Wrap Text
Reviewed Provisional Results and declaration of cash dividend for the year ended 31 December 2015
Trencor Limited
(Incorporated in the Republic of South Africa)
Registration No. 1955/002869/06 | Share code: TRE | ISIN: ZAE000007506 | ("the company" or "Trencor")
Reviewed Provisional Results
and declaration of cash dividend
for the year ended 31 December 2015
HIGHLIGHTS
GROUP
- Trading profit after net financing costs decreased by 20% from R2 001 million in 2014
(restated*) to R1 608 million.
- Headline earnings per share (including the effect of net realised and unrealised foreign
exchange translation gains) were 512,6 cents (2014: 547,9 cents – restated *).
- Adjusted headline earnings per share (which excludes the effect of net unrealised
foreign exchange translation gains) were 443,3 cents (2014: 520,7 cents – restated *).
- Net unrealised foreign exchange gains arising on translation of net dollar receivables
and the related valuation adjustments, not included in adjusted headline earnings, were
R123 million or 69,3 cents per share (2014: R48 million or 27,2 cents per share).
- These various earnings are better reflected in tabular form:
2015 2014
Restated*
Cents per share Cents per share
Basic (loss)/earnings per share (82,7) 543,2
Headline earnings per share 512,6 547,9
Deduct:
Net unrealised foreign exchange translation gains 69,3 27,2
Adjusted headline earnings per share 443,3 520,7
Year-end rate of exchange: SA rand to US dollar 15,53 11,54
Average rate of exchange for the year: SA rand to
US dollar 12,75 10,78
* Refer note 9.
- Consolidated gearing ratio at 31 December 2015 was 224% (2014: 210%).
- Based on the spot exchange rate of US$1 = R15,53 and the price of Textainer's shares
listed on the NYSE on 31 December 2015 (US$14,11), the net asset value of Trencor at that
date was as follows:
R million R per share
Beneficiary interest in Textainer 5 977,6 33,75
Beneficiary interest in TAC 577,1 3,26
Net interest in long-term receivables 555,3 3,14
Cash 2 399,1 13,55
Net liabilities (86,3) (0,49)
9 422,8 53,21
- Final dividend of 220 cents per share declared, making a total of 300 cents per share for
the year (2014: total 267 cents per share), an increase of 12% over the previous year.
TEXTAINER: 48,25% beneficiary interest at 31 December 2015 (2014: 47,97%)
- Net profit for the year in US GAAP was US$106,9 million (2014: US$189,4 million). Adjusted
to conform with International Financial Reporting Standards ("IFRS"), Textainer's net profit
(before the impairment provision) was US$107,3 million (2014: US$171,1 million).
- Average fleet utilisation for the year was 96,8%, compared with 96,1% for 2014.
- Total expenditure for both the owned and managed fleets for lease-out in 2015 was
US$600 million for the year, and US$215 million invested year-to-date in 2016.
- At 31 December 2015, Textainer owned 80,1% of the total fleet of 3 147 690 TEU; at
31 December 2014, it owned 78,9% of the then fleet of 3 233 364 TEU.
- Declared dividends totaling US$1,65 per share in 2015 (2014: US$1,88 per share).
- Textainer's results may be viewed on its website www.textainer.com.
REPORTING RESULTS OF TEXTAINER AND TAC UNDER IFRS
The results of Textainer and TAC, reporting under US GAAP, are converted to IFRS for
inclusion in the results of Trencor, which is required to report under IFRS. Historically,
limited adjustments were necessary in so converting from US GAAP to IFRS. However, in
the year to 31 December 2015 a decline in market conditions meant that differences in
accounting treatment between US GAAP and IFRS, in the areas of impairment testing and
a revision of the residual values of the container fleets, caused significant differences in
financial results reported under the respective accounting conventions. The complex and
time-consuming calculations required to make the necessary IFRS adjustments for the
large owned container fleets resulted in a delay in the issuance of these results.
