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SAH - South African Coal Mining Holding Limited - Unaudited results of
SACMH and its subsidiaries for the 6 months ended 30 June 2011
South African Coal Mining Holding Limited
(Incorporated in the Republic of South Africa)
Registration number 1994/009012/06
Share code: SAH ISIN : ZAE0000102034
("SACMH" or "the company")
UNAUDITED RESULTS OF SACMH AND ITS SUBSIDIARIES ("THE GROUP") FOR THE
6 MONTHS ENDED 30 JUNE 2011
Unaudited
& Audited
Unaudited Restated as at 31
Consolidated statement of as at 30 as at 30 December
financial position June 2011 June 2011 2010
Assets
Non-current assets 557 223 541 372 537 204
Property, Plant & Equipment 134 171 113 829 111 003
Intangibles 418 517 427 543 421 666
Investments 4 535 - 4 535
Current assets 47 555 12 378 67 717
Inventories 17 463 - 44 286
Trade and other receivables 22 267 2 330 17 957
Cash and cash equivalents 7 825 10 048 5 474
Total assets 604 778 553 750 604 921
Equity and liabilities
Capital and reserves 139 246 165 238 173 166
Issued capital 233 885 233 885 233 885
Retained loss (94 639) (83 153) (75 965)
Shareholders` loans - 14 506 15 246
Non-current liabilities 416 490 236 819 372 420
Interest bearing 220 611 46 723 176 562
liabilities
Non-interest bearing 46 600 - 46 600
liabilities
Non-current provisions 47 027 50 595 45 772
Deferred taxation 102 252 139 501 103 486
Current liabilities 49 042 151 693 59 335
Trade and other payables 24 372 12 307 27 066
Short term borrowings - - 7 012
Current portion of interest 19 550 139 386 20 137
bearing liabilities
Current portion of 5 120 - 5 120
provisions
Total equity and 604 778 553 750 604 921
liabilities
Number of shares in issue 452 454 452 454 452 454
(`000)
Net asset value per share 30.78 36.52 38.27
Net tangible asset value (38.67) (40.86) (31.78)
per share
Consolidated statement of Unaudited Unaudited Audited
comprehensive income (R`000) 6 months 6 months 12 months
30 June 30 June 31 Dec
2011 2010 2010
Revenue 174 247 5 093 18 810
Cost of sales (159 309) (538) (7 444)
Gross profit 14 938 4 555 11 366
Other losses (1 288) (1 247)
Foreign exchange gain 601 3 781
Net impairment of assets - 385
Loss on sale/scrapping of - (11 150)
asset
Depreciation (6 931) (4 873) (10 877)
Amortisation of mining rights (3 149) (1 340)
Rehabilitation provision (1 255) (296)
Operating expenses (see note (15 801) (4 836) (24 985)
8)
Operating loss before finance (14 087) (5 154) (34 363)
costs and taxation
Finance costs (5 816) (12 065) (11 683)
Loss before taxation (19 903) (17 219) (46 046)
Taxation 1 229 - 36 015
Total comprehensive loss
attributable to ordinary (18 674) (17 219) (10 031)
shareholders
Headline loss
Weighted average shares in 452 454 452 454 452 454
issue (R`000)
Basic loss per share (cents) (4.13) (3.81) (2.21)
Headline loss per share (4.13) (3.81) (0.53)
(cents)
Unaudited Unaudited Audited
6 months 6 months 12 months
Consolidated statement of 30 June 30 June 31 Dec
cash flow 2011 2010 2010
Cash flow from operations 17 064 5 037 (50 164)
Net finance charges (5 816) (12 065) (11 683)
Taxation refunded/(paid) (5) 2 083 2 083
Net cash flow from operating 11 243 (4 945) (59 765)
activities
Cash flow from investing
activities
Purchase of property, plant (30 097) - (13 942)
and equipment
Increase in investment - - (4 535)
Net cash utilised in (30 097) - (18 477)
investing activities
Cash from financing
activities
New liabilities raised 21 205 8 011 76 734
Net cash from financing 21 205 8 011 76 734
activities
Net decrease in cash and cash 2 351 3 066 (1 508)
equivalent
Cash and cash equivalent at
the beginning of the year 5 474 6 982 6 982
Cash and cash equivalent at
the end of the year 7 825 10 048 5 474
Consolidated Share Share Shareholder Accumulated
statement of changes capital premium loan loss Total
in equity (R`000)
Balance at 1 January 45 246 188 639 11 607 (65 934) 179
2010 558
Increase in equity 3 639 3 639
loans
Total comprehensive
loss attributable to
