To view the PDF file, sign up for a MySharenet subscription.

YORKCOR - INTERIM REPORT

Release Date: 25/08/2000 07:02
Code(s): YRK
Wrap Text
THE YORK TIMBER ORGANISATION LIMITED
REG. NO. 01/04890/06
INTERIM REPORT FOR THE SIX MONTHS TO 30 JUNE 2000
GROUP INCOME STATEMENTS

UNAUDITED AUDITED
30 JUNE 31 DECEMBER 2000 1999 1999
R000 R000 R000
REVENUE 33 565 31 200 62 440
COST OF SALES (11 500) (11 693) (27 532)
GROSS PROFIT 22 065 19 507 34 908
STAFF COSTS (9 909) (10 082) (19 880)
DEPRECIATION (1 003) (1 204) (2 551)
OTHER OPERATING EXPENSES (6 797) (5 232) (12 791)
PROFIT/(LOSS) FROM OPERATIONS 4 356 2 989 (314)
LEGAL COSTS (1 494) (224) (1 595) INCREASE IN NET POLICY VALUE
OF SINKING FUND - - 810 (LOSS)/PROFIT BEFORE
FINANCE COSTS 2 862 2 765 (1 099)
FINANCE COSTS (1 076) (1 370) (1 966)
(LOSS)/PROFIT BEFORE TAXATION 1 786 1 395 (3 065)
TAXATION (59) (27) (101)
(LOSS)/PROFIT AFTER TAXATION 1 727 1 368 (3 166)
MINORITY SHAREHOLDERS' INTEREST (206) (211) (372)
NET (LOSS)/PROFIT FOR THE YEAR 1 521 1 157 (3 538) NOTES TO THE FINANCIAL STATEMENTS
UNAUDITED AUDITED
30 JUNE 31 DECEMBER 2000 1999 1999
1. EARNINGS PER SHARE (CENTS) 13,8 10,9 (32,0) 2. HEADLINE EARNINGS
PER SHARE (CENTS) 13,8 10,9 (32,0)
3. DIVIDENDS PER SHARE (CENTS) - - - 4. CAPITAL EXPENDITURE
FOR THE PERIOD (R000) 13 693 950 5. CAPITAL EXPENDITURE
COMMITTED (R000) - - - 6. CAPITAL EXPENDITURE
AUTHORISED (R000) - - -
7. SHARES IN ISSUE (000) 11 040 11 040 11 040 8. NET ASSET VALUE
PER SHARE (CENTS) 323 342 309
9. GEARING (%) 28 35 28
10. CURRENT RATIO (RATIO) 1,14 1,28 1,07 GROUP BALANCE SHEETS
UNAUDITED AUDITED
30 JUNE 31 DECEMBER 2000 1999 1999
R000 R000 R000 ASSETS NON-CURRENT ASSETS
PROPERTY, PLANT, EQUIPMENT AND VEHICLES 32 427 34 798 33 521
LONG-TERM RIGHTS TO SAWLOGS 931 931 931
INVESTMENTS 25 25 25
LONG-TERM RECEIVABLES 5 631 5 631 5 631
SINKING FUND 2 871 2 061 2 871
41 885 43 446 42 979
CURRENT ASSETS 29 814 31 577 27 077
INVENTORIES 5 906 8 455 7 374
ACCOUNTS RECEIVABLE 22 554 23 049 19 652
BANK BALANCES AND CASH 1 354 73 51
TOTAL ASSETS 71 699 75 023 70 056 EQUITY AND LIABILITIES CAPITAL AND RESERVES
SHARE CAPITAL 3 612 3 612 3 612
NON-DISTRIBUTABLE RESERVES 16 747 17 660 17 167
ACCUMULATED PROFITS 11 265 13 528 9 324
ORDINARY SHAREHOLDERS' FUNDS 31 624 34 800 30 103 MINORITY SHAREHOLDERS' INTEREST
IN SUBSIDIARY 4 000 3 000 4 000
TOTAL SHAREHOLDERS' FUNDS 35 624 37 800 34 103 NON-CURRENT LIABILITIES
