Wrap Text
TRANS HEX GROUP LIMITED
Reg. No. 1963/007579/06
TRANS HEX: AUDITED RESULTS
TRANS HEX GROUP LIMITED
Reg. No. 1963/007579/06
AUDITED RESULTSfor the year ended 31 March 2001
AUDITED CONSOLIDATED INCOME STATEMENTS
% 2001 2000
increase R'000 R'000
Sales revenue 38,1 506 041 366 476
Cost of sales 303 233 229 280
Depreciation of mining assets 44 889 33 811
Royalties:
Namaqualand Diamond Fund Trust 14 300 12 451
Other costs 244 044 183 018
Mining income 47,8 202 808 137 196
Net financial income (note 1) 834 736
Exploration costs (37 944) (20 163)
Research and development (3 579) -
Exceptional items (note 3) 875 (6 072)
Profit before taxation 45,9 162 994 111 697
Taxation 8,6 39 687 36 539
Profit after taxation 64,1 123 307 75 158
Outside shareholders' interest 4 458 2 647
Equity account adjustment 6 (487)
Attributable income 65,3 127 771 77 318
Earnings per share (cents)
- Basic 27,5 155,5 122,0
- Diluted 26,0 151,7 120,4
- Headline 22,4 154,1 125,9
Dividend per share (cents)
- Interim 14,0 12,0
- Final 28,0 21,0
27,3 42,0 33,0
Total number of shares in issue ('000) 82 534 82 122
Weighted average
number of issued shares ('000) 29,7 82 150 63 354
ABRIDGED AUDITED CONSOLIDATED BALANCE SHEET
2001 2000
R'000 R'000
Assets
Fixed assets 676 446 419 123
Investments and loans (note 4) 36 983 36 411
Current assets 117 938 188 436
Cash resources - 101 387
Other 117 938 87 049
831 367 643 970
Equity and liabilities
Total shareholders' interests 581 848 456 255
Outside shareholders' interests - 2 123
Deferred liabilities 140 361 97 759
Current liabilities 109 158 87 833
Short-term borrowings 42 754 -
Other 66 404 87 833
831 367 643 970
Net asset value per share (cents) 705 556
ABRIDGED AUDITED CONSOLIDATED CASH FLOW STATEMENT
2001 2000
R'000 R'000
Cash available
from operating activities 218 089 156 602
Movement in working capital (41 985) 5 345
Taxation paid (3 161) (20 747)
Dividend paid (25 017) (18 273)
Cash retained from operating activities 147 926 122 927
Cash employed (292 067) (92 104)
Fixed assets - Replacement (6 019) 10 723
Fixed assets - Additional (290 781 (113 453)
Investments and loans 4 733 10 626
Net cash flow on
acquisition of subsidiaries - 27 570
Net cash flow for the year (144 141) 58 393
ABRIDGED AUDITED CONSOLIDATED
STATEMENT OF CHANGES IN EQUITY
2001 2000
R'000 R'000
Balance at 1 April 456 255 255 369
Net profit attributable to
ordinary shareholders 127 771 77 318
Dividends paid and provided (11 497) (21 246)
Translation differences on
foreign subsidiaries 6 463 34
Issue of share capital 2 856 144 780
Balance at end of year 581 848 456 255
NOTES
2001 2000
R'000 R'000
1. Net financial income
Net financial income consists mainly
of the following principal categories:
Dividend received - 800
Interest received 4 548 4 690
Interest paid (2 977) (3 916)
Net foreign exchange gain 1 457 145
Rehabilitation provision
- unwinding of discount (2 194) (983)
834 736
2. Reconciliation of headline earnings
Attributable income 127 771 77 318
Exceptional items (note 3) (1 153) 2 417
Headline earnings 126 618 79 735
Amount Amount Amount
per income after after
statement Taxation taxation taxation
2001 2001 2001 2000
R'000 R'000 R'000 R'000
3. Exceptional items
Rationalisation of Lime Division
and related interests (487) (278) (209) (11 591)
Profit on sale of investments 1 362 - 1 362 9 174
875 (278) 1 153 (2 417)
2001 2000
R'000 R'000
4. Investments and loans
Listed investments at cost
Shares 29 209 29 005
Unlisted investments and loans
at carrying value
Associated company 168 162
Trans Hex Rehabilitation Trust Fund 6 943 5 712
Loan to Trans Hex Group Trust to
finance the share purchase scheme 663 1 532
7 774 7 406
Directors' valuation 7 774 7 406
5. Capital commitments
(including amounts authorised,
but not yet contracted) 208 830 190 316
These commitments will be funded out of own resources or borrowed funds.
