Wrap Text
Unaudited results for the interim period ended 30 June 2012
1time holdings Limited
Unaudited results for the
interim period ended 30 June 2012
Incorporated in the Republic of South Africa • Registration Number: 1999/017536/06 • Share Code: 1TM • ISIN Code:
ZAE000102026 • “1time” or “the Group”
CONSOLIDATED CONDENSED STATEMENTS OF FINANCIAL POSITION
Reviewed Audited year
six months ended
Unaudited as ended 30 31 December
at 30 June June 2011
2012 2011
Figures in Rand
Assets
Non-Current Assets 430,577,397 406,161,123 476,174,109
Current Assets 140,296,331 164,094,069 147,568,145
Total Assets 570,873,728 570,255,192 623,742,254
Equity and Liabilities
Equity and reserves 44,238,361 163,926,903 87,810,489
Non-current liabilities 80,886,779 88,192,860 93,331,457
Current Liabilities 445,748,588 318,135,429 442,600,308
Total Equity and liabilities 570,873,728 570,255,192 623,742,254
Net Asset Value per share (Cents) 15,79 58,5 31.36
Net Tangible asset value per share 13,11 56,5 28.92
(Cents)
CONSOLIDATED CONDENSED INCOME STATEMENT
Unaudited
six months
ended Reviewed Audited year
30 June six months ended
2012 ended 30 31 December
June 2011
2011
Figures in Rand
Gross revenue 637,453,290 654,009,387 1,285,399,391
Other income - - 2,428,333
Operating costs (686,884,725) (1,313,430,884)
(648,505,074
)
Earnings before disclosable items (49,431,435) 5,504,313 (25,603,160)
Depreciation and amortisation (23,387,121) (24,173,407) (46,302,718)
Impairments (260,460) (2,064,392) (18,773,245)
Loans waivered - - 13,020,691
Impairment of investments and loans - - (1,627,021)
Impairment of goodwill - - (1,794,078)
(Loss)/Profit on sale of assets (195,532) (14,735,077) 600,730
Foreign exchange difference 3,265,115 (83,732) (16,721,899)
Operating loss (70,009,433) (35,552,294) (97,200,700)
Finance costs (17,013,816) (15,596,672) (34,642,964)
Investment income 330,216 1,904,098 2,330,765
Loss before taxation (86,693,033) (49,244,868) (129,512,899)
Taxation 50,909,429 15,316,293 (27,711,574)
Loss after taxation (35,783,604) (33,928,575) (157,224,473)
Non-controlling interest - 1,282 1,282
Loss attributable to owners of parent (35,783,604) (33,927,293) (157,223,191)
RECONCILIATION OF HEADLINE
EARNINGS
Loss attributable to ordinary (35,783,604) (33,927,293) (157,223,191)
shareholders
Impairment of goodwill - - 1,794,078
Impairment of assets 260,460 2,064,392 18,773,245
Profit/(Loss) on sale of asset 195,532 10,609,255 (600,730)
Impairment of investments and loans - - 1,627,021
Headline loss attributable to ordinary (35,381,612) (21,253,646) (135,629,577)
shareholders
Weighted average number of shares 280,000,000 256,666,667 268,493,151
Headline loss per share (12,6) (8.3) (50.52)
Loss per share (12,8) (13.2) (58.56)
Diluted headline (loss)(cents) (12,6) (7.59) (50.52)
Diluted (loss)(cents) (12,8) (12.1) (58.56)
Loss attributable to ordinary (35,783,604) (33,927,293) (157,223,191)
shareholders
CONSOLIDATED CONDENSED STATEMENTS OF COMPREHENSIVE INCOME
Unaudited
six months
ended Reviewed Audited year
30 June six months ended
2012 ended 30 31 December
June 2011
2011
Figures in Rand
Loss after taxation (35,783,604) (33,928,575) (157,224,473)
Other comprehensive income
Nett (loss)/Gains in aircraft revaluation (7,788,524) - 47,179,484
Total comprehensive loss (43,572,128) (33,928,575) (110,044,989)
Total comprehensive income attributable
to
Non-controlling interest - (1,282) (1,282)
Owners of parents (43,572,128) (33,927,293) (157,223,191)
CONSOLIDATED CONDENSED STATEMENTS OF CHANGES IN EQUITY
Unaudited
six months
ended Reviewed Audited year
30 June six ended
2012 months 31 December
ended 30 2011
Figures in Rand June
2011
Opening Balance 87,810,489 150,787,190 150,787,190
Shares issued - 47,068,288 47,068,288
Share capital issued - 7,000 7,000
Share premium - 47,061,288 47,061,288
Total comprehensive (Loss) (43,572,128) (33,928,575) (110,044,989)
- Non controlling interest - (1,282) (1,282)
- Owners of parent (43,572,128) (33,927,293) (110,043,707)
Purchase of non-controlling interest - - -
Shares purchased - 280 280
Minority interest - 4,033,812 4,033,812
Acquisition of 28% shareholding - (4,034,092) (4,034,092)
Total 44,238,361 163,926,903 87,810,489
CONSOLIDATED CONDENSED SEGMENT REPORT
Unaudited
six months Reviewed Audited year
ended six ended
Figures in Rand 30 June months 31 December
2012 ended 2011
30 June
2011
GROSS REVENUE
Airline 609,508,399 565,430,823 1,147,986,872
Maintenance 122,578,198 139,159,741 259,541,734
Inter segmental revenue (94,633,307) (50,581,177) (122,129,215)
Total 637,453,290 654,009,387 1,285,399,391
