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DTA - Delta EMD Limited - Audited group results and dividend declaration for
the year ended 27 December 2011
DELTA EMD LIMITED
Registration number: 1919/006020/06
Share code: DTA ISIN: ZAE000132817
("Delta EMD" or "the Group")
AUDITED GROUP RESULTS AND DIVIDEND DECLARATION FOR THE YEAR ENDED 27 DECEMBER
2011
CONDENSED GROUP STATEMENT OF COMPREHENSIVE INCOME
Audited Audited
year to year to
December December
2011 2010
Note R`000 R`000
Revenue 366 812 378 661
Gross profit 127 797 153 623
Investment income 3 955 9 918
Distribution expenses (29 948) (27 685)
Administrative expenses (31 829) (43 160)
Closure costs reversal - 52 049
Profit on sale of land - 80 520
Other expenses (23 455) (47 391)
Impairment raised - (13)
Net foreign exchange (losses)/gains (552) 249
Profit before taxation 45 968 178 110
Taxation 9 489 (56 739)
Normal taxation (14 505) (16 524)
Secondary taxation on companies - (18 709)
Capital gains taxation reversed/(raised) 23 994 (21 506)
Profit for the year 55 457 121 371
Other comprehensive income
Increase/(decrease) in foreign currency 4 850 (1 228)
translation reserve
Proceeds on disposal of treasury shares - 181
Total comprehensive income for the year 60 307 120 324
Attributable to equity holders of parent
company
Profit for the year 55 457 121 371
Total comprehensive income for the year 60 307 120 324
Headline earnings attributable to ordinary 1 31 703 69 046
shareholders
Number of shares in issue (`000) 49 166 49 166
Weighted number of shares in issue (`000) 49 166 49 150
Dilutive number of shares in issue (`000) 49 166 49 166
Attributable earnings per share (cents)
- basic 112,8 246,9
- diluted 112,8 246,9
Dividend per share - ordinary (cents) - 80,0
Dividend per share - special (cents) - 300,0
CONDENSED GROUP STATEMENT OF FINANCIAL POSITION
Audited Audited
year to year to
December December
2011 2010
R`000 R`000
ASSETS
Non-current assets
Property, plant and equipment 269 285 273 438
Other non-current assets 4 447 5 971
Current assets
- Inventories 115 033 102 251
- Trade and other receivables 146 827 97 522
- Taxation overpaid - 4 097
Bank balances and cash 118 996 112 964
Non-current assets held for sale 12 067 9 979
Total assets 666 655 606 222
EQUITY AND LIABILITIES
Total shareholders` funds 516 793 456 486
Non-current liabilities
Deferred taxation liabilities 49 690 52 263
Other non-current liabilities 7 262 7 981
Current liabilities
- Trade and other payables 70 116 62 790
- Foreign exchange contracts liability 11 937 -
- Short-term provisions 2 500 4 882
- Taxation 8 357 21 820
Total equity and liabilities 666 655 606 222
Net asset value per share (cents) 1 051 928
CONDENSED GROUP STATEMENT OF CASH FLOWS
Audited Audited
year to year to
December December
2011 2010
R`000 R`000
Cash generated by trading 61 415 61 798
(Increase)/decrease in working capital (43 144) 36 066
Cash generated by operations 18 271 97 864
Interest received 3 955 9 918
Taxation paid - normal (4 631) (71 112)
Taxation paid - secondary tax on companies - (18 709)
Cash inflow from operating activities 17 595 17 961
Replacement capital expenditure (18 456) (12 405)
Decrease/(increase) in non-current asset 1 524 (4 920)
Proceeds on disposal of property, plant and 153 80 634
equipment
Net cash inflow before financing activities 816 81 270
Dividend paid - ordinary - (39 313)
Dividend paid - special - (147 489)
Proceeds on disposal of treasury shares - 312
Net increase/(decrease) in cash and cash 816 (105 220)
equivalents
Cash and cash equivalents at beginning of year 112 964 216 846
Translation of cash in foreign subsidiary 5 216 1 338
Cash and cash equivalents at end of year 118 996 112 964
GROUP STATEMENT OF CHANGES IN EQUITY
Share Foreign
capital currency
and translation Treasury
premium reserve shares
R`000 R`000 R`000
Balance at 27 December 2009 4 856 25 558 (181)
Total comprehensive income for - (1 228) 181
the year
Realisationof foreign currency - (27 630) -
translation reserve
Dividend paid - ordinary - - -
Dividend paid - special - - -
Balance at 27 December 2010 4 856 (3 300) -
Total comprehensive income for - - -
the year
Foreign currency translation - 4 850 -
reserve
Balance at 27 December 2011 4 856 1 550 -
Accumu-
lated
profit Total