6. The Group changed its accounting policy regarding environmental
obligations in order to comply with IAS 37: "Provisions, contingent
liabilities and contingent assets", to reflect the net present value of the
estimated costs of restoring environmental disturbance associated with
operations. The adoption of this policy had no material effect on prior year
earnings.
COMMENTS
FINANCIAL SUMMARY
Attributable income increased by 65% to R128 million (2000: R77 million)
which equates to an increase of 38% in US Dollar terms. Shares in issue
increased by 28% to 82 million. Nevertheless headline earnings per share
increased by 22% to 154 cents (2000: 126 cents) on diamond sales of R506
million (2000: R367 million). These increases were attributable to a higher
value production mix, higher US Dollar diamond prices and the rapid decline
in the value of the Rand against the US Dollar. Cash flow after taxation and
replacement capital expenditure amounted to R167 million (2000: R152
million). Cash equivalent earnings per share were 260 cents (2000: 232
cents), an increase of 12%. We continued our mine development and
exploration programmes at high levels. Our share price ended the year some
48% higher than at the end of 1999/2000.
The diamond market remained buoyant for all qualities of our production,
despite of the slowdown in the economy of the United States in the last
quarter - currently the world's largest diamond jewellery market. The
Saxendrift mine, in the Mid Orange River region, added significant value to
the Group's production mix for the first time.
Our annual report will be mailed before 30 June 2001 and the Annual General
Meeting is scheduled for 17 August 2001.
VALUE OF PRODUCTION INCREASED
Total carat production was marginally less than last year at 130 517 carats
(2000: 135 751 carats) but the US$ value of production increased by 16% to
$67 million (2000: $58 million). In Rand terms this equates to a 38%
increase. Diamond prices for the Lower Orange River and Marine Production
were 12% higher and 5% lower respectively than last year. The Baken,
Hondeklip Bay and Saxendrift operations all produced excellent results while
Marine Production exceeded that of last year.
NEW CENTRAL PLANT FOR BAKEN
The new processing plant at Baken was successfully commissioned within
budget, and three of the four old plants were taken out of production. This
will result in a future production increase of some 33% (to 60 000
carats/year), with significant improvements in operating margins and an
increase in mine-life through the inclusion of lower-grade ore reserves.
LARGEST STONE EVER
Saxendrift's production averaged US$1 258/carat, and the largest diamond
ever produced by Trans Hex in its 38-year history, a 216-carat pale-yellow
stone, was recovered. Operating costs remained stringently controlled;
however, the rise in the price of diesoline was of considerable concern.
Studies of the substitution or conversion of certain of Baken's earthmoving
fleet to electrically-driven vehicles are in progress.
FIRST DEEP-WATER MINING VESSEL
The Marine Division entered a phase of rapid expansion through its joint
venture with Diamond Fields International (DFI) in the highly prospective
Marshall Fork and Diaz Reef No 12 ore bodies within the DFI L deritz
concession in Namibia. Trans Hex's first deep-water mining vessel, the mv
Ivan Prinsep, will be operational in the joint-venture area by the end of
May 2001 - five months ahead of schedule. This vessel will be replaced in
November 2001 with the first of two dedicated joint-venture vessels, with
the second to follow before November 2002. Consequently, the mv Ivan Prinsep
will be available from November 2001 to execute exploration and mining
activities on
Trans Hex's other concessions within South African and Namibian waters.
RESEARCH AND DEVELOPMENT CONTINUE
Research and development aimed at optimal exploitation of those portions of
concessions less than 30 metres water depth continued satisfactorily. This
included the commissioning of a Shallow-Water Mining Tool, aboard the mv
Pafuri (previously mv Lee G), and ongoing reviews of variations and scales
of Walking Jack-up Mining Platform technology.
EXPLORATION ACTIVITIES EXPANDED
Bulk sampling of the PK31 and PK34 megatrenches at Baken proved highly
successful and added to ore reserves which, at current production rates,
provide a 14-year mine life. In-fill trench PK46 will complete all the
required exploration of the Baken palaeochannel. Exploration activities were
expanded at Reuning, while Bloeddrif continued to produce encouraging
results. A review of the economics of a new production centre at the latter
prospect will be completed in the first quarter of 2002. Two new DMS
sampling plants, complete with crushing circuits, were introduced at
Saxendrift and Niewejaarskraal in the Mid Orange River region. During the
coming year the considerable exploration potential of these two areas will
be bulk sampled. The economic viability of crushing currently stockpiled
cemented gravels to liberate diamonds will also be undertaken. Successful
results in this regard will allow for the commercial treatment of major
quantities of additional gravels.