Earnings/(Loss) before disclosable ideas
Airline (17,809,065) (6,990,560) (9,632,992)
Charter - 1,016,922 -
Maintenance (29,648,768) 16,992,670 (14,977,038)
Holdings (1,973,602) (3,008,329) -
Eliminations - (2,506,391) (993,130)
(Loss)/Earnings before disclosable (49,431,435) 5,504,313 (25,603,160)
items
Disclosable Items
Interest expense (17,013,816) (15,596,672) (34,642,964)
Interest received 330,216 1,904,098 2,330,765
Impairment (260,460) (2,064,392) (22,194,344)
Foreign exchange difference 3,265,115 (83,732) (16,721,899)
Loss profit on sale of assets (195,532) (14,735,077) 600,730
Loans payable waived - - 13,020,691
Depreciation and amortisation (23,387,121) (24,173,407) (46,302,718)
Taxation 50,909,429 15,316,293 (27,711,574)
Loss after tax (35,783,604) (33,928,575) (157,224,473)
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
Unaudited
six months
ended Reviewed Audited year
30 June six months ended
2012 ended 30 31 December
June 2011
Figures in Rand 2011
Cash and cash equivelants at 12,482,182 24,084,787 24,084,795
beginning of period
Cash flows from operating activities 1,871,716 (11,557,982) 631,273
Cash generated from operations 18,555,316 4,234,592 35,103,566
Interest received 330,216 1,904,098 2,330,765
Interest paid (17,013,816) (15,596,672) (34,642,964)
Tax paid (2,100,000) (2,160,094)
Cash flows from investing activities (2,954,820) (11,011,193) (1,422,191)
Cash flows from financing activities (9,359,367) (8,977,451) (10,811,695)
Cash and cash equivalents at end of 2,039,711 (7,461,839) 12,482,182
period
PERFORMANCE REVIEW
1time has continued to struggle financially in these tough economic times. Cost pressures pertaining primarily to the oil price has negatively affected
profitability and thus, both subsidiaries of 1time have applied for and have been granted Business Rescue (“BR”) protection.
1time is presently engaging with all of its main partners and counterparts with the view to accomplishing essential streamlining and structural adjustments.
Legacy debts and aircraft lease costs that were incurred in the run-up to 2010, have impacted negatively on the core parts of the business.
The operating environment for domestic commercial airlines has also been tough during the period under consideration, with the market still working
through an excess capacity overhang that forced low ticket prices on off-peak schedules.
The Jetworx Aircraft Service Proprietary Limited (“Jetworx”) maintenance unit of 1time has maintained a steady work flow, but well below its throughput
capacity. The cumulative effect of the above factors has caused the Group to report a net loss of R35,8 million.
Shortly after assuming responsibility for management of 1time, after the departure of the previous executive in late 2011, a process of rightsizing its
business units and adjustment of schedules has been implemented by the new executive team. This has enabled the airline to stem excessive operating
cash outflows, with the current fleet configuration of eight active aircraft, and a market adjusted schedule in 2012.
1time airline Proprietry Limited (“1time airline”) has steadily maintained its annual passenger numbers of approximately 1,8 million passengers. South Africa
has an excellent airport infrastructure and with competition from passenger rail, bus, private car and taxi services continually diminishing due to lengthening
travel time cycles, increasing congestion, higher toll charges, the long term prospects for domestic intercity commercial airlines remains stable.
FINANCIAL RESULTS
The Group’s financial performance for the interim period ended 30 June 2012 was poor, and it incurred a headline loss of R35,4 million compared to a loss
of R21,2 million for the corresponding period in 2011.
AIRLINE
This increase loss was incurred in the airline due to new route development, namely Lanseria and Mombasa both launched in the early part of the 2012
financial year, which resulted in losses of R16,8 million and R8,0 million respectively over the 6 month period. On a normalised basis the airline would have
reflected a profit of R21 million in the airline compared to a loss of R31,0 million the corresponding period in 2011. However, both Lanseria and Mombasa
have subsequently been put on hold until the core business returns to profitability.
Fuel, Airport Charges and Ground Handling constitute 80% of the airlines operating cost, which increased 30% year-on-year. This drove the overall
operating cost base by 25%, which was only partially offset by an increase of 11% in revenue in the 1time airline.
