Wrap Text
Infrasors interims for period ended 31 August 2012
INFRASORS HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number: 2007/002405/06)
Share code on the JSE: IRA ISIN: ZAE000101507
("Infrasors", "the Company" or "the Group")
Unaudited Condensed Consolidated Results
for the six months ended 31 August 2012
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Unaudited Unaudited
six months ended six months ended
31 August 2012 31 August 2011
Note R000's R000's
Revenue 147 790 130 862
Turnover 144 232 128 975
Cost of sales (112 228) (91 507)
Gross profit 32 004 37 468
Net administration and other operating expenses (16 976) (15 458)
Depreciation and amortisation (9 605) (8 196)
Net finance costs (2 928) (2 592)
Profit before tax 2 495 11 222
Income tax expense (728) (3 214)
Profit for the period 1 767 8 008
Total comprehensive income for the period 1 767 8 008
Analysis of profit and
total comprehensive income:
Attributable to the equity holders of
Infrasors at the end of the period 1 556 8 008
Attributable to non-controlling interest
at the end of the period 211 –
Total profit and comprehensive income
for the period 1 767 8 008
Earnings per share (cents) – Basic and diluted 2 0,8 4,4
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Unaudited Audited
as at as at
31 August 2012 29 February 2012
R000's R000's
Non-current assets 624 551 610 229
Property, plant and equipment 352 306 340 825
Investment property 98 333 98 089
Mineral rights 92 464 92 464
Goodwill 129 129
Held to maturity investment 49 596 49 596
Other financial assets 19 676 16 569
Deferred tax assets 12 047 12 557
Current assets 74 821 83 096
Inventories 22 099 19 962
Trade and other receivables 43 779 46 068
Cash and cash equivalents 8 943 17 066
Total assets 699 372 693 325
Capital and reserves
Total equity 464 054 462 287
Issued capital 255 620 255 620
Revaluation reserve 6 150 6 150
Retained earnings 200 159 198 603
Non-controlling interest 2 125 1 914
Non-current liabilities 170 364 173 212
Borrowings 77 216 80 623
Environmental rehabilitation provision 23 178 23 178
Deferred tax liabilities 69 970 69 411
Current liabilities 64 954 57 826
Borrowings 21 288 22 115
Trade and other payables 43 610 35 452
Current tax liabilities 56 259
Total equity and liabilities 699 372 693 325
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
Unaudited Unaudited
six months ended six months ended
31 August 2012 31 August 2011
R000's R000's
Cash inflow from operating activities 19 583 20 366
Cash outflow from investing activities (23 346) (13 385)
Cash (outflow)/inflow from financing activities (4 360) 390
Net (decrease)/increase in cash and cash equivalents (8 123) 7 371
Cash and cash equivalents at the beginning of the period 17 066 17 044
Cash and cash equivalents at the end of the period 8 943 24 415
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Unaudited Unaudited
six months ended six months ended
31 August 2012 31 August 2011
R000's R000's
Share capital 918 918
Share premium 254 702 254 702
Revaluation reserve 6 150 6 150
Retained income 200 159 179 057
Balance at the beginning of the period 198 603 171 049
Profit for the period in total comprehensive income 1 556 8 008
Non-controlling interest 2 125 –
Balance at the beginning of the period 1 914 –
Profit for the period in total comprehensive income 211 –
Balance at the end of the period 464 054 440 827
CONDENSED SEGMENT RESULTS
Segmental information is presented in the condensed unaudited consolidated financial statements in respect to the
Group's business segments.
The business segmental reporting format reflects the Group's management and internal reporting structure. The
segments are reported to the Group's management in terms of the nature of the minerals mined. Segmental results
include items directly attributable to a segment as well as those that can be allocated on a reasonable basis.
Dolomite and
Silica Limestone Other Total
R000's R000's R000's R000's
31 August 2012
Turnover from external customers 46 230 98 002 – 144 232
Inter-segment revenues – – 9 000 9 000
Profit/(loss) before tax 2 758 6 810 (7 073) 2 495
Total assets 169 143 265 366 264 863 699 372
31 August 2011
Turnover from external customers 41 607 87 368 – 128 975
Inter-segment revenues – – 7 200 7 200
Profit/(loss) before tax 5 210 11 538 (5 526) 11 222
Total assets 105 698 247 086 288 591 641 375
MANAGEMENT COMMENTARY
Infrasors
Infrasors is a South Africa-based mining resources company developing, mining and beneficiating a spread of
minerals for the local industrial, mining and construction sectors.
Its operations are conducted at its Lyttelton Centurion mine, Marble Hall mine, Delf Sand mine and its Delf
Silica Coastal operation.
Financial and operation review
The subsidiaries Lyttelton Dolomite and Delf Silica had constrained performances but due to different pressures.
At Lyttelton Dolomite, output was hampered by factors influencing the metallurgical market and by maintenance
cost overruns on sections of the beneficiation plant. At the Delf Sand mine the operations are contending with
a declining reserve.
