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INTERWASTE HOLDINGS LIMITED - Reviewed provisional condensed consolidated financial statements for the year ended 31 December 2016

Release Date: 29/03/2017 16:00
Code(s): IWE
Wrap Text
Reviewed provisional condensed consolidated financial statements for the year ended 31 December 2016

Interwaste Holdings Limited
(Incorporated in the Republic of South Africa)
(Registration number: 2006/037223/06)
(JSE code: IWE   ISIN: ZAE000097903)
(“Interwaste” or “the Company” or “the Group”)

REVIEWED PROVISIONAL CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2016

OVERVIEW

South Africa remains an exciting and dynamic place to conduct business. The group’s general
trading environment remains competitive with several new waste management service providers
entering the market. Interwaste’s strategy of providing integrated waste management
solutions continues to provide us with a competitive advantage with Interwaste being one of
the few companies in the sector that control the entire value chain. This along with our
internationally TUV accredited environmental operating standards and fully compliant service
offering enables Interwaste to be the supplier of choice for many local and multinational
clients.

Demand for services in the waste management industry is largely determined by economic
activity as waste volumes are the direct result of a customer’s activity. During the year
under review we experienced waste volume reductions of up to 20% within our traditional
customer base, as demand for customer’s products and services slowed. In order to mitigate
reduction in volumes, we aggressively targeted new clients and expanded our service offering
within our existing customer base. This has enabled us to achieve moderate growth in revenue
despite of the negative trading environment. Through various cost containment initiatives,
as well as improved asset utilisation, the group has improved profitability at various
levels resulting in a 29% increase headline earnings per share on continuing operations.

Forward looking economic indicators predict subdued growth in many of the industry sectors
in which we operate over the next three to five years, which when combined with increasing
levels of competition suggest that tough trading conditions are expected to continue into
2017.

Increasing levels of compliance, whether voluntary or enforced, will continue to create
demand for our services, providing a pipeline of clientele which will underpin future
growth. Over the next few years, the Department of Environmental Affairs will be introducing
a host of new environmental legislation which will make way for additional service offerings
to our customers thereby generating new revenue and profit opportunities for the group.
Based on the nature of our business and the impact of legislation we are proactive in our
participation and constantly engage at both local and national government level to ensure
that we are suitably prepared and adequately resourced to leverage off legislative changes.

FINANCIAL PERFORMANCE

The revenue improvement of 9% over that of the prior year is pleasing given that we
experienced declines in revenue of up to 20% from our traditional customer base. The
increase is representative of our ability to increase volumes through gains in market share
mitigating, to a large extent, reduction in volumes from our existing customer base. Market
segments positively contributing to growth during the period include the mining and oil and
gas sectors, both of which are recovering from historic lows in international commodity
prices.

Focused operational efficiencies have resulted in improved profitability evident in
increased gross profit and profit after tax on continuing operations of 14% and 32%
respectively. The strong inward focus on improving operational efficiencies, cost
containment and the drive towards achieving critical mass in our key waste processing
facilities will continue to unlock value from existing investments within the group
improving returns on equity.
Historically, the majority of the group’s revenues, as well as profits were derived from
logistics based activities. In line with our long term strategy, significant investments
have been made in the establishment of waste processing facilities including landfills as
well as alternative technologies to manage streams which will be banned from landfill within
the next three to five years. As a result a greater number of company owned facilities are
now operational and contributions of facilities to the group’s financial performance has
increased. This has resulted in an increased requirement to report on traditional logistics
and facilities separately. A key reason for this is that the two business environments
differ significantly from each other, being subject to different market conditions, finance
requirements and expectations in terms of returns. In order to facilitate improved
divisional reporting, additional investments in both our accounting and I.T. infrastructure
have been made.

Revenues from the logistics division increased by 15% despite the competitive nature of the
environment while improvements in operating efficiencies resulted in increased operating
performance of 108%.

The Facilities division reported negative growth both in revenues and profits. This was due
to a large construction contract in the prior year not being repeated. In addition, the
ongoing operations were under pressure due to reduced customer volumes and the start-up
costs associated with the Klinkerstene Landfill. We expect profitability in this division to
improve going forward as cost control measures continue to be implemented.

