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Reviewed Results for the Year Ended 31 December 2012 and Declaration of Cash Dividend
Trencor Limited
(Incorporated in the Republic of South Africa)
Registration No. 1955/002869/06
Share code: TRE
ISIN: ZAE000007506
('the company' or 'Trencor')
Reviewed Results
for the year ended 31 December 2012
and declaration of cash dividend
COMMENTARY
GROUP
- Trading profit from continuing operations after net financing costs increased by 7% from
R1 529 million in 2011 to R1 636 million.
- Headline earnings per share (including the effect of net realised and unrealised foreign exchange
translation gains) were 559,6 cents (2011: 559,3 cents).
- Adjusted headline earnings per share (which excludes the effect of net unrealised foreign
exchange translation gains), at 546,1 cents (2011: 482,4 cents), were up by 13,2%.
- Net unrealised foreign exchange gains arising on translation of net dollar receivables and the
related valuation adjustments, not included in adjusted headline earnings per share, were
R33 million or 13,5 cents per share (2011: gain R191 million or 76,9 cents per share).
- These different earnings are better reflected in tabular form:
2012 2011
Cents per Cents
share per share
Headline earnings including, in 2011, gains on containers sold
pursuant to TMCL restructuring (35,7 cents per share) 559,6 559,3
Deduct: Unrealised foreign exchange translation gains 13,5 76,9
Adjusted headline earnings 546,1 482,4
- Consolidated gearing ratio at 31 December 2012 was 165% (2011: 173%). All of the interest-
bearing debt is in Textainer.
- Based on the spot exchange rate of US$1 = R8,48 and the price of Textainer's shares listed on the
NYSE on 31 December 2012 (US$31,46 per share), the net asset value of Trencor at that date
was as follows:
R million R per share
Net beneficiary interest in Textainer 7 277,5 41,09
Net interest in long-term receivables 646,7 3,65
Cash 1 669,0 9,43
Net liabilities (111,2) (0,63)
9 482,0 53,54
- Final dividend of 150 cents per share declared, making a total of 215 cents per share for the year
(2011: total 175 cents per share), an increase of 23% over the previous year.
Textainer: 48,9% interest at 31 December 2012 (2011: 60,8%)
- Net profit for the year in US GAAP was US$197,5* million (2011: US$189,6* million). Adjusted
to conform with International Financial Reporting Standards, Textainer's net profit was
US$200,2* million (2011: US$194,0* million) (* Excludes bargain purchase gain of US$9,4 million
and in 2011 included a non-cash gain of US$15,5 million arising on the sale of containers to the
prior non-controlling interest in Textainer Marine Containers Ltd.)
- Average fleet utilisation for the year was 97,2%, compared with 98,3% for 2011. 82% of the fleet
is subject to long-term and direct financing leases.
- Total capital expenditure for both the owned and managed fleets was US$1,2 billion for the year,
used to purchase new and used containers.
- At 31 December 2012 Textainer owned 72,7% of the total fleet of 2 775 000 TEU; at
31 December 2011 it owned 58,6% of the then fleet of 2 469 000 TEU.
- Declared dividends totalling US$1,63 per share in respect of 2012 (2011: US$1,28 per share).
- On 20 December 2012 Textainer acquired a 50,1% interest in TAP Funding Ltd, a container-
owning company whose containers are managed by Textainer, for US$20 million. The acquisition
resulted in a bargain purchase gain which has been recorded in the statement of comprehensive
income. The bargain purchase gain arose due to Textainer's particular ability to accommodate the
transaction needs of TAP's selling shareholders. Specifically, the transaction allows approximately
half of TAP's existing shareholders to continue their investment in TAP and allows TAP to continue
to buy containers that will be managed by Textainer on TAP's behalf, thus enabling TAP to
maintain a young fleet of containers that can be readily financed. The transaction also allowed
TAP's other shareholders immediate liquidity in cash. As Textainer was already managing TAP's
assets, Textainer was able to complete the transaction in an expedited manner without the need
for due diligence.
- Raised a net US$185,2 million of new equity through the issue of 6 125 000 shares during
September 2012. At the same time, Halco Holdings Inc sold 2,5 million shares in Textainer,
realising net proceeds of US$75,1 million. These net proceeds of the sale by Halco are intended
to be distributed to Trencor, subject to the approval of the board of Halco Holdings Inc and the
trustees and protectors of the Halco Trust. In this event, the board of Trencor intends to pay a
special dividend of approximately 360 cents per share in the second quarter of 2013.
- Ended the year with a debt-to-equity ratio of 2,16:1. In 2012 the company completed
approximately US$2,4 billion of financing in the debt and equity markets, resulting in over
US$1,3 billion in net incremental funding.
- Textainer's results may be viewed on its website www.textainer.com.