INTEREST BEARING BORROWINGS 10 028 15 914 10 683
CURRENT LIABILITIES 26 047 21 309 25 270
ACCOUNTS PAYABLE 20 860 16 915 22 291
TAXATION 53 45 83
SHORT-TERM BORROWINGS 5 134 4 349 2 896
TOTAL EQUITY AND LIABILITIES 71 699 75 023 70 056 ABRIDGED GROUP CASH FLOW STATEMENTS
UNAUDITED AUDITED
30 JUNE 31 DECEMBER 2000 1999 1999
R000 R000 R000
CASH GENERATED BY OPERATING ACTIVITIES 1 001 (3 125) 3 456
FINANCE COSTS (1 282) (1 581) (2 338)
DIVIDENDS AND TAX PAID (90) (27) (119) NET CASH INFLOW FROM
OPERATING ACTIVITIES (371) (4 733) 999 NET CASH (OUTFLOW)/INFLOW FROM
INVESTING ACTIVITIES 91 (693) 4 NET CASH (OUTFLOW)/INFLOW FROM
FINANCING ACTIVITIES 1 583 3 975 (2 476) NET (DECREASE)/INCREASE IN
BANK BALANCES AND CASH 1 303 (1 451) (1 473) BANK BALANCES AND CASH AT
BEGINNING OF YEAR 51 1 524 1 524
BANK BALANCES AND CASH AT END OF PERIOD 1 354 73 51 STATEMENTS OF CHANGES IN EQUITY UNAUDITED - AT 30 JUNE SHARE NON-
SHARE SHARE ELECTION DISTRIBUTABLE ACCUMULATED CAPITAL PREMIUM RESERVE RESERVE PROFIT TOTAL BALANCE AT
31 DECEMBER 1998 552 3 060 - 18 078 11 951 33 641 DEPRECIATION ON ASSET REVALUATIONS REVERSED (415) 417 2 EXPENSES OF NON-REVENUE PRODUCING SUBSIDIARIES (3) 3 - NET PROFIT FOR THE PERIOD 1 157 1 157 BALANCE AT
30 JUNE 1999 552 3 060 - 17 660 13 528 34 800 BALANCE AT
31 DECEMBER 1999 552 3 060 - 17 167 9 324 30 103 DEPRECIATION ON ASSET REVALUATIONS
REVERSED (417) 417 - EXPENSES OF NON-REVENUE PRODUCING
SUBSIDIARIES (3) 3 - NET PROFIT FOR
THE PERIOD 1 521 1 521 BALANCE AT
30 JUNE 2000 552 3 060 - 16 747 11 265 31 624 COMMENTARY
YORKCOR DID WELL IN THE FIRST HALF OF THE FINANCIAL YEAR, 2000. THE GROUP ACCOMPLISHED A TURNAROUND FROM A LOSS OF R3,54 MILLION LAST YEAR TO A NET PROFIT OF R1, 52 MILLION FOR THE SIX MONTHS TO 30 JUNE 2000. THE COMPARATIVE FIGURE FOR THE SAME PERIOD LAST YEAR WAS A NET PROFIT OF R1,16 MILLION - AN IMPROVEMENT OF MORE THAN 30%. OTHER KEY FIGURES ALSO SHOWED PROGRESS. COMPARED WITH THE SAME PERIOD LAST YEAR, THE HALF-YEAR UNDER REVIEW POSTED A 7,6% INCREASE IN REVENUE, FROM R31,20 MILLION TO R33,57 MILLION. HEADLINE EARNINGS AT 13,8 CENTS PER SHARE IMPROVED BY 26,6% FROM 10,9 CENTS. THE LEVEL OF THE GROUP'S GEARING, AT 28, IS SIGNIFICANTLY BETTER THAN THE 35 OF A YEAR AGO. EARLY IN THE YEAR, OUR PROGRESS WAS STRUCK A SERIOUS BLOW BY INCLEMENT WEATHER OF UNPRECEDENTED PROPORTIONS. OUR