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Interim Condensed Consolidated Financial Statements for the Period Ended 31 August 2014 and Dividend Announcement
Cargo Carriers Limited
(Registration number 1959/003254/06)
Share code: CRG
ISIN: ZAE000001764
Interim condensed consolidated financial statements for the period ended 31 August 2014 and dividend announcement
Unaudited Unaudited Audited
31/08/2014 31/08/2013 28/02/2014
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME R'000 R'000 R'000
Turnover 438 484 477 479 911 375
Other income 2 098 2 668 3 707
Revenue 440 582 480 147 915 082
Operating and administration costs (274 386) (281 046) (561 502) 24 470 25 161 24 470
Employment costs (107 431) (115 001) (221 916)
Depreciation of property, plant and equipment (32 597) (36 827) (73 856)
Profit from operating activities 26 168 47 273 57 808
Profit on disposal of property, plant and equipment 454 8 567 6 334
Impairment of assets (28) (3 180) (10 554)
Revaluation of investment properties - - 8 576
Dividend income - 1 137 1 137
Share of profits from associates and joint ventures 806 1 681 3 218
Profit before finance income and finance cost 27 400 55 478 66 519
Finance income 3 360 2 903 6 472
Finance costs (9 440) (11 529) (23 162) - 1 794 -
Profit before tax 21 320 46 852 49 829
Income tax expense (5 470) (11 196) (3 759)
Profit for the period 15 850 35 656 46 070
Other comprehensive income:
Items not to be reclassified to profit or loss in subsequent periods:
Revaluation of owner occupied properties - - 4 333
Income tax effect - - (770)
Income tax effect of property adjustments - - (1 774)
Change in estimated base cost for CGT purposes - - 2 857
Other comprehensive income to be reclassified to profit or loss in subsequent
periods:
Exchange differences on translation of foreign operations (628) 4 510 3 601
Other comprehensive income, net of tax (628) 4 510 8 247
Total comprehensive income, net of tax 15 222 40 166 54 317
Profit for the period attributable to:
Equity holders of the parent 14 946 32 049 45 482
Non-controlling interest 904 3 607 588
15 850 35 656 46 070
Total comprehensive income, net of tax attributable to:
Equity holders of the parent 14 318 36 559 53 729
Non-controlling interest 904 3 607 588
15 222 40 166 54 317
FINANCIAL INFORMATION
Dividend per share (cents)
- paid during the period 40.0 20.0 15.0
- declared after the period end 6.0 15.0 40.0
Total dividends 46.0 35.0 55.0 CONDENSED CONSOLIDATED STATEMENT OF CASH
Cash receipts from customers 409 397 436 771 897 634
Basic and diluted earnings per share (cents) 77.0 165.1 234.4
Adjustments (cents):
Profit on disposal of property, plant and equipment (1.7) (31.8) (23.5)
Impairment of assets 0.1 16.4 54.4
Revaluation of investment properties - - (36.0)
Basic and diluted headline earnings per share (cents) 75.4 149.7 229.3
Group borrowings
Borrowing capacity of the Group (R'000) 221 254 213 022 217 524
Borrowing capacity utilized (R'000) 101 076 145 305 99 766
Borrowing capacity utilized (%) 45.7% 68.2% 45.9% Payment of contingent consideration (3 251) - (1 437)
Capital commitments (R'000) - - -
Net asset value per share (cents) 2 193 2 092 2 166
Ordinary shares in issue (closing and weighted average) ('000) 19 406 19 406 19 406
SEGMENTAL ANALYSIS
Revenue
Industrial 377 135 390 999 761 630
Agriculture 42 110 70 426 113 529
Aviation 1 980 1 867 3 242
Supply chain services 17 795 14 281 33 212
Property 1 562 2 574 3 469
Total revenue 440 582 480 147 915 082
Profit before finance income and finance cost
Industrial 26 493 45 044 57 985
Agriculture (494) (76) (9 847)
Aviation 1 158 3 620 3 671
Supply chain services (852) (275) (2 629)
Property 1 095 7 165 17 339
Total profit before finance income and finance cost 27 400 55 478 66 519
CONDENSED CONSOLIDATED STATEMENT OF Unaudited Unaudited Audited
FINANCIAL POSITION 31/08/2014 31/08/2013 28/02/2014
R'000 R'000 R'000
Assets
Non-current assets
Property, plant and equipment 495 266 541 936 487 092
Investment properties 24 470 25 161 24 470
Deferred taxation 20 925 20 922 18 481
Investment in associates 32 605 21 104 22 953
Investment in joint ventures 8 127 5 912 4 803
581 353 615 035 557 799
Current assets
Inventories 16 020 19 201 16 989
