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SLO - SELCo - Reviewed interim results for the six months ended 31 December

Release Date: 30/03/2011 14:11
Code(s): SLO
Wrap Text

SLO - SELCo - Reviewed interim results for the six months ended 31 December 2010 Southern Electricity Company Limited (Registration Number 1997/006894/06)JSE Share Code: SLO ISIN: ZAE000041919("SELCo" or "the Group") REVIEWED INTERIM RESULTS OF SOUTHERN ELECTRICITY COMPANY LIMITED FOR THE SIX MONTHS ENDED 31 DECEMBER 2010 CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE PERIOD ENDED 31 DECEMBER 2010 Reviewed Reviewed Audited 6 months (Restated) (Restated) Ended 6 months 12 months
31 December ended ended 2010 31 December 30 June 2009 2010 (R`000) (R`000) (R`000)
Revenue 27 164 24 428 49 968 Turnover 27 164 24 371 49 958 Cost of sales (16 447) (16 108) (28 999) Gross profit 10 717 8 263 20 959 Other income 33 57 61 Operating costs (10 586) (7 737) (17 394) Profit before interest and tax 164 583 3 626 Investment revenue 14 - 11 Finance costs (148) (301) (484) Profit before taxation 30 282 3 153 Taxation (659) (108) (1 058) Total comprehensive income (629) 174 2 095 (Loss) earnings & diluted (loss) (1.14) 0.32 3.81 earnings per ordinary share (cents) Headline & Diluted (loss)earnings (1.14) 0.32 3.83 per share Weighted average number of shares 54 948 173 54 945 373 54 945 373 CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2010 Reviewed Reviewed Audited
6 months as at 6 months as at 12 months 31 December 31 December ended 30 2010 2009 June 2010 (R`000) (R`000) (R`000)
ASSETS Non-current assets 26 705 28 588 27 961 Investment property 13 000 13 000 13 000 Property plant and equipment 7 290 8 041 7 980 Intangible assets 6 415 7 547 6 981 Current assets 16 446 7 816 12 869 Inventories 1 217 1 163 1 721 Other loans receivable - 47 - Current tax receivable 1 426 424 1 426 Trade and other receivables 7 831 3 678 6 388 Cash and cash equivalents 5 972 2 504 3 335 Total assets 43 151 36 404 40 830 EQUITY AND LIABILITIES Equity 23 757 22 466 24 386 Share capital 10 163 10 163 10 163 Non-distributable reserve 16 16 16 Retained income 13 578 12 287 14 207 Liabilities Non-current liabilities 9 076 7 368 8 525 Other financial liabilities 3 221 3 122 3 329 Deferred tax 5 855 4 246 5 196 Current liabilities 10 318 6 570 7 919 Other loans payable 6 042 2 725 2 615 Other financial liabilities 322 122 427 Taxation payable - - - Trade and other payables 3 852 3 613 4 775 Provisions 102 110 102 Total Liabilities 19 394 13 938 16 444 Total equity and liabilities 43 151 36 404 40 830 CONDENSED STATEMENT OF CHANGES IN EQUITY FOR THE PERIOD ENDED 31 DECEMBER 2010 Reviewed Reviewed Audited 6 months 6 months 12 months
as at as at ended 31 December 31 December 30 June 2010 2009 2010 (R`000) (R`000) (R`000)
Balance at beginning of period 24 386 22 291 22 291 Total comprehensive income (629) 174 2 095 Balance at end of period 23 757 22 465 24 386 CONDENSED CONSOLIDATED CASH FLOW STATEMENT FOR THE PERIOD ENDED 31 DECEMBER 2010 Reviewed Reviewed Audited 6 months 6 months 12 months as at as at ended
31 December 31 December 30 June 2010 2009 2010 (R`000) (R`000) (R`000) Cash flows from operating (541) 2 311 3 297 activities Cash receipts from customers 24 192 24 371 49 958 Cash paid to suppliers and (24 634) (21 712) (45 123) employees Cash generated by operating (442) 2 659 4 834 activities Interest income 14 - 11 Finance costs (113) (286) (484) Taxation paid - (62) (1 064) Cash flows from investing 140 (48) (639) activities Property plant and equipment - (29) (779) acquired Proceeds on sale of property, - - 144 plant and equipment Movement in financial assets - - 29 Increase in loans receivable 140 (19) (33) Cash flow from financing 3 039 (2 459) (2 024) activities Repayment of borrowings (179) (136) (2 499) Other loans - repayments 1 718 (2 323) 475 Repayment of loans from group 1 500 - - companies Total cash movement for the 2 638 (196) 634 period Cash and cash equivalents at the 3 334 2 700 2 700 beginning of the period Cash and cash equivalents at end 5 971 2 503 3 334 of period COMMENTARY Review for the reporting period The gross profit margin has remained stable for the 6 months ended 31 December 2010. The total comprehensive loss for the period under review amounted to R629 000 compared to a restated comprehensive income of R174 000 for the corresponding 6 month period in 2009. Details of the earnings per ordinary share are reflected in the Condensed Consolidated Statement of Comprehensive Income. The group incurred a loss of 1.14 cents per share compared to restated earnings of 0.32 cents in the corresponding 6 month period in 2009. This decrease can largely be ascribed to the substantial costs involved in the restructuring transaction that did not materialize. Outlook SELCo`s business in Namibia demonstrates a profitable and sustainable business model in the electricity distribution industry. Management continues to explore opportunities to apply the business model in other aspects of the electricity distribution in Southern Namibia. Directorate Mr