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TRE - Trencor Limited - Interim results unaudited for the six months ended 30
June 2011 and declaration of cash dividend
TRENCOR LIMITED
INCORPORATED IN THE REPUBLIC OF SOUTH AFRICA
REG NO 1955/002869/06
SHARE CODE: TRE
ISIN: ZAE000007506
(`Trencor`)
INTERIM RESULTS UNAUDITED FOR THE SIX MONTHS ENDED 30 JUNE 2011 AND DECLARATION
OF CASH DIVIDEND
HIGHLIGHTS
GROUP
- Trading profit, which is earned in US dollars, after net financing costs,
increased by 82% from R419 million in 2010 to R763 million during the period
under review. Excluding the non-cash gain realised on the sale of containers
referred to below, the increase was 50% from R419 million in 2010 to R629
million (in dollar terms this increased by 67%).
- Profit for the period included a non-cash gain of R60,8 million arising on the
sale of containers to the prior non-controlling interest in Textainer`s primary
asset-owning subsidiary, Textainer Marine Containers Ltd (`TMCL`) - see the
comments under Textainer.
- Headline earnings per share (including the effect of realised and unrealised
foreign exchange translation gains and losses and gains on the sale of
containers referred to above) were 219,3 cents (2010: 121,1 cents).
- Adjusted headline earnings per share (which excludes the effect of foreign
exchange translation gains and losses but includes gains on the sale of
containers referred to above) were 209,7 cents (2010: 107,5 cents).
- The differing measures of earnings are better presented in tabular form:
Year ended
6 months ended 30 June 31 December
2011 2010 2010
Cents per share Cents per share Cents per share
Headline earnings
including gains on
containers sold
pursuant to the TMCL
restructuring in the
current period
(32,9 cents per share) 219,3 121,1 335,5
Deduct/(Add):
Unrealised foreign
exchange translation
gains/(losses) 9,6 13,6 (33,9)
Adjusted headline
earnings 209,7 107,5 369,4
- Based on the spot exchange rate of US$1 = R6,76 and the price of Textainer`s
shares listed on the NYSE on 30 June 2011 (US$30,74), the net asset value of
Trencor at that date was as follows:
R Million Rand per share
Net interest in Textainer 6 188,1 35,05
Net interest in long-term receivables 701,6 3,97
Cash 498,7 2,82
Net liabilities (mainly net deferred tax) (105,2) (0,60)
7 283,2 41,24
- Consolidated gearing ratio at 30 June 2011 increased to 169% (2010: 80%)
mainly as a result of the Trencor specific share repurchase of 10,8 million of
its own shares for a total consideration of R417 million in March 2011,
increased borrowings in Textainer and the buy-out by Textainer of the
non-controlling interest holder in TMCL.
- Interim dividend of 50 cents per share declared (2010: 40 cents per share).
TEXTAINER (60,9% interest)
- Profit for the half-year, reported in terms of US GAAP, was US$88,9 million
(2010: US$49,3 million). Adjusted to conform with International Financial
Reporting Standards, Textainer`s net profit was US$92,1 million (2010:
US$45,2 million). Current period amounts include a non-cash gain of
US$14,8 million arising on the sale of containers to the prior
non-controlling interest in TMCL.
- Fleet utilisation currently stands at a record high of 99,0%, compared with
spot utilisation of 98,3% at 30 June 2010. 78% of the fleet is committed
to long-term and direct financing leases.
- Ordered 172 100 TEU of new containers for delivery through June 2011,
15 000 TEU of new refrigerated containers for delivery through December
2011 and purchased 211 600 TEU of used containers for a total of 398 700
TEU, representing US$761 million of capital expenditure year to date -
a new record for Textainer.
- Completed a capital restructuring of TMCL, effective 30 June 2011, following
which, Textainer now owns 100% of TMCL. The restructuring resulted in a US$19,8
million gross gain on sale of containers to the prior non-controlling interest
in TMCL. The gain was the result of recognising the fair value of containers and
direct finance leases in excess of their book value exchanged for TMCL`s common
shares at the time of the transaction. This was a non-cash transaction.
