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Summarised Unaudited Interim Financial Statements for the Period Ended 31 August 2016 and Dividend Announcement
Cargo Carriers Limited
Registration number: 1959/003254/06
Incorporated in the Republic of South Africa
JSE share code: CRG
ISIN: ZAE000001764
(“Cargo Carriers” or “the Group”)
Summarised unaudited interim financial statements for the period ended 31 August 2016 and dividend announcement
Condensed consolidated statement of comprehensive income
Re-presented
Unaudited Unaudited Audited
31 August 31 August 29 February
2016 2015 2016
R000 R000 R000
Continuing operations
Revenue
- transport services 288 496 307 048 588 079
- other income 1 764 1 638 4 019
290 260 308 686 592 098
Costs and expenses
- operating and administration costs 177 890 178 943 340 305
- employment costs 92 431 89 932 179 994
- depreciation of property, plant and equipment 15 515 15 658 31 026
285 836 284 533 551 325
Profit from operating activities 4 423 24 153 40 773
(Loss)/profit on disposal of property, plant and equipment (2 196) 5 398 1 810
Impairment of assets (2 052) (1 804) (3 438)
Revaluation of investment properties - - 1 485
Profits from associates and joint ventures 2 490 2 568 3 742
Profit before finance income and finance cost 2 665 30 316 44 372
Finance income 6 226 3 563 7 578
Finance expense (5 102) (4 127) (7 504)
Profit before tax from continuing operations 3 789 29 752 44 446
Taxation (4 547) (3 067) (10 052)
(Loss)/profit for the period from continuing operations (759) 26 685 34 394
Discontinued operations
Profit on sale of discontinued operation 25 201 - -
Loss after tax from discontinued operations - (8 674) (26 618)
Profit for the period 24 442 18 011 7 776
Other comprehensive income
Items not to be reclassified to profit or loss in subsequent
periods
Revaluation of owner occupied properties (continued) - - 2 512
Income tax effect (continued) - - (362)
Other comprehensive loss to be reclassified to profit or loss
in subsequent periods
Exchange differences on translation of foreign operations (790) (2 173) (4 809)
Exchange differences on translation of foreign operations from
continued operations (790) (1 064) 4 160
Exchange differences on translation of foreign operations from
discontinued operations - (1 109) (8 969)
Other comprehensive loss for the period, net of tax (790) (2 173) (2 659)
Total comprehensive income for the period, net of tax 23 653 15 838 5 117
(Loss)/profit for the period from continuing activities
attributable to:
Equity holders of the parent (755) 26 008 33 991
Non-controlling interest (3) 677 402
(759) 26 685 34 394
Profit for the period from continuing and discontinued operations
attributable to:
Equity holders of the parent 24 442 21 237 19 352
Non-controlling interest (3) (3 226) (11 576)
24 439 18 011 7 776
Total comprehensive (loss)/income, net of tax attributable to:
Equity holders of the parent (1 549) 19 064 20 729
Non-controlling interest from continuing operations (3) (3 226) (15 612)
(1 552) 15 838 5 117
Financial information
Re-presented
Unaudited Unaudited Audited
31 August 31 August 29 February
2016 2015 2016
R000 R000 R000
Dividends per share (cents)
- paid during the period 20 20 8
- declared after the period 8 8 20
Total dividends 28 28 28
Basic and diluted earnings per share of total operations (cents) 125.9 109.4 99.8
Adjustments (cents):
Loss/(profit) on disposal of property, plant and equipment 8.1 (25.7) (10.5)
Impairment of assets 7.6 9.3 19.5
Revaluation of investment properties - - (6.2)
Profit on the disposal of subsidiary (111.7)
Basic and diluted headline earnings per share (cents) 30.0 93.0 102.5
Group borrowings
Borrowing capacity of the group at 50% of total equity 238 777 235 793 229 057
