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Unaudited interim results for the six months ended 30 June 2017 and declaration of cash dividend
Trencor Limited
(Incorporated in the Republic of South Africa)
Registration No. 1955/002869/06
Share code: TRE
ISIN: ZAE000007506
("Trencor" or "the company")
Unaudited Interim Results
for the six months ended 30 June 2017
and declaration of cash dividend
COMMENTARY
GROUP
- Trading profit increased by 216% from a loss of R396 million for the corresponding six
month period in 2016 to a profit of R459 million.
- Headline loss per share (including the effect of realised and unrealised foreign exchange
translation losses in 2016) was 144,5 cents (2016: 324,1 cents).
- Adjusted headline loss per share (excluding the effect of unrealised foreign exchange
translation losses in 2016) was 144,5 cents (2016: 314,6 cents).
- These amounts are better reflected in tabular form:
Year ended
Six months ended 30 June 31 December
2017 2016 2016
Cents per share Cents per share Cents per share
Headline loss (144,5) (324,1) (435,1)
Deduct: Net unrealised foreign
exchange translation losses - 9,5 -
Adjusted headline loss (144,5) (314,6) (435,1)
Period-end rate of exchange:
SA rand to US dollar 12,99 14,88 13,58
Average rate of exchange for the
period: SA rand to US dollar 13,28 15,39 14,72
- Based on the spot exchange rate and the price of Textainer's shares listed on the NYSE at
the reporting date, the net asset value ("NAV") of Trencor at that date was as follows:
30 June 2017 31 December 2016
Textainer share price US$14,50 US$7,45
Spot exchange rate US$1 equals R12,99 R13,58
R million R per share R million R per share
Beneficiary interest in Textainer 5 138 29,02 2 760 15,58
Beneficiary interest in TAC
(US GAAP NAV) 1 025 5,79 1 069 6,04
Cash (excluding in Textainer and TAC) 1 243 7,02 1489 8,40
Other net assets 224 1,26 238 1,35
7 630 43,09 5 556 31,37
- Consolidated gearing ratio at 30 June 2017 was 320% (2016: 302%).
- Interim dividend of 50 cents per share declared (2016: 80 cents per share).
TEXTAINER (NYSE: TGH): 48,0% beneficiary interest as at 30 June 2017 (2016: 48,2%)
US GAAP RESULTS
- Net loss for the half year was US$16,3 million (2016: loss US$4,9 million). Textainer recorded
US$9,6 million of container impairments (2016: US$36,8 million) resulting from a transfer to
held for sale and a write-down of its inventory of containers pending disposal.
- There was no impairment to the leased container fleet for the six months ended 30 June 2017
(2016: nil).
- Average fleet utilisation for the six months to 30 June 2017 was 95,7% (2016: 94,6%).
- During the second quarter, Textainer raised US$920 million to pay down debt and bank
facilities, enabling it to free up liquidity and acquire new containers.
- Total fleet under management at 30 June 2017 was 2 992 040 (2016: 3 195 378) twenty foot
equivalent units ("TEU") of which Textainer itself owned 81,3% (2016: 81,0%).
- Textainer did not declare any dividends in respect of quarters 1 and 2 of 2017 (2016: US$0,27).
- Textainer's results may be viewed on its website www.textainer.com.
THE FOLLOWING SALIENT MATTERS OCCURRED SUBSEQUENT TO 30 JUNE 2017
- Integrated and assumed the management of the approximately 182 000 TEU fleet of
standard dry freight and refrigerated containers from Magellan Maritime Services GmbH.
- Closed refinancing to extend the term and lower the interest rate on US$1,2 billion
warehouse facility used to acquire intermodal containers.
- Fleet utilisation was 96,6% at 8 August 2017, the date of Textainer's second quarter
results release.
- Approximately US$275 million of capital expenditures to 8 August 2017 with initial yields
above 12%.
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 reports under IFRS.
Despite strong improvements in container leasing market conditions in the six months
ended 30 June 2017, as reflected in the continued improved results reported by Textainer,
the differences in accounting treatment between US GAAP and IFRS require that Trencor
further impairs the container fleets owned by Textainer and TAC in this reporting period.
The main reason for these additional impairments by Trencor is the increased Textainer
weighted average cost of capital ("WACC") rate used to discount future cash flows as
required under IFRS.
Key factors impacting this determination are Textainer's costs of debt and cost of equity.
Textainer's overall debt has remained relatively stable over the period and the cost of
debt has increased marginally. The main factor impacting the higher WACC rate used
by Trencor in discounting has been the performance of the Textainer share relative to the
market, resulting in a higher beta risk factor for Textainer. This, coupled with the almost
doubling in the Textainer market capitalisation since 31 December 2016 and hence the
larger equity weighting in the debt equity mix, has caused the increased WACC.
Adjusted to conform to IFRS, Trencor's consolidation of the results of Textainer requires that
a loss of US$117,1 million be recorded for the half year (2016: loss of US$289,2 million).
This included a non-cash impairment loss on the leased container fleet as required under
IFRS of US$87,5 million (2016: US$223,3 million). No such impairment was necessary
under US GAAP at either 30 June 2017 or 30 June 2016. Furthermore, Trencor recorded
an additional depreciation charge required under IFRS for the six months to 30 June 2017
over and above the amount provided by Textainer under US GAAP of US$21,0 million
(2016: US$42,5 million).