- Issued US$400 million in asset-backed notes at a fixed interest rate of 4,7%
p.a.
- Declared dividends of US$0,31 and US$0,33 per share in respect of quarters 1
and 2 of 2011 respectively.
- Textainer`s results may be viewed on its website www.textainer.com.
PREPARATION OF FINANCIAL STATEMENTS
The unaudited interim condensed consolidated financial statements have not been
audited or reviewed by Trencor`s independent auditors but have been prepared by
management, under the supervision of the financial director.
DECLARATION OF CASH DIVIDEND
The board has declared an interim cash dividend (number 91) of 50 cents per
share in respect of the six months ended 30 June 2011.
The salient dates pertaining to the cash dividend payment are as follows:
Last day to trade cum dividend Friday, 9 September 2011
Trading commences ex dividend Monday, 12 September 2011
Record date Friday, 16 September 2011
Payment date Monday, 19 September 2011
Share certificates may not be dematerialised or rematerialised between Monday,
12 September 2011 and Friday, 16 September 2011, both days inclusive.
On behalf of the board
NI Jowell Chairman
18 August 2011
Condensed consolidated statement of financial position
at 30 June 2011
Unaudited Unaudited Audited
30 June 30 June 31 December
R Million 2011 2010 2010
ASSETS
Property, plant and equipment 12 517 8 563 9 604
Intangible assets 335 488 400
Investments 14 281 14
Long-term receivables 796 424 828
Net investment in finance leases 343 837 325
Derivative financial instruments 3 94 9
Deferred tax assets 67 - 77
Restricted cash 243 105 99
Total non-current assets 14 318 10 792 11 356
Inventories 34 22 22
Trade and other receivables 586 434 458
Current portion of long-term
receivables 143 118 149
Current portion of net investment in
finance leases 139 126 112
Current tax assets 2 - 3
Cash and cash equivalents 1 020 1 121 1 029
Investment - - 235
Current assets 1 924 1 821 2 008
Total assets 16 242 12 613 13 364
EQUITY
Share capital and premium 40 457 457
Reserves 3 621 3 568 3 438
Equity attributable to equity holders
of the company 3 661 4 025 3 895
Non-controlling interest 1 650 2 119 2 056
Total equity 5 311 6 144 5 951
LIABILITIES
Interest-bearing borrowings 8 364 4 527 5 475
Amounts attributable to third parties
in respect of long-term receivables 214 192 221
Derivative financial instruments 100 111 90
Deferred revenue 11 51 20
Deferred tax liabilities 210 230 225
Total non-current liabilities 8 899 5 111 6 031
Trade and other payables 1 257 720 909
Current tax liabilities 76 171 64
Current portion of interest-bearing
borrowings 619 393 340
Current portion of amounts
attributable to third parties in
respect of long-term receivables 23 20 24
Current portion of deferred revenue 57 54 45
Current liabilities 2 032 1 358 1 382
Total liabilities 10 931 6 469 7 413
Total equity and liabilities 16 242 12 613 13 364
Capital expenditure incurred during
the period 3 989 781 3 566
Capital expenditure committed and
authorised, but not yet incurred 129 336 -
Directors` valuation of unlisted
investments 14 281 249
Ratio to aggregate of total equity:
Total liabilities (%) 205,9 105,3 124,6
Interest-bearing debt (%) 169,2 80,1 97,7
Condensed consolidated statement of comprehensive income
for the six months ended 30 June 2011
Unaudited Unaudited
6 months 6 months Audited
ended ended Year ended
30 June 30 June 31 December
R Million 2011 2010 2010
Revenue (Note 2) 2 430 1 292 2 353
Trading profit before items listed below 925 538 1 226
Realised and unrealised exchange
gains/(losses) on translation of
long-term receivables, excluding
fair value adjustment 32 60 (149)
Net long-term receivable fair value
adjustment 6 (13) 250
Impairment of plant and equipment (5) (5) (12)
Profit from operations 958 580 1 315
Net finance (expenses)/income (Note 3) (162) (119) (224)
Finance expenses - Interest expense (112) (40) (132)
- Losses on derivative financial