CASH FLOWS

The group has retained healthy cash reserves and is currently cash generative. However, cash
reserves have reduced due to the nature of our business, investment cycles and the differing
funding requirements for each of our divisions. Capital investments within our logistics
division are financed largely through debt, however, investments into the facilities
operations are self-funded utilising cash reserves. During the period under review,
investments in facilities were made in order to increase available airspace capacity at our
FG facility as well as the commissioning of our new Klinkerstene Landfill Site in Delmas,
Mpumalanga. With the completion of these strategic facilities and the focus on obtaining
critical mass, investment demand within our facilities division will decrease resulting in
improved cash flows.

The sale of our Compost manufacturing division in June 2016, which is largely seasonal and
generated positive cash flows in the second half of the year has contributed to a reduction
in cash generated from operations. However continuing operations continue to perform well
with year on year increases in cash flows.

Future cash flows are expected to improve as we reach the end of our investment in strategic
facilities and as we unlock value within existing operations.

SADC INVESTMENTS

Our cross-border investments performed well during the period with healthy returns,
contributing to the group’s overall financial performance. In order to limit our exposure to
currency fluctuations, we renegotiated US Dollar based contracts with our major cross-border
customers. However with the strengthening of the Rand against the US Dollar during the
fiscal period, we incurred exchange rate losses. What is pleasing is that we are still able
to repatriate foreign revenue generated outside South Africa, affirming our investment
strategy and local knowledge regarding the countries which we operate in.

The SADC Region remains a key growth area and we will continue to assess investments which
are appropriately risk warranted. Interwaste invested in various SADC countries 20 years
ago. Over this period we gained extensive local knowledge enabling us to understand and
navigate the unique challenges of these foreign environments.
DISCONTINUED OPERATIONS

Our strategy to broaden the range of our service offering within the environmental sector
included the acquisition of a speciality sewerage and water treatment entity in 2014.
Unfortunately, this market sector experienced ever increasing levels of competition,
unpredicted subdued economic conditions, along with the lack of private investment in the
development of treatment facilities resulted in the entity suffering losses. Subsequently
the investment was materially compromised resulting in the entity being placed into
liquidation. This situation resulted in an R8 million loss which negatively affected the
group’s financial performance. The full impact of the loss has been realised and included in
the financials with no additional impact expected in the future.


Despite improved financial performance of the division over the past two years, Interwaste
disposed of its Compost manufacturing division, during the year. The business was heavily
reliant on a large volume producer of organic waste. Strategic changes within the producer’s
operations resulted in a reduction of both the quality and volume of material available,
requiring a significant change in our operating model. Analysis of alternatives available
resulted in the conclusion that the required capital investment and associated return on the
investment, did not meet the groups strategic objectives. As a result, the division was sold
during the 2016 financial year.

FG LANDFILL

The FG Landfill is one of only two in the Gauteng province that complies with current
landfill liner legislation, and is recognised by independent experts as one of the best
managed landfill facilities in South Africa. It is also the only facility in the country
that has received international OHSAS 18001 certification, from German based TUV Rheinland.

Over the past 10 years the FG Landfill witnessed significant encroachment by urban
development in the vicinity adjacent to the landfill. Certain of these communities have been
very vocal in alleging that emissions from the facility are having a significant impact on
air quality in the area and have resorted to social and main stream media campaigns to
highlight their concerns.

Interwaste has always embraced the communities within which we conduct business and are
respectful of the potential impacts our operations may have on the local environment. As a
result, we have always pursued best practice with respect to the management of our
operations. Various measures have been implemented at the landfill site to ensure that
potential environmental impacts associated with the operation of the landfill are
effectively mitigated. These measures were designed, managed and commissioned by leading
engineering companies in the sector, both local and international. The final capital
investment was in excess of R 15 million. The measures included the installation of a
progressive landfill gas harvesting network on an active waste cell (the first of its kind
in South Africa). The implementation of this system entailed the installation of a vented
collection network excavated in the waste body expanding to over 3,500 meters in length.
This network was connected to a state of the art gas flaring system supplied and
commissioned by global leaders in landfill gas management, Organics PLC from the United
Kingdom. We are investigating various opportunities to leverage from this substantial green
energy source and hope to implement the appropriate technology to harness same in the short
term.

