Wrap Text
Financial Results
AIRPORTS COMPANY SOUTH AFRICA LIMITED
ANNUAL FINANCIAL STATEMENTS FOR THE
YEAR ENDED 31ST MARCH 2012
DATED: 27 MARCH 2013
Overview
The Group posted a R188 million profit for the financial year ended 31 March 2012. This is a
significant improvement when compared to the prior year’s first-ever loss of R221 million. The
recovery profit is, however, still not at the levels that were experienced in the years prior to
2011. The results in the 2012 financial year are driven primarily by the increase in aeronautical
revenue as a result of the tariff increase of 34,8 percent recovered from 1 October 2011. This
increase in revenue was eroded by the high financing costs, which peaked in 2012 at R2,034
billion.
Group
31 March 2012 31 March 2011
R’000 R’000
VALUE ADDED
Value added by operations 4 183 677 3 318 222
Sales of goods and services 5 738 543 4 658 239
Less: Cost of goods and services provided (1 554 866) (1 340 017)
Value added by investing activities 249 135 479 447
Finance income 47 133 32 597
Fair value movement 1 534 379 703
Other income 200 468 67 147
Total value added 4 432 812 3 797 669
VALUE DISTRIBUTED
Distributed to employees (769 481) (714 163)
Distributed to providers of capital – finance costs (2 081 460) ( 1 848 268)
Distributed to government (25 682) (38 692)
Income tax expense (25 682) 23 104
Capital gains tax - (61 796)
Value reinvested (1 368 616) (1 417 076)
Depreciation and amortization 1 463 804) (1 445 228)
Capitalised interest - 28 687
Deferred taxation 95 188 535
Total distributions (4 245 239) 4 018 199
VALUE RETAINED
Income (retained)/utilized in the business (187 573) 220 350
Retained profit (187 573) 220 350
Minority interests - -
Total (retained)/utlised for investment (187 573) 220 350
Total value distributed and retained (4 432 812) (3 797 669)
The Eurozone debt crisis continues to have a negative impact on the overall traffic performance,
particularly international traffic, and as a consequence, the revenue increase from international
traffic was moderate, and lower than expected.
The Group still strives to create value for all its stakeholders. The value added is the measure of
wealth the Group has created in its operations by adding value to the cost of services. The
Value Added Statement on the preceding page summarises the total wealth created and shows
how it was shared by employees and other parties who contributed to its creation. Also set out
on the previous page is the amount retained and re-invested in the Group for the replacement of
assets and the further development of operations.
Revenue and traffic trends
The Group revenue comprises both aeronautical and non- aeronautical revenue streams. The
aeronautical revenues are derived from regulated income, which includes a passenger service
charge, and aircraft landing and parking charges. Non-aeronautical revenue is derived from the
Group’s commercial activities and comprises mainly of property rentals, retail, car rental, car
parking and advertising. Total revenue for the year ending 31 March 2012 increased by 23
percent to R5,738 billion (2011: R4,658 billion). This represents a 38 percent increase in
aeronautical revenue to R3,350 billion (2011: R2,430 billion) and seven percent in non-
aeronautical revenues to R2,389 billion (2011: R2,228 billion). Non-aeronautical revenues
continue to contribute positively to the Group; in the 2012 financial year, the contribution from
non-aeronautical revenue to total revenue was 42 percent (2011: 48 percent).
Aeronautical revenue
The increase in aeronautical revenue of 38 percent (R920 million) is due primarily to the
increase in overall traffic of three percent and the increase in tariffs. The allowed increase per
the 2011-2015 permission cycle was an annual increase of 34,8 percent. However, as there
were delays in the promulgation process, the tariff was implemented later than anticipated, on 1
October 2012, and hence was doubled to 69,6 percent due to the recovery of revenue foregone
for the first half of the financial year.
Traffic trends
The Group experienced a moderate upswing in total departing passengers for the period under
review, with traffic for the 2012 financial year ending three percent higher than the previous
year. In the year under review, 17,9 million passengers (2011: 17,5 million) departed from the
Group’s network of airports. Aircraft landings declined by one percent to 272 320 (2011: 274
292). International passenger traffic increased by two percent and international aircraft landings
increased by one percent when compared to that of the prior year. Domestic passengers, who
constitute 70 percent of the total passenger traffic, increased by three percent and related
aircraft landings increased by two percent as compared to the previous period. Regional
passengers increased by six percent, while related aircraft movements (landings) increased by
five percent when compared to the 2011 financial year.
Non-aeronautical revenue
Non-aeronautical revenue continues to serve as a stable and growing revenue stream, with the
increase being driven by both traffic growth and customer spend. In addition, new lease
contracts concluded with our new customers are underpinned by strong minimum rentals, which
protect the Group from downside risk associated with lower traffic volumes.
