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Unaudited interim results and declaration of cash dividend for the six months ended 30 June 2013
Trencor Limited
(Incorporated in the Republic of South Africa)
Registration No. 1955/002869/06
Share code: TRE
ISIN: ZAE000007506
('the company' or 'Trencor')
COMMENTARY
GROUP
- Trading profit, which is earned mainly in US dollars, after net financing costs,
increased by 29,7% from R777 million in 2012 to R1 008 million during the
period under review.
- Headline earnings per share (including the effect of realised and
unrealised foreign exchange translation gains and losses were 318,1 cents
(2012: 262,3 cents), an increase of 21,3%.
- Adjusted headline earnings per share (which excludes the effect of net
unrealised foreign exchange translation gains and losses) were 264,5 cents
(2012: 256,7 cents), an increase of 3,0%.
- These various earnings are better presented in tabular form:
Six months Year ended
ended 30 June 31 December
2013 2012 2012
Cents Cents Cents
per share per share per share
Headline earnings 318,1 262,3 559,6
Deduct: Unrealised foreign exchange
translation gains and losses 53,6 5,6 13,5
Adjusted headline earnings 264,5 256,7 546,1
- Based on the spot exchange rate of US$1 = R9,95 and the price of Textainers
shares listed on the NYSE on 28 June 2013 (US$38,44), the net asset value of
Trencor at that date was as follows:
Rand
R million per share
Net interest in Textainer 10 434 58,92
Net interest in long-term receivables 732 4,13
Cash 1 214 6,86
Net liabilities (mainly deferred tax) (122) (0,69)
12 258 69,22
- Consolidated gearing ratio at 30 June 2013 was 181% (2012: 178%).
- On 29 April 2013 a special gross cash dividend of 360 cents per share was paid.
- Interim gross cash dividend of 72 cents per share declared (2012: 65 cents
per share).
TEXTAINER (NYSE: TGH): 48,4% beneficiary interest at 30 June 2013
- Net profit for the half year in US GAAP was US$97,1 million (2012:
US$95,7 million). Adjusted to conform with International Financial Reporting
Standards, Textainers net profit was US$100,8 million (2012: US$97,3 million).
- Average fleet utilisation to 30 June 2013 was 95,1% (2012: 97,2%).
- Textainer acquired more than US$494 million in new and used containers
during the period under review.
- Total fleet under management at 30 June 2013 was 2 860 000 (2012:
2 615 000) twenty foot equivalent units of which Textainer itself owned 74,0%
(2012: 60,4%).
- Announced a collaboration with Trifleet allowing expansion into tank container
leasing with one of the leaders in the industry.
- Reduced average interest rate by 132 basis points over the past twelve months
while increasing the size of several financing facilities.
- Textainer declared dividends of US$0,46 and US$0,47 per share in respect of
quarters 1 and 2 of 2013 respectively.
- Textainers results may be viewed on its website www.textainer.com.
Preparation of financial statements
These unaudited interim condensed consolidated financial statements have been
prepared by management under the supervision of the Financial Director and have
not been audited or reviewed by Trencors independent auditors.
Declaration of cash diVidend
The board has declared an interim gross cash dividend (number 96) of 72,00 cents per
share out of distributable reserves in respect of the six months ended 30 June 2013.
The salient dates pertaining to the dividend payment are as follows:
Last day to trade cum the dividend Friday, 6 September 2013
Trading commences ex the dividend Monday, 9 September 2013
Record date Friday, 13 September 2013
Payment date Monday, 16 September 2013
Share certificates may not be dematerialised or rematerialised between Monday,
9 September 2013 and Friday, 13 September 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 61,20 cents per share to such shareholders;
- Trencors tax reference number is 9676002711; and
- Trencors issued share capital at the declaration date is R885 340
(177 068 011 ordinary shares of 0,5 cent each).
