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TRENCOR LIMITED - Reviewed Provisional Results and declaration of cash dividend for the year ended 31 December 2015

Release Date: 25/04/2016 07:05
Code(s): TRE     PDF:  
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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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