Details of the different requirements under US GAAP and IFRS and their materially different
impact on the reported results of Textainer and TAC and those of Trencor are as follows:
- Impairment testing – under US GAAP the container fleets are required to be impaired to
fair value where the undiscounted expected future cash flows are less than the carrying
value of the container fleet. As this was not the case, no impairment was necessary at
31 December 2015 under US GAAP. IFRS on the other hand requires that, where there is
an indicator of impairment, expected future cash flows should be discounted to present
value. Applying this methodology results in a non-cash impairment of US$114 million
(R1 770 million) in Trencor's 2015 financial statements, which has been recorded in profit
or loss but excluded from headline earnings, as required in respect of all such impairment
losses. The impact on earnings, after tax and non-controlling interests, is a net charge of
R1 034 million or 584 cents per share).
- Residual values of containers – IFRS requires the reassessment of the residual values of
containers, which are then used to determine the amount by which containers are
depreciated. In accordance with IFRS, residual values are determined using current
market conditions and are therefore likely to fluctuate over time as market prices
fluctuate (i.e. will reflect market volatility). IFRS defines the residual value of a container
as the estimated amount that would currently be obtained from the disposal of a
container, after deducting the estimated costs of disposal, if the container were already
of the age and in the condition expected at the end of its useful life. This requirement
necessitated a reassessment of the residual values of the container fleets at
31 December 2015. This is in contrast to US GAAP which takes a long-term view of the
value to be realised on disposal of each container up to 12 to 13 years in the future
(i.e. market fluctuations in price are not taken into account in the reassessment of
residual values unless they persist for extended periods of time).
The resale values of containers can vary significantly depending on, among other
factors, location at time of sale, the condition of the container and customer demand.
Recent average sales prices for containers were considered by major asset type
and the residual values were adjusted accordingly at year-end. The consequence
of this reassessment is an estimated increase of R1 448 million in the depreciation
charge to be recorded prospectively in the 2016 financial year under IFRS over what
it would have been had the residual values not been revised (the impact on earnings
and headline earnings, after tax and non-controlling interests, is estimated to be
a net charge of R635 million or 359 cents per share). This depreciation charge is
calculated after adjusting the carrying value of the container fleet for impairment at
year-end. This estimate presumes no material changes to the composition of the
container fleets and no significant changes during 2016 to market factors prevailing at
31 December 2015. Changes in these factors will influence the depreciation actually
to be charged in future periods.
DECLARATION OF CASH DIVIDEND
The board has declared a final gross cash dividend (number 101) of 220 cents per share out of
distributable reserves in respect of the year ended 31 December 2015.
The salient dates pertaining to the dividend payment are as follows:
Last day to trade cum the dividend Friday, 20 May 2016
Trading commences ex the dividend Monday, 23 May 2016
Record date Friday, 27 May 2016
Payment date Monday, 30 May 2016
Share certificates may not be dematerialised or rematerialised between Monday, 23 May 2016
and Friday, 27 May 2016, both days inclusive.
Note that:
- In terms of the company's Memorandum of Incorporation, dividends will only be
transferred electronically to the bank accounts of shareholders, while dividend cheques
will no longer be mailed. If you have in the past received dividend cheques, please contact
the Transfer Secretaries to provide them with confirmation of your banking details. In the
instance where shareholders do not provide the Transfer Secretaries with their banking
details, the dividend will not be forfeited but will be marked as "unclaimed" in the share
register until the shareholder provides the Transfer Secretaries with the relevant banking
details for payout;
- Dividend withholding tax at the rate of 15% will be applicable to shareholders who are not
exempt from this tax, which will result in a net dividend of 187 cents per share to these
shareholders;
- Trencor's tax reference number is 9676002711; and
- Trencor's issued share capital at the declaration date is R885 340 (177 068 011 ordinary
shares of 0,5 cent each).
PREPARATION OF FINANCIAL STATEMENTS
These reviewed provisional results have been prepared by management under the supervision
of the financial director, Mr RA Sieni CA(SA).
REVIEW REPORT
These results, other than the figures stated in US dollars, have been reviewed by the
independent auditors, KPMG Inc, and their unmodified review report is available for inspection
at the registered office.
DIRECTORATE
As announced on 25 February 2016, with effect from 1 March 2016:
- Mr JE McQueen (previously financial director) was appointed as chief executive officer; and
- Mr RA Sieni (previously financial manager) was appointed as financial director in the
place of Mr McQueen. Mr Sieni was also appointed to the executive committee.