Given the extensive focus on the FG Landfill, the site’s licence and compliance have come
under scrutiny from both the national and provincial Regulators. The company is confident
that the site is compliant with its licence conditions and detailed information on the
matter is available on the company’s web site. The company is currently engaged in legal
processes involving the applicable regulators and we have retained leading environmental law
experts.
DIVIDEND

The executive board remains committed to the payment of a dividend however in the current
economic climate and operational environment a more prudent stance relating to the
conservation of cash reserves is warranted and therefore no dividend is declared. Future
dividend payments will consider various aspects of the organisation in order to ensure that
dividends are sustainable and that the group is still able to capitalise on opportunities
which will deliver short, medium and long term value for shareholders.


OUTLOOK

Based on forecasts of economic growth, it is reasonable to presume relatively flat growth in
the coming year. That said our business model and opportunities are not driven by these
factors alone. The provision of integrated waste management solutions in conjunction with
increasing levels of compliance will aid in the retention of existing clients and the
acquisition of new clients, providing a sound foundation for sustained growth.

Although revenue growth remains an important factor in our long term strategy, slow economic
growth and increasing levels of competition in the near term, have redirected our efforts
inward and we firmly believe that additional value can be unlocked within our existing
investments and financial performance improved organically.

In 2013 and 2014 we initiated a program of transitioning vehicles from full maintenance
lease to outright ownership with particular emphasis on our logistics fleet. Historically
full maintenance lease provided some benefit to the group in terms of cost management but
placed restrictions on vehicle life to a maximum of 4 years and as a result our average
fleet age is one of the youngest in the industry. Outright ownership of these assets will
provide an opportunity to extend vehicle useful life, in line with industry standards,
reducing the group’s capex requirements and thereby increasing returns within the Logistics
division. Additionally we are strengthening internal fleet management processes in order to
increase asset utilisation and improve operating performance, the effects of which will be
realised in the short to medium term.

Over the past 10 years Interwaste has invested heavily into the development of facilities
including both landfill and alternatives to landfill technologies in line with short, medium
and long term regulatory changes within the industry. During the 2016 financial year the
last of these major investments, Klinkerstene Landfill was completed and commissioned. With
these investments now complete and facilities operational, attracting new waste volumes to
each of these facilities continues to be a key strategic focus in order to increase revenues
and realise the projected returns. The lack of government investment in new waste disposal
facilities will further enhance the optimisation of the group’s disposal assets. The Gauteng
province has finite landfill disposal space remaining and given the extensive capital
investment and lengthy environmental impact assessment process it is unlikely that any of
the large metros in Gauteng will invest in this sector in the foreseeable future.

The Group has incurred significant capital expenditure over the past few years and the focus
going forward will be on ensuring that the investments generate acceptable returns.
Accordingly, capital expenditure is anticipated to reduce and be limited to projects that
offer compelling returns.

The Waste to Energy sector remains an exciting proposition for future long term growth
opportunities for the group. The granting of our permit in Gauteng for the development of a
20 Mw thermal waste to energy facility enables our entry into the market. The sector does
however require significant capital investment and various business models are being
investigated in order to minimise risk, maximise investment returns and leverage off both
our existing permit and access to alternative fuels in the form of waste volumes.

TEAM INTERWASTE
More than 2,400 permanent Interwaste employees contribute to their households and South
Africa’s GDP. Management are extremely proud to have issued long service awards to numerous
employees including two recipients of 25-year awards. Noteworthy is our first employee Mr
Julius Ndlovu is still employed in the group today and so too is our first customer who
contracted our services at the onset of the company. This is testament to the values, ethics
and standards embedded in the group of which we remain committed to.

The group’s safety and health statistics remain industry leading, confirming our ongoing
commitment to employee wellbeing and job specific training. The group continues to invest in
our human capital, a culture built over many years, with meaningful, ongoing industry
related training and market related pay.

