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eXtract GROUP LIMITED - Trading statement and business update

Release Date: 14/12/2016 13:51
Code(s): EXG     PDF:  
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Trading statement and business update

eXtract Group Limited
(previously Eqstra Holdings Limited)
(Incorporated in the Republic of South Africa)
(Registration number 1998/011672/06)
Share code: EXG ISIN: ZAE000223202
(“eXtract” or “the Company” or “the Group”)

TRADING STATEMENT AND BUSINESS UPDATE

Trading statement

In terms of the Listings Requirements of the JSE Limited, companies are
required to publish a trading statement as soon as a reasonable degree of
certainty exists that the financial results for the period to be reported
on next will differ by at least 20% or more from the financial results of
the previous corresponding reporting period.

The Company changed its year end to August 2017 being a 14-month period.
Its first interim results period will be for the six months’ ending 31
December 2016 (“the period”). It is important to note that the Eqstra
Fleet Management and Logistics and Industrial Equipment divisions (“the
Sold Divisions”) had been sold to enX Group Limited post the previous
comparative period being the six months’ period ended 31 December 2015
(“prior period”).

It is expected that earnings per share (“EPS”) will increase by at least
20% (at least 57.5 cents) from the prior period loss of 287.4 cents per
share and headline earnings per share (“HEPS”) will decrease by at least
20% (at least 0.4 cents) from the prior period loss of 2.2 cents per
share. The increase in EPS is primarily as a result of the significant
impairments recorded in the prior period and the decrease in HEPS mainly
attributable to lower profitability and bad debts recorded during the
period.

There is currently insufficient certainty to enable the Company to
provide specific guidance on the extent of the decrease in HEPS and
increase in EPS and as such the Company will publish a further trading
statement once it has certainty.

The financial information on which this trading statement is based has
not been reviewed and reported on by eXtract’s external auditors. The
statement is based on financial information available at the time of this
publication.                                                                                                                                 
 
Business update

FIRST ASSET LIGHT PARTNERSHIP CONTRACT SECURED

The Company confirmed its first international contract win in Indonesia
from PT Bangun Olah Sarana Sukses (“PT BOSS”) in the East Kalimantan
region of the country. The two-year contract will commence in early 2017
to mine LCV thermal coal on a 1.2 million ton reserve, of which 25% has
been pre-sold.   The total area of the mine is 1,125 Ha. The project
will be uniquely executed on a partnership approach with open-book
costing. The initial contract value is R600 million of revenue over the
two year, which has the potential to be expanded in future on the
adjoining concessions. The project is the first asset-light model to
commence under the Group’s revised strategy. Collectively management has
41 years’ mining experience in Indonesia.

INTERNATIONAL COAL VENTURES PRIVATE LIMITED (“ICVL”)

The receivable of $14 million due by ICVL has been settled in full with
the final payment being received on 28 November 2016 from ICVL in
conclusion of the Benga contract. The proceeds have been allocated to
settle lenders and all local creditors. The Mozambique assets are now
fully unencumbered.

EXCESS AND END OF LIFE ASSETS

On 11 July 2016 shareholders approved the sale of excess assets, refer to
SENS announcement dated 11 July 2016 and related circular dated 10 June
2016.

Excess Asset sales progress since the last reporting period is as
follows:

Monetisation of assets (30 June 2016 to 30 November 2016)
                        Impaired Book 
Asset (R’ millions)         Value      Realized           Forex         Remaining
                         
Plant rental assets           163         (148)               -                15 
SA excess assets              135          (23)               -               112 
Benga assets                  511         (196)            (21)               294 
Total                         809         (367)            (21)               421 

The sale of the plant rental assets progressed well over the period and
is in the final stages of completion. The SA excess assets remain slow
movers as a result of the depressed economic conditions, while we
continue to actively market these assets.

The most significant sale during the period has been the 14 Caterpillar
793 trucks which have been sold to an international mining house to the                                                                         
value of R196 million. The suspensive conditions to the contract of sale
are mostly complete and demobilisation of the trucks has started.

CEO MESSAGE
CEO Justin Colling added: “Since the sale of the Eqstra Fleet Management
and Logistics and Industrial Equipment divisions to enX Group Limited in
November, we have achieved some important milestones such as the
conclusion of the Benga Mozambique contract, excess assets sale progress
and winning the Indonesian contract. The unexpected set back of losing
the Boteti contract in Botswana has been disappointing; however, we
remain committed to doing all that is necessary to ensure that damages
are recouped.

The contract win in Indonesia affirms our approach to the way we want to
run the model going forward. Truly partnering with clients in a way that
shares both risk and reward, whilst being responsible with our balance
sheet and shareholders’ funds, is the way we believe we drive
efficiencies and add longevity and value to contracts. We have a combined
management experience of 41 years of mining in Indonesia and we look
forward to delivering for PT BOSS on its Coal project.”

14 December 2016

Sponsor
RAND MERCHANT BANK (A division of FirstRand Bank Limited)

Date: 14/12/2016 01:51:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
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