Core retail
Retail revenue, adjusted for straight-lining of lease income of R32 million (2011: R20 million),
grew by 7,3 percent (2011:19 percent) to R758 million (2011: R706 million). This growth is in
fact much higher (12,1 percent) if the impact of the 2010 FIFA World Cup in the prior year’s
revenue is excluded. The growth in retail revenue is attributable to the annual rental escalation
in on-going leases, an increase in passengers and weakening foreign currencies.
Trading conditions remain lacklustre, with the spend by international passengers, who
contribute over 65 percent of revenue, only growing by 2,3 percent. A major portion of this
passenger growth occurred at Cape Town International Airport, at which the spending
opportunities are far less than at O.R. Tambo International, where spend per passenger at the
international airside duty-free mall remained flat at around US$48.
The focus during the coming year will be on planning and implementing the upgrade and
improvement of the duty free mall at O.R. Tambo International, which is expected to be
completed by the end of 2013. The core duty-free stores at O.R. Tambo and Cape Town
International Airports will also be revamped. In addition, kiosks will be placed in strategic
passenger flow routes to drive up impulse spending.
Retail marketing will be focused on completing the digital suite of solutions required to run
multi-level marketing campaigns to increase the reach and return of retail initiatives, both
immediately and into the future.
The development of the business lounge white label strategy, which runs off a tablet-optimised
version of the e-commerce website, has been completed for roll-out in 2012/13. This seeks to
target the business passenger with a convenience proposition inside the business lounges.
Despite the difficult trading year, in which passengers from major economies were still
struggling to overcome the effects of the recession, passengers were engaged on their
preferred terms and maintained the level of average spend per passenger within Duty Free.
Car parking
The financial year under review is the first normalised year after the refurbishment of the
airports. Parking income increased slightly by five percent to R435 million (2011: R409 million)
against an overall growth of 2,5 percent in departing passenger numbers over the review period.
O.R. Tambo International managed to equal its 2011 financial year performance of R235 million.
Despite the 1,7 percent growth in passengers, parking was adversely affected by the opening of
the Pretoria and Rosebank links of the Gautrain, causing an estimated monthly reduction in
parking income of approximately seven percent, which has stabilised since opening the
extended line in June 2011. It still remains uncertain what effect the tolling of the access routes
to O.R. Tambo International will have, once implemented.
Cape Town International achieved a 12 percent growth in revenue, despite a moderate growth
in passengers of only 4,6 percent. The growth was mainly due to the reconfiguration of product
offerings, including the introduction of long-stay parking.
King Shaka International posted a three percent growth in revenue, year-on-year, against
passenger growth of 3,4 percent. The introduction of reconfigured product offerings and traffic
control should improve the performance.
Domestic airports performed exceptionally, with a revenue growth of 33 percent, whilst
passenger numbers were constant. Improved parking management measures and moderate
tariff increases reflect in the results.
All airports achieved real parking revenue growth despite low growth in passengers and a
stressed global economy. Parking revenue growth has been achieved through tariff increases,
passenger growth and management interventions.
Car rental
Car rental revenue grew by six percent (2011: 10 percent) to R154 million (2011: R145 million)
after adjusting for straight-lining of leases totaling R8 million (2011: R14 million). The annual
escalation of eight percent was offset by lower turnover of top-up rentals, caused largely by
passengers using the Gautrain. The growth rate over the prior year was negatively impacted by
the inclusion of additional turnover rental during the 2010 FIFA World Cup.
Passengers using the Gautrain are on the increase now that the lines to Rosebank and Hatfield
have been opened and will further increase once the Park Station line is commissioned. The
delay in the Gauteng toll roads will benefit car rental users, but once implemented will result in
users reviewing their transport options, and this may well have a negative impact on revenue.
Advertising
Advertising revenue declined by 18 percent (2011: +46 percent) to R186,5 million (2011: R228
million) after adjustment for negative straight-lining of R2,7 million (2011: R5 million).
The reduction was due to the normalisation of revenue after the 2010 FIFA World Cup. Further
to this, the official FIFA commercial partners, i.e. MTN, Coca-Cola and Visa, reduced their
advertising spend with both MTN and Coca-Cola withdrawing completely from the airports.
Standard Bank, which has exclusive advertising inside the Gautrain station, reduced their
advertising budget by half after the World Cup.
Maintenance of pre-World Cup advertising rates has been difficult as market demand has
reduced and concessionaires have had to offer reduced rates. This situation is prevalent across
the world’s airports, with reducing rates and returns. Advertising is becoming extremely
competitive with new opportunities, especially on-line advertising, forcing down rates despite
any increase in passenger numbers.