instruments (52) (86) (102)
Finance income - Interest income 2 7 10
Profit before tax 796 461 1 091
Income tax expense (52) (61) (9)
Profit for the period 744 400 1 082
Other comprehensive income/(loss)
Foreign currency translation differences 137 191 (583)
Total comprehensive income for the period 881 591 499
Total comprehensive income for the
period attributable to:
Equity holders of the company 485 339 268
Non-controlling interest 396 252 231
881 591 499
Profit attributable to:
Equity holders of the company 394 225 624
Non-controlling interest 350 175 458
744 400 1 082
Basic earnings per share (cents) 217,9 120,0 332,5
Diluted earnings per share (cents) 217,3 119,9 331,8
Number of shares in issue (million) 176,7 187,5 187,5
Weighted average number of shares in
issue (million) 181,0 187,5 187,5
Period-end rate of exchange: SA rand
to US dollar 6,76 7,63 6,61
Average rate of exchange for the
period: SA rand to US dollar 6,84 7,50 7,33
Condensed consolidated statement of cash flows
for the six months ended 30 June 2011
Unaudited Unaudited
6 months 6 months Audited
ended ended Year ended
30 June 30 June 31 December
R Million 2011 2010 2010
Cash generated from operations 1 206 947 1 881
Acquisition of container leasing
equipment (3 741) (450) (2 934)
Finance income received 2 7 10
Finance expenses paid (125) (72) (175)
Dividends paid to equity holders of
the company (177) (159) (234)
Dividends paid to non-controlling
interest (80) (66) (136)
Taxation paid (41) (30) (56)
Net cash (outflow)/inflow from
operating activities (2 956) 177 (1 644)
Cash inflow from investing activities 189 36 105
Cash inflow/(outflow) from financing
activities 2 719 (245) 1 562
Net (decrease)/increase in cash and
cash equivalents before exchange rate
changes (48) (32) 23
Net cash and cash equivalents at the
beginning of the period 1 029 1 115 1 115
Effects of exchange rate changes on
cash and cash equivalents 39 38 (109)
Net cash and cash equivalents at the
end of the period 1 020 1 121 1 029
Condensed consolidated statement of changes in equity
for the six months ended 30 June 2011
Unaudited Unaudited
6 months 6 months Audited
ended ended Year ended
30 June 30 June 31 December
R Million 2011 2010 2010
Balance at the beginning of the
period 3 895 3 841 3 841
Total comprehensive income for the
period 485 339 268
Profit for the period 394 225 624
Foreign currency translation
differences 91 114 (356)
Dividends paid (177) (159) (234)
Share-based payments 27 12 24
Change in holding in subsidiary (8) (8) (4)
Repurchase of own shares from owners (417) - -
Acquisition of non-controlling
interest without change in control (144) - -
Shareholders` interest 3 661 4 025 3 895
Non-controlling interest in
subsidiaries 1 650 2 119 2 056
Balance at the beginning of the
period 2 056 1 905 1 905
Total comprehensive income for the
period 396 252 231
Profit for the period 350 175 458
Foreign currency translation
differences 46 77 (227)
Dividends paid to non-controlling
interest (80) (66) (136)
Share-based payments 16 7 15
Liquidation dividend paid by
subsidiary company (6) - -
Shares issued by subsidiary 39 13 37
Acquisition of non-controlling
interest without change in control (779) - -
Change in holding in subsidiary 8 8 4
Equity 5 311 6 144 5 951
Notes to the condensed consolidated interim financial statements for the six
months ended 30 June 2011
1. These condensed consolidated interim financial statements have been prepared
in accordance with International Reporting Standards (IFRS) including IAS 34
Interim Financial Reporting, South African Statements and Interpretations of
Statements of Generally Accepted Accounting Practice (AC 500 Series) and the
Companies Act of South Africa. The accounting policies applied in the
preparation of these consolidated condensed financial statements are consistent
with those used in the annual financial statements for the year ended 31
December 2010.