THI UNDER REVIEW
Trans Hex International's Northbank prospect adjacent to the Orange River at
Aussenkehr in Namibia remained the subject of litigation with the landowner
throughout the year. Trans Hex Group, which holds 73% of THI's shares, plans
to decide on the future of this shareholding in THI later in the year when
further bulk sampling results from its Barra Grande prospect in Brazil are
available. Early sampling results from this prospect have produced
encouraging results in the form of relatively large stones of good value.
Grass-roots kimberlite exploration activities continued in Botswana and
Zimbabwe.
DRAFT MINERALS DEVELOPMENT BILL
Although the Group supports the principles underlying the Bill, submissions
recommending the reconsideration and redrafting of certain sections have
been submitted to the Department of Minerals and Energy. Notable among these
concerns is the possible imposition of export duty on rough diamonds.
INCREASED SHAREHOLDING BY MVELAPHANDA HOLDINGS AND FURTHER CAUTIONARY
ANNOUNCEMENT
Subject to the approval of shareholders, an agreement in principle has been
reached with Mvela regarding an increase in its interest in Trans Hex Group.
These negotiations are expected to be completed within the next few weeks. A
further announcement will then be issued.
In the interim shareholders should continue to exercise caution in their
dealings in Trans Hex Group shares.
FUTURE PROSPECTS
The commissioning of Baken's new plant, the addition of high value
Saxendrift production together with that region's exciting exploration
potential, and the wonderful opportunity for the expansion of our marine
division provided by the joint-venture with Diamond Fields International,
all bode well for the future. These new developments have resulted in an
explosion of enthusiasm amongst our employees who remain committed
to maintaining our reputation as one of the world's leading alluvial diamond
mining companies.
We remain confident that prices for Trans Hex's high-quality production mix
will remain buoyant into the foreseeable future. We continue to closely
monitor the rapidly changing face of international rough-diamond marketing
as a number of major industry players move into downstream activities. We
remain committed to our tender sales system as this method has consistently
provided us with premium returns since its inception in 1983. The
introduction of the new Minerals Development Bill should see no short-term
change in this marketing method. We will continue to market our goods in
terms of our Section 59 Agreement with the South African Diamond Board, with
whom we have a close and harmonious working relationship, until the new Bill
has been enacted. We firmly support the elimination of 'conflict' diamonds
from world markets and all our sales will carry a Certificate of Origin.
TARGET SET FOR OVER TWO HUNDRED THOUSAND
We have budgeted for an increase in production to above 200 000 carats for
2001/2002, a large proportion of the projected increase being from our
Marine Division where an average price of US$150/carat is anticipated.
Provided that the price projections for our goods in the international
market remain reasonable and that the current Rand/Dollar exchange rates
remains stable, we are confident that our past year's results can be
improved in a continuing mode of expansion and growth.
DIVIDEND DECLARATION
A final dividend of 28 cents per share (2000: 21 cents) has been declared,
payable on 20 July 2001 to ordinary shareholders registered in the books of
the Company at the close of business on 8 June 2001. The total dividend paid
for the year is thus 42 cents (2000: 33 cents).
SHAREHOLDERS' DIARY
Our annual report will be mailed before 30 June 2001 and the Annual General
Meeting is scheduled for 17 August 2001.
Trans Hex Group Limited is scheduled to commence trading within the STRATE
(Share Transactions Totally Electronic) environment during October 2001. A
notice to this effect will be included in the Annual Report.
By Order of the Board
B R van Rooyen P D Danchin
Chairman Managing Director: Operations
PAROW
21 MAY 2001
REGISTERED OFFICE
405 Voortrekker Road, Parow 7500. PO Box 723, Parow 7499, South Africa
TRANSFER SECRETARIES
South Africa: Computershare Services Ltd, 41 Fox Street, Johannesburg 2001.
PO Box 61051, Marshalltown 2107, South Africa
Namibia: Transfer Secretaries (Pty) Ltd. PO Box 2401, Windhoek.
Directors: B.R. van Rooyen (Chairman), T.M.G. Sexwale (Deputy Chairman),
P.D. Danchin (Managing Director: Operations), A.C. Louw (Executive Director:
Marine Division), W.E. B hrmann, E. de la H. Hertzog,
D.M. Hoogenhout, A.R. Martin, Y.P.J. Mercier*, M.J. Willcox * France
G.J. Zacharias (Company Secretary)
These results are also available on our website @ www.transhex.co.za
Sharenet Sites 