Exposures
In the year under review, the City of Cape Town served notices of non-compliance of billboards
to bye-laws by advertisers, resulting in removal of advertising and a loss of revenue.
Subsequent discussions between the City and Airports Company South Africa resulted in the
withdrawal of these notices. A similar challenge is being faced at King Shaka International
with Ethekwini Municipality. Should engagements with the two municipalities not resolve the
situations, there would be a potential annual loss of R14 million.
Strategic initiatives for the coming year
The strategy for the coming financial year is to segment the advertising portfolio into advertising
zones (such as domestic arrivals, external sites, etc.), each of which will be awarded to a single
concessionaire through a tender process. This will allow the concessionaire to reformat
advertising into large, impactful, value-enhanced sites. The division is finalising the advertising
website, which will assist in the positioning of airport advertising as the brand positioning area of
choice. The website will educate and inform current and prospective advertisers on the airports
and their offerings, and will assist advertising concessionaires to access both local and
international markets.
Airport TV
Television leads the advertising industry, with a 46 percent market share, and Airports Company
South Africa, together with a concessionaire, will be introducing Airport Television in the
forthcoming financial year. The transmission will incorporate news, current events, and traffic
and weather reports, with advertising being sold in loops alternating with content. The television
screens will be positioned at strategic positions to ensure maximum viewership.
Property
The Group property income, excluding the straight-lining of leases of R24 million, (2011: R44
million), grew by 15 percent to R617 million (2011: R538 million). In analysing the reasons for
growth in the 2011/12 financial year, it must be acknowledged that a full year’s income has been
recognised from the new developments at King Shaka and Cape Town International Airports for
the first time since their completion. In addition, positive cash flow from short-term, income-
generating initiatives at the Durban International site, growth in rentals from renewing leases, re-
letting vacant space and contractual rental escalations have had a positive influence on growth.
At Cape Town International Airport, R26 million was earned as fees on facilitating the cession of
long-term leases between developers for parts of Precinct 2, further boosting the performance
of the portfolio.
The focus in the year under review was on optimising occupancy and negating vacancies,
making a concerted effort to retain quality tenants. Of concern was the emergence of available
new office and industrial space at highly favourable terms in areas surrounding O.R. Tambo
International. Thus, to have successfully retained reputed tenants under trying conditions and
without sacrificing the average rental rate is satisfying. It further confirmed that the airport, and
airports in general, are locations of choice.
The portfolio’s office vacancy is estimated at nine percent, which although higher than the norm
for Airports Company South Africa, is still fractionally lower than the ten percent estimated for
the market.
The existing lease with Denel, due to expire in September 2012, has been renegotiated and
Denel will lease approximately 138 hectares of the property. This will release to Airports
Company South Africa about 100 hectares of developable land with the potential for 58 000m2
of buildings. The process of enabling this land is in progress and the proclamation and record of
decision on the environmental impact assessment are expected by the last quarter of 2012.
The old Durban International Airport site generated income of approximately R17 million in the
2011/12 financial year from ad hoc, short-term rentals. Agreement was reached with Transnet in
March 2012 for the sale of the property at a price of R1,85 billion. The sale has been approved
by the Competitions Commission.
During the year under review, Airports Company South Africa began the process of unbundling
its non-aviation property assets through the proposed creation of a new subsidiary, ‘PropCo’.
Whilst still subject to the necessary Board and statutory approvals and stakeholder acceptance,
it was felt opportune to create a suitably focused and commercially agile entity to better optimise
the Group’s previously dormant properties (land and buildings). The newly formed company
(anticipated to be fully operational in 2013) should be well positioned to accelerate earnings for
the Group.
An intensive marketing drive in Bloemfontein has resulted in three developments, from
conventional warehousing, through offices to a medical step-down facility, being planned for the
forthcoming year. Likewise, at Cape Town International Airport, the industrial ‘Precinct 3’ has
now been formally zoned and land enablement will begin to release much needed land for
development in the region. In contrast, the market in Port Elizabeth shows no sign of any
recovery, as evidenced by the failure to draw any response to an initiative to attract
development on prime land at the airport.
Finally, the Ekurhuleni Metro Municipality’s (EMM) marketing of its plans for an ‘Aerotropolis’ in
Gauteng are embraced with enthusiasm and optimism. The Property division is liaising with the
planning team assembled by the EMM to ensure that both the metro and O.R. Tambo
International Airport benefit from development plans.