DECLARATION OF CASH DIVIDEND
The board has declared a final gross cash dividend (number 94) of 150 cents per share out of
distributable reserves in respect of the year ended 31 December 2012.
The salient dates pertaining to the dividend payment are as follows:
Last day to trade cum the dividend Thursday, 14 March 2013
Trading commences ex the dividend Friday, 15 March 2013
Record date Friday, 22 March 2013
Payment date Monday, 25 March 2013
Share certificates may not be dematerialised or rematerialised between Friday, 15 March 2013 and
Friday, 22 March 2013, both days inclusive.
Note that:
- As no secondary tax on companies' credits are available, dividend withholding tax at the rate of
15% will be applicable to shareholders who are not exempt, which will result in a net dividend of
127,50000 cents per share;
- Trencor's tax reference number is 9676002711; and
- Trencor's issued share capital at the declaration date is R885 340 (177 068 011 ordinary shares
of 0,5 cent each).
PREPARATION OF FINANCIAL STATEMENTS
These reviewed results have been prepared by management under the supervision of the financial director.
REVIEW OPINION
These results, other than the figures stated in US dollars, have been reviewed by the independent
auditors, KPMG Inc, and their unmodified review report is available for inspection at the registered office.
On behalf of the board
NI Jowell Chairman
21 February 2013
Directors: NI Jowell* (Chairman), JE Hoelter (USA), C Jowell*, JE McQueen* (Financial), DM Nurek,
E Oblowitz, RJA Sparks, HR van der Merwe*, H Wessels (* executive)
Secretaries: Trencor Services (Pty) Ltd
Registered Office: 1313 Main Tower, Standard Bank Centre, Heerengracht, Cape Town 8001
Transfer Secretaries: Computershare Investor Services (Pty) Ltd, 70 Marshall Street,
Johannesburg 2001 (PO Box 61051, Marshalltown 2107)
Sponsor: Rand Merchant Bank (A division of FirstRand Bank Ltd)
Condensed Consolidated statement of financial position
at 31 December 2012
R million Reviewed 2012 Audited 2011
ASSETS
Property, plant and equipment 24 798 15 600
Intangible assets 283 380
Investment in equity accounted investee 40 3
Investments 66 14
Long-term receivables 699 756
Net investment in finance leases 627 444
Deferred tax assets 20 22
Restricted cash 448 370
Total non-current assets 26 981 17 589
Inventories 195 169
Trade and other receivables 885 773
Current portion of long-term receivables 133 285
Current portion of net investment in finance leases 201 167
Current tax assets 2 2
Cash and cash equivalents 2 513 1 333
Current assets 3 929 2 729
Total assets 30 910 20 318
EQUITY
Share capital and premium 44 44
Reserves 6 370 4 750
Equity attributable to equity holders of the company 6 414 4 794
Non-controlling interests 4 628 2 188
Total equity 11 042 6 982
LIABILITIES
Interest-bearing borrowings 17 107 11 031
Amounts attributable to third parties in respect of long-term receivables 156 173
Derivative financial instruments 89 131
Deferred revenue 27 9
Deferred tax liabilities 218 224
Total non-current liabilities 17 597 11 568
Trade and other payables 1 029 510
Current tax liabilities 83 78
Current portion of interest-bearing borrowings 1 115 1 076
Current portion of amounts attributable to third parties in respect of long-term receivables 30 53
Current portion of deferred revenue 14 51
Current liabilities 2 271 1 768
Total liabilities 19 868 13 336
Total equity and liabilities 30 910 20 318
Capital expenditure incurred during the year 8 647 5 396
Capital expenditure committed and authorised, but not yet incurred 193 277
Directors' valuation of unlisted investments 66 14
Ratio to total equity:
Total liabilities (%) 179,9 191,0
Interest-bearing debt (%) 165,0 173,4
Condensed Consolidated statement of Cash flows
for the year ended 31 December 2012
R million Reviewed 2012 Audited 2011
Cash generated from operations 3 510 2 485
Increase in container leasing equipment (8 036) (5 912)
Finance income received 16 5
Finance expenses paid (559) (335)
Dividends paid to equity holders of the company (336) (265)
Dividends paid to non-controlling interest (302) (187)
Income tax paid (64) (43)
Net cash outflow from operating activities (5 771) (4 252)
Cash inflow from investing activities 614 236
Cash inflow from financing activities 6 253 4 075
Net increase in cash and cash equivalents before exchange rate fluctuations 1 096 59
Net cash and cash equivalents at the beginning of the year 1 333 1 029
Effects of exchange rate fluctuations on cash and cash equivalents 84 245
Net cash and cash equivalents at the end of the year 2 513 1 333
Condensed consolidated statement of comprehensive income
for the year ended 31 December 2012
R million Reviewed 2012 Audited 2011
Revenue (Note 2) 4 553 4 649
Trading profit before items listed below 2 225 1 944
Realised and unrealised exchange gains on translation of long-term receivables, excluding fair value adjustment 54 276
Net long-term receivable fair value adjustment 68 (40)
Impairment of plant and equipment (6) (18)
Bargain purchase gain 80
Profit from operations 2 421 2 162
Net finance expenses (Note 3) (589) (415)
Finance expenses Interest expense (571) (315)
Losses on derivative financial instruments (34) (105)
Finance income Interest income 16 5
Share of profit/(loss) of equity accounted investee (net of tax) 2 (2)
Profit before tax 1 834 1 745
Income tax expense (61) (100)
Profit for the year 1 773 1 645
Other comprehensive income
Foreign currency translation differences 389 1 120
Change in fair value of available-for-sale financial asset 52