Trade and other receivables 166 203 169 408 150 190
Cash and short-term deposits 106 924 126 060 116 341
Taxation - 1 704 -
289 147 316 463 283 520
Non-current assets held for sale 10 639 2 344 11 702
Total Assets 881 139 933 842 853 021
Equity and liabilities
Equity attributable to owners of the parent
Share capital 194 194 194
Non-distributable reserves 51 168 68 164 51 796
Distributable reserves 374 201 337 586 368 212
Equity attributable to equity holders of the parent 425 563 405 944 420 202
Non-controlling interest 16 944 20 100 14 846
Total Equity 442 507 426 044 435 048
Non-current liabilities
Deferred taxation 101 450 116 049 98 954
Contingent consideration 2 655 5 359 5 721
Provisions 3 891 - 2 781
Interest-bearing loans and borrowings 120 933 157 231 107 019
228 929 278 639 214 475
Current liabilities
Trade and other payables 110 363 101 528 82 736
Provisions 9 818 13 497 9 573
Interest-bearing loans and liabilities 87 067 114 134 109 088
Taxation 2 455 - 2 101
209 703 229 159 203 498
Total Equity and liabilities 881 139 933 842 853 021
CONDENSED CONSOLIDATED STATEMENT OF Unaudited Unaudited Audited
CASH FLOWS 31/08/2014 31/08/2013 28/02/2014
R'000 R'000 R'000
Cash receipts from customers 409 397 436 771 897 634
Cash paid to suppliers and employees (332 026) (366 074) (792 244)
Cash generated by operations 77 371 70 697 105 390
Finance income 3 360 2 903 6 472
Finance costs (9 440) (11 529) (23 162)
Dividends paid (7 763) (3 881) (9 028)
Dividend income - 1 137 1 137
Income tax paid (4 648) (3 008) (4 085)
Cash inflow from operating activities 58 880 56 319 76 724
Cash outflow from financing activities (8 791) (11 698) (50 091)
Cash (outflow)/inflow from investing activities (58 355) (3 605) 5 047
(Increase)/decrease in loans to associates
and joint ventures (12 171) (741) 57
Payment of contingent consideration (3 251) - (1 437)
Purchase of property, plant and equipment (45 029) (55 426) (64 133)
Proceeds from sale of property, plant and equipment 2 096 52 562 70 560
(Decrease)/increase in cash and cash equivalents (8 266) 41 016 31 680
Cash at the beginning of the period 116 341 84 780 84 780
Foreign exchange movement during the period (1 151) 264 (119)
Cash and cash equivalents at the end of the period 106 924 126 060 116 341
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Foreign Equity
Asset Currency attributable to
Share revaluation Distributable Translation Other equity holders of
Capital reserve* reserves Reserve* reserves* the parent Non- Controlling interest Total Equity
R'000 R'000 R'000 R'000 R'000 R'000 R'000 R'000
Balance at 31 August 2013 194 60 049 337 586 8 065 50 405 944 20 100 426 044
Total comprehensive income - 4 646 14 673 1 732 - 21 051 (3 019) 18 032
- Profit for the period - - 14 673 - - 14 673 (3 019) 11 654
- Other comprehensive income - 4 646 - 1 732 - 6 378 - 6 378
Disposal of assets and transfer between reserves - (20 878) 27 169 (6 291) - - - -
Exchange differences realised on dissolution of
foreign subsidiary - - 2 641 (2 641) - - - -
Transfer between reserves on disposal of assets - - - - - - - -
Post tax transfer of revaluation of investment properties - 7 064 (7 064) - - - - -
Dividends paid - - (6 793) - - (6 793) (2 235) (9 028)
Balance at 28 February 2014 194 50 881 368 212 865 50 420 202 14 846 435 048
Total comprehensive income - - 14 946 (628) - 14 318 904 15 222
- Profit for the period - - 14 946 - - 14 946 904 15 850
- Other comprehensive income - - - (628) - (628) - (628)
Dissolution of foreign subsidiary - - - - - - - -
Purchase of non-controlling interest - - (1 194) - (1 194) 1 194 -
Dividends paid - - (7 763) - - (7 763) - (7 763)
Balance at 31 August 2014 194 50 881 374 201 237 50 425 563 16 944 442 507
* represents non-distributable reserves
Review
Labour unrest and strike action within South Africa and Swaziland has had a direct impact on our customers' productivity levels which translated
into lower volumes being transported by our operations during the six months under review. In addition, the significant depreciation of the
Zambian kwacha against the US dollar increased the unrealised foreign exchange losses within our Zambian subsidiary ("BHL"), which negatively
impacted profits from operating activities.