YORK LUMBER MILL NEAR ACORNHOEK WAS MAROONED FOR SEVERAL WEEKS FOLLOWING THE HEAVIEST RAINS AND FLOODS IN LIVING MEMORY. OUR RESULTS SHOULD BE WEIGHED IN THE CONTEXT OF INHOSPITABLE CONDITIONS FOR THE INDUSTRY AS A WHOLE. ONE IN EVERY FOUR SAWMILLERS IN THE FORMAL SECTOR OPERATED AT A LOSS IN THIS PERIOD. HOME BUILDING WAS IN THE DOLDRUMS AND THE PRICE OF STRUCTURAL TIMBER DROPPED TO A LEVEL LAST SEEN TWO YEARS AGO. A REDEEMING FEATURE HAS BEEN WHOLESOME GROWTH IN THE FURNITURE INDUSTRY FOR BOTH DOMESTIC AND EXPORT MARKETS. OUR MILLS HAVE DONE WELL TO DEVELOP PRODUCTS OF HIGH QUALITY, ESPECIALLY "SHOW-WOOD", TO TAKE ADVANTAGE OF THE NEW TREND. PRIVATISATION
ALL EYES ARE ON DEVELOPMENTS REGARDING PRIVATISATION. THE INDUSTRY HAS BEEN IMMOBILISED FOR YEARS FOR WANT OF DIRECTION. TARGETING TOO MANY OBJECTIVES HAS BLURRED FOCUS. AS A RESULT, THE CAPACITY OF THE INDUSTRY TO CONTRIBUTE TO RURAL ECONOMIES, AND ESPECIALLY PROVIDE JOBS, HAS CONTRACTED. SAWMILLERS,
APPROPRIATELY SUPPORTED, COULD DO MUCH TO LIFT HARD LIVING CONDITIONS IN THE COUNTRY.
SHAREHOLDERS SHOULD UNDERSTAND YORKCOR'S SPECIAL POSITION REGARDING ITS SAWLOG RIGHTS. OUR RESOURCE ENTITLEMENTS WERE ESTABLISHED BY LONG STANDING CONTRACTS WITH THE STATE. THEY HAVE BEEN CALLED "EVERGREEN" CONTRACTS BECAUSE THEY PROVIDE SECURITY OF TENURE. IN THE RUN UP TO PRIVATISATION, MOST SAWMILLERS WERE INDUCED TO GIVE UP THEIR LONG-TERM RIGHTS AND ACCEPT THREE YEARS' NOTICE OF TERMINATION. THEY NOW FACE AN UNCERTAIN FUTURE.
FOR YORKCOR, THE STRATEGIC ENTITLEMENTS IN OUR EVERGREEN CONTRACTS REPRESENT CONSIDERABLE SHAREHOLDER VALUE. WHAT MAKES THESE CONTRACTS CONTROVERSIAL TODAY IS THAT THEY COMPLICATE THE PRIVATISATION PROCESS. A BIDDER WOULD PAY LESS FOR A FOREST SUBJECT TO AN "EVERGREEN" CONTRACT THAN FOR ONE NOT SO BURDENED. THE BILL OF RIGHTS AFFORDS PROTECTION AGAINST DEPRIVATION OR EXPROPRIATION WITHOUT COMPENSATION. AN EXPRESS STIPULATION IN OUR LOG SUPPLY CONTRACT WITH THE STATE PROVIDES THAT WE SHOULD BE PLACED IN THE SAME FINANCIAL POSITION AS WE WOULD HAVE BEEN IN IF THE CONTRACT WERE TO CONTINUE INDEFINITELY WITHOUT
INTERRUPTION. IF THE CONTRACT IS TO BE HONOURED, SUCH COMPENSATION WOULD BE SUBSTANTIAL. OUR WISH IS TO SETTLE THE MATTER REASONABLY. LITIGATION
THE DEFENCE OF OUR LOG SUPPLY CONTRACTS HAS BEEN LONG AND HARD - AND MOSTLY SUCCESSFUL. THERE IS COMFORT IN THE RULE OF LAW.