Income tax expense on other comprehensive income (10)
Total comprehensive income for the year 2 204 2 765
Total comprehensive income for the year attributable to:
Equity holders of the company 1 282 1 720
Non-controlling interest 922 1 045
2 204 2 765
Profit attributable to:
Equity holders of the company 1 027 991
Non-controlling interests 746 654
1 773 1 645
Basic earnings per share (cents) 579,9 554,3
Diluted earnings per share (cents) 579,9 554,3
Number of shares in issue (million) 177,1 177,1
Weighted average number of shares in issue (million) 177,1 178,8
Year-end rate of exchange: SA rand to US dollar 8,48 8,12
Average rate of exchange for the year: SA rand to US dollar 8,16 7,20
Condensed Consolidated statement of Changes in equity
for the year ended 31 December 2012
R million Reviewed 2012 Audited 2011
Balance at the beginning of the year 4 794 3 895
Total comprehensive income for the year 1 282 1 720
Profit for the year 1 027 991
Foreign currency translation differences 213 729
Net change in fair value of available-for-sale financial asset 42
Dividends paid (336) (265)
Share-based payments 52 42
Changes in ownership interests in subsidiary 330 (8)
Repurchase of own shares from owners (417)
Share options exercised 5
Sale of shares in subsidiary to non-controlling interest without a change in control 292
Acquisition of non-controlling interest without a change in control (178)
Shareholders' interest 6 414 4 794
Non-controlling interests in subsidiaries 4 628 2 188
Balance at the beginning of the year 2 188 2 056
Total comprehensive income for the year 922 1 045
Profit for the year 746 654
Foreign currency translation differences 176 391
Dividends paid to non-controlling interest (302) (187)
Share-based payments 36 25
Shares issued by subsidiary 1 556 42
Sale of shares in subsidiary to non-controlling interest without a change in control 324
Acquisition of non-controlling interest without a change in control (801)
Acquisition of subsidiary non-controlling interests 234
Changes in ownership interests in subsidiary (330) 8
Equity 11 042 6 982
These results can be viewed on the website at www.trencor.net
Notes to the condensed consolidated Preliminary financial statements
for the year ended 31 December 2012
1. These condensed consolidated financial statements have been prepared in accordance with the recognition and measurement requirements of
International Financial Reporting Standards (IFRS), the presentation and disclosure requirements of IAS 34 Interim Financial Reporting,
the AC 500 Series issued by the Accounting Practices Board, the requirements of the Companies Act, 2008 of South Africa and the
JSE Listings Requirements. The accounting policies applied in the preparation of these condensed consolidated financial statements
comply with IFRS and are consistent with those used in the annual financial statements for the year ended 31 December 2011.
R million Reviewed 2012 Audited 2011
2. Revenue
Goods sold and services rendered 1 134 1 765*
Leasing income 3 130 2 378
Management fees 221 212
Finance income 14 18
4 499 4 373
Realised and unrealised exchange differences 54 276
4 553 4 649
* Includes R899 million containers sold to
non-controling interests
3. Net finance expenses
Finance expenses 605 420
Interest expense Textainer 571 315
Losses on derivative financial instruments 34 105
Finance income
Interest income cash and cash equivalents (16) (5)
589 415
4. Headline earnings
Profit attributable to equity holders of the company 1 027 991
Impairment of property, plant and equipment 6 18
Gain on disposal of property, plant and equipment (1)
Bargain purchase gain (80)
Total non-controlling interests' share of adjustments 38 (7)
Headline earnings 991 1 001
Weighted average number of shares in issue (million) 177,1 178,8
Headline earnings per share (cents) 559,6 559,3
Diluted headline earnings per share (cents) 559,6 559,3
Adjusted headline earnings
Headline earnings (as above) 991 1 001
Net gain on translation of net US dollar receivables (33) (191)
Total tax effects of adjustments 9 53
Adjusted headline earnings 967 863
Undiluted adjusted headline earnings per share (cents) 546,1 482,4
Diluted adjusted headline earnings per share (cents) 546,1 482,4
5. Segmental reporting
Revenue
Reportable segments
Containers finance (including exchange differences) 70 296
Containers owning, leasing, management and reselling 4 483 4 3531
4 553 4 649
Profit from operations
Reportable segments
Containers finance 130 248
Containers owning, leasing, management and reselling 2 330² 1 934²
2 460 2 182
Unallocated (39) (20)
2 421 2 162
Profit before taxation
Reportable segments
Containers finance 130 248
Containers owning, leasing, management and reselling 1 728² 1 512²
1 858 1 760
Unallocated (24) (15)
1 834 1 745
1 Includes R899 million revenue containers sold to non-controlling interest
2 Includes R80 million bargain purchase gain. (2011: R134 million gain containers sold to
non-controlling interest)
Assets
Capital expenditure incurred by the container owning, leasing, management and reselling segment 8 646 5 396
In order to provide a better appreciation of the results of the group's activities, a condensed consolidated income statement and
a condensed consolidated statement of financial position are also presented in US dollars, as virtually all of the group's revenue
and assets and much of its expenditure are denominated in that currency. The amounts stated in US dollars have been prepared
by management and are unaudited.