Unaudited Unaudited
6 months 6 months Audited
ended ended Year ended
30 June 30 June 31 December
R Million 2011 2010 2010
2. Revenue
Goods sold and services rendered 1 213 (1) 311 521
Leasing income 1 070 806 1 744
Management fees 105 100 214
Finance income 10 15 23
2 398 1 232 2 502
Realised and unrealised exchange
differences 32 60 (149)
2 430 1 292 2 353
1 Includes R899 million revenue in
respect of containers sold to
non-controlling interest
3. Net finance expenses/(income)
Finance expenses 164 126 234
Interest expense - Textainer 112 40 131
Interest expense - other group
companies - - 1
Losses on derivative financial
instruments 52 86 102
Finance income
Interest income - cash and cash
equivalents (2) (7) (10)
162 119 224
4. Headline earnings
Profit attributable to equity
holders of the company 394 225 624
Impairment of plant and equipment 5 5 12
Total tax effects of adjustments - - (1)
Total non-controlling interest
share of adjustments (2) (2) (6)
Headline earnings 397 228 629
Weighted average number of shares in
issue (million) 181,0 187,5 187,5
Headline earnings per share (cents) 219,3 121,1 335,5
Diluted headline earnings
per share (cents) 218,8 121,0 334,8
Adjusted headline earnings
Headline earnings (as above) 397 228 629
Net (gain)/loss on translation of net
US dollar receivables (24) (36) 88
Total tax effects of adjustments 7 10 (25)
Adjusted headline earnings 380 202 692
Undiluted adjusted headline earnings
per share (cents) 209,7 107,5 369,4
Diluted adjusted headline earnings per
share (cents) 209,3 107,4 368,6
5. Segmental reporting
Revenue
Reportable segments
Containers - finance (including
exchange differences) 43 76 (126)
Containers - owning, leasing,
management and reselling 2 387 (1) 1 215 2 477
2 430 1 291 2 351
Unallocated - 1 2
2 430 1 292 2 353
1 Includes R899 million revenue in
respect of containers sold to
non-controlling interest
Profit from operations
Reportable segments
Containers - finance 44 59 123
Containers - owning, leasing,
management and reselling 922 (2) 535 1 223
966 594 1 346
Unallocated (8) (14) (31)
958 580 1 315
Profit before taxation
Reportable segments
Containers - finance 44 59 123
Containers - owning, leasing,
management and reselling 758 (2) 409 990
802 468 1 113
Unallocated (6) (7) (22)
796 461 1 091
Assets
Capital expenditure incurred by the
container owning, leasing, management
and reselling segment 3 989 781 3 566
1 Includes R899 million revenue in respect of containers sold to non-controlling
interest
2 Includes R134 million gain in respect of containers sold to non-controlling
interest
In order to provide a better appreciation of the results of the group`s
activities, a condensed consolidated income statement and a statement of
financial position are also presented in US dollars, as virtually all of the
group`s revenue and assets and much of its expenditure are denominated in that
currency. The amounts stated in US dollars have been prepared by management and
are unaudited.
