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CARGO CARRIERS LIMITED - Summarised unaudited interim financial statements for the period ended 31 August 2015 and Dividend Announcement

Release Date: 27/10/2015 17:05
Code(s): CRG     PDF:  
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Summarised unaudited interim financial statements for the period ended 31 August 2015 and Dividend Announcement

Cargo Carriers Limited
Registration number: 1959/003254/06
Incorporated in the Republic of South Africa
("Cargo Carriers" or “the Group”)
JSE Share code: CRG
ISIN Code: ZAE000001764


SUMMARISED UNAUDITED INTERIM FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 AUGUST 2015 AND DIVIDEND
ANNOUNCEMENT


CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

                                                               Unaudited           Unaudited        Audited
R'000                                                     31 August 2015      31 August 2014    28 February
                                                                                                       2015
Turnover                                                         417,578             438,484        909,699
Other income                                                       1,640               2,098          3,728
Revenue                                                          419,218             440,582        913,427
Operating and administration costs                              (259,546)           (274,386)      (573,561)
Employment costs                                                (110,593)           (107,431)      (214,076)
Depreciation of property, plant and
equipment                                                        (30,882)            (32,597)      (69,588)
Profit from operating activities                                  18,197              26,168        56,202
Profit on disposal of property, plant and
equipment                                                          6,938                 454          (518)
Impairment of assets                                              (1,804)                (28)        (2,469)
Revaluation of investment properties                                   -                   -          1,265
Share of profits from associates and joint
ventures                                                           2,568                806          2,920
Profit before finance income and finance
cost                                                              25,899              27,400        57,400
Finance income                                                     3,568               3,360         6,378
Finance costs                                                     (7,431)             (9,440)      (18,351)
Profit before tax                                                 22,036              21,320        45,427
Income tax expense                                                (4,025)             (5,470)      (15,501)
Profit for the period                                             18,011              15,850        29,926

Other comprehensive income:
Items not to be reclassified to profit or loss
in subsequent periods:
Revaluation of owner occupied properties                               -                   -         6,052
Income tax effect                                                      -                   -          (783)
Other comprehensive income to be
reclassified to profit or loss in subsequent
periods:
Exchange differences on translation of
foreign operations                                                (2,173)               (628)       (1,615)
Other comprehensive income, net of tax                            (2,173)               (628)        3,654

Total comprehensive income, net of tax                            15,838              15,222        33,580
Profit for the period attributable to:
Equity holders of the parent                                      21,237              14,946        28,411
Non-controlling interest                                          (3,226)                904         1,515
                                                                  18,011              15,850        29,926

Total comprehensive income, net of tax
attributable to:
Equity holders of the parent                                      19,064              14,318        32,065
Non-controlling interest                                          (3,226)                904         1,515
                                                                  15,838              15,222        33,580

FINANCIAL INFORMATION
Dividend per share (cents)
- paid during the period                                            20.0                40.0           6.0
- declared after the period end                                      8.0                 6.0          20.0
Total dividends                                                     28.0                46.0          26.0


Basic and diluted earnings per share
(cents)                                                            109.4                77.0         146.4
Adjustments (cents):
Profit on disposal of property, plant and
equipment                                                          (25.7)               (1.7)          1.9
Impairment of assets                                                 9.3                 0.1          12.7
Revaluation of investment properties                                   -                   -          (5.9)
Basic and diluted headline earnings per
share (cents)                                                       93.0                75.4         155.1

Group borrowings
Borrowing capacity of the Group (R'000)                          235,793             221,254       229,814
Borrowing capacity utilised (R'000)                               52,745             101,076        40,104
Borrowing capacity utilised (%)                                     22.4                45.7          17.5

Capital commitments (R'000)                                        3,316                   -             -

Net asset value per share (cents)                                  2,356               2,193         2,279

Ordinary shares in issue (closing and
weighted average) ('000)                                          19,406              19,406        19,406


SEGMENTAL ANALYSIS

Revenue
Industrial                                                       365,373             377,135       796,616
Agriculture                                                       38,112              42,110        74,770
Aviation                                                             631               1,980         3,193
Supply chain services                                             13,445              17,795        35,681
Property                                                           1,657               1,562         3,167
Total revenue                                                    419,218             440,582       913,427


