL RESULTS
HEADLINE EARNINGS PER SHARE INCREASED BY 31% TO 126 CENTS ON DIAMOND SALES OF
R366 MILLION WHICH IS AN INCREASE OF 29%. THIS INCREASE WAS ATTRIBUTABLE TO
INCREASED PRODUCTION, A BETTER PRODUCTION MIX AND SIGNIFICANTLY HIGHER US $
PRICES. CASH FLOW AFTER TAXATION AND REPLACEMENT CAPITAL EXPENDITURE AMOUNTED
TO R151.9 MILLION (1999: R58,3 MILLION). CASH EQUIVALENT EARNINGS PER SHARE
WERE 232,4 CENTS - AN INCREASE OF 52%. THE GROUP CONTINUED ITS MINE DEVELOPMENT
AND EXPLORATION AT HIGH LEVELS. AN AMOUNT OF R9.7 MILLION (1999: R17.5 MILLION)
WAS SPENT AND CAPITALISED ON MINE DEVELOPMENT AND R20.2 MILLION (1999: R21.3
MILLION) WAS SPENT ON EXPLORATION.
DIAMOND PRICES FROM ALL OPERATIONS EXCEEDED PREDICTIONS, WITH THE IMPORTANT
ORANGE RIVER AND MARINE PRICES 10% HIGHER THAN LAST YEAR.
THE ANNUAL REPORT WILL BE MAILED BEFORE 30 JUNE 2000 AND THE ANNUAL GENERAL
MEETING IS SCHEDULED FOR 14 AUGUST 2000.
OPERATIONS AND EXPLORATION
TOTAL CARAT PRODUCTION INCREASED BY 19% TO 135,751 CARATS, DESPITE THE IMPACT
OF VERY POOR WEATHER CONDITIONS ON MARINE PRODUCTION.
THE GROUP'S FLAGSHIP OPERATION BAKEN ONCE AGAIN PERFORMED SUPERBLY. PRODUCTION
WAS LOWER FROM THE HONDEKLIP BAY, REUNING AND JAKKALSBERG OPERATIONS WHERE
PROCESSING PLANTS WERE TEMPORARILY TAKEN OUT OF COMMISSION FOR NECESSARY
UPGRADING. THESE PLANTS RECENTLY RETURNED TO FULL PRODUCTION. THIS WAS MORE
THAN BALANCED BY A SPECTACULAR EXPLORATION SUCCESS AT BLOEDDRIF. STRINGENT COST
CONTROLS, THE INTRODUCTION OF A PRODUCTIVITY BONUS SCHEME, AND EVER IMPROVING
RELATIONSHIPS WITH THE NATIONAL UNION OF MINEWORKERS AND THE UNITED ASSOCIATION
OF SOUTH AFRICA CONTRIBUTED TO THE ACHIEVEMENT OF EXCELLENT PRODUCTION RESULTS.
ORE RESERVES AT THE SO VER KIMBERLITE DUMP RETREATMENT OPERATION NEAR BARKLY
WEST WERE EXHAUSTED AND THE OPERATION WAS CLOSED IN MARCH 2000.
MINE DEVELOPMENT CONTINUED SATISFACTORILY AT BAKEN AND THE ENTIRE PALEOCHANNEL
WILL BE FULLY EVALUATED BY OCTOBER 2000. ENCOURAGING RESULTS WERE ALSO REPORTED
BY THE BLOEDDRIF AND REUNING PROJECTS.
TRANS HEX INTERNATIONAL'S EXPLORATION ACTIVITIES CONTINUED. THE NAMIBIAN
NORTHBANK PROJECT (IN CONCESSION BLOCK 9 AT AUSSENKEHR ADJACENT TO THE ORANGE
RIVER) REMAINS SUSPENDED DUE TO OBSTRUCTIVE LITIGATION BY THE FARM OWNER.
DRILLING AT THE BARRA GRANDE PROSPECT IN BRAZIL HAS SUCCESSFULLY OUTLINED MAJOR
VOLUMES OF PROSPECTIVE GRAVEL WHICH WILL BE BULK SAMPLED DURING 2000/01. GRASS
ROOTS KIMBERLITE SEARCHES CONTINUED IN BOTSWANA AND ZIMBABWE. TRANS HEX
INTERNATIONAL IS 73% OWNED.