On behalf of the board
NI Jowell Chairman
22 April 2016
Directors: NI Jowell* (Chairman), JE Hoelter (USA), C Jowell*, JE McQueen* (CEO), DM Nurek, E Oblowitz, RA Sieni* (Financial), RJA Sparks, HR van der Merwe*, H Wessels (* executive)
Secretaries: Trencor Services Proprietary Limited
Registered Office: 13th Floor, The Towers South, Heerengracht, Cape Town 8001
Transfer Secretaries: Computershare Investor Services Proprietary Limited, 70 Marshall Street, Johannesburg 2001 (PO Box 61051, Marshalltown 2107)
Sponsor: Rand Merchant Bank (A division of FirstRand Bank Limited)
www.trencor.net
Consolidated statement of financial position
at 31 December 2015
Reviewed Restated Restated
31 December 31 December 1 January
R million 2015 2014 2014
ASSETS
Property, plant and equipment 59 636 44 911 36 505
Intangible assets and goodwill 486 416 421
Investment in equity accounted investees 145 92 57
Other investments 45 66 66
Long-term receivables 506 498 637
Net investment in finance leases 1 465 1 662 1 305
Derivative financial instruments 10 14 12
Deferred tax assets 19 24 16
Restricted cash 450 646 629
Total non-current assets 62 762 48 329 39 648
Inventories 766 375 471
Trade and other receivables 1 930 1 360 1 201
Current portion of long-term receivables 134 181 230
Current portion of net investment
in finance leases 758 652 447
Current tax assets – – 3
Cash and cash equivalents 4 241 3 160 2 744
Total current assets 7 829 5 728 5 096
Total assets 70 591 54 057 44 744
EQUITY
Share capital and premium 44 44 44
Reserves 11 736 9 160 7 808
Total equity attributable to equity holders
of the company 11 780 9 204 7 852
Non-controlling interests 9 479 7 712 6 426
Total equity 21 259 16 916 14 278
LIABILITIES
Interest-bearing borrowings 46 006 32 373 27 298
Amounts attributable to third parties
in respect of long-term receivables 71 85 119
Derivative financial instruments 40 20 43
Deferred revenue 40 33 34
Deferred tax liabilities 271 235 284
Total non-current liabilities 46 428 32 746 27 778
Trade and other payables 1 170 1 105 594
Current tax liabilities 144 92 76
Current portion of interest-bearing
borrowings 1 571 3 164 1 978
Current portion of amounts attributable
to third parties in respect of long-term
receivables 14 30 36
Current portion of deferred revenue 5 4 4
Total current liabilities 2 904 4 395 2 688
Total liabilities 49 332 37 141 30 466
Total equity and liabilities 70 591 54 057 44 744
Capital expenditure incurred during
the year 6 095 8 653 6 928
Capital expenditure committed and
authorised, but not yet incurred 166 1 018 643
Directors' valuation of unlisted investments 45 66 66
Ratio to total equity:
Total liabilities (%) 232,1 219,6 213,4
Interest-bearing debt (%) 223,8 210,0 205,0
Consolidated statement of comprehensive income
for the year ended 31 December 2015
Reviewed Restated
R million 2015 2014
Revenue (note 2) 9 277 8 055
Trading profit before items listed below 2 784 3 063
Realised and unrealised exchange gains on translation
of long-term receivables, excluding fair value adjustment 278 98
Fair value adjustment on net long-term receivables (77) (36)
Impairment of property, plant and equipment (note 6) (1 912) (18)
Compensation receivable from third party in respect of
impairment of property, plant and equipment 98 –
Operating profit before net finance expenses 1 171 3 107
Net finance expenses (note 3) (1 176) (1 062)
Finance expenses Interest expense (1 025) (990)
Realised and unrealised losses on
derivative financial instruments (174) (85)
Finance income Interest income 23 13
Share of profit of equity accounted investees (net of tax) 9 4
Profit before tax 4 2 049
Income tax expense 61 22
(Loss)/Profit for the year (57) 2 027
Other comprehensive income
Items that are or may be reclassified subsequently
to profit or loss
Foreign currency translation differences 5 695 1 487
Impairment of available-for-sale financial asset (21) –
Income tax expense on other comprehensive income 4 –
Total comprehensive income for the year 5 621 3 514
Total comprehensive income for the year attributable to:
Equity holders of the company 2 832 1 747
Non-controlling interests 2 789 1 767
5 621 3 514
(Loss)/Profit for the year attributable to:
Equity holders of the company (146) 962
Non-controlling interests 89 1 065
(57) 2 027
Basic (loss)/earnings per share (cents) (82,7) 543,2
Diluted (loss)/earnings per share (cents) (82,7) 543,2
Number of shares in issue (million) 177,1 177,1
Weighted average number of shares in issue (million) 177,1 177,1
Year-end rate of exchange: SA rand to US dollar 15,53 11,54
Average rate of exchange for the year: SA rand to US dollar 12,75 10,78