Net (cash)/interest-bearing loans and borrowings (61 666) 52 745 (120 258)
Borrowing capacity of the group utilised at end of the period - 22 -
Capital commitments 16 951 3 316 -
Net asset value per share (cents) 2 455 2 356 2 351
Closing ordinary shares in issue 21 052 20 000 20 000
Treasury shares held in trust 594 594 594
Employee ownership plan shares in issue 1 052 - -
Weighted average ordinary shares in issue 19 406 19 406 19 406
Segmental analysis
Re-presented
Unaudited Unaudited Audited
31 August 31 August 29 February
2016 2015 2016
R000 R000 R000
Revenue
Fuel and Powders 116 922 131 220 219 497
Chemical and Steel 154 384 127 712 281 678
Sugar 10 813 35 216 64 478
Supply chain services 8 141 14 538 26 445
Continuing operations 290 260 308 686 592 098
Discontinued operations - 114 475 213 579
290 260 423 161 805 677
Profit before finance income and finance cost
Fuel and Powders 480 8 140 10 061
Chemical and Steel 13 197 12 246 30 817
Sugar (7 465) 6 350 7 093
Supply chain services (3 547) 3 580 (3 599)
Continuing operations 2 665 30 316 44 372
Discontinued operations 25 201 (1 938) (23 128)
27 866 28 377 21 244
Condensed consolidated statement of financial position
Unaudited Unaudited Audited
31 August 31 August 29 February
2016 2015 2016
R000 R000 R000
ASSETS
Non-current assets 431 939 514 143 404 424
Property, plant and equipment 362 747 434 094 337 192
Investment properties 25 989 25 735 26 520
Investment in associates 31 771 29 220 29 997
Investment in joint ventures 11 370 8 796 10 654
Deferred taxation 62 16 298 62
Current assets 313 603 331 338 283 157
Inventories 8 959 16 946 9 846
Trade and other receivables 136 905 194 560 91 468
Cash and short-term deposits 164 624 119 832 180 349
Taxation 3 114 - 1 494
Disposal group and non-current assets held for sale 2 543 18 470 136 730
Total assets 748 085 863 951 824 311
EQUITY AND LIABILITIES
Share capital 194 194 194
Non-distributable reserves 54 524 54 374 58 067
Distributable reserves 421 641 402 688 397 911
Equity attributable to equity holders of the parent 476 359 457 256 456 172
Non-controlling interest 1 193 14 329 1 943
Total equity 477 553 471 585 458 114
Non-current liabilities 143 864 187 479 100 635
Deferred taxation 70 016 89 369 71 766
Contingent consideration - 3 583 -
Employee benefit obligations 2 111 4 717 2 101
Interest-bearing loans and borrowings 71 737 89 810 26 768
Current liabilities 126 668 204 887 133 567
Trade and other payables 89 136 103 092 81 116
Employee benefit obligations 6 311 8 928 9 614
Interest-bearing loans and borrowings 31 221 82 767 33 324
Taxation - 10 100 9 513
Disposal group liabilities - - 131 995
Total equity and liabilities 748 085 863 951 824 311
Condensed consolidated statement of changes in equity
Equity
Foreign attributable
Asset currency Distri- to equity Non-
Share revaluation translation butable holders controlling Total
R000 capital reserve* reserve* reserve of the parent interest equity
GROUP 194 57 297 (750) 385 332 442 073 17 555 459 628
Balance at 28 February 2015
Total comprehensive income - - (2 173) 21 237 19 064 (3 226) 15 838
- Profit for the period - - - 21 237 21 237 (3 226) 18 011
- Other comprehensive loss for the period - - (2 173) - (2 173) - (2 173)
Dividends paid - - - (3 881) (3 881) - (3 881)
Balance at 31 August 2015 194 57 297 (2 923) 402 688 457 256 14 329 471 585
Total comprehensive income - 2 150 1 400 (1 885) 1 665 (12 386) (10 721)
- Profit/(loss) for the period from
continuing operations - - - 7 984 7 984 (275) 7 709
- Loss for the period from discontinued
operations - - - (9 869) (9 869) (8 075) (17 944)
- Other comprehensive income from
continuing operations - 2 150 5 225 - 7 374 - 7 374
- Other comprehensive loss from
discontinued operations - - (3 824) - (3 824) (4 036) (7 861)