Airport Management Solutions
During the reporting period, Airport Management Solutions (AMS) successfully participated in
an airport privatisation bid for an airport in Brazil. The bid to develop, maintain and operate
Guarulhos International Airport, São Paulo, which handles approximately 30 million passengers
per annum, was won by a consortium consisting of Airports Company South Africa and a
Brazilian partner, Invepar, who together own 51 percent of the concessionaire vehicle. Infraero,
the Brazilian airports authority, holds the balance of 49 percent. The Airports Company South
Africa equity interest in the consortium is 10 percent, equating to 5,1 percent of the total project.
In addition, Airports Company South Africa will be appointed as airport operator for five years
though a Technical Services Agreement.
This 20-year concession is to develop, finance, operate and manage Guarulhos International
Airport in compliance with prescribed service standards, as well as satisfying safety and security
requirements. The concession agreement and related project documentation is expected to be
signed in June 2012, paving the way for the site take-over. Infrastructure developments will
begin shortly thereafter and the concession company will subsequently take over the role of
airport operator. The viability of the concession is underpinned by the realization of the
successful implementation of the airport’s commercial plan to enable payment of concession
fees and generate acceptable shareholder returns.
The Brazilian Government, through the conceding authority, will receive Brazilian (Reals: BR)
BR16,2 billion in concession fees over the 20-year concession period and these will be paid
from the trading income. The concessionaire is expected to deliver the first phase of specific
mandatory capital projects within 22 months from the execution of the concession contract,
amounting to BR1,5 billion. These projects will develop the infrastructure and enable the
delivery of significantly improved levels of service to travellers.
Airports Company South Africa has also been instrumental in efforts to unlock an airport
rehabilitation project in Kinshasa, Democratic Republic of the Congo (DR C). During the past
financial year a technical team, together with external consultants, undertook several visits to
Ndjili International Airport with a view to developing and quantifying an infrastructure
rehabilitation programme, estimated at US$85 million. The DRC Government and the
Development Bank of Southern Africa (DBSA) are at an advanced stage of negotiating the
funding. Airports Company South Africa’s role will be to assist in compiling a development
framework and partaking in the project review and supervision that will follow the start of the
project.
In an effort to support international airport investment activities, and thereby diversify Airports
Company South Africa’s earnings, the Board recently approved the formation of an independent
and wholly owned subsidiary. The rationale behind the decision was to increase the agility and
responsiveness required to pursue airport concessions, management contracts and technical
consultancy opportunities. This subsidiary is expected to be operational from the third quarter of
2012, once all internal and regulatory approvals have been successfully obtained.
Airport Management Solutions continued to forge partnerships with various stakeholders and
prospective clients. The division hosted a senior delegation from the Federal Airports Authority
of Nigeria (FAAN ) on a fact-finding mission. The division also hosted a delegation from the
Indonesian airports authority with a specific focus on international benchmarking.
Chhatrapati Shivaji International Airport, Mumbai, India
Chhatrapati Shivaji International Airport in Mumbai once again experienced robust traffic growth
in the last financial year, with passengers exceeding 30 million, a 5,8 percent growth over the
previous year. By increasing its market share of cargo handled through the airport, the company
increased its cargo handling volumes by 8,3 percent to 390 000 tonnes.
Revenue increased over the previous financial year by 11,4 percent, supported in particular by
growth in nonaeronautical revenue of 16 percent. As a consequence of aeronautical tariffs not
being increased, pending the regulator’s decision on the multi-year tariff application, and
expenses being incurred in respect of the new terminal under construction, profit after tax
decreased by seven percent, compared to the previous financial year, to R277 million. To date,
Airports Company South Africa has contributed some R200 million to the investment, including
bid costs, and has received, from airport operator, consultancy and transaction facilitation fees,
R140 million, leaving a net investment of R60 million. The value of the investment is estimated
to be in the order of ten times this figure.
The redevelopment of the airport is currently estimated to cost in excess of R18 billion. A
substantial portion of this is being spent on a new, 45-million passengers per annum integrated
terminal. The first phase, for international passengers, is scheduled for completion by the last
quarter of 2013 and the next phase, which will include facilities for domestic passengers, a year
later.
Airports Company South Africa has now supported the management of the airport for six years
and, in particular, has played a leading role in the runway and taxiway reconstruction and
improvement. This was completed in the financial year under review and was performed under
extremely demanding operational conditions.
Operating expenses
Total operating expenses increased by 16 percent to R2,325 billion (2011: R2,054 billion)
mainly due to inflationary costs associated with additional capacity now in operation. The Group
continues to focus on managing discretionary expenses and processes are constantly reviewed
to reduce cost and enhance efficiency.
