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Unaudited Interim Results and interim cash dividend declaration
Comair Limited
Incorporated in the Republic of South Africa
Registration number: 1967/006783/06
Share code: COM
ISIN: ZAE000029823
(Comair or the Company or the Group)
Unaudited Interim Results and interim cash dividend declaration
for the six months ended 31 December 2012
Performance review
The turnaround in profitability that commenced in the second half of the 2012
financial year has continued into the six months to December 2012, and has
resulted in a profit after tax of R79 million for the period, a significant
improvement on the results of the comparative period. While it took time to
adequately address the effect of higher operating costs, brought on predominantly
by the rapid escalation of the fuel price in 2011, we are now accommodating an
oil price of over $110 per barrel and do not anticipate a reduction in this price
in the near future.
Revenue grew by 20%, mainly attributable to the fuel surcharge on British Airways
tickets and kululas improved pricing capability and revenue integrity processes
emanating from its new inventory management system. The four new Boeing 737-
800s, introduced during the period, further contributed to increased revenue
per flight, while at the same time improving fuel efficiency. Our in-house
catering facility and other cost saving initiatives continued to deliver
meaningful results.
Earnings per share and headline earnings per share grew to 16.4 cents (prior
period loss of 7.1 cents and headline loss of 4.9 cents) and cash generation
was particularly strong due to the tax allowances on the new aircraft,
as well as abnormally good advance ticket sales in December,resulting in a cash
balance of R529 million at 31 December 2012.
The four new aircraft were brought onto the statement of financial position
during the period,funded with US Export-Import Bank backed loans, which
ensured excellent financing rates.
We are particularly proud of the fact that the turnaround in profitability was
achieved without the retrenchment of any staff, largely as result of their own
commitment towards implementing the changes required to turn the
business around.
Prospects
The total domestic passenger market has shown year-on-year shrinkage since
February 2012, with the half year volumes for the market 6% lower than for the
comparative period. The continued devaluation of the Rand has driven the Rand
price of fuel and dollar-based technical services to record levels, and therefore
we do not foresee early growth in market volumes as ticket prices will remain at
the levels necessary to recover such escalating costs. We also do not anticipate
any near-term recovery in global or local consumer spending.
However, our new enterprise-wide IT platform and the new fleet, which were only
in operation for a portion of the reporting period, offer further opportunities
for improved revenue and operating efficiency that will be fully optimised over
the next few years.
Flights from Johannesburg (ORTIA) to East London on the kulula brand will
commence on 1 March 2013, and flights from Johannesburg to Maputo on the British
Airways brand from May 2013. There are also good growth opportunities for our
travel business, flight training facility, catering business and airport
lounges.
We are therefore cautiously optimistic for further improvements to profitability
and cash generation in the second half of the 2013 financial year.
The above outlook has not been reviewed and reported on by Comairs external
auditors and does not constitute an earnings forecast.
Dividend
Contrary to past practice and in light of the Companys improved trading
results, notice is hereby given that a gross interim cash dividend of 5.0 cents
per ordinary share has been declared payable to shareholders. The Dividend has
been declared out of income reserves.
STC Credits of R5 640 412 (equating to 1.15304 cents per share) are available
to be utilised as part of this declaration. The gross dividend will be subject
to a local dividend tax rate of 15.00% but the effective rate is brought down
to 11.54% once STC Credits have been applied resulting in a net dividend
of 4.42296 cents per ordinary share, unless the shareholder is exempt from
paying dividend tax or is entitled to a reduced rate in terms of the applicable
double tax agreement. The Companys tax reference number is 9281/874/1/0
and the number of ordinary shares in issue at the date of this declaration
is 489,176,471.
In accordance with the provisions of Strate, the electronic settlement and
custody system used by the JSE Limited, the relevant dates for the dividend are
as follows:
Event Date
Last day to trade (cum dividend) Friday, 8 March 2013
Shares commence trading (ex dividend) Monday, 11 March 2013
Record date (date shareholders recorded in books) Friday, 15 March 2013
Payment date Monday, 18 March 2013
Share certificates may not be dematerialised or rematerialised between Monday,
11 March 2013 and Friday, 15 March 2013, both days inclusive.
Directors resignations and appointment
Derek Henry Borer was appointed as an alternate director to Rodney Cyril Sacks,
an independent non-executive director, on 17 October 2012.
Alan Buchanan, a non-executive director, having left the employ of British Airways
resigned as a Board Member on 27 November 2012.
Basis of preparation
In terms of the Listings Requirements of the JSE Limited, the Group has prepared
its consolidated interim results in accordance with International Financial
Reporting Standards, including IAS 34 Interim Financial Reporting, the SAICA
Financial Reporting Guides as issued by the Accounting Practices Committee
and the requirements of the Companies Act, Act No. 71 of 2008. The accounting
policies used in the preparation of these results are consistent in all
material aspects with those used for the previous Annual Financial Statements.
