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Unaudited group results for the six months ended 27 June 2013
DELTA EMD LIMITED
Registration number: 1919/006020/06
Income tax number: 9375057719
Share code: DTA ZAE000132817
("Delta EMD" or "the Group")
UNAUDITED GROUP RESULTS
FOR THE SIX MONTHS ENDED 27 JUNE 2013
CONDENSED GROUP STATEMENT OF COMPREHENSIVE INCOME
Unaudited Unaudited Audited
six months six months year to
to June to June December
2013 2012 2012
Note R'000 R'000 R'000
Revenue 171 031 172 534 365 459
Gross profit 62 408 53 147 117 821
Investment income 3 226 2 720 6 226
Under recovery of manufacturing overheads (17 309) (14 511) (25 393)
Distribution expenses (15 997) (15 792) (32 034)
Administrative expenses (19 215) (17 022) (31 282)
Other (3 245) (4 006)
Impairment raised (659)
Net foreign exchange gains/(losses) 4 158 (3 545) (3 808)
Profit before taxation 14 025 4 996 26 865
Taxation (4 732) (2 880) (9 742)
Normal taxation (4 732) (1 651) (8 513)
Secondary taxation on companies (1 229) (1 229)
Profit for the period 9 293 2 115 17 123
Other comprehensive income
Increase in foreign currency translation reserve 761 621 1 746
Total comprehensive income for the period 10 054 2 736 18 869
Attributable to equity holders of parent company
Profit for the period 9 293 2 115 17 123
Total comprehensive income for the period 10 054 2 736 18 869
Headline earnings attributable to
ordinary shareholders 1 9 293 2 118 17 782
Number of shares in issue ('000) 49 166 49 166 49 166
Weighted number of shares in issue ('000) 49 166 49 166 49 166
Dilutive number of shares in issue ('000) 49 166 49 166 49 166
Attributable earnings per share (cents)
basic 18,9 4,3 34,8
diluted 18,9 4,3 34,8
Dividend per share (cents) 25,0 25,0 25,0
CONDENSED GROUP STATEMENT OF FINANCIAL POSITION
Unaudited Unaudited Audited
six months six months year to
to June to June December
2013 2012 2012
R'000 R'000 R'000
ASSETS
Non-current assets
Property, plant and equipment 255 271 261 459 260 251
Other non-current assets 3 707 4 849 3 291
Current assets
Inventories 147 063 116 971 121 142
Trade and other receivables 88 845 107 279 105 037
Bank balances and cash 148 901 132 558 153 622
Non-current assets held for sale 13 400 12 288 12 871
Total assets 657 187 635 405 656 214
EQUITY AND LIABILITIES
Total shareholders' funds 522 208 507 238 524 446
Non-current liabilities
Deferred taxation liabilities 45 264 46 951 46 191
Other non-current liabilities 8 401 7 685 8 108
Current liabilities
Trade and other payables 70 844 63 583 62 669
Short-term provisions 3 727 2 500 3 727
Taxation payable 6 743 7 447 11 073
Total equity and liabilities 657 187 635 405 656 214
Net asset value per share (cents) 1 062 1 032 1 067
CONDENSED GROUP STATEMENT OF CASH FLOWS
Unaudited Unaudited Audited
six months six months year to
to June to June December
2013 2012 2012
R'000 R'000 R'000
Cash generated by trading 22 707 13 557 45 821
(Increase)/decrease in working capital (1 556) 19 098 17 288
Cash generated by operations 21 151 32 655 63 109
Net interest received 3 226 2 720 6 226
Taxation paid normal (9 992) (6 530) (9 296)
Taxation paid secondary tax on companies (1 229)
Cash inflow from operating activities 14 385 28 845 58 810
Replacement capital expenditure (6 636) (3 033) (14 074)
(Increase)/decrease in non-current asset (416) (402) 1 156
Net cash inflow before financing activities 7 333 25 410 45 892
Dividend paid ordinary (12 291) (12 291) (12 291)
Net (decrease)/increase in cash and cash equivalents (4 958) 13 119 33 601
Cash and cash equivalents at beginning of period 153 622 118 996 118 996
Currency translation of cash in foreign subsidiary 237 444 1 025
Cash and cash equivalents at end of period 148 901 132 559 153 622
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 2011 4 856 1 550 510 387 516 793
Total comprehensive income for the period 2 736 2 736
Realisation of foreign currency translation reserve (929) 929
Dividend paid (12 291) (12 291)
Balance at 27 June 2012 4 856 621 501 761 507 238
Total comprehensive income for the period 16 133 16 133
Creation of foreign currency translation reserve 2 675 (2 675)
Prior year unclaimed dividend reversed 1 075 1 075
Balance at 27 December 2012 4 856 3 296 516 294 524 446
Total comprehensive income for the period 10 054 10 054
Creation of foreign currency translation reserve 761 (761)
Dividend paid (12 291) (12 291)
Balance at 27 June 2013 4 856 4 057 513 295 522 208
NOTES
Unaudited Unaudited Audited
six months six months year to
to June to June December
2013 2012 2012
R'000 R'000 R'000
1. Reconciliation between attributable earnings
and headline earnings
Attributable earnings after taxation 9 293 2 115 17 123
Impairment raised 659
Profit on disposal of fixed assets 3
Taxation effect
Headline earnings attributable to ordinary shareholders 9 293 2 118 17 782
Attributable headline earnings per share (cents)
basic 18,9 4,3 36,2
diluted 18,9 4,3 36,2
2. Basis of presentation
The Group is domiciled in South Africa. The unaudited condensed consolidated interim financial results at and for the half year
ended 27 June 2013 comprise the company and its subsidiaries (the 'Group').