ordinary (10 031) (10
shareholders 031)
Balance at 31 45 246 188 639 15 246 (75 965) 173
December 2010 166
Transfer to interest
bearing liabilities (15 246) (15
246)
Total comprehensive
loss attributable to
ordinary (18 674) (18
shareholders 674)
Balance at 30 June 45 246 188 639 - (94 639) 139
2011 246)
Statement of compliance and basis of preparation
The condensed financial statements have been prepared in accordance
with International Financial Reporting Standards (IAS34 Interim
financial reporting and AC500 standards as issued by the Accounting
Practice Board), the Companies Act of South Africa and the Listings
Requirements of the JSE Limited. The accounting policies used to
prepare the financial statements have been consistently applied to all
periods presented. These financial results have not been reviewed or
audited by the company`s auditors, Deloitte & Touche.
The financial statements have been prepared on the going concern basis
taking into account JSW Energy Limited, (a company listed on the
Mumbai stock exchange and operating through its subsidiary JSW Natural
Resources South Africa (Proprietary) Limited)("JSW"), continues to
support SACMH as reflected in the Annual Report issued in July 2011.
Commentary
1. Restatement of comparative figures
The financial position at 30 June 2010 has been restated to
reflect the estimated cost of rehabilitation of historical mining
operation shortfalls in existence prior to the acquisition of
Umlabu Colliery as well as historical shortfalls not previously
valued by the company. These have no impact on the performance
for the 6 months period to 30 June 2010. The net effect of the
restatement is to increase the net tangible asset value at 30
June 2010 by R5.7 million.
These changes were effected in the 31 December 2010 results and
reported in the company`s annual report.
2. Performance for the 6 months to 30 June 2011
2.1 Mining Performance
Open cast and underground mining activities continued to be in
ramp-up phase during these 6 months, with monthly ROM levels,
increasing from 13,406 tons per month to 76,864 tons (2010: Nil)
in June 2011.
High strip ratios and difficulties with the underlying geology
continued to plague the mining operations, resulting in a higher
cost per ton and lower ROM volumes than originally anticipated.
The new management instituted a comprehensive review of the
resource to obtain more detailed geological information and
improve the geoscientific confidence in the resource. This has
resulted in a comprehensive drilling programme and consequent
detailed new life of mine plan being prepared which will be
completed during the month of October.
The open cast mining operations are contracted to Megacube and to
STA for the underground operations.
2.2 Production Performance
During the period the wash plant was upgraded to a 200 t.p.h
facility with a spiral and centrifuge component.
A total of 139,477 tons (2010: Nil) was produced from operations,
during this period with and average yield of 52 %, the underlying
resource, inter alia, constraining yield to below than expected
levels for the period.
ROM has been processed to a RB1 specification during the period,
save for the products inherent sulphur levels which are between
1.0% and 1.2% on average, which is consistent with expectations
from the reserve.,
2.3 Health and Safety
The company managed to achieve a 0 Lost Time Injury Frequency
Rate during the period, and continues to have a key focus on
maintaining this standard and achievement.
2.4 Management
During the period, management decided to effect changes to the
operations and mining teams; Phillip Buckle was appointed as the
mine manager and Roelof Hugo as Chief Operating Officer (
subsequent to the period in review ), replacing previous
incumbents. Both Philip and Roelof have significant experience
in the industry; we believe they will add meaningful value to the
company`s operations and in particular in improving the mining
and operational controls and systems.
