DEVELOPMENT BANK OF SOUTHERN AFRICA - Interim Results for Half Year ended 30 September 2016

Release Date: 25/11/2016 08:00
 
Wrap Text
Interim Results for Half Year ended 30 September 2016

The Development Bank of Southern Africa
(Registration number 1600157FN)
JSE Company code: BIDBS


Reviewed interim results for the half year ended 30 September 2016


Preparation of this report


The Chief Financial Officer, Kameshni Naidoo CA (SA) was responsible for the
preparation of the interim results.


Basis of preparation

Accounting policies adopted and methods of computation are consistent with those
applied to the annual financial statements at 31 March 2016. The condensed
interim financial statements are prepared on the historical cost basis except
that the following assets and liabilities are stated at their fair value:
derivative financial instruments, financial instruments at fair value through
profit and loss, available-for-sale financial assets, land and buildings, post-
retirement medical benefit and funeral benefit obligations measured at actuarial
values. The interim financial statements are in conformity with IAS 34, Interim
Financial Reporting. The preparation of interim financial statement requires
management to make judgments, estimates and assumptions that affect the
application of accounting policies and reported amounts of assets and
liabilities, income and expenses. Actual results may differ from these
estimates.


Key financial performance

- Total assets declined by 1.1% from 31 March 2016
- Development bonds and loan book net growth of 0.4% from 31 March 2016
- Profit for the interim period R1.04bn
- Included in profit is foreign exchange loss amounting to R474m
- Cash flow from operations R1.8bn

Six months overview

The DBSA generated a profit of R1.04bn, a 27% decrease from the profit reported
as at 30 September 2015. The decrease in profit was primarily due to foreign
exchange losses amounting to R474m as well as the revaluation losses on
financial instruments which amounted to R131m. Total assets declined by 1.1%
from R82.3bn (March 2016) to R81.4bn (Sept 2016). This was due to a sale of O3b
Networks equity investment and excess cash surplus which was used to fund
disbursements.




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Independent review of results by Auditors

The condensed interim financial results of DBSA for the six months ended 30
September 2016 have been reviewed by the Bank’s auditor, Nkonki Inc. In their
review report, which is available for inspection at the Company's registered
office, Nkonki Inc. stated that the review was conducted in accordance with
International Standard on Review Engagements 2410, Review of Interim Information
Performed by the Independent Auditor of the Entity, and have expressed an
unmodified conclusion on the condensed interim financial statements.


Outlook

The success to the year ending 31 March 2017 hinges on the DBSA’s ability to
continue delivering on its mandate, within the uncertain economic environment.
The responsive initiatives that have been put in place would see the targeted
results been achieved.




Condensed Income Statement for the six months ended 30 September 2016
                                                             Six months     Six months
in thousands of rand                                         ended          ended
                                                             30 Sept 2016   30 Sept 2015
                                                             Reviewed       Reviewed



Net interest income                                          1 777   647    1 406   102
Other income                                                   673   471      235   873
Net foreign exchange (loss)/gain                              (473   714)     680   261
Grants                                                          (7   299)      (6   858)
Net impairment loss on financial assets                       (442   768)    (453   978)
Personnel expenses                                            (335   149)    (320   436)
Other expenses                                                (133   642)     (96   020)
Depreciation and amortisation                                  (17   688)     (15   299)

Profit for the period                                        1 040 858      1 429 645



Condensed Statement of Comprehensive Income for the
six months ended 30 September 2016

                                                             Six months     Six months
                                                             ended          ended
                                                             30 Sept 2016   30 Sept 2015
                                                             Reviewed       Reviewed

Profit for the period                                        1 040 858      1 429 645
Other comprehensive profit/(loss)                               69 375        (56 243)
Total comprehensive income                                   1 110 233      1 373 402

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Statement of Financial Position as at 30 September 2016




                                                          As at          As at
in thousands of rand                                      30 Sept        31 March
                                                          2016           2016
                                                          Reviewed       Audited
Assets
Cash and cash equivalents                                  1 806   468    2 084   565
Other receivables                                            124   084      138   533
Investment securities                                      1 021   167    1 265   218
Derivative assets held for risk management                 1 020   910    1 163   533
Post-retirement medical benefits investment                   46   126       49   978
Equity investments                                         5 853   128    6 278   575
Development bonds                                          1 290   490    1 290   296
Development loans                                         69 744   654   69 494   954
Property and equipment                                       493   125      501   202
Intangible assets                                             74   300       79   142

Total assets                                              81 474 452     82 345 996

Liabilities
Other payables                                               887   339      894   795
Provisions                                                   144   513      152   533
Liability for funeral benefits                                 3   100        3   100
Liability for post-retirement medical benefits                88   508      239   289
Funding: debt securities                                  33 310   064   35 271   135
Funding: lines of credit                                  16 541   288   16 371   534
Derivative liabilities held for risk management              124   349      148   551

Total liabilities                                         51 099 161     53 080 937

Equity
Share capital                                                200 000        200 000
Retained earnings                                         15 632 263     14 544 861
Permanent government funding                              11 692 344     11 692 344
Revaluation reserve on land and buildings                    269 256        269 256
Hedging reserve                                              192 796        123 050
Reserve for general loan risks                             2 389 814      2 436 358
Fair value reserve                                            (1 182)          (810)


Total equity                                              30 375 291     29 265 059

Total liabilities and equity                              81 474 452     82 345 996




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Condensed statement of changes in equity for the six months period ended 30 September
2016
                                                             Six months      Six months
in thousands of rand                                         ended           ended
                                                             30 Sept 2016    30 Sept
                                                             Reviewed        2015
                                                                             Reviewed

Balance at beginning of the year                             29 265 059      23 682 685
National Treasury capital injection                                           1 000 000
Profit for period                                             1 040 858       1 429 645

Net unrealized gain on cash flow hedges                          69 746         (55 608)
Change in value of available for sale financial assets             (372)           (635)
Total equity at end of the period                            30 375 291      26 056 087




Condensed statement of cash flow for the six months period ended 30 September 2016


                                                          Six months ended   Six months
                                                          30 Sept 2016       ended
                                                          Reviewed           30 Sept 2015
                                                                             Reviewed


Cash flows generated from operating activities                 1 856 545      1 178 393

Cash flows used in development activities                     (1 084 132)    (6 009 365)

Cash flows (used in)/generated from investing
activities                                                      (329 787)       505 971
Cash flows (used in)/ generated from financing
activities                                                      (705 321)     4 193 794
Effect of exchange rate movement on cash balances                (15 403)        24 969
Net decrease in cash and cash equivalents                       (278 098)      (106 237)
Cash and cash equivalents at the beginning of the
year                                                           2 084 565      3 901 663
Cash and cash equivalents at the end of the period             1 806 468      3 795 426




25 November 2016

Debt sponsor: The Standard Bank of South Africa Limited




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