Debt and financing costs
Total interest-bearing borrowing debt for the Group at the end of the financial year was R16,7
billion (2011:16,6 billion). The debt raised is mainly long-term and in line with the maturity profile
of the assets that were constructed during the period from 2006 to 2011. More than 60 percent
of the debt has maturity periods greater than five years and total debt redemption is less than
R2 billion per annum in any given year. Accordingly, the Group has a fairly stable balance sheet
and very strong liquidity.
The return to profitability in the 2012 financial year improved the Group’s credit metrics with net
debt to EBITDA improving to 4,1x (2011: 6,1x) and EBITDA interest coverage increasing to 2,3x
(2011: 1,7x).
The financing cost associated with the borrowings to fund the capital expenditure programme
has a major impact on earnings before tax. The financing cost for the year ended 31 March
2012 was R2,034 billion, which is an increase of 14 percent compared to that of the prior year.
The weighted average cost of borrowings increased from 9,26 percent to 9,86 percent in 2012.
This is largely driven by additional borrowings of R1,950 billion from Agence Française de
Développement (AFD) at a rate of 10,55 percent. The AFD loan matures in 2026 and was
raised to replace short-term commercial paper. The financing costs were further exacerbated by
the fair value loss on interest rate swap contracts entered into during the 2009/10 financial year.
The loss realised on these contracts was R463 million (2011: R280 million). Part of the fair
value loss of R40 million was deferred to equity as the Company designated the interest rate
swap contract on the Nedbank loan of R1,750 billion and the swap contract on the Infrastructure
Finance Corporation Limited (INCA) loan of R250 million as cash flow hedges on the underlying
loans. The cash flow hedging relationship arises as the interest rate payable on these varies
with the three-month Johannesburg Inter-bank Agreed Rate (JIBAR) and the Group then
swapped this variable component for a fixed interest rate.
Capital expenditure
Following the completion of the major capital investment programme in the 2011 financial year,
the capital expenditure for the 2012 financial year was limited to refurbishment and replacement
projects with no new capacity projects. This limitation was also in light of the uncertainties with
respect to the economic regulatory framework.
The reduced capital expenditure is primarily due to savings on projects at O.R. International
Airport, specifically apron rehabilitation. A strategic decision was taken to appoint a panel of
consultants to design the pavement rehabilitation works for the national airports. As a
consequence, the construction commencement on these projects was delayed.
Financial position
Non-current assets
The Group’s non-current assets decreased by 10 percent to R25 billion (2011: R27 billion). The
decrease is as a result of the reclassification of investment properties pertaining to the Durban
International Airport site, which has now been classified as an asset held for sale following an
agreement of sale concluded before the end of the financial year.
Current assets
The Group’s current assets increased from R1,799 billion to R3,622 billion. This increase is
mainly due to an increase in cash and cash equivalents as a result of positive cash generated
by the business, as well as short-term investment of the advance payment of R1,2 billion
received for the sale of the Durban International Airport site. The increase in cash and cash
equivalents supports the Group’s financing strategy to hold sufficient cash and committed credit
lines to cover at least 12 months funding requirements.
Non-current liabilities
The Group’s non-current liabilities increased by five percent to R16,9 billion (2011: R16,2
billion). This increase is mainly attributable to a ten percent increase in interest-bearing
borrowings from R14,3 billion to R15,6 billion, this being slightly offset by a sixty percent
decrease in the derivative financial instruments from R509 million to R195 million.
Current liabilities
The Group’s current liabilities increased by 0,09 percent toR3,384 billion (2011: R3,380 billion).
The increase is mainly attributable to an increase in deferred revenue of R1,2 billion,
representing the proceeds from the sale of the Durban International Airport site. The increase is
slightly offset by the short-term commercial paper that was repaid in the current financial year
and replaced with the funding from L’Agence Francaise de Developpement (AFD).
Ratings
On a positive note, the Fitch Rating Agency revised Airports Company South Africa’s rating
outlook from ‘stable’ to ‘positive’ and affirmed the national long-term rating and domestic
medium-term note (DMTN) programme rating at ‘AA-(zaf)’. Fitch also affirmed the national
short-term rating at ‘F1+(zaf)’. The ‘AA-(zaf)’ rating reflects a combination of a reasonably strong
asset profile and a leverage level (net debt/EBITDA ) which peaked at over six times during the
period from 2009 to 2011, as the ambitious capital expenditure programme coincided with the
world economic recession.