Rate change deferred tax - (1 197) - - (1 197) - (1 197)
Post-tax transfer of revaluation of
investment properties - 1 341 - (1 341) - - -
Dividends paid - - - (1 551) (1 551) - (1 551)
Balance at 29 February 2016 194 59 590 (1 523) 397 911 456 173 1 942 458 114
Total comprehensive income - - (790) 24 442 23 653 (3) 23 649
- Loss for the period from continuing
operations - - - (759) (759) (3) (762)
- Profit for the period from discontinued
operations - - - 25 201 25 201 - 25 201
- Other comprehensive loss - - (790) - (790) - (790)
Dividends paid - - - (4 211) (4 211) - (4 211)
Disposal of subsidiary - (10 367) 7 614 3 498 745 (745) -
Balance at 31 August 2016 194 49 223 5 301 421 641 476 360 1 193 477 553
Condensed consolidated statement of cash flows
Unaudited Unaudited Audited
31 August 31 August 29 February
2016 2015 2016
R000 R000 R000
Cash receipts from customers 332 778 399 004 828 923
Cash paid to suppliers and employees (355 876) (366 916) (679 501)
Cash generated by operations (23 098) 32 088 149 423
Finance income 6 226 3 568 12 523
Finance costs paid (5 102) (7 431) (19 872)
Taxation received/(paid) (15 681) (6 868) (8 983)
Dividend paid (4 211) (3 881) (5 432)
Net cash (outflow)/inflow from operating activities (41 865) 17 477 127 659
Net cash outflow from investing activities (15 537) (18 561) (15 542)
- Proceeds on disposal of investment in subsidiary 26 312 - -
- Increase in loans to joint venture and associate (219) (800) (2 259)
- Replacement of tangible assets (51 462) (39 204) (44 752)
- Proceeds on sale of tangible assets 9 832 21 443 31 469
Net cash inflow/(outflow) from financing activities 42 866 (10 819) (66 173)
Secured loans repaid (27 126) (45 493) (104 317)
Secured loans raised 69 992 34 674 38 144
Net (decrease)/increase in cash (14 536) (11 904) 45 944
Net cash at beginning of the period 180 349 134 412 134 412
Less: Cash and cash equivalents from disposal group - - (1 991)
Net foreign exchange difference (1 190) (2 676) 1 984
Net cash at end of the period 164 624 119 832 180 349
Commentary
The group’s performance has been affected by the challenging local and global economic environment. The stagnant local
economy and low infrastructure spend have resulted in decreased volumes and increased pressure on rates in all of the
sectors in which the company operates. Operations in the agricultural sector have been hampered by drought conditions as
well as indigenisation pressures in other southern African countries. As a result revenue from continuing operations has
decreased by 6% compared to the same period last year.
In reacting to market conditions, we have strategically partnered with our key clients on implementing efficiency measures
to achieve rate reductions to alleviate industry cost pressures. The key business risk emanating from this approach is the
protection of volumes to realise the planned efficiencies, which has been difficult given the low level of infrastructure
investment and mining activity within South Africa and the rest of Africa.
In order to limit the impact of reduced revenue, operating expenditure has been carefully managed and limited to an
increase of 0.5% over the prior period, despite increased labour input costs. In addition, the costs of exit from
underperforming contracts and African territories amounted to R4.2 million, and once-off costs of retrenchment and foreign
exchange losses were R1.1 million and R1.5 million respectively.
Despite the difficult economic environment, associates and joint ventures have performed satisfactorily, contributing
R2.5 million to the operating profit.
The strategic sale of our Zambian subsidiary has yielded a R25.2 million contribution to profit, and has reduced group
debt and foreign currency exposure.