On behalf of the board
NI Jowell Chairman
16 August 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)
These results can be viewed at www.trencor.net
Condensed consolidated statement of financial
position at 30 June 2013
Unaudited Unaudited Audited
30 June 30 June 31 December
R million 2013 2012 2012
ASSETS
Property, plant and equipment 30 128 19 120 24 798
Intangible assets 311 361 283
Investment in equity accounted investees 61 16 40
Other investments 66 14 66
Long-term receivables 755 678 699
Net investment in finance leases 1 151 474 627
Deferred tax assets 23 20 20
Restricted cash 429 376 448
Total non-current assets 32 924 21 059 26 981
Inventories 465 200 195
Trade and other receivables 1 000 820 885
Current portion of long-term receivables 144 256 133
Current portion of net investment in
finance leases 361 168 201
Current tax assets 2
Cash and cash equivalents 2 109 1 468 2 513
Total current assets 4 079 2 912 3 929
Total assets 37 003 23 971 30 910
EQUITY
Share capital and premium 44 44 44
Reserves 6 942 5 069 6 370
Total equity attributable to equity holders
of the company 6 986 5 113 6 414
Non-controlling interests 5 787 2 493 4 628
Total equity 12 773 7 606 11 042
LIABILITIES
Interest-bearing borrowings 21 773 11 453 17 107
Amounts attributable to third parties in
respect of long-term receivables 140 158 156
Derivative financial instruments 52 114 89
Deferred revenue 33 1 27
Deferred tax liabilities 315 208 218
Total non-current liabilities 22 313 11 934 17 597
Trade and other payables 538 2 158 1 029
Current tax liabilities 40 103 83
Current portion of interest-bearing
borrowings 1 308 2 101 1 115
Current portion of amounts attributable
to third parties in respect of long-term
receivables 27 48 30
Current portion of deferred revenue 4 21 14
Total current liabilities 1 917 4 431 2 271
Total liabilities 24 230 16 365 19 868
Total equity and liabilities 37 003 23 971 30 910
Capital expenditure incurred during
the period 2 765 3 875 8 647
Capital expenditure committed and
authorised, but not yet incurred 302 1 503 193
Directors valuation of unlisted
investments 66 14 66
Ratio to total equity:
Total liabilities (%) 189,7 215,2 179,9
Interest-bearing debt (%) 180,7 178,2 165,0
Condensed consolidated statement of
comprehensive income for the six months ended 30 June 2013
Unaudited Unaudited Audited
Six months ended Year ended
30 June 30 June 31 December
R million 2013 2012 2012
Revenue (Note 2) 2 982 2 138 4 553
Trading profit before items listed below 1 364 1 043 2 225
Realised and unrealised exchange gains
on translation of long-term receivables,
excluding fair value adjustment 170 18 54
Net long-term receivable fair value
adjustment (51) 30 68
Impairment of plant and equipment (13) (3) (6)
Bargain purchase gain 80
Profit from operations 1 470 1 088 2 421
Net finance expenses (Note 3) (356) (266) (589)
Finance expenses Interest expense (377) (250) (571)
Gains/(Losses) on
derivative financial
instruments 10 (22) (34)
Finance income Interest income 11 6 16
Share of profit/(loss) of equity accounted
investees (net of tax) 9 (1) 2
Profit before tax 1 123 821 1 834
Income tax expense (66) (53) (61)
Profit for the period 1 057 768 1 773
Other comprehensive income
Foreign currency translation differences 1 767 111 389
Change in fair value of available-for-sale
financial asset 52
Income tax expense on other
comprehensive income (10)
Total comprehensive income for the period 2 824 879 2 204
Total comprehensive income for the
period attributable to:
Equity holders of the company 1 489 529 1 282
Non-controlling interests 1 335 350 922
2 824 879 2 204
Profit attributable to:
Equity holders of the company 557 463 1 027
Non-controlling interests 500 305 746
1 057 768 1 773
Basic earnings per share (cents) 314,7 261,5 579,9
Diluted earnings per share (cents) 314,7 261,5 579,9
Number of shares in issue (million) 177,1 177,1 177,1
Weighted average number of shares in
issue (million) 177,1 177,1 177,1
Period-end rate of exchange: SA rand to
US dollar 9,95 8,24 8,48
Average rate of exchange for the period
SA rand to US dollar 9,24 7,89 8,16
Condensed consolidated statement of cash flows
for the six months ended 30 June 2013
Unaudited Unaudited Audited
Six months ended Year ended
30 June 30 June 31 December
R million 2013 2012 2012
Cash generated from operations 2 197 1 521 3 510
Increase in container leasing equipment (3 326) (2 229) (8 036)
Finance income received 11 6 16
Finance expenses paid (360) (241) (559)
Dividends paid to equity holders of the