Profit before finance income and finance
cost
Industrial                                                        12,597              26,493        55,174
Agriculture                                                        8,276                (494)          157
Aviation                                                           2,770               1,158         1,020
Supply chain services                                             (1,343)               (852)       (3,375)
Property                                                           3,239               1,095         4,424
Total profit before finance income and
finance cost                                                      25,899              27,400        57,400

CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

                                                                                    Audited
                                                   Unaudited         Unaudited  28 February
R'000                                         31 August 2015    31 August 2014         2015
Assets
Non-current assets
Property, plant and equipment                        434,094           495,226      448,146
Investment properties                                 25,735            24,470       25,735
Investment in associates                              29,220            32,605       26,778
Investment in joint ventures                           8,796             8,127        7,872
Deferred taxation                                     16,298            20,925       15,296

                                                     514,143           581,353      523,827

Current assets
Inventories                                           16,946            16,020       15,230
Trade and other receivables                          194,560           166,203      167,948
Cash and short-term deposits                         119,832           106,924      134,412
                                                     331,338           289,147      317,590

 Non- current assets held for sale                    18,470            10,639       20,799

Total assets                                         863,951           881,139      862,216

Equity and Liabilities
Equity attributable to owners of the parent
Share capital                                            194              194           194
Non-distributable reserves                            54,374           51,168        56,547

Distributable reserves                               402,688           374,201      385,332
Equity attributable to equity holders of the
parent                                               457,256           425,563      442,073
Non-controlling interest                              14,329            16,944       17,555
Total equity                                         471,585           442,507      459,628

Non-current liabilities
Deferred taxation                                     89,369           101,450       95,232
Contingent consideration                               3,583             2,655        3,010
Provisions                                             4,717             3,891        3,881
Interest bearing loans and borrowings                 89,810           120,933       93,713
                                                     187,479           228,929      195,836
Current liabilities
Trade and other payables                             103,092           110,363      109,751
Provisions                                             8,928             9,818        8,990
Interest bearing loans and borrowings                 82,767            87,067       80,803
Taxation                                              10,100             2,455        7,208
                                                     204,887           209,703      206,752

Total equity and liabilities                         863,951           881,139      862,216

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

                                                   Unaudited         Unaudited         Audited
                                              31 August 2015    31 August 2014     28 February
                                                                                          2015
Cash receipts from customers                         399,004           409,397         891,901
Cash paid to suppliers and employees                (366,916)         (332,026)       (746,777)
Cash generated by operations                          32,088            77,371         145,124
Finance income                                         3,568             3,360           6,378
Finance costs                                         (7,431)           (9,440)        (18,351)
Dividends paid                                        (3,881)           (7,763)         (8,927)
Dividend income                                            -                 -               -
Tax paid                                              (6,868)           (4,648)        (10,254)
Cash flows from operating activities                  17,476            58,880         113,970
Cash flows from financing activities                 (10,819)           (8,791)        (41,591)
Cash flows from investing activities                 (18,561)          (58,355)        (51,252)
Increase in loans to joint ventures                     (800)          (12,171)         (3,974)
Payment of contingent consideration                        -            (3,251)         (3,251)
 Purchase of property, plant and
equipment                                            (39,204)          (45,029)        (53,269)
Proceeds from sale of property, plant and
equipment                                             21,443             2,096           9,242

(Decrease)/increase in cash and cash
equivalents                                          (11,904)           (8,266)         21,127
Cash at the beginning of the period                  134,412           116,341         116,341
Foreign exchange movement on cash
balances                                              (2,676)           (1,151)         (3,056)
Cash and cash equivalents at the end of
the period                                           119,832           106,924         134,412

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

                                                                                                              Equity
                                                                                  Foreign               attributable
                                                      Asset                     currency                   to equity         Non-
                                       Share    Revaluation   Distributable   translation       Other     holders of   controlling     Total
                                      capital      reserve*        reserves      reserve*   reserves*    the parent       interest    equity