To that end Thank you to everyone who is part of “Team Interwaste”. We have a great company
and many exciting opportunities ahead along with the responsibility of managing the
environment footprint of valued customers. Ultimately, we are all privileged to be able to
contribute to sustainable and positive economic growth in our great Country.

To our Board members and valued shareholders, the past year was peppered with challenges,
most of which we navigated positively, we will continue in the ensuing year to affect the
same. Your dedication and continued support is greatly appreciated and valued by the entire
team.

CHANGES TO THE BOARD

On 23 January 2017, Andre Broodryk resigned as Financial Director and Andries Cronje was
appointed as acting Financial Director. Robert Lumb was appointed as Financial Director with
effect from 1 May 2017 on 16 March 2017.

Mr Gavin Tipper resigned as non-executive director on 3 March 2017. On 22 March 2017, Mr
Charles Boles was appointed as an independent non-executive director with effect from 1
April 2017.

BASIS OF PREPARATION

The condensed consolidated provisional financial statements are prepared in accordance with
the requirements of the JSE Limited Listings Requirements for provisional reports 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 the SAICA Financial Reporting Guides as issued by the Accounting Practices
Committee and Financial Reporting Pronouncements as issued by the 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 presentation of these condensed consolidated
provisional financial statements are in terms of International Financial Reporting Standards
and are consistent with those applied in the previous financial statements except for
standards, interpretations and amendments that are newly effective for the period ended 31
December 2016, and which have become applicable.

BASIS OF MEASUREMENT

The condensed consolidated provisional financial statements are presented in thousands of
South African Rands (R’000s) on the historical cost basis.


GOING CONCERN

The condensed consolidated provisional financial statements have been prepared on the going
concern basis as the directors believe the Group has adequate resources to continue in
operation for the foreseeable future.
REPORT OF THE INDEPENDENT AUDITORS

The condensed consolidated provisional financial statements have been reviewed by the
auditors KPMG Inc. In their report dated, 29 March 2017 they have expressed an unmodified
conclusion. The auditor’s report does not necessarily report on all the information in this
announcement or financial statements. Shareholders are therefore advised that in order to
obtain a full understanding of the nature of the auditor’s engagement, they should obtain a
copy of the auditor’s report together with the accompanying financial information from the
issuer’s registered office.


PREPARATION OF PROVISIONAL RESULTS

The preparation of the Group’s condensed consolidated provisional financial statements was
supervised by the acting financial director, JA Cronje CA(SA).


On behalf of the Board
29 March 2017

WAH Willcocks                                       JA Cronje
Chief Executive Officer                             Acting Financial Director

Provisional Condensed Consolidated Statement of Comprehensive Income for the year ended 31
December 2016
                                                                Dec 2016      %          Dec 2015
                                                                Reviewed   Change         Audited
                                                                   R’000                Restated*
                                                                                            R’000
  Continuing operations

 Revenue                                                          924 003      9%            851 300
 Cost of sales                                                  (421 317)                  (411 538)
 Gross profit                                                     502 686     14%            439 762
 Operating expenses                                             (297 591)                  (270 514)
 Earnings before interest, tax, depreciation and                  205 095     21%            169 248
 amortisation
 Depreciation and amortisation                                  (106 636)                   (93 717)
 Result from operating activities                                  98 459     30%             75 531
 Net finance costs                                               (28 719)                   (23 625)
 Finance costs                                                   (30 881)                   (25 200)
 Finance income                                                     2 162                      1 575
 Profit before taxation                                            69 740     34%             51 906
 Taxation expense                                                (21 999)                   (15 666)
 Profit for the year from continuing operations                    47 741     32%             36 240

 Discontinued operations
 (Loss)/profit from discontinued operations, net of               (3 961)                     5 993
 tax
 Profit for the year                                               43 780      4%            42 233