Revenue of the Group for the period under review improved to R147,8 million (2011: R130,9 million), an increase
of 12,9%. Total volumes sold for the Group reduced by 4 485 tons, a 0,5% decrease (2011: 1,9% increase).
The gross profit of the Group from operating activities for the period under review was R32,0 million
(2011: R37,4 million), a decrease of R5,4 million (14,4%).
The profit before tax of the Group for the period under review was R2,5 million (2011: R11,2 million), a decrease
of R8,7 million (77,7%), due to lower gross profit earnings, increased depreciation and increased finance costs.
Depreciation and amortisation increased as a result of the additions to property, plant and equipment acquired
compared to the corresponding period. Net finance cost increased to R2,9 million (2011: R2,6 million), as a
result of increased interest rates paid on borrowings.
Cash generated from operating activities remained steady at R19,6 million (2011: R20,4 million). The cash outflow
from investing activities increased to R23,3 million (2011: R13,4 million) as a result of mobile equipment
acquired, along with over burden removal and investment in endowment policies held for rehabilitation and for settlement
of instalment sale agreements. The net outflow of financing activities of R4,4 million (2011: inflow R0,4
million)was a result of payments made towards capital borrowings outstanding.
Trade and other payables increased due to higher amounts payable to sub-contractors owing to increased loading,
hauling, drilling and blasting costs resulting from increased production, which led to higher quantities of stock
piles of inventory on hand.
Silica Dolomite Limestone Total
2012 2011 2012 2011 2012 2011 2012 2011
Tons sold 150 440 146 230 592 828 568 732 153 928 186 719 897 196 901 681
Lyttelton Dolomite
Lyttelton Dolomite increased its turnover by R10,6 million to R98,0 million (2011: R87,4 million) mainly as a
result
of annual price increases and also by a change in the sales mix and an increase in logistics revenue.
The output of dolomite from the Lyttelton Centurion mine increased by 24 096 tons, a 4,2% increase
(2011: 0,9% increase) mainly due to increased demand from the construction sector which compensated for the
decline in metallurgical sales due to a prolonged labour unrest experienced by a major metallurgical customer.
The Lyttelton Centurion mine experienced abnormal repair and maintenance costs which contributed to the gross
profit
reducing by R3,7 million from R24,8 million in 2011 to R21,1 million for the current six months ended 31 August
2012.
Similar maintenance costs and associated production downtime are not expected to be repeated during the second
half of the year ending 28 February 2013. Further cost reduction measures have been implemented.
The Marble Hall mine output reduced by 32 791 tons, a 17,6% decrease (2011: 3,2% increase), to 153 928 tons
(2011: 186 719 tons) mainly due to the curtailment of customers purchasing metallurgical products and the closure
of furnaces during the high Eskom winter tariff period. However, additional off-take has been secured as from
September 2012. The lost output was partially compensated by an increase in sales of powders. An additional
powder mill was commissioned at the Marble Hall mine, raising the milling capacity in order to meet increased
demand from the coal and agriculture sectors.
Delf Silica
Delf Silica increased turnover by R4,6 million from R41,6 million in 2011 to R46,2 million. The Delf Silica
volumes increased by 4 210 tons, a 2,9% increase (2011: 4,1% increase) to 150 440 tons (2011: 146 230 tons) mainly as a
result of improved sales at the Delf Silica Coastal operation.
Due to the reduction of the mining yield at the declining Delf Sand mine mineral reserve, it experienced
increased beneficiation costs resulting in reducing the gross profit by R4,4 million from R12,9 million in 2011, to R8,5
millionfor the current six months ended 31 August 2012. This was partially offset by improved profits from the Delf
Silica Coastal operation.
In line with the reducing yield of the Delf Sand mine deposit, cost-saving initiatives have been implemented in
order to reduce the beneficiation costs and maximise the current sales mix.
Prospects
The New Order Mining Right was granted and executed for the Lyttelton Centurion mine on 7 August 2012. Together
with the approval of expansion to the mining footprint area previously reported on and remodelling of the pit
layout,the dolomite resources have increased by 50,5% to 81,1 million tons from 53,9 million tons in 2011. This gives a
total life of mine of 50 years with the metallurgical component being 20 years.
As a result of the approval and execution of the New Order Mining Right and the associated increase in the
Mineral Resources and Mineral Reserves, the Lyttelton Centurion mine has initiated the Lyttelton 2 project as was
published in the SENS release on 16 August 2012. The project is aimed at increasing its production capacity and ensuring
that the mine positions itself to become a low-cost producer. This will allow the mine to take up future demand in the
local infrastructure development and will maximise its metallurgical grade component. The mine has seen steady
increase in demand from the local construction sector, albeit that there are few large construction projects
currently on the go.
The Marble Hall mine will have an increase in uptake of its metallurgical grade component in the next period
as a result of concluding off-take discussions. Exploratory work is continuing on the ore body. The mine remains
well-positioned to participate in the flue gas desulphurisation initiatives related to the energy sector and
therefore continues to firm up its reserves.