Although basic and diluted earnings per share for the six-month period is 125.9 cents (2015: 109.4 cents), a large
proportion results from the profit on sale of our Zambian subsidiary (111.7 cents). Rate and volume pressure on continuing
operations is an area of great concern. The effect of excluding the extraordinary items, results in basic and diluted
headline earnings per share of 30.0 cents (2015: 93.0 cents), which shows the negative effects during this interim period
(63.0 cents).
Prospects
Due to earnings on new contracts materialising and cost efficiency actions taking effect, an improved performance in the
second half of the year is expected. At the same time new opportunities for both organic and acquisitive growth are being
targeted and evaluated.
Preparation of results and accounting policies
The interim condensed consolidated financial statements for the period ended 31 August 2016 have been prepared in
accordance with the recognition and measurement criteria of International Financial Reporting Standards (IFRS),
IAS 34: Interim Financial Reporting, the Listings Requirements of the Johannesburg Stock Exchange and the requirements
of the Companies Act 71 of 2008.
Re-presentation of 2015 results
The 2015 results have been re-presented in line with IFRS 5.34; to reflect the Zambian subsidiary as a discontinued
operation.
Re-presentation of operating segments
The group’s segments are re-presented in a manner in which the chief operating decision-maker manages the business,
considering the impact of several business changes during the period. The industrial segment has been further split
into Fuel and Powders and Chemicals and Steel. Furthermore, the exit from the aviation industry as well as the property
segment not constituting more than 10% of revenue, profit or assets of the combined operating segments, has resulted in
these segments no longer being separately disclosed.
The accounting policies are consistent with those applied in the prior year financial statements and the carrying
amounts of financial instruments approximates their fair value. These results have not been audited nor have they been
reviewed by the group’s auditors, Ernst & Young Inc. The interim condensed consolidated financial statements were compiled
under the supervision of the Chief Financial Officer, Mr J Kriel CA(SA).
Events after the reporting period
There were no significant events after the reporting period.
Dividend declaration
Despite the challenging trading conditions experienced, the board has decided to declare a gross interim cash dividend
(number 51) of 8.0 cents per share (2015: 8.0 cents) for the period ended 31 August 2016. The dividend has been
declared out of income reserves.
The dividend will be subject to a dividend withholding tax rate of 15% or 1.2 cents per ordinary share. Shareholders,
unless exempt or qualifying for a reduced withholding tax rate, will receive a net dividend of 6.8 cents per share
(2015: 6.8 cents).
Cargo Carriers tax reference number is 9900156713 and the number of ordinary shares in issue at the declaration date
is 21 052 632, of which 1 646 342 are treasury shares.
The salient dates for the dividend are as follows:
Last day to trade “cum” the cash dividend (LDT) Tuesday, 15 November 2016
Shares commence trading “ex” the dividend Wednesday, 16 November 2016
Record date (date shareholders recorded in share register) Friday, 18 November 2016
Payment date Monday, 21 November 2016
Shareholders may not dematerialise or rematerialise their share certificates between Wednesday, 16 November 2016 and
Friday, 18 November 2016, both dates inclusive.
Corporate information
Registered office
11A Grace Road, Mountainview, Observatory, Johannesburg, 2198
Transfer secretaries
Computershare Investor Services Proprietary Limited, 70 Marshall Street, Johannesburg, 2001
(PO Box 61051, Marshalltown, 2107)
By order of the board
Arbor Capital Company Secretarial Proprietary Limited
Company secretary
1 November 2016
Directors
SP Mzimela* (Chairperson), AE Franklin*, BB Fraser#, MJ Vuso*, V Raseroka*,
GD Bolton (Executive), MJ Bolton (CEO), J Kriel (CFO)
#non-executive director *independent non-executive director
Sponsor
Arbor Capital Sponsors Proprietary Limited
Website
www.cargocarriers.co.za
Date: 01/11/2016 05:05:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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