Consolidated statement of cash flows
for the year ended 31 December 2015
Reviewed Restated
R million 2015 2014
Cash generated from operations (before items listed below) 7 561 6 534
Increase in container leasing equipment (6 277) (8 283)
Finance income received 23 13
Finance lease income received 184 187
Finance expenses paid (1 037) (873)
Decrease in finance leases 823 563
Receipts from long-term receivables 257 272
Payments to third parties in respect of long-term receivables (39) (40)
Dividends paid to equity holders of the company (487) (407)
Dividends paid to non-controlling interests (665) (606)
Income tax paid (57) (60)
Net cash inflow/(outflow) from operating activities 286 (2 700)
Cash inflow from investing activities 321 17
Cash (outflow)/inflow from financing activities (556) 2 826
Net increase in cash and cash equivalents before exchange
rate fluctuations 51 143
Cash and cash equivalents at the beginning of the year 3 160 2 744
Effects of exchange rate fluctuations on cash
and cash equivalents 1 030 273
Cash and cash equivalents at the end of the year 4 241 3 160
Consolidated statement of changes in equity
for the year ended 31 December 2015
Equity holders of the company
Gain/(Loss)
Foreign on changes
currency Share-based in ownership Non-
Share Share Fair value translation payment interests in Retained controlling Total
R million capital premium reserve reserve reserve subsidiaries income Total interests equity
Balance at 1 January 2014 1 43 52 1 983 281 383 5 169 7 912 6 647 14 559
Restatement (note 9) – – – (3) – – (57) (60) (221) (281)
Restated balance at 1 January 2014 1 43 52 1 980 281 383 5 112 7 852 6 426 14 278
Total comprehensive income for the year (restated)
Profit for the year – – – – – – 962 962 1 065 2 027
Other comprehensive income for the year
Foreign currency translation differences – – – 785 – – – 785 702 1 487
Total comprehensive income for the year (restated) – – – 785 – – 962 1 747 1 767 3 514
Transactions with owners, recorded directly in equity
Contributions by/(distributions to) owners
Share-based payments – – – – 53 – – 53 57 110
Share options exercised – – – – – – – – 27 27
Dividends paid to equity holders (restated) – – – – – – (407) (407) (606) (1 013)
Total contributions by/(distributions to) owners (restated) – – – – 53 – (407) (354) (522) (876)
Changes in ownership interests in subsidiaries – – – – – (41) – (41) 41 –
Total transactions with owners (restated) – – – – 53 (41) (407) (395) (481) (876)
Restated balance at 31 December 2014 1 43 52 2 765 334 342 5 667 9 204 7 712 16 916
Total comprehensive income for the year
(Loss)/Profit for the year – – – – – – (146) (146) 89 (57)
Other comprehensive income for the year
Foreign currency translation differences – – – 2 995 – – – 2 995 2 700 5 695
Impairment of available for sale financial asset – – (17) – – – – (17) – (17)
Total comprehensive income for the year – – (17) 2 995 – – (146) 2 832 2 789 5 621
Transactions with owners, recorded directly in equity
Contributions by/(distributions to) owners
Share-based payments – – – – 40 – – 40 43 83
Share options exercised – – – – – – – – 4 4
Shares bought back by subsidiary – – – – – – – – (131) (131)
Dividends paid to equity holders – – – – – – (487) (487) (665) (1 152)
Total contributions by/(distributions to) owners – – – – 40 – (487) (447) (749) (1 196)
Changes in ownership interests
Acquisition of non-controlling interest without a
change in control – – – – – – 204 204 (286) (82)
Other changes in ownership interests in subsidiaries – – – – – (13) – (13) 13 –
Total changes in ownership interests – – – – – (13) 204 191 (273) (82)
Total transactions with owners – – – – 40 (13) (283) (256) (1 022) (1 278)
Balance at 31 December 2015 1 43 35 5 760 374 329 5 238 11 780 9 479 21 259
Notes to the condensed consolidated financial
statements for the year ended 31 December 2015
1. These condensed consolidated financial statements have been prepared in
accordance with the requirements of the JSE Limited's Listings Requirements for
provisional results and the requirements of the Companies Act of South Africa. The
Listings Requirements require provisional reports to be prepared in accordance with
the framework concepts and the measurement and recognition requirements of
International Financial Reporting Standards ("IFRS") and SAICA Financial Reporting
Guides as issued by the Accounting Practices Committee and financial
pronouncements as issued by Financial Reporting Standards Council and to also, as
a minimum, contain the information required by IAS 34 Interim Financial Reporting.