Delf Silica is experiencing increased demand by the foundry sector for its product as a result of the railway
infrastructure initiative by Transnet. However, supply from the greenfields project Delf Cullinan mine is being
delayed due to the lack of obtainment of timely environmental regulatory approvals. Relevant Department of Mineral
Resources and Department of Water Affair approvals have been obtained. The Group continues to work through
the environmental regulatory approvals for the Delf Cullinan mine and anticipates that mine development will
commence early 2013. The new mine is a replacement project for the existing Delf Sand mine and will result in
improved yields, increased beneficiation capacity and improved profit margins.
NOTES TO THE CONDENSED CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS
1. Basis of preparation
The unaudited condensed consolidated financial statements for the six-month period ended 31 August 2012
have been prepared in accordance with and containing information required by International Accounting
Standard ("IAS") 34: Interim Financial Reporting, as well as the AC 500 series as issued by the Accounting
Practices Board, the Listings Requirements of the JSE Limited and the South African Companies Act, 71 of
2008, as amended. The unaudited condensed consolidated financial statements are prepared on the historical cost
basis, with the exception of certain financial instruments and investment property which are measured at fair
value. The results of the interim period are not necessarily indicative of the results for the entire year,
and these unaudited financial statements should be read in conjunction with the audited financial statementsfor
the year ended 29 February 2012. The condensed consolidated financial statements for the six-month
period ended 31 August 2012 have not been audited nor reviewed.
The unaudited condensed consolidated financial statements were authorised for issue by the directors on
6 November 2012 for publication on 8 November 2012. The condensed consolidated financial statements
for the six-month period ended 31 August 2012 have been prepared by the Financial Director,
Mr M Potgieter, CA(SA).
The preparation of unaudited condensed consolidated financial statements requires the use of estimates and
assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets
and liabilities at the date of the unaudited condensed consolidated financial statements and the reported amounts
of revenue and expenses during the reporting periods. Although these estimates are based on management's
best knowledge of current events and actions that the Group may undertake in the future, actual results may
differ from those estimates.
The accounting policies and methods of computation are in terms of International Financial Reporting
Standards and have been applied consistently by the Group to all periods presented in these unaudited condensed
consolidated financial statements. All comparative figures throughout this report relate to the corresponding
period of the prior year.
2. Earnings per share ("EPS") reconciliation – Basic and diluted
EPS is based on the Group's profit for the six-month period ended 31 August 2012, divided by the weighted
average number of shares in issue during the six-month period and its comparative six-month period ended
31 August 2011.
Six months ended 31 August 2012 Six months ended 31 August 2011
Weighted Weighted
average average
number number
Page 6
Infrasors SENS 071112
of shares Earnings of shares Earnings
Net profit in issue per share Net profit in issue per share
R000's 000's Cents R000's 000's Cents
1 556 183 709 0,8 8 008 183 709 4,4
Headline earnings per share ("HEPS") reconciliation – Basic and diluted
HEPS is based on the Group's headline earnings divided by the weighted average number of shares in
issue during the six-month period ended 31 August 2012 and its comparative six-month period ended
31 August 2011.
Six months ended 31 August 2012 Six months ended 31 August 2011
Weighted Weighted
average average
number Headline number Headline
Net of shares earnings Net of shares earnings
profit in issue per share profit in issue per share
R000's 000's Cents R000's 000's Cents
Net profit 1 556 8 008
Profit on sale of assets (204)
Tax effect on headline
adjustments 57
1 409 183 709 0,8 8 008 183 709 4,4
3. Dividends
The directors have elected not to declare a dividend for the period ended 31 August 2012 (2011: R nil).
4. Related party transactions
Unaudited Unaudited
period ended period ended
31 August 2012 31 August 2011
R000's R000's
Product purchases between fellow subsidiary companies 135 100
Management and consulting fees paid
to Infrasors Holdings Limited 9 000 7 200
Interest paid by subsidiaries to holding company 74 155
Contributions made to the Infrasors Environmental
Rehabilitation Trust 519 519
Rental recoveries from director controlled entity 145 131
Rent paid to Whirlprops 35 Proprietary Limited 675 385
5. Subsequent events
No material subsequent events have been identified.
6. Directorate and Company Secretary
Mochele Noge# (Chairman), Stephen Courtney* (Deputy Chairman),
Trevor Robinson (Chief Executive Officer), Marius Potgieter (Financial Director),
Chris Boulle#, Percy Ying#, Hugh Courtney*^^, Kerry Colley (Company Secretary).
All of the above directors are South African and resident in South Africa.
* Non-executive directors # Independent non-executive directors ^^ alternate to Stephen Courtney
On behalf of the board
M Noge T Robinson
Chairman Chief Executive Officer
Johannesburg
8 November 2012
Sponsor Auditors
Sasfin Capital Mazars
A division of Sasfin Bank Limited
Legal Advisers and Attorneys Transfer Secretaries
HR Levin Attorneys Notaries and Conveyancers Link Market Services South Africa Proprietary Limited
VISIT US AT www.infrasors.co.za
"RESOURCES FOR GROWTH"
Date: 08/11/2012 04:45:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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