3. Logistics
The Companys rail allocation to Richards Bay Coal Terminal (RBCT)
in terms of the Quattro allocation scheme administrated by the
Department of Minerals and Resources (DMR) was reduced to 157,000
tons (2010: 207,000 tons) resulting in a total rail allocation of
227,000 tons (2010: 257,000 tons) of rail allocation being
available. The company is concerned about this reduction and has
made representation on this matter to DMR. The impact of
reducing allocation at this stage of the company`s life is
effectively to significantly constrain future export potential
and concomitant profitability. Production in excess of the RBCT /
Quattro Channel is being shipped through an alternative export
channel. Additional export channels are being explored, in
addition to inland market opportunities.
4. Revenue
A total of 204,304 tons (2010: Nil) of product was sold on the export
market during the period, representing R171 million (2010: Nil) of
total turnover.
5. Asset Management
Capital expenditure of R30 million was incurred during the year.
The upgraded wash plant was fully commissioned at a cost of R12
million during the year and development of the Vlakfontein open
cast reserve was completed together with the recommencement of
mining operations on the Mooifontein underground section at a
cost of R14.5 million. No further major capital commitments were
approved.
Mining rights were amortised based on production volumes. The
necessary rehabilitation costs have been provided for and include
full mine closure and the rehabilitations of previous operations.
6. Updated Statement of Reserves and Resources and Prospects
As an integral part of the aforementioned resource evaluation
programme, the company is in the process of updating the
statement of reserves and resources; this is expected to be
issued by the end of October. Once the statement is complete,
details of the company`s future prospects will be made available.
7. Financing Activities
JSW
During the year a further R21.2 million was advanced by JSW to
finance the upgrades to the wash plant and to supplement working
capital requirements.
Standard Bank of South Africa
The company formalised banking facilities with the Standard Bank
of South Africa over and above the existing term loan of R58
million previously in existence.
8. Taxation
Due to the losses incurred during the period no income tax
liability was incurred. A reduction in the deferred tax provision
of R1.2 million (2010: Nil) was recorded.
Mining Royalty tax of R1.9million (2010: nil) has been included
in operating expenses.
Condensed Segmental Analysis
Segmental information has not been prepared as more than 90% of the
company`s operations relate to its mining activities.
Post Balance Sheet Events
The following events occurred after the balance sheet date:
1. Mainsail Shareholder Loan
The shareholder loan of R15,8 million by Mainsail Trading 55
(Pty) Limited was acquired by JSW, which has elected not to
convert the loan to equity, and the loan has been reclassified to
an interest bearing liability. The loan will continue to bear
interest at the prime overdraft rate.
2. Mining Activities
An independent investigation which may include a forensic
investigation is currently being undertaken into certain of the
company`s mining activities over the period. Shareholders will
be informed of the outcome of the investigation.
Capital Expenditure Commitments
No material commitments have been approved.
Contingencies and Commitments
There has been no change in the previously disclosed contingent assets
and liabilities.
Changes to Directorate
Dr V Lickfold, an independent non-executive director was required to
retire by rotation at the annual general meeting held on 18 August
2011 and advised that she would not seek re-election.
Mr L M Ndala, a non-executive director and audit committee chairman,
resigned with effect from
31 August 2011.
The board wishes to extend its appreciation to both Dr Lickfold and Mr
Ndala for their invaluable contributions to the board over the past
years.
Change of address
The company relocated from 2nd Floor, 198 Oxford Road to 3rd Floor,
198 Oxford Road on 30 September 2011.
For and behalf of the board
TV MOKGATLHA AJL RAYMENT
Chairman Chief Executive Officer
7 October 2011
Johannesburg
Directors : TV Mokgatlha (Chairman), AJL Rayment (Chief Executive
Officer), VP Garg (Non-Executive), DGA Miller (Chief Financial
Officer)
Registered Office : 3rd Floor, 198 Oxford Road, Illovo, Sandton,
Gauteng
Company Secretary: Mrs P F Smit
Transfer Secretary : Computershare Investor Services (Pty) Ltd
Sponsor : Exchange Sponsors (2008) (Pty) Ltd
Auditors : Deloitte & Touche
Date: 07/10/2011 14:54:01 Supplied by www.sharenet.co.za
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