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 2014.
Reviewed Restated
R million 2015 2014
2. Revenue
Goods sold 1 930 1 976
Leasing income 6 905 5 819
Management fees 156 149
Finance income 8 13
8 999 7 957
Realised and unrealised exchange differences 278 98
9 277 8 055
3. Net finance expenses
Finance expenses 1 199 1 075
Interest expense – Textainer 922 890
Interest expense – TAC 103 100
Realised and unrealised losses on derivative
financial instruments 174 85
Finance income
Interest income – cash and cash equivalents (23) (13)
1 176 1 062
4. Headline earnings
(Loss)/Profit attributable to equity holders
of the company (146) 962
Impairment of property, plant and equipment 1 912 18
Compensation receivable from third party in
respect of impairment of property, plant and
equipment (98) –
Total tax effects of adjustments (24) (1)
Total non-controlling interests' share
of adjustments (736) (9)
Headline earnings 908 970
Weighted average number of shares in
issue (million) 177,1 177,1
Headline earnings per share (cents) 512.6 547,9
Diluted headline earnings per share (cents) 512,6 547,9
Adjusted headline earnings
Headline earnings (as above) 908 970
Net unrealised foreign exchange gains
on translation of long-term receivables (171) (67)
Total tax effects of adjustments 48 19
Adjusted headline earnings 785 922
Undiluted adjusted headline earnings
per share (cents) 443,3 520,7
Diluted adjusted headline earnings
per share (cents) 443,3 520,7
5. Segmental reporting
Revenue
Reportable segments
Containers – finance (including exchange
differences) 288 113
Containers – owning, leasing, management
and trading 8 989 7 942
9 277 8 055
Profit from operations
Reportable segments
Containers – finance 200 66
Containers – owning, leasing, management
and trading 1 004 3 083
1 204 3 149
Unallocated (33) (42)
1 171 3 107
Profit before tax
Reportable segments
Containers – finance 200 66
Containers – owning, leasing, management
and trading (185) 2 013
15 2 079
Unallocated (11) (30)
4 2 049
Assets
Capital expenditure incurred by the container
owning, leasing, management and trading
segment 6 095 8 653
6. Impairment of property, plant and equipment
Container leasing equipment
Impairment recognised at 31 December 1 770 –
Impairment recognised in respect of containers
on operating leases not recovered from
defaulting customers 142 18
1 912 18
Due to a decline in market conditions in 2015, an impairment has been recognised
at 31 December 2015, reducing the carrying value of container leasing equipment
to its recoverable amount. For the purposes of calculating the impairment loss,
Cash Generating Units ("CGU's") have been defined as containers grouped by
container type. The recoverable amount of the CGU's is its value in use, which has
been calculated based on estimated future cash flows over the remaining useful
life of the container leasing equipment, discounted at rates ranging between 4,8%
and 5,7%. Contractually stipulated per diem rates have been used in estimating
future cash flows, with per diem rates on renewal based on current market rates.