company (903) (221) (336)
Dividends paid to non-controlling interest (250) (121) (302)
Income tax paid (26) (27) (64)
Net cash outflow from operating activities (2 657) (1 312) (5 771)
Cash inflow from investing activities 298 97 614
Cash inflow from financing activities 1 618 1 334 6 253
Net (decrease)/increase in cash and
cash equivalents before exchange rate
fluctuations (741) 119 1 096
Net cash and cash equivalents at the
beginning of the period 2 513 1 333 1 333
Effects of exchange rate fluctuations on
cash and cash equivalents 337 16 84
Net cash and cash equivalents at the end
of the period 2 109 1 468 2 513
Condensed consolidated statement of changes in
equity for the six months ended 30 June 2013
Unaudited Unaudited Audited
Six months ended Year ended
30 June 30 June 31 December
R million 2013 2012 2012
Balance at the beginning of the period 6 414 4 794 4 794
Total comprehensive income for the
period 1 489 529 1 282
Profit for the period 557 463 1 027
Foreign currency translation
differences 932 66 213
Net change in fair value of available-
for-sale financial asset 42
Dividends paid (903) (221) (336)
Share-based payments 20 35 52
Changes in ownership interests in
subsidiary (34) (24) 330
Sale of shares in subsidiary to non-
controlling interest without a change in
control 292
Shareholders interest 6 986 5 113 6 414
Non-controlling interests in subsidiaries 5 787 2 493 4 628
Balance at the beginning of the period 4 628 2 188 2 188
Total comprehensive income for the
period 1 335 350 922
Profit for the period 500 305 746
Foreign currency translation
differences 835 45 176
Dividends paid to non-controlling
interest (250) (121) (302)
Share-based payments 21 23 36
Shares issued by subsidiary 19 29 1 556
Sale of shares in subsidiary to
non-controlling interest without a
change in control 324
Acquisition of subsidiary
non-controlling interests 234
Changes in ownership interests in
subsidiary 34 24 (330)
Equity 12 773 7 606 11 042
Notes to the condensed consolidated interim
financial statements for the six months ended 30 June 2013
1. These condensed consolidated interim financial statements have been
prepared in accordance with IAS 34 Interim Financial Reporting, the SAICA
Financial Reporting Guides as issued by the Accounting Practices Committee
and the Financial Reporting pronouncements as issued by the Financial
Reporting Council and the requirements of the Companies Act, 2008. Except
as stated below 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 2012.
The group applied IFRS 10 Consolidated Financial Statements, IFRS 11
Joint Arrangements, IFRS 12 Disclosure of Interests in Other Entities, IAS 27
Separate Financial Statements, IAS 28 Investments in Associates and Joint
Ventures (2011) and IFRS 13 Fair Value Measurement, as well as amendments
to IFRS 7 Financial Instruments: Disclosures: Offsetting Financial Assets and
Financial Liabilities. The application of these standards and amendments to
IFRS has had no impact the groups financial results.
Unaudited Unaudited Audited
Six months ended Year ended
30 June 30 June 31 December
R million 2013 2012 2012
2. Revenue
Goods sold and services rendered 608 580 1 134
Leasing income 2 089 1 420 3 130
Management fees 96 114 221
Finance income 19 6 14
2 812 2 120 4 499
Realised and unrealised exchange
differences 170 18 54
2 982 2 138 4 553
3. Net finance expenses
Finance expenses 367 272 605
Interest expense Textainer 377 250 571
(Gains)/Losses on derivative
financial instruments - Textainer (10) 22 34
Finance income
Interest income cash and cash
equivalents (11) (6) (16)
356 266 589
4. Headline earnings
Profit attributable to equity holders of
the company 557 463 1 027
Impairment of property, plant and
equipment 13 3 6
Bargain purchase gain (80)
Total tax effects of adjustments (1)
Total non-controlling interests share
of adjustments (6) (1) 38
Headline earnings 563 465 991
Weighted average number of shares
in issue (million) 177,1 177,1 177,1
Headline earnings per share (cents) 318,1 262,3 559,6
Diluted headline earnings per share
(cents) 318,1 262,3 559,6
Adjusted headline earnings
Headline earnings (as above) 563 465 991
Net gain on translation of net
US dollar receivables (132) (14) (33)
Total tax effects of adjustments 37 4 9
Adjusted headline earnings 468 455 967
Undiluted adjusted headline earnings
per share (cents) 264,5 256,7 546,1
Diluted adjusted headline earnings
per share (cents) 264,5 256,7 546,1
5. Segmental reporting
Revenue
Reportable segments
Containers finance (including