 Profit attributable to:
 Non-controlling interests                                             14                     1 331
 Owners of the company                                             43 766      7%            40 902
 Other comprehensive income
 Items that are or may be reclassified to profit or
 loss:
 Foreign currency translation reserve movement on                 (5 434)                    (2 687)
 foreign operations
 Total comprehensive income for the year                           38 346     (3%)           39 546
 Total comprehensive income attributable to:
 Non-controlling interests                                             14                     1 331
 Owners of the company                                             38 332                    38 215

 Continuing and discontinued operations
 Basic earnings per share (cents)                                    9.36      7%              8.77
 Diluted earnings per share (cents)                                  9.29      7%              8.65
 Continuing operations
 Basic earnings per share (cents)                                    9.95     29%              7.74
 Diluted earnings per share (cents)                                  9.88     29%              7.63

  *The restatement of December 2015 figures relates to the separate disclosure of discontinued
  operations.


  Provisional Condensed Consolidated Statement of Financial Position as at 31 December 2016

                                                                   Dec 2016          Dec 2015
                                                                   Reviewed           Audited
                                                                      R’000             R’000
 ASSETS

 Non-current assets                                                 778 914           737 099
    Property, plant and equipment                                   713 290           674 804
    Goodwill                                                         64 008            61 082
    Deferred tax assets                                               1 616             1 213

    Current assets                                                  238 283           249 709
    Inventories                                                       8 143            11 472
    Current tax receivables                                           6 066             4 745
    Trade and other receivables                                     193 223           180 338
    Cash and cash equivalents                                        30 851            53 154

    TOTAL ASSETS                                                  1 017 197           986 808

    EQUITY AND LIABILITIES

    Equity                                                          541 343           504 163
    Equity attributable to the owners of the Company                537 906           500 480
    Stated share capital                                            315 558           317 620
    Share based payment reserves                                      5 402             4 246
    Foreign currency translation reserve                             (8 061)           (2 627)
    Retained earnings                                               225 007           181 241
    Non controlling interests                                         3 437             3 683

    Non-current liabilities                                         274 046           279 640
    Interest-bearing borrowings                                     183 579           204 876
    Provision for site rehabilitation                                34 347            27 931
    Deferred tax liabilities                                         56 120            46 833

    Current liabilities                                             201 808           203 005
    Current tax payables                                              4 159               291
    Interest-bearing borrowings                                     105 386            91 461
    Trade and other payables                                         92 263           111 253

    Total liabilities                                               475 854           482 645
    TOTAL EQUITY AND LIABILITIES                                  1 017 197          986 808



Provisional Condensed Consolidated Statement of Cash Flows for the year ended 31 December
2016

                                                                   Dec 2016       Dec 2015
                                                                   Reviewed        Audited
                                                                      R’000          R’000
     Net cash inflow from operating activities                      137 985        142 114
     Net cash outflow on investing activities                     (145 770)      (175 986)
     Net cash (outflow)/inflow from financing activities            (8 352)         26 538
     Total cash movement for the year                              (16 137)        (7 334)
     Effect of exchange rate fluctuations on cash held              (6 166)        (1 418)
     Cash and cash equivalents at beginning of year                  53 154         61 906
     Total cash and cash equivalents at end of year                  30 851         53 154


1   Refer to notes regarding discontinued operations



Provisional Condensed Consolidated Statement of Changes in Equity for the year ended 31
December 2016

                                                                   Dec 2016       Dec 2015
                                                                   Reviewed        Audited
                                                                      R’000            R’000
  Profit after tax                                                   43 780           42 233
  Dividends paid to non-controlling interest                          (260)            (539)
  Shares issued                                                       1 164           11 122
  Treasury shares acquired                                          (3 226)                -
  Foreign currency translation reserve movement                     (5 434)          (2 687)
  Share-based payment transactions                                    1 156              951
  Equity at beginning of year                                       504 163          453 083
  Total Equity at end of year                                       541 343          504 163


Provisional Condensed Consolidated Segment Report for the year ended 31 December 2016

                                                                                    Dec 2015
                                                                   Dec 2016
                                                                                     Audited
                                                                   Reviewed
                                                                                    Restated
                                                                      R’000
                                                                                       R’000
   Gross revenue from external customers
   Logistics+                                                       803 887          700 865
   Facilities*                                                      120 116          150 436
                                                                    924 003          851 300