7. Change in estimate
Residual values of the container fleets have been reassessed due to a significant
decline in container prices during 2015. In accordance with IAS16 Property, Plant
and Equipment residual values are the estimated amounts that the group would
currently obtain at the financial reporting date from the disposal of containers,
after deducting the estimated costs of disposal, if the containers were already
of the age and in the condition expected of at the end of their useful lives. The
reassessment of residual values is accounted for prospectively as a change in
accounting estimate from the date of change of estimate, in accordance with IAS
8 Accounting Policies, Changes in Accounting Estimates and Errors. The residual
values for certain container types were revised at 30 June 2015 for the purposes
of reporting the results of Textainer and TAC under US GAAP. These changes to
residual values were also made at 30 June 2015 for the purposes of reporting the
results of Trencor under IFRS and has resulted in additional depreciation of R150
million in 2015. Due to a further decline in container prices, residual values were
revised again in accordance with IFRS at 31 December 2015 and will result in
additional estimated depreciation in 2016 of R1 448 million over what it would have
been had the residual values not been revised. This estimate presumes no material
changes to the composition of the container fleets and no significant changes to
market factors prevailing at 31 December 2015. Changes in these factors will
influence the depreciation actually charged in future periods.
8. Financial instruments
The carrying amounts and fair values of financial assets and financial liabilities are as follows:
Reviewed Restated
2015 2014
Carrying Carrying
R million amount Fair value amount Fair value
Assets
Equity securities – available-for-sale:
Other investments 45 45 66 66
Designated at fair value through profit or loss:
Long-term receivables 640 640 679 679
Held for trading:
Derivative financial instruments 10 10 14 14
Loans and receivables:
Restricted cash 450 450 646 646
Trade and other receivables 1 793 1 793 1 237 1 237
Cash and cash equivalents 4 241 4 241 3 160 3 160
Other:
Net investment in finance leases 2 223 2 203 2 314 2 291
9 402 9 382 8 116 8 093
Liabilities
Liabilities at amortised cost:
Interest-bearing borrowings (excluding debt 47 935 47 711 35 816 35 789
issuance costs)
Trade and other payables 1 170 1 170 1 105 1 105
Designated at fair value through profit or loss:
Amounts attributable to third parties in respect
of long-term receivables 85 85 115 115
Held for trading:
Derivative financial instruments 40 40 20 20
49 230 49 006 37 056 37 029
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.
R million Level 1 Level 2 Level 3 Total
2015
assets
Other investments – 45 – 45
Long-term receivables – – 640 640
Derivative financial instruments – 10 – 10
– 55 640 695
liabilities
Amounts attributable to third parties
in respect of long-term receivables – – 85 85
Derivative financial instruments – 40 – 40
– 40 85 125
2014
Assets
Other investments – 66 – 66
Long-term receivables – – 679 679
Derivative financial instruments – 14 – 14
– 80 679 759
Liabilities
Amounts attributable to third parties
in respect of long-term receivables – – 115 115
Derivative financial instruments – 20 – 20
– 20 115 135
Details of the determination of Level 3 fair value measurements during the year ended
31 December 2015 are set out below:
Long-term receivables and attributable 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% per annum (2014: 8,5%), and amounts
attributable to third parties in respect of long-term receivables is 10% per annum
(2014: 10%). 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=R15,53 (2014: US$1=R11,54).
The following table shows a reconciliation from the opening balances 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
R million receivables receivables Total
2014
Balance at the beginning of the year 867 (155) 712
Total gains in profit or loss 84 – 84
Settlements (272) 40 (232)
Balance at the end of the year 679 (115) 564
2015
Total gains/(losses) in profit or loss 218 (9) 209
Settlements (257) 39 (218)
Balance at the end of the year 640 (85) 555
Total gains/(losses) included in profit
or loss for the year in the above table
are presented in the statement of
comprehensive income as follows:
2015
Total gains/(losses) included in profit or
loss for the year
Operating profit 218 (11) 207
Associate tax credit – 2 2
Total unrealised gains for the year
included in profit or loss for assets and
liabilities held at the end of the year
Operating profit 150 (2) 148
2014
Total gains/(losses) included in profit or
loss for the year
Operating profit 84 (3) 81
Associate tax credit – 3 3
Total unrealised gains for the year
included in profit or loss for assets and
liabilities held at the end of the year
Operating profit 32 4 36
Although the estimates of fair value are considered to be 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:
Reviewed Audited
2015 2014
Increase/(decrease) in Favourable/(unfavourable)
R million unobservable inputs impact on profit or loss
Interest rates – discount rate
Long-term receivables 100 basis points (21) (19)
(100) basis points 21 19
Amounts attributable to third parties
in respect of long-term receivables 100 basis points 2 3
(100) basis points (2) (3)
Exchange rates (SA rand = US$1) 1% 6 4
Long-term receivables (1%) (6) (4)
9. Restatement
During 2015, it came to light that in converting the financial statements of TAC from US
GAAP to IFRS and in calculating the fair values of the assets and liabilities of TAC on step up
to control at 1 July 2013, a constructive obligation existing in TAC had not been taken into
account. As a result of this, at 1 July 2013, interest-bearing borrowings were understated by
R371 million, non-controlling interests were overstated by R207 million and this gave rise to
goodwill of R110 million and the bargain purchase gain of R54 million recognised at the time
has been reversed. The effect on profit attributable to equity holders in 2014 was immaterial.