exchange differences) 190 25 70
Containers owning, leasing,
management and resale 2 792 2 113 4 483
2 982 2 138 4 553
Profit from operations
Reportable segments
Containers finance 136 50 130
Containers owning, leasing,
management and resale 1 354 1 058 2 330*
1 490 1 108 2 460
Unallocated (20) (20) (39)
1 470 1 088 2 421
Profit before tax
Reportable segments
Containers finance 136 50 130
Containers owning, leasing,
management and resale 996 786 1 728*
1 132 836 1 858
Unallocated (9) (15) (24)
1 123 821 1 834
* Includes R80 million bargain
purchase gain
Assets
Capital expenditure incurred by
the container owning, leasing,
management and resale segment 2 765 3 875 8 646
6. Financial instruments
The carrying amounts and fair values of financial
assets and financial liabilities are as follows:
Carrying Fair
R million amount value
Assets
Other investments - Equity securities - available-for-sale 66 66
Long-term receivables - designated at fair value
through profit or loss 899 899
Net investment in finance leases - other 1 512 1 453
Restricted cash - loans and receivables 429 429
Trade and other receivables - loans and receivables 969 969
Cash and cash equivalents - loans and receivables 2 109 2 109
5 984 5 925
Liabilities
Interest-bearing borrowings - liabilities at amortised
cost (excluding debt issuance costs) 23 319 23 388
Amounts attributable to third parties in respect of
long-term receivables - designated at fair value
through profit or loss 167 167
Derivative financial instruments - held for trading 52 52
Trade and other payables - liabilities at amortised cost 538 538
24 076 24 145
Financial instruments carried at fair value
Fair value hierarchy
The table below analyses the recurring fair value measurements for financial
assets and financial liabilities. These fair value measurements are categorised
into different levels in the fair value hierarchy based on the inputs to valuation
techniques used. The different levels are defined as follows:
Level 1: Quoted prices (unadjusted) in active markets for identical assets or
liabilities that the group can access at measurement date.
Level 2: Inputs other than quoted prices included in Level 1 that are observable
for the asset or liability, either directly or indirectly.
Level 3: Unobservable inputs for the asset or liability.
Level 1 Level 2 Level 3 Total
Assets
Other investments - Equity securities -
available-for-sale 66 66
Long-term receivables - designated at fair
value through profit or loss 899 899
66 899 965
Liabilities
Amounts attributable to third parties
in respect of long-term receivables -
designated at fair value through profit
or loss 167 167
Derivative financial instruments - held
for trading 52 52
52 167 219
Details of the determination of Level 3 fair value measurements during the six
months ended 30 June 2013 are set out below:
Long-term receivables and amounts due to third parties in respect of long-
term receivables are valued by discounting future cash flows. The discount
rate applied to the long-term receivables (denominated in US$) is 8,5% p.a.,
and amounts attributable to third parties in respect of long-term receivables is
10% p.a. An appropriate fair value adjustment is made to the net investment
for the estimated timing of receipt and the possible non-collectability of these
receivables, and the related effect on the payment to third parties. The net
present value of the long-term receivables and the related fair value adjustment
were translated into SA rand at US$1 = R9,95.
The following table shows a reconciliation from the opening balanced to the closing balances for
fair value measurements in Level 3 of the fair value hierarchy:
Amounts
attributable to
third parties
in respect
Long-term of long-term
receivables receivables Total
Balance at the beginning of
the period 832 (186) 646
Total gains/(losses in profit or loss 162 (1) 161
Settlements (95) 20 (75)
Balance at the end of the period 899 (167) 732
Total gains or losses included in profit
or loss for the period in the above
table are presented in the statement
of comprehensive income as follows:
Total gains or losses included in profit
or loss for the period
Operating profit 162 (3) 159
Associate tax credit 2 2
Total gains or losses for the year
included in profit or loss for assets and
liabilities held at the end of the year
Operating profit 140 2 142
Although the group believes that its estimates of fair value are appropriate, the
use of different assumptions could lead to different measurements of fair value.
