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Audited Group Results And Cash Dividend Declaration For The Year Ended 27 December 2012
DELTA EMD LIMITED
Registration number: 1919/006020/06
Income tax number: 9375057719
Share code: DTA ISIN: ZAE000132817
("Delta EMD" or "the Group")
AUDITED GROUP RESULTS AND CASH DIVIDEND DECLARATION
FOR THE YEAR ENDED 27 DECEMBER 2012
CONDENSED GROUP STATEMENT OF COMPREHENSIVE INCOME
Audited Audited
year to year to
December December
2012 2011
Note R'000 R'000
Revenue 365 459 366 812
Gross profit 117 821 127 797
Investment income 6 226 3 955
Under recovery of manufacturing overheads (25 393) (18 971)
Distribution expenses (32 034) (29 948)
Administrative expenses (31 282) (31 829)
Other (4 006) (4 244)
Loss on sale of assets (137)
Impairment raised (659) (103)
Net foreign exchange losses (3 808) (552)
Profit before taxation 26 865 45 968
Taxation (9 742) 9 489
Normal taxation (8 513) (14 505)
Secondary taxation on companies (1 229)
Capital gains taxation reversed 23 994
Profit for the year 17 123 55 457
Other comprehensive income
Increase in foreign currency translation reserve 1 746 4 850
Total comprehensive income for the year 18 869 60 307
Attributable to equity holders of parent company
Profit for the year 17 123 55 457
Total comprehensive income for the year 18 869 60 307
Headline earnings attributable to ordinary shareholders 1 17 782 31 703
Number of shares in issue ('000) 49 166 49 166
Weighted number of shares in issue ('000) 49 166 49 166
Dilutive number of shares in issue ('000) 49 166 49 166
Attributable earnings per share (cents)
basic 34,8 112,8
diluted 34,8 112,8
Dividend per share (cents) 25,0
CONDENSED GROUP STATEMENT OF FINANCIAL POSITION
Audited Audited
year to year to
December December
2012 2011
R'000 R'000
ASSETS
Non-current assets
Property, plant and equipment 260 251 269 285
Other non-current assets 3 291 4 447
Current assets
Inventories 121 142 115 033
Trade and other receivables 105 037 146 827
Bank balances and cash 153 622 118 996
Non-current assets held for sale 12 871 12 067
Total assets 656 214 666 655
EQUITY AND LIABILITIES
Total shareholders' funds 524 446 516 793
Non-current liabilities
Deferred taxation liabilities 46 191 49 690
Other non-current liabilities 8 108 7 262
Current liabilities
Trade and other payables 62 669 70 116
Foreign exchange contracts liability 11 937
Short-term provisions 3 727 2 500
Taxation payable 11 073 8 357
Total equity and liabilities 656 214 666 655
Net asset value per share (cents) 1 067 1 051
CONDENSED GROUP STATEMENT OF CASH FLOWS
Audited Audited
year to year to
December December
2012 2011
R'000 R'000
Cash generated by trading 45 821 61 415
Decrease/(Increase) in working capital 17 288 (43 144)
Cash generated by operations 63 109 18 271
Net interest received 6 226 3 955
Taxation paid normal (9 296) (4 631)
Taxation paid secondary tax on companies (1 229)
Cash inflow from operating activities 58 810 17 595
Replacement capital expenditure (14 074) (18 456)
Decrease in non-current assets 1 156 1 524
Proceeds on sale of assets 153
Net cash inflow before financing activities 45 892 816
Dividend paid ordinary (12 291)
Net increase in cash and cash equivalents 33 601 816
Cash and cash equivalents at beginning of the year 118 996 112 964
Currency translation of cash in foreign subsidiary 1 025 5 216
Cash and cash equivalents at end of the year 153 622 118 996
CONDENSED GROUP STATEMENT OF CHANGES IN EQUITY
Share Foreign
capital currency Accumu-
and translation lated
premium reserve profit Total
R'000 R'000 R'000 R'000
Balance at 27 December 2010 4 856 (3 300) 454 930 456 486
Total comprehensive income for the year 60 307 60 307
Foreign currency translation reserve 4 850 (4 850)
Balance at 27 December 2011 4 856 1 550 510 387 516 793
Total comprehensive income for the year 18 869 18 869
Foreign currency translation reserve 1 746 (1 746)
Dividend paid ordinary (12 291) (12 291)
Prior years unclaimed dividends reversed 1 075 1 075
Balance at 27 December 2012 4 856 3 296 516 294 524 446
NOTES
Audited Audited
year to year to
December December
2012 2011
R'000 R'000
1. Reconciliation between attributable earnings and headline earnings
Attributable earnings after taxation 17 123 55 457
Impairment raised 659 103
Loss on sale of assets 137
Capital gains taxation reversed (23 994)
Headline earnings attributable to ordinary shareholders 17 782 31 703
Attributable headline earnings per share (cents)
basic 36,2 64,5
diluted 36,2 64,5
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 2012 comprise the Company and its subsidiaries (the Group) and have been audited in compliance with
section 29(1)(e) of the Companies Act of South Africa.