Amount
previously Restated
R million reported Change amount
Consolidated statement of financial position
1 January 2014
Intangible assets and goodwill 305 116 421
Others 44 323 – 44 323
Total assets 44 628 116 44 744
Interest-bearing liabilities (26 936) (362) (27 298)
Current portion of interest-bearing borrowings (1 943) (35) (1 978)
Others (1 190) – (1 190)
Total liabilities (30 069) (397) (30 466)
Retained earnings (5 169) 57 (5 112)
Foreign currency translation reserve (1 983) 3 (1 980)
Non-controlling interests (6 647) 221 (6 426)
Others (760) – (760)
Total equity (14 559) 281 (14 278)
Total equity and liabilities (44 628) (116) (44 744)
31 December 2014
Intangible assets and goodwill 288 128 416
Others 53 641 – 53 641
Total assets 53 929 128 54 057
Interest-bearing liabilities (31 976) (397) (32 373)
Current portion of interest-bearing borrowings (3 128) (36) (3 164)
Others (1 604) – (1 604)
Total liabilities (36 708) (433) (37 141)
Retained earnings (5 722) 55 (5 667)
Foreign currency translation reserve (2 774) 9 (2 765)
Non-controlling interests (7 953) 241 (7 712)
Others (772) – (772)
Total equity (17 221) 305 (16 916)
Total equity and liabilities (53 929) (128) (54 057)
Amount
previously Restated
R million reported Change amount
Consolidated statement of comprehensive income
for the year ended 31 December 2014
Interest expense (970) (20) (990)
Others 3 017 – 3 017
Profit for the year 2 047 (20) 2 027
Other comprehensive income
Foreign currency translation differences 1 516 (29) 1 487
Total comprehensive income for the year 3 563 (49) 3 514
Total comprehensive income for the year
attributable to:
Equity holders of the company 1 751 (4) 1 747
Non-controlling interests 1 812 (45) 1 767
3 563 (49) 3 514
Profit for the year attributable to:
Equity holders of the company 960 2 962
Non-controlling interests 1 087 (22) 1 065
2 047 (20) 2 027
Basic earnings per share (cents) 542,0 1,2 543,2
Headline earnings per share (cents) 546,6 1,3 547,9
Adjusted earnings per share (cents) 519,4 1,3 520,7
Amount
previously Restated
R million reported Change amount
Consolidated statement of cash flows
for the year ended 31 December 2014
Cash generated from operations 6 534 – 6 534
Dividends paid to non-controlling interests (631) 25 (606)
Others (8 628) – (8 628)
Net cash outflow from operating activities (2 725) 25 (2 700)
Cash inflow from investing activities 17 – 17
Cash inflow from financing activities 2 851 (25) 2 826
Net increase in cash and cash equivalents
before exchange rate fluctuations 143 – 143
Cash and cash equivalents at the beginning of
the year 2 744 – 2 744
Effects of exchange rate fluctuations on cash
and cash equivalents 273 – 273
Cash and cash equivalents at the end of the
year 3 160 – 3 160
In order to provide a better appreciation of the results of the group's 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 group's consolidated 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 have been calculated by translating the assets and liabilities
at the closing rate, income statement items at the average rate with the difference allocated to
the foreign currency translation reserve included in equity. These amounts below are unaudited.