For fair value measurement in Level 3 of the fair value hierarchy, changing one
or more of the unobservable inputs used, to reasonably possible alternative
assumptions, would have the following effects:
Increase/ Favourable/
(Decrease) (Unfavourable)
in unobservable impact on profit
inputs or loss
Interest rates - discount rate:
Long-term receivables 100 basis points (1)
(100) basis points 1
Amounts attributable to third parties in
respect of long-term receivables 100 basis points 1
(100) basis points (1)
Exchange rates:
Long-term receivables 1% 6
(1%) (6)
In order to provide a better appreciation of the results of the groups 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 groups 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 six months
ended 30 June 2013
Unaudited Unaudited Unaudited
Six months ended Year ended
30 June 30 June 31 December
US$ million 2013 2012 2012
Revenue 303,9 269,2 620,5
Trading profit before items listed below 147,7 132,1 272,8
Realised and unrealised exchange gains
on translation of long-term receivables (0,7) 0,6 0,4
Net long-term receivable fair value
adjustment 1,8 4,6 11,0
Impairment of plant and equipment (1,4) (0,3) (0,8)
Bargain purchase gain 9,4
Profit from operations 147,4 137,0 292,8
Net finance expenses (38,5) (33,8) (72,2)
Finance expense Interest expense (40,8) (31,7) (70,0)
Gains/(Losses) on
derivative financial
instruments 1,0 (2,8) (4,2)
Finance income Interest income 1,3 0,7 2,0
Share of profit/(loss) of equity accounted
investees (net of tax) 0,9 (0,1) 0,3
Profit before tax 109,8 103,1 220,9
Income tax expense (3,8) (6,5) (6,4)
Profit for the period 106,0 96,6 214,5
Attributable to:
Equity holders of the company 52,0 57,9 123,3
Non-controlling interests 54,0 38,7 91,2
106,0 96,6 214,5
Number of shares in issue (million) 177,1 177,1 177,1
Weighted average number of shares in
issue (million) 177,1 177,1 177,1
Basic earnings per share (US cents) 29,4 32,7 69,6
Diluted earnings per share (US cents) 29,4 32,7 69,6
Headline earnings per share (US cents) 29,8 32,8 67,3
Diluted headline earnings per share
(US cents) 29,8 32,8 67,3
Adjusted headline earnings per share
(US cents) 28,6 32,7 67,0
Diluted adjusted headline earnings per
share (US cents) 28,6 32,7 67,0
Period-end rate of exchange: SA rand to
US dollar 9,95 8,24 8,48
Average rate of exchange for the period:
SA rand to US dollar 9,24 7,89 8,16
Trading profit from operations comprises:
Textainer 147,9 134,4 276,5
Other (0,2) (2,3) (3,7)
147,7 132,1 272,8
Unaudited Trencor condensed consolidated
statement of financial position in US dollars
at 30 June 2013
Unaudited Unaudited Audited
30 June 30 June 31 December
US$ million 2013 2012 2012
ASSETS
Property, plant and equipment 3 028,0 2 320,4 2 924,3
Long-term receivables 75,8 82,3 82,5
Other non-current assets 205,1 153,0 174,9
Total non-current assets 3 308,9 2 555,7 3 181,7
Total current assets 410,0 353,4 463,3
Inventories 46,7 24,3 23,0
Trade and other receivables 100,6 100,0 104,4
Current portion of long-term receivables 14,4 31,0 15,7
Current portion of net investment in
finance leases 36,3 20,0 23,7
Current tax assets 0,2
Cash and cash equivalents 212,0 178,1 296,3
Total assets 3 718,9 2 909,1 3 645,0
Equity and liabilities
Equity attributable to equity holders of the
company 702,1 620,4 756,3
Non-controlling interests 581,6 302,6 545,7
Total equity 1 283,7 923,0 1 302,0
LIABILITIES
Interest-bearing borrowings 2 188,2 1 389,9 2 017,4
Amounts attributable to third parties in
respect of long-term receivables 14,1 19,2 18,4
Derivative financial instruments 5,2 13,9 10,5
Deferred revenue 3,3 0,1 3,2
Deferred tax liabilities 31,7 25,2 25,7
Total non-current liabilities 2 242,5 1 448,3 2 075,2
Total current liabilities 192,7 537,8 267,8
Trade and other payables 54,0 261,9 121,3
Current tax liability 4,1 12,4 9,8
Current portion of amounts attributable
to third parties in respect of long-term
receivables 2,7 5,9 3,5
Current portion of interest-bearing
borrowings 131,5 255,0 131,5
Current portion of deferred revenue 0,4 2,6 1,7
Total liabilities 2 435,2 1 986,1 2 343,0
Total equity and liabilities 3 718,9 2 909,1 3 645,0
Ratio to total equity:
Total liabilities (%) 189,7 215,2 179,9
Interest-bearing debt (%) 180,7 178,2 165,0
Date: 16/08/2013 03:21:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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