Economic regulation
The developments in economic regulation are encouraging. The Department of Transport has
developed a ‘roadmap’, which includes the formation of a Steering Committee, representedby
industry stakeholders, to develop regulations and a funding model that will ensure predictability,
sustainability, transparency and balance within the economic regulatory framework. This
isindeed a most welcome development as the current regulations,which largely required the
Company to pre-fund its capital expenditure programme, had an unintended consequence of
eroding the Company’s returns.
Cash position
Airports Company South Africa retains a strong cash position, well above the minimum required
level for debt service cover ratios, as defined in the loan agreements.
The Group generated cash from operations of R2,9 billion (2011: R1,7 billion), mainly as a result
of the increased revenue. The cash generated was used to pay interest and other finance costs
of R1,9 billion and the balance used for repayment of maturing debt and funding of capital
infrastructure.
Procurement
Central to Airports Company South Africa’s Procurement Policy is the Black Empowerment
Strategy, underpinned by five of the six elements of the Broad-Based Black Economic
Empowerment (B-BBEE) Public Sector Scorecard. This is the basis for the Company’s
verification and provides impetus for supplier empowerment and socio-economic transformation.
The Group has maintained its level 3 B-BBEE contributor status for the second year in a row,
which allows vendors and stakeholders to claim 110 percent Procurement Recognition Level for
every Rand spent with Airports Company South Africa.
Preferential Procurement, Enterprise Development and Corporate Social Investment will remain
a primary focus within Procurement activities to enable transformation. Procurement initiatives
are aimed at exploiting opportunities for Black suppliers, especially within maintenance,
professional services, capital expansion programmes and retail opportunities.
New focus areas for Procurement in the coming year, in accordance with the Public Transport
Charter, are:
The promotion of Exempted Micro Enterprises * (EMEs) and Qualifying Small
Enterprises † (QSEs) in the Company’s procurement opportunities and processes. The
Company’s Shared Service Centre (SSC) will be the lead agent in promoting business
opportunity availability for small enterprises
Training and development of EMEs and QSEs will be undertaken to equip them with the
necessary skills to effectively manage the ramifications of doing business with a large
organisation
Procedures will be refined to ensure that EMEs and QSEs are paid within thirty days
A database is in the process of being created to identify and qualify small businesses
that have the potential to participate in ACSA procurement opportunities.
* Exempted Micro Enterprise (EME) is one that is exempt from measurement in terms of the B-
BBEE scorecard and qualifies as a 100 percent contributor towards B-BBEE or 110 percent in
the case of Black ownership of 50 percent and more.
† Qualifying Small Enterprise (QSE) is one that has an annual turnover of between R5 million
and R35 million.
Both enterprise categories are designed and intended to encourage and promote the creation
and success of small, entrepreneurially-inclined businesses with associated job creation
benefits. Airports Company South Africa fully supports this intent and is developing the
necessary infrastructural components to support and encourage the programme.
Consolidated Statement of Financial Position
For the year ended 31 March 2012
Group Company
31 March 31 March 31 March 31 March
Notes
2012 2011 2012 2011
R’000 R’000 R’000 R’000
ASSETS
Non-current assets 24 594 799 27 357 913 23 166 948 26 135 050
Property, plant and equipment 6 20 624 767 21 589 594 20 602 926 21 548 984
Investment property 8 2 832 652 4 669 802 1 959 582 3 814 692
Intangible assets 7 214 745 301 273 214 498 300 724
Investment in subsidiaries 9 - - 180 569 288 285
Investment in joint ventures 10 - - * *
Investment in associates 11 748 643 647 129 35 381 32 250
Other non-current assets 12 173 992 150 115 173 992 150 115
Current assets 3 621 856 1 798 667 3 532 243 1 684 592
Inventories 13 6 220 916 - -
Derivative financial instruments 28 - 163 235 - 163 235
Trade and other receivables 14 1 035 251 955 635 1 029 001 942 766