THE DEPARTMENT OF WATER AFFAIRS & FORESTRY, HOWEVER, IS INVOKING A PROVISION IN THE NATIONAL FORESTRY ACT OF 1998 WHICH, IT CONTENDS, GIVES THE MINISTER A QUALIFIED DISCRETION TO TERMINATE OUR LONG-TERM SAWLOG CONTRACT AT FIVE YEARS' NOTICE. OUR LOG SUPPLY CONTRACT EXPRESSLY PROMISES SECURITY OF TENURE
INDEFINITELY. MOST SAWMILLERS HAVE THREE YEARS. IN 1994, THE STATE INSTITUTED ACTION IN THE HIGH COURT FOR AN ORDER DECLARING OUR LONG-TERM SAWLOG CONTRACT VOID. THE COURT DISMISSED THE ACTION AND AWARDED YORKCOR DAMAGES FOR
UNDER-DELIVERY OF SAWLOGS, COSTS AND INTEREST. THE AMOUNT TODAY EXCEEDS R5,0 MILLION. AN APPEAL BY THE STATE AGAINST THIS JUDGMENT IS TO BE HEARD BY THE SUPREME COURT OF APPEAL IN NOVEMBER 2000.
THERE HAVE BEEN, AND WILL BE, OTHER HEARINGS. SHAREHOLDERS WERE EARLIER ADVISED OF THE OUTCOME OF A LOG PRICE ARBITRATION WHICH FAVOURED SAFCOL. SHORTLY THEREAFTER, YORKCOR FILED PAPERS IN THE COMPETITION TRIBUNAL SEEKING RELIEF FOR ANTI-COMPETITIVE CONDUCT BY SAFCOL INVOLVING, WE SAY, AN ABUSE OF ITS DOMINANT POSITION IN THE MARKET FOR SAWLOGS. MADIBA MILLS
YORKCOR LAUNCHED THE MADIBA MILLS PROJECT FIVE YEARS AGO TO PROMOTE A BLACK ENTERPRISE IN THE FOREST PRODUCTS INDUSTRY. TODAY IT IS A PROMINENT PLAYER IN THE INDUSTRY. ITS MANAGEMENT AND STAFF ARE ALMOST ENTIRELY MADE UP FROM THE PREVIOUSLY DISADVANTAGED GROUPS. MADIBA MILLS HAS DONE WELL IN THE PERIOD UNDER REVIEW AND PLANS ARE UNDERWAY TO PROVIDE STABLE FUNDING. ULTIMATELY MORE THAN 80% OF ITS SHARE CAPITAL WILL BE OWNED BY ITS EMPLOYEES AND OTHERS PREVIOUSLY DISADVANTAGED. OUTLOOK
THE DOMESTIC TIMBER MARKET SHOWED SIGNS OF WEAKENING IN THE SECOND AND THIRD QUARTERS. OUR EXPORT EFFORT, HOWEVER, SHOWS PROMISE. MUCH DEPENDS ON A RETURN OF CONFIDENCE AND THE STATE'S HANDLING OF PRIVATISATION. IT WOULD NOT BE HELPFUL IN SUCH A CLIMATE OF UNCERTAINTY TO OFFER A QUANTIFIED FORECAST. HOWEVER, OUR BUSINESS IS IN PLACE TO ENSURE THAT WE ARE AMONGST THE BETTER PERFORMERS IN THE ARENA. SOLLY TUCKER CHAIRMAN PRETORIA 25 AUGUST 2000.
