Wrap Text
HLM - Hulamin Limited - Unaudited interim results for the half-year ended 30
June 2011
HULAMIN LIMITED
("Hulamin" or "the group")
Registration number: 1940/013924/06
Share code: HLM
ISIN: ZAE000096210
UNAUDITED INTERIM RESULTS
FOR THE HALF-YEAR ENDED 30 JUNE 2011
- Rolled Products sales volumes increase 22% to 208 000 tons annualised
- Headline earnings improve by 167% to R71 million, off a low base
- Reductions in unit costs continue
Richard Jacob (Chief Executive Officer) commented:
"We continued to improve operational performance in the first half. As a
manufacturing exporter, much of these improvements were offset by the
strengthening Rand. We are cautious about prospects for the second half, with
the current local supply and sales disruptions, and markets in Europe and the
USA weakening. We remain on track though to continue our performance
improvements."
Enquiries
Hulamin 033 395 6911
Richard Jacob, CEO 082 806 4068
Charles Hughes, CFO 082 745 6173
Hector Molale 083 639 1021
CapitalVoice
Johannes van Niekerk 082 921 9110
COMMENTARY
Hulamin`s improving operational performance continued in the first half of
2011, resulting in increased production and therefore sales volumes, as well
as reduced unit costs.
Sales of rolled products for the first half of 2011 saw an increase of 22% to
208 000 tons annualised compared to 170 000 tons in the comparative period.
Rolling margins in US Dollars continued to improve driven by increases in both
sales of high value products and market prices. Turnover grew to R3,4 billion,
an increase of 24% over the comparative period.
The Rand continued to strengthen against the US Dollar and averaged R6,91 in
the reporting period, 8% stronger than the average of R7,54 in the first half
of 2010. The profit impact of this strengthening of the Rand offset much of
the operational improvements achieved.
An insurance settlement of R26 million (after tax) arising from a breakdown of
the Camps Drift Hot Mill in 2009 contributed to the 167% increase in headline
earnings to R71 million.
Hulamin`s order book remains healthy as a result of solid demand. Local sales
showed modest recovery, with the exception of the building and construction
sector, which has continued to constrain sales of extrusions, as have ongoing
low priced imports. Hulamin Extrusions is due to close the Cape Town extrusion
plant at the end of September.
The R75 million project to increase rolling slab capacity in Pietermaritzburg
was completed during the second quarter and is being ramped up to full
capacity. Discussions continue with BHP Billiton on the supply of rolling
slab beyond June 2012.
In the second half of 2011, prospects have been tempered by weaker demand in
Europe and the USA, disruption of LP gas supply and the impact of the SEIFSA
strike at local customers.
The above information has not been reviewed and reported on by the company`s
external auditors.
Hulamin is pleased to announce the appointment of Messrs Gerrit Pretorius and
Geoff Watson as independent non-executive directors with effect from 1 August
2011. Mr Pretorius is a former CEO of Reunert Limited and has 37 years`
experience in South African manufacturing. Mr Watson has held numerous senior
executive positions in the aluminium rolling and steel industries, having
spent the majority of his career with Alcoa Rolled Products in Australia and
China.