Investments 16 600 000 - 600 000 -
Cash and cash equivalents 15 1 980 385 678 881 1 903 242 578 591
Non-Current assets held for sale 17 1850 000 - 1 850 000 -
Total assets 30 066 655 29 156 580 28 549 191 27 819 642
EQUITY AND LIABILITIES
Equity
Share capital 18 500 000 500 000 500 000 500 000
Share premium 18 250 000 250 000 250 000 250 000
Other reserves 20 719 096 821 637 856 346 891 079
Treasury share reserve 19 (44 024) (44 024) - -
Retained earnings 8 264 557 8 070 624 7 396 482 7 404 226
Total equity attributable to equity
9 689 629 9 598 237 9 002 828 9 045 305
holders
Debentures 21 - 6 000 - -
Total Equity 9 689 629 9 604 237 9 002 828 9 045 305
Non-current liabilities 16 993 204 16 171 645 16 832 724 15 412 531
Interest bearing borrowings 24 15 647 002 14 266 707 15 600 538 13 577 231
Retirement benefit obligations 22 125 577 137 106 125 577 137 106
Derivative financial instruments 28 129 426 610 013 129 426 610 013
Deferred income 23 74 059 77 367 74 059 77 367
Deferred income tax liabilities 25 1 017 140 1 080 452 903 124 1 010 814
Current liabilities 3 383 822 3 380 689 2 713 639 3 361 806
Trade and other payables 26 948 419 909 137 916 240 893 346
Interest-bearing borrowings 24 1 063 774 2 340 762 442 367 2 339 262
Provisions 27 87 026 65 742 87 026 65 694
Derivative financial instruments 28 65 349 61 849 65 349 61 849
Current income tax liability 16 597 1 553 - -
Deferred income 23 1 202 657 1 655 1 202 657 1 655
Total liabilities 20 377 026 19 552 343 19 546 363 18 774 337
Total equity and liabilities 30 066 655 29 156 580 28 549 191 27 819 642
*Amount less than R1 000
Consolidated Statement of Comprehensive Income
For the year ended 31 March 2012
Group Company
31 March 31 March 31 March 31 March
Notes
2012 2011 2012 2011
R’000 R’000 R’000 R’000
Revenue 30 5 738 543 4 658 239 5 586 104 4 514 839
Other operating income 31 149 433 11 072 16 888 11 066
Employee benefit expense 33 (769 481) (714 163) (750 859) (694 599)
( 1 445
Depreciation and amortization expense 6&7 (1 463 804) ( 1 446 725) (1 439 651)
228)
Other operating expenses 34 ( 1 554 866) (1 340 017) (1 523 309) ( 1 288 499)
2 099
Operating profit 1 169 903 1 882 099 1 103 156
825
Fair value gains on investment properties 32 1 534 379 703 (16 426) 327 727
Share of equity-accounted associate 11 51 035 56 075 - -
Net finance expense 35 (2 034 327) (1 786 984) (1 962 983) (1 716 045)
Finance income 35 47 133 32 597 48 786 29 814
Finance expenses 35 ( 1594 657) (1 567 325) (1 524 966) (1 493 603)
Finance expenses capitalized - 28 687 - 28 687
Losses on remeasurement and disposal of
35 (486 803) (280 943) (486 803) (280 943)
trading financial instruments
Profit/(loss) before tax 118 067 ( 181 303) (97 310) (285 162)
Income tax expense 36 69 506 (39 227) 89 566 (24 3630
Profit/(loss) for the year 187 573 (220 530) (7 744) (309 525)
Other comprehensive income for the
(102 180) 850 635 (34 732) 911 939
year, net of tax
Fair value on investment property - 1 283 391 - 1 283 391
Actuarial losses on defined benefit post
22 (8 008) (16 809) (8 008) (16 809)
retirement medical aid liability
Foreign currency translation differences ( 46 028) (85 145) - -
Cash flow hedge reserve on derivative
(40 231) - (40 231) -
financial instruments
Income tax relating to components of other
( 7913) (330 802) 13 507 (354 643)
comprehensive income
Total comprehensive income for the
85 393 630 105 (42 476) 602 414
year
Profit/(loss) attributable to owners of the
187 573 (220 530) (7 744) (309 525)
parent
Total comprehensive income
85 393 630 105 (42 476) 602 414
attributable to owners of the parent
Earnings per share
Basic (cents) 37,97 (44,64)
Diluted (cents) 37,97 (44,64)
Dividend per share (cents) - -
*Amount less than R 1 000
CONSOLIDATED STATEMENT OF CASH FLOWS
For the year ended 31 March 2012
Group Company
31 March 31 March 31 March 31 March
Notes
2012 2011 2012 2011
CASH FLOWS FROM OPERATING ACTIVITIES
Cash receipts from customers 5 748 485 4 5789 333 4 492 881 4 449 460
Cash paid to suppliers and employees (2 879 249) (2 925 380) (2 770 626) (2 876 473)
Cash generated from operations 41.1 2 905 236 1 653 953 2 722 255 1 572 987
Income tax received/(paid) 41.2 83 867 (21 467) 74 173 (16 800)
Interest received 47 132 32 598 48 786 29 824
Net cash inflow from operating activities 3 036 235 1 665 084 2 845 214 1 586 001
CASH FLOW FROM INVESTING ACTIVITIES
