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SAH - South African Coal Mining Holding Limited - Unaudited results of

Release Date: 07/10/2011 14:54
Code(s): SAH
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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 Produced by the JSE SENS Department. 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