ME Mkwanazi RG Jacob
Chairman Chief Executive Officer
21 July 2011
CONDENSED INCOME STATEMENT
Unaudited Unaudited Audited
Half-year Half-year Year ended
30 June 30 June 31 December
2011 2010 2010
R`000 R`000 R`000
Note
Revenue 3 354 006 2 704 645 5 808 667
Cost of sales (3 114 182) (2 518 140) (5 260 954)
Gross profit 239 824 186 505 547 713
Other gains and losses 3 90 768 111 225 71 744
Selling and marketing
expenses (162 091) (153 262) (312 113)
Administrative expenses (36 785) (42 671) (89 111)
Operating profit 131 716 101 797 218 233
Net finance costs (29 318) (69 188) (116 923)
Share of profits/(losses)
of associates and joint
ventures 191 (191) 2 654
Profit before tax 102 589 32 418 103 964
Taxation 4 (29 978) (6 255) (30 716)
Net profit for the year 72 611 26 163 73 248
Headline earnings
Net profit for the year 72 611 26 163 73 248
Loss on disposal of property,
plant and equipment - 492 2 174
Net impairments (709)
Tax effects of adjustments (1 023) (138) (609)
Headline earnings attributable
to shareholders 70 879 26 517 74 813
Earnings per share 5
Basic (cents) 23 11 26
Diluted (cents) 23 11 26
Headline earnings per share
Basic (cents) 22 11 27
Diluted (cents) 22 11 26
Dividend per share (cents) - - -
Currency conversion
Rand/US dollar average 6,91 7,54 7,32
Rand/US dollar closing 6,82 7,64 6,63
CONDENSED STATEMENT OF COMPREHENSIVE INCOME
Unaudited Unaudited Audited
Half-year Half-year Year ended
30 June 30 June 31 December
2011 2010 2010
R`000 R`000 R`000
Net profit for the year 72 611 26 163 73 248
Cash flow hedges, net of tax (33 515) (3 854) 39 362
Total comprehensive income
for the period 39 096 22 309 112 610
CONDENSED STATEMENT OF CHANGES IN EQUITY
Unaudited Unaudited Audited
Half-year Half-year Year ended
30 June 30 June 31 December
2011 2010 2010
R`000 R`000 R`000
Balance at beginning of period 4 609 534 3 744 279 3 744 279
Total comprehensive income
for the period 39 096 22 309 112 610
Shares issued - share capital 1 372 9 421 10 059
Shares issued - share premium 767 727 481 726 216
Value of employee services 17 119 3 792 20 355
Settlement of employee share incentives - (1 084) (4 025)
Tax on employee share incentives (940) 535 40
Total equity 4 666 948 4 506 733 4 609 534
CONDENSED BALANCE SHEET
Unaudited Unaudited Audited
Half-year Half-year Year ended
30 June 30 June 31 December
2011 2010 2010
R`000 R`000 R`000
ASSETS
Non-current assets
Property, plant and equipment 4 986 125 4 992 544 4 989 646
Intangible assets 34 775 28 963 33 346
Investments in associates
and joint ventures 45 573 42 889 51 887
Retirement benefit asset 56 018 - 73 819
Deferred tax asset 21 609 16 026 22 102
5 144 100 5 080 422 5 170 800
Current assets
Inventories 1 275 664 1 352 022 1 189 929
Trade and other receivables 1 043 244 862 764 792 357
Derivative financial assets 58 451 43 734 180 247
Income tax asset 925 10 085 -
Cash and cash equivalents 8 843 30 193 24 439
2 387 127 2 298 798 2 186 972
Total assets 7 531 227 7 379 220 7 357 772
EQUITY
Share capital and share premium 1 730 969 1 729 457 1 728 830
BEE reserve 174 686 174 686 174 686
Employee share-based
payment reserve 108 338 77 565 91 219
Hedging reserve 5 325 (4 376) 38 840
Retained earnings 2 647 630 2 529 401 2 575 959
Total equity 4 666 948 4 506 733 4 609 534
LIABILITIES
Non-current liabilities
Non-current borrowings 628 082 628 220 627 759
Deferred income tax liabilities 949 655 909 861 941 260
Retirement benefit obligations 158 724 141 754 147 909
1 736 461 1 679 835 1 716 928
Current liabilities
Trade and other payables 760 366 721 469 607 917
Current borrowings 326 789 424 089 355 077
Derivative financial liabilities 40 663 47 094 66 971
Income tax liability - - 1 345
1 127 818 1 192 652 1 031 310
Total liabilities 2 864 279 2 872 487 2 748 238
Total equity and liabilities 7 531 227 7 379 220 7 357 772
Net debt to equity (%) 20,3 22,7 20,8
CONDENSED CASH FLOW STATEMENT
Unaudited Unaudited Audited
Half-year Half-year Year ended
30 June 30 June 31 December
2011 2010 2010
R`000 R`000 R`000
Cash flows from operating activities
Operating profit 131 716 101 797 218 233
Net interest paid (34 141) (80 558) (136 596)
Loss on disposal of property,
plant and equipment - 492 2 174
Non-cash items:
Depreciation and amortisation 106 075 92 739 192 899
Other non-cash items 94 676 38 213 (69 502)
Income tax payment (11 267) (11 399) (16 408)
Changes in working capital (184 173) (363 480) (244 532)
102 886 (222 196) (53 732)
Cash flows from investing activities
Additions to property, plant
and equipment (96 206) (94 332) (186 899)
Additions to intangible assets (2 955) - (6 005)
Proceeds on disposal of property,
plant and equipment - 116 3 664
Decrease/(increase) in investment
in associates and joint ventures 6 505 (32 617) (38 770)
(92 656) (126 833) (228 010)
Cash flows from financing activities
Borrowings repaid (27 965) (421 009) (490 482)
Shares issued 2 139 736 902 736 275
Settlement of share options,
net of reversals - (1 084) (4 025)
(25 826) 314 809 241 768
Net decrease in cash and cash
equivalents (15 596) (34 220) (39 974)
Balance at beginning of period 24 439 64 413 64 413
Cash and cash equivalents
at end of period 8 843 30 193 24 439
NOTES
1. Basis of preparation
The condensed consolidated interim financial information of the group for the
half-year ended 30 June 2011 has been prepared in accordance with IAS 34 -
Interim Financial Reporting, under the supervision of the Chief Financial
Officer, Charles Hughes CA(SA), and should be read in conjunction with the
group`s 2010 annual financial statements, which have been prepared in
accordance with International Financial Reporting Standards. The accounting
policies and methods of computation adopted are consistent with those used in
the preparation of the group`s 2010 annual financial statements.