R`000 R`000
Balance at 27 December 2009 492 731 522 964
Total comprehensive income for 121 371 120 324
the year
Realisationof foreign currency 27 630 -
translation reserve
Dividend paid - ordinary (39 313) (39 313)
Dividend paid - special (147 489) (147 489)
Balance at 27 December 2010 454 930 456 486
Total comprehensive income for 60 307 60 307
the year
Foreign currency translation (4 850) -
reserve
Balance at 27 December 2011 510 387 516 793
NOTES
Audited Audited
year to year to
December December
2011 2010
R`000 R`000
1. Reconciliation between attributable
earnings and headline earnings
Attributable earnings after taxation 55 457 121 371
Impairment raised - 13
Profit on disposal of fixed assets 240 (73 844)
Taxation effect (23 994) 21 506
Headline earnings attributable to ordinary 31 703 69 046
shareholders
Attributable headline earnings per share
(cents)
- basic 64,5 140,5
- diluted 64,5 140,4
2. Basis of presentation
The Group is domiciled in South Africa. The audited condensed consolidated
financial results at and for the year ended 27 December 2011 comprise the
company and its subsidiaries (the `Group`).
The Group`s principal accounting policies have been applied consistently over
the current and prior financial years.
The Group`s condensed consolidated financial results have been prepared in
accordance with the framework concepts and measurement and recognition
requirements of International Financial Reporting Standards (IFRS) of the
International Accounting Standards Board, interpretations issued by the
International Financial Reporting Interpretations Committee (IFRIC), and the
presentation and disclosure requirements of International Accounting Standard
(IAS) 34 "Interim Financial Reporting", the Companies Act of South Africa, as
well as the AC 500 standards as issued by the Accounting Practices Board or
its successor.
The auditors, Deloitte & Touche, have issued their unmodified opinion on the
Group`s financial statements for the year ended 27 December 2011. The audit
was conducted in accordance with International Standards on Auditing. This
abridged report has been derived from the Group financial statements and is
consistent in all material respects, with the Group financial statements. A
copy of their audit report is available for inspection at the company`s
registered office. Any reference to future financial performance included in
this announcement, has not been reviewed or reported on by the company`s
auditors.
2011 2010
R`000 R`000
3. Commitments
Capital commitments - authorised but not 4 377 1 959
contracted
Capital commitments - contracted 1 625 11 737
6 002 13 696
Operating lease commitments 4 068 4 720
COMMENTARY
Delta EMD`s full-year trading results for the year ended 27 December 2011
exceeded earlier expectations following improved second-half trading.
The Group`s full-year results also were enhanced by a favourable Australian
tax ruling relating to the 2010 sale of the Group`s Australian residue
disposal site.
PERFORMANCE OF THE GROUP`S SOUTH AFRICAN EMD BUSINESS
Global demand for alkaline grade EMD remained flat during the year, and market
prices remained under pressure with major global battery producers continuing
to source most of their EMD requirements locally. Nonetheless Delta EMD
secured additional volumes during the second half of the year by providing
competitive US dollar selling prices in select geographies.
Sales revenue for the year ended 27 December 2011 reduced to R366,8 million
from R378,7 million for the comparable 2010 period, with a modest decline in
sales volumes. Most of the decline resulted from the absence during 2011 of
the high margin lithium manganese sales made during early 2010. Premium-grade
EMD sales volumes recovered during the second half of the year, resulting in a
slightly improved full-year sales mix when compared to 2010.
2011 EMD market prices were lower than during 2010, and the Group`s average US
dollar selling price reduced from 2010 levels. The weakening of the Rand in
the last quarter of 2011 partially offset the lower US dollar selling prices,
resulting in the Group`s 2011 average Rand-denominated selling price being
only slightly below the average Rand-denominated selling price achieved for
the comparable period in 2010.