These Unaudited Interim Group Results were prepared by:
R Yasas Sri-Chandana
Financial Director
Comair Limited
Unaudited Unaudited Audited
6 months 6 months year
31 Dec 2012 31 Dec 2011 30 June 2012
R'000 R'000 R'000
-------------------------------------------------
Abridged Group Statement of
Comprehensive Income
Revenue 2,411,335 2,053,784 4,162,938
Operating expenses (2,176,919) (1,998,192) (3,974,163)
-------------------------------------------------
Operating profit before
depreciation 234,416 55,592 188,775
Depreciation (110,113) (85,083) (153,270)
Impairment - - (4,049)
Loss on sale of assets - (10,669) (10,669)
-------------------------------------------------
Profit (loss) before interest,
dividend and taxation 124,303 (40,160) 20,787
Interest income 7,523 4,497 8,200
Interest expense (23,499) (11,135) (19,433)
Share of profit of associates 426 1,856 1,329
-------------------------------------------------
Profit (loss)before taxation 108,753 (44,942) 10,883
Taxation (29,625) 10,776 (3,202)
-------------------------------------------------
Profit (loss) for the period 79,128 (34,166) 7,681
Other comprehensive gain
Fair value adjustment of cash
flow hedge - 395 395
-------------------------------------------------
Total comprehensive profit
(loss)for the year
attributable to ordinary
shareholders of the parent 79,128 (33,771) 8,076
-------------------------------------------------
Earnings(loss) per share
(cents) 16.4 (7.1) 1.6
Headline earnings (loss) per
share (cents) 16.4 (4.9) 3.8
Diluted earnings (loss) per
share (cents) 16.4 (7.1) 1.6
Diluted headline earnings
(loss) per share (cents) 16.4 (4.9) 3.8
Dividends per share 0.0 0.0 0.0
Actual number of shares in
issue ('000) 489,176 489,176 489,176
Weighted ordinary shares in
issue ('000) 483,028 481,484 483,028
Diluted weighted ordinary
shares in issue ('000) 483,055 482,464 483,055
Reconciliation between earnings
and headline earnings
profit (loss) after tax
attributable to the equity
holders of the parent 79,128 (34,166) 7,681
Add: IAS 16 loss on disposal of
property, plant and equipment
after taxation - 10,669 10,669
Add: IAS 16 impairment to
assets - - 4,049
Less: tax effect of
re-measurement adjustments - - (4,121)
-------------------------------------------------
Headline earnings (loss)
attributable to ordinary
shareholders 79,128 (23,497) 18,278
-------------------------------------------------
Abridged Group Statement of At 31 Dec At 31 Dec At 30 June
Financial Position 2012 2011 2012
Assets
Property, plant and equipment 2,381,578 1,375,284 1,432,509
Intangible assets 51,307 - 51,515
Investments in associates 9,293 - 8,717
Goodwill 3,668 3,668 3,668
Current assets 1,101,409 641,909 709,358
-------------------------------------------------
3,547,255 2,020,861 2,205,767
-------------------------------------------------
Equity and liabilities
Share capital and reserves 895,303 768,464 814,461
Interest bearing liabilities 1,258,360 310,663 85,907
Deferred taxation 120,562 108,174 99,039
Current liabilities 1,273,030 833,560 1,206,360
-------------------------------------------------
3,547,255 2,020,861 2,205,767
-------------------------------------------------
Net asset value per share
(cents) 183.0 157.1 166.5
Unaudited Unaudited Audited
6 months 6 months year
31 Dec 2012 31 Dec 2011 30 June 2012
R'000 R'000 R'000
-------------------------------------------------
Abridged Group Statement
of Cash Flows
Cash and cash equivalents at
the beginning of the period 246,095 234,031 234,031
Cash from operations and
investment income 262,672 161,809 278,197
Tax refunded (paid) 9,158 1,198 (4,971)
Cash utilised in investing
activities (1,059,826) (100,284) (134,388)
Cash generated by
(utilised in) financing
activities 1,071,281 (41,956) (126,774)
-------------------------------------------------
Cash and cash equivalents
at the end of the period 529,380 254,798 246,095
-------------------------------------------------
Abridged Group Segmental Report
Segmental revenue
Airline 2,378,148 2,024,907 4,076,004
Non-airline 33,187 28,877 86,934
-------------------------------------------------
2,411,335 2,053,784 4,162,938
-------------------------------------------------
Segmental results
Airline 222,419 40,520 169,705
Non-airline 11,997 15,072 19,070
-------------------------------------------------
Operating profit before
depreciation, impairment
and loss on sale of assets 234,416 55,592 188,775
Depreciation airline (107,731) (79,810) (148,030)
Depreciation non-airline (2,382) (5,273) (5,240)
-------------------------------------------------
Impairment airline - - (4,049)
Loss on sale of assets
airline - (10,669) (10,669)
-------------------------------------------------
Profit (loss) before interest,
dividend and taxation 124,303 (40,160) 20,787
-------------------------------------------------
Segmental assets airline 3,376,252 1,894,964 2,039,582
Segmental assets non-airline 171,003 125,897 166,185
Segmental liabilities
airline (2,552,405) (1,156,531) (1,295,250)
Segmental liabilities
non-airline (99,547) (95,866) (96,056)
Segmental capital additions
airline (excluding borrowing
costs capitalised) 1,041,035 143,877 305,161
Segmental capital additions
non-airline 2,398 7,551 3,046
Abridged Group Statement of
Changes in Equity
Opening Balance 814,461 800,521 800,521
Total comprehensive income
(loss) for the period 79,128 (33,771) 8,076
Equity settled share-based
payment adjustment 1,714 1,714 3,428
Net effect of share trust
activities - - 2,436
-------------------------------------------------
895,303 768,464 814,461
-------------------------------------------------
By order of the Board
P van Hoven (Chairman) E Venter (Chief Executive Officer)
11 February 2013
Sponsor
Rand Merchant Bank (A division of FirstRand Bank Limited)
Release date: 12 February 2012
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