Increase in investments in associates (32 163) (31 663) (3 131) -
Increase in short-term investments (600 000) - (600 000) -
Loans repaid/(granted) to subsidiaries - - 107 716 (31 994)
Proceeds on disposal of property, plant and
13 703 4 123 13 703 4 123
equipment
Proceeds on disposal of investment properties 1 200 000 - 1 200 000 -
Addition to property , plant and equipment and
(417 100) (505 368) (414 438) (502 333)
investment property
Net cash inflow/(outflow) from investing activities 164 440 (532 908) 303 850 (530 204)
CASH FLOWS FROM FINANCING ACTIVITIES
Interest bearing borrowings repaid (2 962 394) (3 482 808) (2 957 044) (3 482 808)
Interest bearing borrowings raised 2 960 429 3 950 000 2 960 429 3 950 000
Financial instruments held for trading (425 861) 110 822 (425 861) 110 822
Interest paid (1 471 292) (1 465 763) (1 401 937) (1 405 836)
Net cash outflow from financing activities (1 899 118) (887 749) (1 824 413) (827 822)
Net foreign currency translation adjustments (53) 457 - -
Increase in cash and cash equivalents 1 301 504 244 884 1 324 651 227 975
Cash and cash equivalents at beginning of year 678 881 433 997 578 591 350 616
Cash and cash equivalents at end of year 15 1 980 385 678 881 1 903 242 578 591
*Amount less than R1 000
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the year ended 31 March 2012
Treasury Non
Share Share Retained Other
share Total controlling Debenture Total
Capital premium earnings reserves
reserve R’000 interest R’000 R’000
R’000 R’000 R’000 R’000
R’000 R’000
GROUP
Balance at 1April 2010 500 000 250 000 8 290 669 (44 024) (28 513) 8 968 132 - 6 000 8 974 132
Transactions with owners
Comprehensive income
Loss for the year - - (220 530) - - (220 530) - - (220 530)
Other comprehensive income - - 485 - 850 150 850 635 - - 850 635
Actuarial losses on defined benefit
Post retirement medical aid liability, net of tax - - - - (12 102) (12 102) - - (12 102)
Gain on revaluation of investments property, net of tax - - - 924 041 924 041 - - 924 041
Foreign currency translation differences, net of tax (61 304) (61 304) - - (61 304)
Transfer between reserves - - 485 - (485) - - - -
Total comprehensive income - - (220 045) - 850 150 630 105 - - 630 105
Balance at 1 April 2011 500 000 250 000 8 070 624 (44 024) 821 637 9 598 237 - 6 000 9 604 237
Transactions with owners
Comprehensive income
Profit for the year - - 187 573 - - 187 573 - - 187 573
Other comprehensive income - - 6 360 - (102 541) (96 181) - (6 000) (102 181)
Actuarial losses on defined benefit post retirement
- - - - (5 767) (5 767) - - (5 767)
medical aid liability, net of tax
Foreign currency translation differences, net of tax - - - - (67 448) (67 448) - - (67 448)
Cash flow hedge reserve on derivative financial
- - - - (28 966) (28 966) - - (28 966)
instruments net of tax
Transfer between reserves - - 6 360 (360) 6 000 - (6 000) -
Total comprehensive income - - 193 933 - (102 541) 91 392 - (6 000) 85 392
Balance at 31 March 2012 500 000 250 000 8 264 557 (44 024) 719 096 9 689 629 - - 9 689 629
COMPANY
Balance at 1 April 2011 500 000 250 000 7 713 751 - (20 860) 8 442 891 - - 8 442 891
Transactions with owners -
Comprehensive income
Loss for the year - - (309 525) - - (309 525) - - (309 525)
Other comprehensive income - - - - 911 939 911 939 - - 911 939
Actuarial losses on defined benefit post retirement
- - - - (12 102) (12 102) - - (12 102)
medical aid liability, net of tax
Gain on revaluation of investments property, net of tax - 924 041 924 041 - - 924 041
Total comprehensive income - - (309 525) - 911 939 602 414 - - 602 414
Balance at 1 April 2011 500 000 250 000 7 404 226 - 891 079 9 045 305 - - 9 045 305
Transactions with owners
Comprehensive income
Loss for the year - - ( 7744) - - ( 7744) - - ( 7744)
Other comprehensive income - - - (34 732) (34 732) - - (34 732)
Actuarial losses on defined benefit, post retirement
- - - - (5 767) (5 767) - - (5 767)
medical aid liability, net of tax
Cash flow hedge reserve on derivative financial
- - - - (28 966) (28 966) - - (28 966)
instrument , net of tax
Total comprehensive income - - (7 744) - (34 733) (42 477) - - (42 477)
Balance at 31 March 2012 500 000 250 000 7 396 482 - 856 346 9 002 8828 - - 9 002 828
Date: 27/03/2013 02:30:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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