Revenue declined 8.2%, reflecting the effects of the labour disruptions within the industrial and agriculture segment combined with the disposal
of the Malelane business in the prior year. The industrial segment revenue declined 3.5% as a result of the strike within the mining and steel
sectors. The agriculture segment revenue declined 40.2%, with the disposal of the Malelane business accounting for 34.2% of this decrease.
Whilst efforts have been made to reduce or contain costs during this period, certain costs remain fixed in nature. Profit from operating activities
declined 44.6% primarily due to foreign exchange loss movement of R9.4 million and the strike action during the period.
Finance income increased 15.7% due to the proceeds from the sale of property in the prior year being invested for the full current period. Finance
costs decreased 18.1% due to a larger proportion of instalment sale agreements having matured and settled, and existing contracts approaching maturity
with increased contribution to capital.
Earnings per share and headline earnings per share have decreased by 53.4% and 49.6% respectively. The decreased earnings reflect the impact of the
tough trading conditions, strike action and foreign exchange losses during this period, coupled with the non-recurring impact that
the profit on sale of property and dividend income from an associate had on the comparative period results. The interim results are disappointing
but management remains committed to ensuring that the business operates profitably and will endeavour to once again deliver the levels of returns
acceptable to all stakeholders.
Prospects
The local economy remains volatile with continued uneasiness around labour relations. This has translated into constrained investment which
negatively impacts many local businesses and growth. The Group will continue with its strategy of seeking profitable organic growth, but will
augment this by utilising its healthy balance sheet and favourable gearing should suitable acquisition opportunities present themselves. The
Group does not expect to recover the losses incurred as a result of the effects of the systemic labour disruptions experienced during the current
reporting period, but expects to continue operating profitably to year end barring any unforeseen circumstances.
Accounting Policies
The interim condensed consolidated financial statements for the period ended 31 August 2014 have been prepared in accordance with the recognition and
measurement criteria of International Financial Reporting Standards ("IFRS"), IAS 34: Interim Financial Reporting, the Listings Requirements of the
Johannesburg Stock Exchange and the requirements of the Companies Act, 2008 (No. 71 of 2008). The accounting policies are consistent with those applied
in the prior year financial statements and the carrying amounts of financial instruments approximates their fair value. These results have not been
audited nor have they been reviewed by the Group's auditors, Ernst & Young Inc. The interim condensed consolidated financial statements were
compiled under the supervision of the Chief Financial Officer, Mr S Maharaj CA(SA)/HDipTax.
Events after the reporting period
There were no significant events after the reporting period.
Appointment of Independent Non-executive director
Mr Vincent Raseroka was appointed as an independent non-executive and member of the Audit and Risk Committee with effect from 18 July 2014.
Dividend Declaration
Despite the challenging trading conditions experienced, the board has decided to declare a gross interim cash dividend (Number 47) of 6.0 cents
per share (2013: 15.0 cents) for the period ended 31 August 2014. The dividend has been declared out of income reserves.
The dividend will be subject to a dividend withholding tax rate of 15% or 0.9 cents per ordinary share. As no STC credits are available for
utilisation, shareholders, unless exempt or qualifying for a reduced withholding tax rate, will receive a net dividend of 5.1 cents per share
(2013: 12.75 cents).
Cargo Carriers' tax reference number is 9900156713 and the number of ordinary shares in issue at the declaration date is 20 000 000, of which
593 710 are treasury shares.
The salient dates for the dividend will be as follows:
Last day to trade “cum” the cash dividend (“LDT”): Friday, 28 November 2014
Shares commence trading "ex" the dividend: Monday, 1 December 2014
Record date (date shareholders recorded in share register): Friday, 5 December 2014
Payment date: Monday, 8 December 2014
Shareholders may not dematerialise or rematerialise their share certificates between Monday, 1 December 2014 and Friday, 5 December 2014,
both dates inclusive.
Registered Office
11A Grace Road
Mountainview, Observatory, Johannesburg
2198
Transfer Secretaries
Computershare Investor Services Proprietary Limited
70 Marshall Street
Johannesburg, 2001
(PO Box 61051, Marshalltown, 2107)
Website
www.cargocarriers.co.za
Cargo Carriers Limited, Registration number :1959/003254/06
Incorporated in the Republic of South Africa ("Cargo Carriers" or " the company")
JSE Share code: CRG
ISIN Code: ZAE000001764
By order of the board
Arbor Capital Company Secretarial Proprietary
Limited
Company Secretary
30 October 2014
Directors
SP Mzimela* (Chairperson), A E Franklin*, B B Fraser#, M J Vuso*,
V Raseroka*, G D Bolton (Executive), M J Bolton (CEO), S Maharaj (CFO)
# non-executive director
* independent non-executive director
Date: 31/10/2014 07:05:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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