The Group's principal accounting policies and methods of computation in the unaudited Group results have been applied
consistently over the current and prior financial years.
The Group's condensed consolidated interim 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 Standards (IAS) 34, the Companies Act of
South Africa, as well as SAICA Financial Reporting Guides as issued by the Accounting Practices Committee and Financial
Reporting Pronouncements as issued by Financial Reporting Standards Council.
3. Unaudited results
This report has not been audited or reviewed.
Unaudited Unaudited Audited
six months six months year to
to June to June December
2013 2012 2012
R'000 R'000 R'000
4. Commitments
Capital commitments authorised but not contracted 3 150 6 475
Capital commitments contracted 3 943 8 422 4 975
3 943 11 572 11 450
Operating lease commitment 3 160 3 412 3 471
COMMENTARY
Market conditions in the global electrolytic manganese dioxide (EMD) market remained soft during the six-month period
ended 27 June 2013 (the "period"). Market demand continued to fall short of global supply, and selling prices remained under
pressure.
The Group's lower than planned sales volumes were offset by an improved sales mix and by a higher average Rand-
denominated selling price. Improved operating margins provided improved earnings.
PERFORMANCE OF THE GROUP'S EMD BUSINESS
Revenue for the period totaled R171 million and was in line with revenue for the period ended 27 June 2012 (the "comparable
period") (2012: R172,5 million). A reduction in sales volumes was offset by an improved sales mix and by a higher average
Rand-denominated selling price.
Average per unit production costs for the period increased over the comparable period. Input cost increases were partly offset
by operational improvements, and operating inefficiencies continued due in part to production volumes falling well short of
capacity. Administration costs increased due to inflation, as well as due to increased expenditures on product and market
development. Additional expenses were also incurred responding to regulatory reviews of the outstanding EU and Japanese
anti-dumping duties.
The Group's higher average selling price resulted from an improved sales mix, more favourable foreign exchange rates, and
some selling price increases, and resulted in improved operating margins.
Trading profit for the period improved to R9,8 million (2012: R5,8 million).
The revaluation of US Dollar debtors provided a foreign exchange gain of R4,2 million (2012: a loss of R3,6 million), and interest
received increased to R3,2 million (2012: R2,7 million). Profit before tax was R14,0 million (2012: R5,0 million), and the Group's
taxation charge for the period was R4,7 million (2012: R2,9 million).
Attributable earnings for the period totaled R9,3 million (2012: R2,1 million), and earnings and headline earnings per share
were 18,9 cents (2012: 4,3 cents).
Net cash generated by operations for the period totaled R21,2 million (2012: R32,7 million). Working capital increased
during the period by R1,6 million (2012: a R19,1 million decrease), and capital expenditures for the period totaled R6,6 million
(2012: R3,0 million). Dividend payments during the period totaled R12,3 million (2012: R12,3 million).
Cash balances as at 27 June 2013 totaled R148,9 million (December 2012: R153,6 million).
DISPOSAL OF THE GROUP'S AUSTRALIAN PLANT SITE
Efforts to sell the Group's former plant site in Australia continue.
PROSPECTS
The Group's second half sales volumes are forecast to increase over the period's sales volumes in line with historic seasonality,
whilst selling prices are expected to remain under pressure.
The Group's challenge remains to achieve the best possible sales volumes and mix in soft market conditions and to diversify
its customer base. Production volumes are expected to remain at levels similar to the period and input costs are expected to
continue to increase, resulting in continued poor recovery of manufacturing overheads and continued pressure on margins.
The Group continues to assess its strategic position, as well as the adequacy of the returns that might be possible from the
investments required to sustain the business.
Any reference to future financial performance included in this announcement has not been reviewed or reported on by the
Company's auditors.
DIRECTORATE
Mr Lionel Bird retired as independent non-executive director and Chairman of the Audit and Risk Committee on 3 May 2013.
Mr Luigi Matteucci was appointed as Chairman of the Audit and Risk Committee on 3 May 2013.
DIVIDEND
No interim dividend has been declared.
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)
21 August 2013
Johannesburg
DELTA EMD LIMITED
Registration number: 1919/006020/06
Income tax number: 9375057719
Share code: DTA ZAE000132817
("Delta EMD" or "the Group")
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: AC Hicks, BR Wright, L Matteucci
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: 22/08/2013 01:00:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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