Unaudited Trencor condensed consolidated income statement
in US dollars for the six months ended 30 June 2011
Unaudited Unaudited
6 months 6 months Unaudited
ended ended Year ended
30 June 30 June 31 December
US$ Million 2011 2010 2010
Revenue 352,3 (1) 164,7 337,1
Trading profit before items listed
below 135,7 71,6 167,2
Realised and unrealised exchange
gains/(losses) arising on
translation - 0,5 (4,3)
Net long-term receivable fair value
adjustment 2,8 2,2 29,3
Impairment of plant and equipment (0,8) (0,6) (1,6)
Profit from operations 137,7 73,7 190,6
Net finance (expenses)/income (23,7) (15,8) (30,7)
Finance expense - Interest expense (16,4) (5,3) (18,1)
- Losses on derivative financial
instruments (7,6) (11,4) (13,9)
Finance income - Interest income 0,3 0,9 1,3
Profit before tax 114,0 57,9 159,9
Income tax expense (7,0) (7,3) (4,7)
Profit for the period 107,0 50,6 155,2
Attributable to:
Equity holders of the company 55,7 27,3 92,8
Non-controlling interest 51,3 23,3 62,4
107,0 50,6 155,2
Number of shares in issue (million) 176,7 187,5 187,5
Weighted average number of shares
in issue (million) 181,0 187,5 187,5
Basic earnings per share (US cents) 30,8 14,6 49,5
Diluted earnings per share (US cents) 30,7 14,5 49,4
Headline earnings per share (US cents) 31,0 14,7 49,9
Diluted headline earnings per share
(US cents) 30,9 14,7 49,8
Adjusted headline earnings per share
(US cents) 31,0 14,5 51,5
Diluted adjusted headline earnings per
share (US cents) 30,9 14,4 51,4
Period-end rate of exchange: SA rand
to US dollar 6,76 7,63 6,61
Average rate of exchange for the
period: SA rand to US dollar 6,84 7,50 7,33
Trading profit from operations
comprises:
Textainer 116,1 71,8 168,5
Textainer - gain on sale of
containers to non-controlling
interest 19,8 - -
Other (0,2) (0,2) (1,3)
135,7 71,6 167,2
1 Includes US$133 million revenue in respect of containers sold to non-
controlling interest
Unaudited Trencor condensed consolidated statement of financial position
in US dollars at 30 June 2011
Unaudited Unaudited Unaudited
30 June 30 June 31 December
US$ Million 2011 2010 2010
ASSETS
Property, plant and equipment 1 851,7 1 122,3 1 453,0
Long-term receivables 117,8 109,7 125,2
Other non-current assets 148,6 182,4 139,9
Non-current assets 2 118,1 1 414,4 1 718,1
Current assets 284,5 238,5 303,7
Inventories 5,0 2,9 3,3
Trade and other receivables 86,5 56,8 69,2
Current portion of long-term
receivables 21,2 15,4 22,5
Current portion of net investment in
finance leases 20,6 16,6 16,9
Current tax assets 0,3 - 0,5
Investment - - 35,6
Cash and cash equivalents 150,9 146,8 155,7
Total assets 2 402,6 1 652,9 2 021,8
Equity and liabilities
Equity attributable to equity holders
of the company 541,4 527,3 589,1
Non-controlling interest 244,1 277,7 311,1
Total equity 785,5 805,0 900,2
LIABILITIES
Interest-bearing borrowings 1 237,3 593,3 828,4
Amounts attributable to third parties
in respect of long-term receivables 31,7 25,2 33,5
Derivative financial instruments 14,9 14,6 13,6
Deferred revenue 1,6 6,6 3,0
Deferred tax liabilities 31,0 30,2 34,0
Total non-current liabilities 1 316,5 669,9 912,5
Current liabilities 300,6 178,0 209,1
Trade and other payables 186,1 94,3 137,4
Current tax liability 11,2 22,4 9,7
Current portion of amounts
attributable to third parties in
respect of long-term receivables 3,4 2,7 3,6
Current portion of interest-bearing
borrowings 91,5 51,5 51,5
Current portion of deferred revenue 8,4 7,1 6,9
Total liabilities 1 617,1 847,9 1 121,6
Total equity and liabilities 2 402,6 1 652,9 2 021,8
Ratio to aggregate of total equity:
Total liabilities (%) 205,9 105,3 124,6
Interest-bearing debt (%) 169,2 80,1 97,7
Directors: NI Jowell* (Chairman), JE Hoelter (USA), C Jowell*, JE McQueen*
(Financial), DM Nurek, E Oblowitz, RJA Sparks, HR van der Merwe*, H Wessels
(* executive)
Secretaries: Trencor Services (Pty) Ltd
Registered Office: 1313 Main Tower, Standard Bank Centre, Heerengracht,
Cape Town 8001
Transfer Secretaries: Computershare Investor Services (Pty) Ltd, 70 Marshall
Street, Johannesburg 2001 (PO Box 61051, Marshalltown 2107)
Sponsors: Rand Merchant Bank (A division of FirstRand Bank Ltd)
www.trencor.net
Date: 18/08/2011 15:00:04 Supplied by www.sharenet.co.za
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