   Results from operating activities
   Logistics+                                                        64 619           31 038
   Facilities*                                                       33 840           44 493
                                                                     98 459           75 531

   Depreciation and amortisation
   Logistics+                                                        84 443           75 481
   Facilities*                                                       22 193           18 236
                                                                    106 636           93 717

   +Previously Waste management
   *Previously Landfill management
   Refer note regarding the discontinuation of the Compost Manufacturing and Sales segment

       Reconciliation of headline earnings for the year ended 31 December 2016


 Profit attributable to owners of the company                     43 766                     40 902
 Adjusted for:
 Loss/(profit) on disposal of property, plant and                  1 599                       (52)
 equipment
 Profit on sale of discontinued operations                       (2 448)                          -
 Taxation charge on headline earnings adjusting                      238                         15
 items
 Total non-controlling interest effects of                             -                       (28)
 adjustments
 Headline earnings attributable to ordinary                       43 155      6%             40 837
 shareholders
 Weighted average number of shares in issue on which         467 818 670                466 374 466
 earnings per share are based
 Diluted weighted average number of shares in issue          471 135 689                472 937 529
 on which diluted earnings per share are based

 Headline earnings per share (cents)                                9.22      5%               8.76
 Diluted headline earnings per share (cents)                        9.16      6%               8.63
 Continuing operations
 Headline earnings per share (cents)                                9.94      29%              7.72
 Diluted headline earnings per share (cents)                        9.87      30%              7.62
DISCONTINUED OPERATIONS

COMPOST MANUFACTURING AND SALES


Effective 1 June 2016 the group sold the assets of the Compost manufacturing and sales
segment. While the segment had been restored to profitability there were concerns as to the
sustainability of raw material and it was not regarded as part of the group’s key
competencies. The Compost manufacturing and sales segment had not previously been classified
as held-for-sale or as a discontinued operation as there was no intention to dispose of it
at the last reporting date. The comparative condensed consolidated statement of
comprehensive income has been restated to show the discontinued operation separately from
continuing operations.


RESULTS OF DISCONTINUED OPERATION FOR THE YEAR ENDED 31 DECEMBER 2016

                                                          Reviewed        Audited
                                                         12 months      12 months
                                                          Dec 2016       Dec 2015
                                                            R’000           R’000


 Revenue                                                     25 644         46 096
 Cost of sales                                             (17 394)       (26 693)
 Gross Profit                                                 8 250         16 403

 Operating expenses                                         (4 637)        (9 424)
 Earnings before interest, tax, depreciation and
                                                              3 613          6 979
 amortization

 Depreciation and amortisation                                (133)        (1 655)
 Results from operating activities                            3 480          5 324

 Net finance costs                                                4          (110)
 Finance costs                                                    -          (110)
 Finance income                                                   4              -
 Earnings before taxation                                     3 484          5 214

 Taxation expense                                             (976)        (1 568)
 Results from operating activities, net of tax                2 508          3 646

 Gain on sale of discontinued operation                       2 448              –
 Income tax on gain of sale                                   (685)              –
 Profit for the period                                        4 271          3 646

 Profit attributable to:
   Non-controlling interests                                      -              –
   Owners of the company                                      4 271          3 646

 Basic earnings per share                                      0.91           0.78
 Diluted earnings per share                                    0.91           0.77

 CASH FLOWS FROM/(USED IN) DISCONTINUED OPERATION FOR THE YEAR ENDED 31 DECEMBER 2016
                                                           Reviewed     Audited
                                                          12 months    12 months
                                                          Dec 2016        Dec 2015
                                                            R’000           R’000
 Net cash (outflow)/inflow from operating
                                                            (8 455)          11 465
 activities
 Net cash inflow from investing activities                    8 560               –
 Net cash flow for the period                                   105          11 465

 EFFECT OF DISPOSAL ON THE FINANCIAL POSITION OF THE GROUP FOR THE YEAR ENDED 31 DECEMBER
 2016

                                                                       Reviewed
                                                                      12 months
                                                                       Dec 2016
                                                                         R’000
 Property, plant and equipment                                           (6 112)
 Net assets sold                                                         (6 112)