Unaudited Trencor condensed consolidated income statement
in US dollars for the year ended 31 December 2012
Unaudited Unaudited
US$ Million 2012 2011
Revenue 551,8 620,5
Trading profit before items listed below 272,8 271,3
Realised and unrealised exchange gains on translation of long-term receivables 0,4 4,7
Net long-term receivable fair value adjustment 11,0 6,1
Impairment of plant and equipment (0,8) (2,4)
Bargain purchase gain 9,4
Profit from operations 292,8 279,7
Net finance expenses (72,2) (57,8)
Finance expense Interest expense (70,0) (43,7)
Losses on derivative financial instruments (4,2) (14,7)
Finance income Interest income 2,0 0,6
Share of profit/(loss) of equity accounted investee (net of tax) 0,3 (0,2)
Profit before tax 220,9 221,7
Income tax expense (6,4) (7,8)
Profit for the year 214,5 213,9
Attributable to:
Equity holders of the company 123,3 122,7
Non-controlling interests 91,2 91,2
214,5 213,9
Number of shares in issue (million) 177,1 177,1
Weighted average number of shares in issue (million) 177,1 178,8
Basic earnings per share (US cents) 69,6 68,6
Diluted earnings per share (US cents) 69,6 68,6
Headline earnings per share (US cents) 67,3 69,2
Diluted headline earnings per share (US cents) 67,3 69,2
Adjusted headline earnings per share (US cents) 67,0 66,6
Diluted adjusted headline earnings per share (US cents) 67,0 66,6
Year-end rate of exchange: SA rand to US dollar 8,48 8,12
Average rate of exchange for the year: SA rand to US dollar 8,16 7,20
Trading profit from operations comprises:
Textainer 276,5 251,8
Textainer gain on sale of containers to non-controlling interest 20,4
Other (3,7) (0,9)
272,8 271,3
Unaudited Trencor condensed consolidated statement of financial position
in US dollars at 31 December 2012
Unaudited Unaudited
US$ million 2012 2011
ASSETS
Property, plant and equipment 2 924,3 1 921,2
Long-term receivables 82,5 93,1
Other non-current assets 174,9 151,8
Non-current assets 3 181,7 2 166,1
Current assets 463,3 336,1
Inventories 23,0 20,8
Trade and other receivables 104,4 95,3
Current portion of long-term receivables 15,7 35,1
Current portion of net investment in finance leases 23,7 20,6
Current tax assets 0,2 0,2
Cash and cash equivalents 296,3 164,1
Total assets 3 645,0 2 502,2
Equity and liabilities
Equity attributable to equity holders of the company 756,3 590,6
Non-controlling interests 545,7 269,4
Total equity 1 302,0 860,0
LIABILITIES
Interest-bearing borrowings 2 017,4 1 358,5
Amounts attributable to third parties in respect of long-term receivables 18,4 21,3
Derivative financial instruments 10,5 16,1
Deferred revenue 3,2 1,1
Deferred tax liabilities 25,7 27,6
Total non-current liabilities 2 075,2 1 424,6
Current liabilities 267,8 217,6
Trade and other payables 121,3 62,8
Current tax liability 9,8 9,6
Current portion of amounts attributable to third parties in respect of long-term receivables 3,5 6,5
Current portion of interest-bearing borrowings 131,5 132,5
Current portion of deferred revenue 1,7 6,2
Total liabilities 2 343,0 1 642,2
Total equity and liabilities 3 645,0 2 502,2
Ratio to total equity:
Total liabilities (%) 179,9 191,0
Interest-bearing debt (%) 165,0 173,4
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