 Balance at 31 August 2014               194         50,881         374,201           237          50        425,563        16,944    442,507
 Total comprehensive
 income                                    -          5,269          13,465          (987)          -         17,747           611     18,358
 - Profit for the period                   -              -          13,465             -           -         13,465           611     14,076
 - Other comprehensive
 income                                    -          5,269               -          (987)          -          4,282             -      4,282
 Purchase of non-controlling
 interest                                                               (73)                                    (73)             -        (73)
 Transfer between reserves                 -                             50             -         (50)             -                        -
 Post tax transfer of
 revaluation of investment
 properties                                -          1,147          (1,147)            -           -             -              -          -
 Dividends paid                            -              -          (1,164)            -           -        (1,164)             -     (1,164)
 Balance at 28 February
 2015                                    194         57,297         385,332          (750)          -       442,073         17,555    459,628
 Total comprehensive
 income                                    -              -          21,237        (2,173)          -        19,064         (3,226)    15,838
  Profit for the period                    -              -          21,237             -           -        21,237         (3,226)    18,011
  - Other comprehensive
 income                                    -              -               -        (2,173)          -        (2,173)             -     (2,173)
 Dividends paid                            -              -          (3,881)            -           -        (3,881)             -     (3,881)
 Balance at 31 August 2015               194         57,297         402,688        (2,923)          -       457,256         14,329    471,585

* represents non-distributable reserves

Review
Global economies have experienced a steady deterioration in trading conditions during the period, with the
local economy being significantly impacted by lower commodity prices and the strengthening of the US dollar.
The Group, however, managed to remain steadfast amidst tough trading conditions delivering a 13.6% increase
in profits for the period.

Revenue decreased 4.8%, primarily due to the slowdown in demand for copper and steel related products
which impacted our industrial segment. The industrial segment's operating profits were further impaired by
R18.2 million due to unrealised foreign exchange losses incurred within our Zambian subsidiary. The significant
increase in profitability within the agriculture segment is attributable to favourable weather patterns resulting in
increased throughput, a R2.1 million increase in foreign exchange gains within our Zimbabwean subsidiary and a
R2.3 million increase in profits from an associate. The increased profits of R1.6m and R2.1m within the aviation
and property segments respectively, is primarily attributable to profit on disposal of assets. The supply chain
segment operating losses increased by R0.49 million and was affected by a slow uptake in project revenue
during the period.

Net finance costs decreased by 36.5% as a result of the majority of instalment sale contracts within South Africa
reaching maturity. Finance costs are expected to increase in line with new capital expenditure incurred during
the latter part of the current reporting period.

Earnings per share and headline earnings per share have increased by 42.1% and 23.4% respectively, benefitting
significantly from the South African and Swaziland operations. The disposal of non-core assets together with a
lower effective tax rate of 18.3% further enhanced earnings, thereby partially offsetting the exchange losses
incurred in Zambia. Management remains committed to ensuring that the business remains profitable and
generates acceptable levels of returns to all of its stakeholders.

Prospects
It is very challenging at this stage to predict the future course of the economy, however, there are indications of
a slight recovery in commodity prices as efforts are boosted to revive the faltering sector. Further depreciation
of the major reporting currencies against the US dollar is envisaged, which would result in our Zambian subsidiary
not recovering from the foreign exchange losses incurred. The Group intends to remain focused on its growth
ambitions and is well supported by its current low gearing and available debt capacity. Barring any unforeseen
circumstances, the Group is expected to continue profitably to year end.


Accounting Policies
The interim condensed consolidated financial statements for the period ended 31 August 2015 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 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.

Dividend Declaration
Despite the challenging trading conditions experienced, the board has decided to declare a gross interim cash
dividend (Number 49) of 8.0 cents per share (2014: 6.0 cents) for the period ended 31 August 2015. The dividend
has been declared out of income reserves.

The dividend will be subject to a dividend withholding tax rate of 15% or 1.2 cents per ordinary share. Shareholders, 
unless exempt or qualifying for a reduced withholding tax rate, will receive a net dividend of 6.8 cents per share 
(2014: 5.1 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 are as follows:


 Last day to trade “cum” the cash dividend (LDT)                                    Friday, 27 November 2015

 Shares commence trading “ex” the dividend                                          Monday, 30 November 2015

 Record date (date shareholders recorded in share register)                          Friday, 4 December 2015

 Payment date                                                                        Monday, 7 December 2015


Shareholders may not dematerialise or rematerialise their share certificates between Monday, 30 November
2015 and Friday, 4 December 2015, 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

By order of the board
Arbor Capital Company Secretarial Proprietary Limited
Company Secretary
27 October 2015

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


Sponsor
Arbor Capital Sponsors Proprietary Limited

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