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 recognition and measurement
criteria of International Financial Reporting Standards (IFRS), interpretations issued by the IFRS Interpretations Committee
(IFRIC) containing the information required by International Accounting Standard (IAS) 34, the Companies Act of South Africa,
as well as the SAICA Financial Reporting Guides as issued by the Accounting Practices Committee and Financial Reporting
Pronouncements as issued by Financial Reporting Standards Council.
The auditors, Deloitte & Touche, have issued their unmodified opinion on the Group's financial statements for the year ended
27 December 2012. 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.
2012 2011
R'000 R'000
3. Commitments
Capital commitments authorised but not contracted 6 475 4 247
Capital commitments contracted 4 975 1 645
11 450 5 892
Operating lease commitment 3 471 4 068
COMMENTARY
During the year, the global market for electrolytic manganese dioxide (EMD) remained soft and was price competitive. Certain local input
costs increased significantly. Consequently the Group's margins declined in comparison with the prior year.
Market demand remained soft as general economic conditions limited consumer spending. Demand for EMD also was impacted by
migration to embedded rechargeable batteries and to smaller batteries that require less EMD. Market demand continued to fall short of
supply, affording battery producers more attractive prices.
The Group's volumes sold and volumes produced for the year fell short of capacity resulting in under recovery of manufacturing overheads,
and operational improvements were more than offset by certain input cost increases that exceeded inflation.
PERFORMANCE OF THE GROUP'S EMD BUSINESS
Revenue for the year totaled R365,5 million, and was in line with the prior year (2011: R366,8 million).
Sales volumes and sales mix for the year were in line with the prior year. The majority of sales were made in Rand-denominated selling
prices, which were slightly higher than the prior year. The average Rand selling price realised during the year on US dollar-denominated
sales was marginally lower than the prior year, due to reduced US dollar selling prices and notwithstanding a weaker Rand.
Average per unit production cost for the year increased from the prior year, due to substantial input cost increases, particularly for
electricity, which were only in part offset by operational improvements.
Administration costs were in line with the prior year.
Trading profit for the year totaled R29,1 million and fell short of the prior year (2011: R44,7 million), due to reduced margins and under
recovery of manufacturing overheads.
Interest received increased to R6,2 million (2011: R4,0 million), and the Group's taxation charge for the year was R9,7 million (2011: a tax
credit of R9,5 million).
Attributable earnings for the year totaled R17,1 million (2011: R55,5 million), and earnings per share was 34,8 cents (2011: 112,8 cents).
Headline earnings per share for the year was 36,2 cents (2011: 64,5 cents).
Net cash generated by operations for the year totaled R63,1 million (2011: R18,3 million). Working capital decreased during the year by
R17,3 million (2011 increase R43,1 million), and capital expenditure for the year totaled R14,1 million (2011: R18,5 million).
Year end cash balances increased to R153,6 million (2011: R119,0 million).
DISPOSAL OF THE GROUP'S AUSTRALIAN PLANT SITE
Efforts to sell the Group's former plant site in Australia continue.
PROSPECTS
We do not expect short-term growth in the global EMD market and therefore expect current market conditions to continue.
Efforts to sell more material into developing markets in South East Asia continue, as do our efforts to commercialise a higher grade
material.
Recent movements in foreign exchange rates enhance the competitiveness of our Rand-denominated selling prices, and improve the
margins we realise on products sold in US dollar prices. Such movements, however, can reverse.
We continue our research and development efforts toward the production and sale of manganese-based materials for use in electric
vehicle batteries, a potential new market.
DIRECTORATE
As announced on 3 October 2012, Mr Luigi Matteucci joined the Board as an independent non-executive director with effect from
15 October 2012. Mr Matteucci has also been appointed a member of the Audit and Risk Committee.
CASH DIVIDEND
The Group is pleased to announce the declaration of a final gross cash dividend of 25 cents (21,25 cents net of dividend withholding tax)
per ordinary share for the year ended 27 December 2012.
The dividend has been declared from income reserves and no secondary tax on companies' credits has been used. A dividend withholding
tax of 15% will be applicable to all shareholders who are not exempt.
The issued share capital at the declaration date is 49 165 553 ordinary shares.
The salient dates are as follows:
Last day for trading to qualify and participate in the final dividend
(and change of address of dividend instructions) Friday, 8 March 2013
Trading "ex dividend" commences Monday, 11 March 2013
Record date Friday, 15 March 2013
Dividend 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.
PREPARER OF FINANCIAL STATEMENTS
These condensed consolidated financial statements have been prepared under the supervision of JS Seymore, CA(SA) in his capacity as
Chief Financial Officer of the Group.
TG Atkinson P Baijnath
(Chairman) (Chief Executive Officer)
14 February 2013
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, L Matteucci, BR Wright
Non-executive: TG Atkinson* (Chairman) *USA
Executive: P Baijnath (Chief Executive Officer), JS Seymore, CA(SA) (Chief Financial Officer)
Sponsor: Rand Merchant Bank (A division of FirstRand Bank Limited)
Date: 14/02/2013 04:00:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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