 Gain on sale of discontinued operation                                 (2 448)
 Total consideration                                                    (8 560)

 Consideration received, satisfied in cash                                8 560
 Net cash inflow                                                          8 560



ENBITEC ENVIRONMENTAL SOLUTIONS PROPERIETARY LIMITED

In July 2016 Enbitec Environmental Solutions Proprietary Limited, a 50% subsidiary of the
group was placed in voluntary liquidation. At 30 June 2016 the liabilities of this legal
entity exceeded its assets and the entity was determined as no longer being viable. The
comparative condensed consolidated statement of comprehensive income has been restated to
show the discontinued operation separately from continuing operations.

Upon placing the legal entity in voluntary liquidation the group lost effective control of
the subsidiary and subsequently de-recognised the assets and liabilities and accounted for
the associated loss.


RESULTS OF DISCONTINUED OPERATION FOR THE YEAR ENDED 31 DECEMBER 2016

                                                          Reviewed          Audited
                                                         12 months        12 months
                                                          Dec 2016         Dec 2015
                                                            R’000             R’000

                                                              13 904          59 519
 Revenue                                                    (11 084)        (42 862)
 Cost of sales                                                 2 820          16 657
 Gross Profit

 Operating expenses                                         (13 113)        (12 145)
 Earnings before interest, tax, depreciation and
                                                            (10 293)           4 512
 amortization

 Depreciation and amortisation                                     -           (464)
 Results from operating activities                          (10 293)           4 048

 Net finance costs                                             (472)           (771)
 Finance costs                                                 (512)           (771)
 Finance income                                                   40               –
(Loss)/profit before taxation                               (10 765)           3 277

Taxation credit/(expense)                                      2 533            (931)
(Loss)/profit for the period                                 (8 232)            2 346

(Loss)/profit attributable to:
  Non-controlling interests                                  (1 173)            1 173
  Owners of the company                                      (7 059)            1 173

Basic earnings per share                                      (1.51)              0.25
Diluted earnings per share                                    (1.50)              0.25

CASH FLOWS FROM/(USED IN) DISCONTINUED OPERATION FOR THE YEAR ENDED 31 DECEMBER 2016

                                                           Reviewed           Audited
                                                          12 months         12 months
                                                           Dec 2016          Dec 2015
                                                             R’000              R’000
Net   cash   outflow from operating activities                  (362)            (8 226)
Net   cash   inflow/(outflow) from investing activities          475               (829)
Net   cash   (outflow)/inflow from financing activities       (1 104)            10 152
Net   cash   flow for the period                                (991)             1 097

EFFECT OF LIQUIDATION ON THE FINANCIAL POSITION OF THE GROUP FOR THE YEAR ENDED 31
DECEMBER 2016

                                                                          Reviewed
                                                                         12 months
                                                                          Dec 2016
                                                                            R’000
Trade and other receivables                                                 (2 622)
Receiver of revenue                                                           (214)
Property, plant and equipment                                                 (545)
Inventories                                                                   (601)
Cash and cash equivalents                                                     (106)
Trade and other payables                                                      4 088
Net assets and liabilities disposed                                               –

Gain on liquidation of discontinued operation                                    -
Total consideration                                                              -

Consideration received in cash                                                   –
Cash and cash equivalents disposed of                                        (106)
Net cash inflow                                                              (106)


Corporate Information
Non-executive directors: A Kawa (Chairperson), LJ Mahlangu, PF Mojono, BL Willcocks
Executive directors: WAH Willcocks (CEO), LC Grobbelaar, JA Cronje (Acting FD)
Registration number: 2006/037223/06
Registered address: P O Box 382, Germiston, 1400
Company secretary: Allen de Villiers
Telephone: (011) 323 7300
Facsimile: 086 576 8152
Transfer secretaries: Computershare Investor Services (Pty) Limited
Sponsor: Grindrod Bank Limited
www.interwaste.co.za

Date: 29/03/2017 04:00:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
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