Eckhard Cloete was appointed as Independent Non-Executive Director and member of the Audit Committee with effect 16 March 2011. Mr Cloete holds a MComm degree and has served as Financial Director of GP Retail Operations (Pty) Ltd for the past 10 years. Prior to that he spent 8 years in the banking sector, variously as Manager Public Sector Banking, Corporate Banker and in Structured Finance. His financial and business expertise will stand SELCo in good stead and will serve to strengthen the Audit Committee. Segmental Analysis The group engages in only one business activity providing only one product or service as a vertically integrated electricity distributor. The rental income and management fees received within the group are insignificant and the group therefore only reports as one operating segment. The group`s business is limited to southern Namibia. The numbers reported to the chief operating decision maker are made in accordance with IFRS and can therefore be read directly from the annual financial statements. Subsequent events There were no material events subsequent to the six month period ended 31 December 2010. Basis of preparation The condensed consolidated interim financial statements have been prepared in accordance with IAS 34 Interim Financial Reporting and in compliance with the South African Companies Act, 1973. The condensed consolidated interim financial statements are prepared on the historical cost basis, with the exception of certain financial instruments which are measured at fair value. The results of the interim period are not necessarily indicative of the results for the entire year, and these unaudited financial statements should be read in conjunction with the audited financial statements for the year ended 30 June 2010. The preparation of condensed consolidated interim financial statements requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated interim financial statements and the reported amounts of revenue and expenses during the reporting periods. Although these estimates are based on management`s best knowledge of current events and actions that the group may undertake in the future, actual results may differ from those estimates. The accounting policies and methods of computation are consistent with those applied in the financial statements for the year ended 30 June 2010 and are in terms of IFRS. Middel & Partners, the group`s independent auditor, has reviewed the interim financial statements contained in this interim report and has expressed an unqualified review opinion on the interim financial statements. Their review report is available for inspection at the company`s registered office. Dividend No dividend has been declared for the six month period ended 31 December 2010. Prior period error Reviewed Audited (Restated) (Restated)
6 months ended 12 months ended 31 December 30 June 2010 2009 R`000 R`000
During the course of management`s review of accounting records and current interim results it was discovered that an error was made in the accrual for the cost of electricity during the 2010 period. The comparative amounts have been appropriately adjusted. The effect of the correction of this error on the results of 2010 is as follows: Increase in cost of sales 1 362 1 362 Decrease in tax expense (463) (463) Decrease in profit 899 899 Increase in creditors 1 362 1 362 Decrease in deferred tax (463) (463) liability Decrease in equity 899 899 Decrease in earnings per (1.64) (1.64) share (cents) Decrease in headline earnings (1.64) (1.64) per share (cents) EARNINGS AND HEADLINE EARNINGS PER SHARE Reviewed Reviewed Audited 6 months (restated) (restated) as at 6 months 12 months 31 December as at ended
2010 31 December 30 June 2009 2010 Cents Cents Cents Earnings and diluted earnings (1.14) 0.32 3.81 per share Headline and diluted headline (1.14) 0.32 3.83 earnings per share Basic attributable earnings per share are calculated by dividing the net profit attributable to shareholders by the weighted average number of ordinary shares in issue during the period. The calculation of earnings and diluted earnings per ordinary share is based on a loss for the group of R 629 000 (2009: R174 000 profit) on weighted average ordinary shares of 54 948 173 (2009: 54 945 373) for the period. There are no reconciling items to headline earnings. By order of the Board 30 March 2011 DIRECTORS: B Hlongwa* (Chairman), PM Bester (CEO), I Bosch, EE Cloete*, WB Mahlangu*, H van Zyl* * Non Executive COMPANY SECRETARY AND REGISTERED OFFICE: Eugene Espag, 99 Fascia Street, Silvertondale, 0184 TRANSFER SECRETARIES: Link Market Services South Africa (Pty) Limited, PO Box 4844, Johannesburg, 2000 SPONSOR: Grindrod Bank Limited, PO Box 78011, Sandton, 2146 AUDITORS: Middel & Partners Date: 30/03/2011 14:11:02 Supplied by www.sharenet.co.za Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited (`JSE`). The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct, indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on, information disseminated through SENS.

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