DIRECTORS: SOLLY TUCKER (CHAIRMAN), IVOR TUCKER (MANAGING DIRECTOR),
AC DE VILLIERS, DR WALLY KOPP, SALLY MOTLANA
YORKCOR POSTS TURNAROUND INTERIM RESULTS IN TOUGH CONDITIONS
THE YORK TIMBER ORGANISATION (YORKCOR) HAS REPORTED ITS INTERIM RESULTS FOR FINANCIAL 2000, ACHIEVING A TURNAROUND FROM A LOSS OF R3,54 MILLION AT YEAR-END DECEMBER 1999 TO A NET PROFIT OF R1,52 MILLION FOR THE SIX MONTHS TO 30 JUNE 2000. THIS IS AN IMPROVEMENT OF MORE THAN 30% OVER THE SAME PERIOD LAST YEAR, FOR WHICH THE COMPARATIVE FIGURE WAS A NET PROFIT OF R1,16 MILLION.
OTHER KEY FIGURES ALSO SHOWED PROGRESS. COMPARED WITH THE 1999 INTERIM RESULTS, THE PERIOD UNDER REVIEW POSTED A 7,6% INCREASE IN REVENUE, FROM R31,20 MILLION TO R33,57 MILLION. HEADLINE EARNINGS AT 13,8 CENTS PER SHARE IMPROVED BY 26,6% FROM 10,9 CENTS. THE LEVEL OF THE GROUP'S GEARING, AT 28, IS SIGNIFICANTLY BETTER THAN THE 35 OF A YEAR AGO.
YORKCOR CHAIRMAN SOLLY TUCKER SAYS THAT THE RESULTS SHOULD BE VIEWED IN THE CONTEXT OF INHOSPITABLE CONDITIONS FOR THE INDUSTRY AS A WHOLE. "ONE IN EVERY FOUR SAWMILLERS IN THE FORMAL SECTOR OPERATED AT A LOSS IN THIS PERIOD," HE SAYS.
"A NUMBER OF FACTORS DEPRESSED INDUSTRY ACTIVITY," SAYS TUCKER. "HOME BUILDING WAS IN THE DOLDRUMS AND THE PRICE OF STRUCTURAL TIMBER DROPPED TO A LEVEL LAST SEEN TWO YEARS AGO. A REDEEMING FEATURE HAS BEEN WHOLESOME GROWTH IN THE FURNITURE INDUSTRY FOR BOTH THE DOMESTIC AND EXPORT MARKETS. OUR MILLS HAVE DONE WELL TO DEVELOP PRODUCTS OF HIGH QUALITY, ESPECIALLY 'SHOW WOOD', TO TAKE ADVANTAGE OF THE NEW TREND.
TUCKER SAYS THAT UNCERTAINTY ABOUT PRIVATISATION OF THE STATE'S FORESTRY ASSETS HAS IMMOBILISED THE INDUSTRY. ON THE ONE HAND THERE HAS BEEN LACK OF
DIRECTION, ON THE OTHER TOO MANY OBJECTIVES HAVE BEEN TARGETED. A WORRYING OUTCOME HAS BEEN THAT THE CAPACITY OF THE INDUSTRY TO CONTRIBUTE TO RURAL ECONOMIES, AND ESPECIALLY PROVIDE JOBS, HAS CONTRACTED. "SAWMILLERS,
APPROPRIATELY SUPPORTED, COULD DO MUCH TO LIFT HARD LIVING CONDITIONS IN THE COUNTRY," HE SAYS.
ON THE SUBJECT OF YORKCOR'S SO-CALLED 'EVERGREEN' SAWLOG CONTRACTS, TUCKER REAFFIRMS THAT THESE PROVIDE FOR THE PAYMENT OF COMPENSATION FOR PREMATURE TERMINATION. "FOR EXAMPLE, THERE IS AN EXPRESS STIPULATION THAT, IN THE EVENT OF TERMINATION BY THE MINISTER, YORKCOR SHOULD BE PLACED IN THE SAME FINANCIAL POSITION AS IT WOULD HAVE BEEN IN HAD THE CONTRACT CONTINUED INDEFINITELY WITHOUT INTERRUPTION. SUCH COMPENSATION WOULD, NO DOUBT, BE SUBSTANTIAL. OUR WISH IS TO SETTLE THE MATTER," HE SAYS.