Unaudited Trencor condensed consolidated income
statement in US dollars
for the year ended 31 December 2015
Unaudited
Unaudited Restated*
US$ million 2015 2014
Revenue 707,5 738,0
Trading profit before items listed below 217,7 284,0
Realised and unrealised exchange gains/(losses)
on translation of long-term receivables 1,5 (0,2)
Fair value adjustment on net long-term receivables 2,4 0,5
Impairment of property, plant and equipment (125,2) (1,6)
Compensation receivable from third party in respect of
impairment of property, plant and equipment 7,7 –
Operating profit before net finance expenses 104,1 282,7
Net finance expenses (92,1) (98,4)
Finance expense Interest expense (80,4) (91,8)
Realised and unrealised losses on
derivative financial instruments (13,6) (7,8)
Finance income Interest income 1,9 1,2
Share of profit of equity accounted investees (net of tax) 0,7 0,4
Profit before tax 12,7 184,7
Income tax expense/(credit) 1,9 0,5
Profit for the year 10,8 184,2
Attributable to:
Equity holders of the company (6,3) 85,4
Non-controlling interests 17,1 98,8
10,8 184.2
Number of shares in issue (million) 177,1 177,1
Weighted average number of shares in issue (million) 177,1 177,1
Basic (loss)/earnings per share (US cents) (3,6) 48,2
Diluted (loss)/earnings per share (US cents) (3,6) 48,2
Headline earnings per share (US cents) 35,0 48,6
Diluted headline earnings per share (US cents) 35,0 48,6
Adjusted headline earnings per share (US cents) 34,2 48,3
Diluted adjusted headline earnings per share (US cents) 34,2 48,3
Year-end rate of exchange: SA rand to US dollar 15,53 11,54
Average rate of exchange for the year: SA rand to US dollar 12,75 10,78
Trading profit from operations comprises:
Textainer and TAC 221,0 287,5
Other (3,3) (3,5)
217,7 284,0
Unaudited Trencor condensed consolidated
statement of financial position in US dollars
at 31 December 2015
Unaudited Unaudited
Unaudited Restated* Restated*
31 December 31 December 1 January
US$ million 2015 2014 2014
ASSETS
Property, plant and equipment 3 840,1 3 891,8 3 489,9
Long-term receivables 36,0 43,2 60,9
Other non-current assets 165,3 253,1 239,6
Total non-current assets 4041,4 4 188,1 3 790,4
Total current assets 504,1 496,3 487,2
Inventories 49,3 32,5 45,1
Trade and other receivables 124,3 117,8 117,5
Current portion of long-term receivables 8,6 15,7 21,6
Current portion of net investment in finance leases 48,8 56,5 40,4
Current tax asset – – 0,3
Cash and cash equivalents 273,1 273,8 262,3
Total assets 4 545,5 4 684,4 4 277,6
Equity and liabilities
Equity attributable to equity holders of the company 758,6 797,4 750,9
Non-controlling interests 610,4 668,0 614,7
Total equity 1 369,0 1 465,4 1 365,6
LIABILITIES
Interest-bearing borrowings 2 962,4 2 805,7 2 609,0
Amounts attributable to third parties in respect
of long-term receivables 4,5 7,4 11,4
Derivative financial instruments 2,6 1,7 4,2
Deferred revenue 2,5 2,9 3,3
Deferred tax liabilities 17,5 20,4 27,1
Total non-current liabilities 2 989,5 2 838,1 2 655,0
Total current liabilities 187,0 380,9 257,0
Trade and other payables 75,3 95,8 57,0
Current tax liability 9,3 8,0 7,1
Current portion of amounts attributable to third
parties in respect of long-term receivables 0,9 2,6 3,4
Current portion of interest-bearing borrowings 101,2 274,2 189,2
Current portion of deferred revenue 0,3 0,3 0,3
Total liabilities 3 176,5 3 219,0 2 912,0
Total equity and liabilities 4 545,5 4 684,4 4 277,6
Ratio to total equity:
Total liabilities (%) 232,1 219,6 213,4
Interest-bearing debt (%) 223,8 210,1 205,0
* Refer note 9 for details of the restatement. The restatements have been reflected in US dollars in line with
the basis of preparation above.
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