Hulamin has not adopted any new or revised accounting standards in the current
period which have impacted the reported results.
Unaudited Unaudited Audited
Half-year Half-year Year ended
30 June 30 June 31 December
2011 2010 2010
R`000 R`000 R`000
2. Operating segment analysis
The group is organised into two
major operating segments namely
Hulamin Rolled Products and
Hulamin Extrusions.
Revenue
Hulamin Rolled Products 3 007 058 2 382 366 5 191 705
Hulamin Extrusions 346 948 322 279 616 962
Group total 3 354 006 2 704 645 5 808 667
Operating profit
Hulamin Rolled Products 124 807 103 733 226 868
Hulamin Extrusions 6 909 (1 936) (8 635)
Group total 131 716 101 797 218 233
Total assets
Hulamin Rolled Products 7 203 220 7 072 257 7 069 431
Hulamin Extrusions 328 007 306 963 288 341
Group total 7 531 227 7 379 220 7 357 772
3. Other gains and losses
The group is exposed to fluctuations in aluminium prices, interest rates and
exchange rates, and hedges these risks with derivative financial instruments.
Other gains and losses reflect the fair value adjustments arising from these
derivative financial instruments and non-derivative financial instruments
classified as fair value through profit and loss in terms of IAS 39.
4. Taxation
The tax charge/(relief) included within these interim financial statements is:
Normal 8 998 9 361 25 801
Deferred 20 980 (3 106) 4 915
29 978 6 255 30 716
Normal rate of taxation (%) 28,0 28,0 28,0
Adjusted for:
Other non-allowable items (%) 1,2 (8,8) 1,5
(%) 29,2 19,2 29,5
5. Earnings per share
The weighted average number of shares used in the calculation of basic and
diluted earnings per share are as follows:
Number Number Number
of shares of shares of shares
June June December
2011 2010 2010
Weighted average number of
shares used for basic EPS 316 842 024 245 185 429 281 206 387
Share options 3 866 149 3 575 815 3 498 720
Weighted average number of
shares used for diluted EPS 320 708 173 248 761 244 284 705 107
6. Commitments and contingent
liabilities
Capital expenditure contracted for
but not yet incurred 61 825 151 998 90 381
Operating lease commitments 7 307 11 225 9 392
Guarantees and contingent liabilities 23 086 25 840 25 962
CORPORATE INFORMATION
Business and postal address
Moses Mabhida Road, Pietermaritzburg, 3201
PO Box 74, Pietermaritzburg, 3200
Contact details
Telephone: +27 33 395 6911
Facsimile: +27 33 394 6335
Website: www.hulamin.co.za
E-mail: hulamin@hulamin.co.za
Securities exchange listing
South Africa (Primary), JSE Limited
Transfer secretaries
Computershare Investor Services (Pty) Limited
70 Marshall Street, Johannesburg, 2001; PO Box 61051, Marshalltown, 2107
Sponsor
Rand Merchant Bank (A division of FirstRand Bank Limited)
1 Merchant Place, corner Fredman Drive and Rivonia Road, Sandton, 2196
PO Box 786273, Sandton, 2146
Directorate
Non-executive directors: LC Cele, VN Khumalo, TP Leeuw, JB Magwaza,
NNA Matyumza, ME Mkwanazi (Chairman), SP Ngwenya, PH Staude
Executive directors: RG Jacob (Chief Executive Officer), CD Hughes, MZ Mkhize
Date: 25/07/2011 07:05:02 Supplied by www.sharenet.co.za
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