OPERATIONAL PERFORMANCE
1time airline has continued to be the best performing airline in respect of on time performance (“OTP”) with a 6 month average of 90%. Our continued
operational excellence has also led to 1time airline being voted the best low cost airline in Africa by World travel awards. We are proud of this accolade and
aim to continue offering our clients the experience they deserve. Together with the South African Civil Aviation Authority we have ensured safety is our top
priority. Our maintenance facility has continued to deliver top class service with a technical dispatch reliability outperforming the industry significantly.
CUSTOMER EXPERIENCE
We have strived to increase our customer service to our valued passengers and have reduced our customer complaints by 80% since May 2012, which
during these trying and difficult times reflects the dedication of our valued staff who have shown great character and strength.
MAINTENANCE
After purchasing the 28% shareholding from Safair Operations Proprietary Limited (“Safair”) in March 2011, the maintenance division lost a substantial
amount of revenue when this major customer decide to do their own back office and line maintenance work, this had a huge impact on the revenue of the
maintenance division amounting to lost revenue of R18 million, and also lost revenue due to 1time airline flying less aircraft, generating less
Comprehensive Maintenance revenue of R19 million and the costs did not reduce in proportion.
GOING CONCERN
The directors have reviewed the Group’s cash flow forecast, estimates, and income and expenditure projections for the coming year. The result of this
review was that the 1time’s holdings board decided to place both subsidiaries under BR. The sustainability of the Group is reliant on the success of this
process.
SUBSEQUENT EVENTS
The board and executive team of 1time has filed for BR for both 1time airline and Jetworx subsidiaries under the Companies Act, 71 of 2008 (“the
Companies Act”) on the 21 August 2012, which is a statutory process that allows for the legal protection of business whilst reorganisation of the financial
and operational matters may occur. This affords the companies a mantle of legal protection. This is a process based on a similar procedure known in the
United States of America as a Chapter 11 filing; the BR process is aimed at restoring operational as well as structural stability in an enterprise that has a
reasonable prospect for returning to long- term feasibility and sustainability.
CHANGES TO THE BOARD
On 12 March 2012 both Rodney James and Michael Kaminski resigned as directors of the Group.
DIVIDEND POLICY
Due to the losses incurred for the period under review no dividend has been declared.
BASIS OF PREPARATION AND ACCOUNTING POLICIES
The consolidated condensed group financial statements have been prepared in accordance with the recognition and measurement criteria of International
Financial Reporting Standards (IFRS), the AC 500 Standards, disclosure as required by IAS34: Interim Financial Reporting, the JSE listings Requirements
and the requirements of the Companies Act of South Africa 2008 as amended. The group financial statements have been prepared on the historical cost
basis as modified by the valuation of aircraft and investment properties and are consistent with the previous period.
These results for the interim period ended 30 June 2012, have been prepared under the supervision of Ms Lorna Terblanche, CA (S.A.), Group Financial
Director of 1time.
AUDIT REVIEW
These Consolidated Condensed Group financial statements have not been audited or reviewed by the Group auditors.
PROSPECTS
The process that will encompass restructuring the Group is aimed at restoring the balance sheet structure and bringing debt repayment streams into line
with the net operating cash flow of the operating subsidiaries. At the point of reaching consensus at a level deemed appropriate with the above referred
contractual counterparts, the Group will be in a position to launch its proposed rights offer of new ordinary shares that has been approved at the Annual
General Meeting held on 27 July 2012, with the view to issuing up to 700 000 000 new ordinary shares for cash subscription.
The purpose of the proposed rights offer is to restore the balance sheet of the Group following two years of losses that have materially weakened the
existing balance sheet, liquidity and reserves levels. The board view a strong balance sheet and creation of an appropriate liquidity buffer as a more
suitable framework to support long term sustainability of a commercial low cost airline enterprise, in a market where air travel has a secure and growing
share of the intercity travel market.
The continued growth and expansion prospects of commercial air travel in the Southern African passenger and freight market remain secure with a present
market size of approximately 24 million passengers per annum.
We are confident that the turnaround strategy for the Group that the BR Practitioner is compiling at present will get the necessary approvals in order for the
group to return to liquidity and sustainability. We are expecting higher demand in the second half of the financial year and with the continued support of the
South African public have been experiencing very good load factors.
Blacky Komani
Group Chief Executive Officer
Sipho Twala
Chairman
26 October 2012
CORPORATE INFORMATION
Non-executive directors: Sponsor: Merchantec Capital
Sipho Twala(Chairman)*; Tania Matshine*;
Grant Wishart; Brandon Topham*; Auditors: Nexia SAB&T
Ken Jarvis*; Khaya Sikosana*; Kesebone
Maema; Myles Sinclair (Alternate) Registered address:
16 Quality Street, Isando
* Independent non-executive director
Postal address:
Executive directors: PO Box 7110, Bonaero Park, 1622
Blacky Komani (Chief Executive Officer);
Rinesh Ramkissoon; Telephone: 011 086 8100
Lorna Terblanche (Financial Director); Busiwe
Maqungo. Facsimile: 0866 492 712
Company secretary: Merchantec Capital Website: www.1timeholdings.co.za
Transfer secretaries:
Computershare Investor Services Proprietary
Limited
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