Manufacturing efficiencies were improved significantly during 2011 compared
with 2010. Nonetheless the cost of sales per ton increased as a result of
substantially higher input costs, particularly for electrical power and key
raw materials. Administration costs were reduced to R31,8 million (2010: R43,2
million).
Improved manufacturing efficiencies and reduced administrative expenses
allowed operating profit for the year ended 27 December 2011 to be improved to
R49,5 million (2010: R43,4 million).
GROUP RESULTS
The Group`s profit before tax of R46 million for the year ended 27 December
2011 includes R3 million of costs incurred in Australia relating to the former
plant site which is held for sale. The Group`s profit before tax of R178,1
million for the comparable period last year included a R132,5 million profit
related to the sale of the Australian residue disposal site and holding costs
of R7,8 million for the Australian assets held for sale.
Interest received totalled R4 million and was lower than the R9,9 million
received in the comparable 2010 period, due to lower interest rates and
reduced cash balances after payment of a special dividend in the second half
of 2010.
The Group secured a favourable Australian private tax ruling on the 2010 sale
of Group assets in Australia. Consequently the AUD3,2 million taxation charge
raised in the Group`s 2010 accounts related to the sale of the Group`s
Australian residue disposalsite has been reversed in the Group`s 2011
accounts, and the Group has a net taxation credit of R9,5 million for the
year.
Attributable earnings after taxation totalled R55,5 million for the year
(2010: R121,4 million).
The Group`s earnings per share for the year ended 27 December 2011 were 112,8
cents (2010: 246,9 cents), and the Group`s headline earnings per share for the
year were 64,5 cents (2010: 140,5 cents).
The Group`s net cash inflow from trading for the year ended 27 December 2011
totalled R61,4 million (2010: R61,8 million).Working capital increased during
the year by R43,1 million, and the Group`s capital expenditures for the year
totalled R18,5 million (2010: R12,4 million). The Group`s year-end cash
balances totalled R119 million (2010: R113 million).
PROSPECTS
We do not expect significant growth in the EMD markets we serve during 2012,
and we expect continued price competition. The attractiveness of our Rand-
denominated selling prices, and the margins we realise on products sold with
US dollar prices, will continue to be affected by foreign exchange movements.
Whilst major battery producers are expected to continue to favour local
supply, Delta EMD remains an attractive secondary supplier, particularly as
our product quality and performance continues to improve. Efforts also
continue to improve our market positions in geographies not subject to anti-
dumping duties and in the high grade EMD market segments. We are pleased with
the progress made during 2011 and expect to build upon it during 2012.
DISPOSAL OF THE GROUP`S AUSTRALIAN PLANT SITE
The Group has received interest from a potential buyer for the purchase of the
remaining plant site in Australia and efforts to sell the site continue.
DIVIDEND
The Group is pleased to announce the declaration of a final dividend of 25
cents per share, which represents an appropriate payout from the Group`s
underlying 2011 earnings. It shall be paid from existing cash balances.
The salient dates are as follows:
Last day for trading to qualify and participate Friday, 13 April 2012
in the final dividend (and change of address of
dividend instructions)
Trading "ex dividend" commences Monday, 16 April 2012
Record date Friday, 20 April 2012
Dividend payment date Monday, 23 April 2012
Share certificates may not be dematerialised or rematerialised between Monday,
16 April 2012 and Friday, 20 April 2012, both days inclusive.
PREPARER OF FINANCIAL STATEMENTS
These condensed consolidated financial statements have been prepared under the
supervision of JS Seymore, CA(SA), in his capacity as Financial Director of
the Group.
TG Atkinson P Baijnath
(Chairman) (Chief Executive Officer)
27 March 2012
Johannesburg
Registered Office
15 Heyneke Street, Industrial Site, Nelspruit, 1200
Transfer Secretaries
Computershare Investor Services (Proprietary) Limited
70 Marshall Street, Johannesburg, 2001
PO Box 61051, Marshalltown, 2107
Directors:
Independent non-executive:
LB Bird
AC Hicks
BR Wright
Non-executive:
TG Atkinson* (Chairman)
Executive:
P Baijnath (Chief Executive Officer)
JS Seymore (CA)SA (Financial Director)
*USA
Sponsor:
Rand Merchant Bank (A division of FirstRand Bank Limited)
Date: 27/03/2012 11:35:51 Supplied by www.sharenet.co.za
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