YORKCOR IS STILL IN LITIGATION WITH THE STATE AND SAFCOL OVER LOG SUPPLY CONTRACTS. "THE DEFENCE OF OUR LOG SUPPLY CONTRACTS HAS BEEN LONG AND HARD - AND MOSTLY SUCCESSFUL. THERE IS COMFORT IN THE RULE OF LAW," HE SAYS. IN ONE MATTER, IN WHICH THE HIGH COURT DISMISSED THE STATE'S ACTION AND AWARDED YORKCOR DAMAGES FOR UNDER-DELIVERY, COSTS AND INTEREST, THE AMOUNT TODAY EXCEEDS R5,0 MILLION. "THE STATE HAS APPEALED AGAINST THIS JUDGMENT AND THE MATTER IS TO BE HEARD BY THE SUPREME COURT OF APPEAL IN NOVEMBER 2000," SAYS TUCKER.
IN ANOTHER MATTER, IN WHICH THE OUTCOME OF A LOG PRICE ARBITRATION FAVOURED SAFCOL, YORKCOR IS PURSUING ITS APPLICATION TO THE COMPETITION TRIBUNAL AGAINST SAFCOL FOR WHAT THE COMPANY BELIEVES IS ANTI-COMPETITIVE CONDUCT INVOLVING ABUSE OF ITS DOMINANT POSITION IN THE MARKET FOR SAWLOGS.
TURNING TO EMPOWERMENT INITIATIVES, TUCKER SAYS THAT YORKCOR LAUNCHED THE MADIBA MILLS PROJECT FIVE YEARS AGO TO PROMOTE BLACK ENTERPRISE IN THE FOREST PRODUCTS INDUSTRY. "TODAY MADIBA MILLS IS A SIGNIFICANT PLAYER, A GOING CONCERN WITH A MEDIUM SIZED LUMBERMILL AND WITH MANAGEMENT AND STAFF ALMOST ENTIRELY MADE UP FROM THE PREVIOUSLY DISADVANTAGED GROUPS," HE SAYS. "PLANS ARE UNDERWAY TO PROVIDE STABLE FUNDING FOR THE PROJECT. ULTIMATELY MORE THAN 80% OF ITS SHARE CAPITAL WILL BE OWNED BY ITS EMPLOYEES AND OTHERS PREVIOUSLY DISADVANTAGED."
ON THE OUTLOOK FOR YORKCOR TUCKER SAYS, "THE DOMESTIC TIMBER MARKET HAS DEVELOPED SIGNS OF WEAKENING IN THE SECOND QUARTER AND THIRD QUARTERS OF 2000. FORTUNATELY, OUR EXPORT EFFORT, HOWEVER, SHOWS PROMISE. MUCH DEPENDS ON A RETURN OF CONFIDENCE AND THE STATE'S HANDLING OF THE PRIVATISATION OF IS FORESTRY ASSETS. IT WOULD NOT BE HELPFUL IN SUCH A CLIMATE OF UNCERTAINTY TO OFFER A QUANTIFIED FORECAST. HOWEVER, OUR BUSINESS IS IN PLACE TO ENSURE THAT WE ARE AMONGST THE BEST PERFORMERS IN THE ARENA," HE CONCLUDES. ENDS ISSUED FOR: YORK TIMBER ORGANISATION (YORKCOR)
CONTACT: SOLLY TUCKER (012) 804 9730 083 456 9900 FAX NO:: (012) 804 8611 ISSUED BY: TISH STEWART PR ASSOCIATES CONTACT: TISH STEWART (011) 325 4195 FAX NO: (011) 325-4199 E-MAIL: TISH@TSPR.CO.ZA DATE: 24 AUGUST 2000

Share This Story