THE MARINE DIVISION COMPLETED GEOPHYSICAL SURVEYS OF SOUTH AFRICAN AND NAMIBIAN
CONCESSIONS DURING THE YEAR. BULK SAMPLING OF HIGHLY PROSPECTIVE MID AND DEEP
WATER
TARGETS IS IN THE PLANNING STAGE. THE DIVISION IS PROCEEDING WITH TWO EXCITING
RESEARCH AND DEVELOPMENT PROJECTS AIMED AT SAMPLING AND MINING IN WATER DEPTHS
UP TO 30 METRES. A PROTOTYPE SEMI-REMOTE MINING TOOL WILL BE TESTED IN OCTOBER
AND A WALKING JACK-UP MINING PLATFORM WILL UNDERGO ITS FIRST SEA TRIALS OFF THE
COAST OF CORNWALL IN JUNE. IF THESE TRIALS PROVE SUCCESSFUL A PRODUCTION
PLATFORM WILL BE TESTED IN SOUTH AFRICAN WATERS EARLY IN 2001. DUE TO
UNACCEPTABLY HIGH OPERATING COSTS, THE BENCO MV MOONSTAR HAS BEEN LAID UP IN
SALDANHA BAY PENDING A FINAL DECISION.
THE GROUP'S LIME DIVISION WAS SOLD LATE IN THE FINANCIAL YEAR FOR R20 MILLION.
MERGERS WITH GEM DIAMOND MINING CORPORATION LIMITED AND BENGUELA CONCESSIONS
LIMITED
BOTH MERGERS WERE SUCCESSFULLY COMPLETED AND WERE EFFECTIVE ON 31 MARCH 2000.
THE BALANCE SHEETS AT 31 MARCH 2000 OF BOTH GEM AND BENCO ARE INCORPORATED
HEREIN. THE INCOME STATEMENTS DO NOT INCLUDE ANY ITEMS FROM EITHER COMPANY FOR
THE YEAR ENDED 31 MARCH 2000. ON A HISTORICAL COST BASIS THE GEM AND BENCO
TRANSACTIONS ARE NEUTRAL IN RESPECT OF EARNINGS PER SHARE.
PROSPECTS
PROVIDED THE US ECONOMY REMAINS STRONG, DIAMOND PRICES ARE EXPECTED TO RETAIN
HIGH LEVELS DURING THE CURRENT YEAR. THE WEAKENING RAND WILL ALSO PROVIDE
POSITIVE IMPETUS TO DIAMOND SALES REVENUE. THE EFFECTS OF THE FORTHCOMING
SCRAPPING OF THE SA DIAMOND ACT AND NEW DEVELOPMENTS IN INTERNATIONAL MARKETING
STRATEGIES ARE BEING CAREFULLY MONITORED. EXPANSION OF BAKEN'S PRODUCTION TO
AROUND 60,000 CARATS PER YEAR FROM APRIL 2001 ONWARDS, TOGETHER WITH THE
CONTINUED EXPLORATION SUCCESSES, INNOVATIVE SHALLOW WATER MARINE DEVELOPMENTS
AND DEEPER WATER POTENTIAL, BODE WELL FOR THE FUTURE. EXISTING PRODUCTION FROM
GEM'S SAXENDRIFT OPERATION IS COMPLEMENTED BY THE EXCITING POTENTIAL OF THE GEM
AND BENCO CONTROLLED PROPERTIES IN THE VICINITY. THE GROUP NOW HOLDS 19 000 KM2
OF MARINE CONCESSIONS INCLUDING BENCO'S DEEP WATER CONCESSIONS WHICH HAVE
CONSIDERABLE POTENTIAL.
DIRECTORATE
MESSRS TOKYO SEXWALE (DEPUTY CHAIRMAN) AND ANDR LOUW (EXECUTIVE DIRECTOR -
MARINE DIVISION) JOINED THE BOARD DURING THE FINANCIAL YEAR. WE EXTEND OUR
WARMEST WELCOME TO THESE EXCEPTIONALLY TALENTED PEOPLE AND LOOK FORWARD TO THE
POSITIVE IMPACT THEY WILL BRING TO TRANS HEX.
YEAR 2000 COMPLIANCE
AS PREDICTED, THE GROUP EXPERIENCED NO Y2K PROBLEMS.
DIVIDEND
A DIVIDEND OF 21 CENTS PER SHARE (1999: 17.5 CENTS) WAS DECLARED, ON 2 MARCH
2000 AND WAS PAID ON 5 MAY 2000. THE TOTAL DIVIDEND PAID FOR THE YEAR WAS THUS
33 CENTS (1999: 28.5 CENTS).
BY ORDER OF THE BOARD
B R VAN ROOYEN P D DANCHIN
CHAIRMAN MANAGING DIRECTOR: OPERATIONS
PAROW
22 MAY 2000
TRANSFER SECRETARIES
REGISTERED OFFICE OPTIMUM REGISTRARS (PTY) LTD
405 VOORTREKKER ROAD 40 COMMISSIONER STREET, JOHANNESBURG 2001
PAROW 7500 PO BOX 62391, MARSHALLTOWN 2107
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