Adjusted to conform to IFRS, Trencor's consolidation of the results of TAC requires that
a loss of US$6,0 million be recorded for the half year (2016: US$21,7 million loss). This
included a non-cash impairment loss on the leased container fleet as required under IFRS
of US$5,2 million (2016:US$19,2 million). Trencor recorded an additional depreciation
charge required under IFRS for the six months 30 June 2017 over and above the amount
provided under US GAAP of US$1,0 million (2016: US$1,1 million).
PREPARATION OF FINANCIAL STATEMENTS
These unaudited interim condensed consolidated financial statements have been prepared
by management under the supervision of the financial director, Ric Sieni (CA)SA, and have not
been audited or reviewed by Trencor's external auditors. The directors take full responsibility for
the preparation of the interim condensed consolidated financial statements.
DECLARATION OF CASH DIVIDEND
At the annual general meeting on 10 August 2017 the chairman made reference to complex
and time-consuming processes underway towards the commercial objectives of unlocking
value for shareholders and finding solutions to the issues relating to the US GAAP/IFRS
conversion referred to above. Pending certainty on the final outcome of these
processes, the board deems it appropriate to declare an interim dividend for 2017 in the same
amount as the final dividend for 2016.
Thus the board has declared an interim gross cash dividend (number 104) of 50 cents per share
out of distributable reserves in respect of the six months ended 30 June 2017.
The salient dates pertaining to the dividend payment are as follows:
Last day to trade cum the dividend Tuesday, 24 October 2017
Trading commences ex the dividend Wednesday, 25 October 2017
Record date Friday, 27 October 2017
Payment date Monday, 30 October 2017
Share certificates may not be dematerialised or rematerialised between Wednesday,
25 October 2017 and Friday, 27 October 2017, both days inclusive.
Note that:
- Dividend withholding tax at the rate of 20% will be applicable to shareholders who are not
exempt, which will result in a net dividend of 40 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).
CHANGES TO DIRECTORATE AND BOARD COMMITTEES
As announced on 11 August 2017, with effect from 10 August 2017:
- Jim Hoelter retired as a non-executive director;
- Jimmy McQueen retired as chief executive officer, chairman of the executive committee and
executive director but remains on the board in a non-executive capacity and as a member of
the risk and social and ethics committees; and
- Hennie van der Merwe was appointed as chief executive officer and chairman of the executive
committee in the place of Jimmy McQueen.
On behalf of the board
Hennie van der Merwe Chief Executive Officer
29 September 2017
Directors: David Nurek (Chairman), Jimmy McQueen, Eddy Oblowitz, Ric Sieni* (Financial),
Roddy Sparks, Hennie van der Merwe* (CEO), Herman 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, Rosebank Towers,
15 Biermann Avenue, Rosebank 2196 (PO Box 61051, Marshalltown 2107)
Sponsor: Rand Merchant Bank (A division of FirstRand Bank Limited)
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL
POSITION
at 30 June 2017
Unaudited Unaudited Audited
30 June 30 June 31 December
R million 2017 2016 2016
ASSETS
Property, plant and equipment 43 312 52 375 49 060
Intangible assets and goodwill 323 425 367
Investment in equity accounted investee 112 119 121
Long-term receivables - 455 -
Net investment in finance leases 785 1 867 983
Derivative financial instruments 65 - 63
Deferred tax assets 18 23 18
Restricted cash 1 065 445 737
Total non-current assets 45 680 55 709 51 349
Inventories 444 439 434
Trade and other receivables 1 535 1 801 2 017
Current portion of long-term receivables - 121 -
Current portion of net investment in finance
leases 408 907 467
Current tax asset 14 - 18
Cash and cash equivalents 3 384 3 780 2 837
Total current assets 5 785 7 048 5 773
Total assets 51 465 62 757 57 122
EQUITY
Share capital and premium 44 44 44
Reserves 6 899 8 512 8 155
Total equity attributable to equity holders of the
company 6 943 8 556 8 199
Non-controlling interests 5 124 6 493 6 218
Total equity 12 067 15 049 14 417
LIABILITIES
Interest-bearing borrowings 33 457 43 936 4 913
Amounts attributable to third parties in respect
of long-term receivables - 68 -
Derivative financial instruments 5 248 17
Deferred revenue 28 36 30
Deferred tax liabilities 66 136 66
Total non-current liabilities 33 556 44 424 5 026
Trade and other payables 548 1 592 719
Current tax liabilities 140 168 136
Current portion of interest-bearing borrowings 5 146 1 506 36 755
Current portion of amounts attributable to third
parties in respect of long-term receivables 5 14 65
Current portion of deferred revenue 3 4 4
Total current liabilities 5 842 3 284 37 679
Total liabilities 39 398 47 708 42 705
Total equity and liabilities 51 465 62 757 57 122
Capital expenditure incurred during the period 283 3 830 7 210
Capital expenditure committed and authorised,
but not yet incurred 2 430 1 407 -
Ratio to total equity:
Total liabilities (%) 326,5 317,0 296,2
Interest-bearing borrowings (%) 319,9 302,0 289,0
CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR
LOSS AND COMPREHENSIVE INCOME
for the six months ended 30 June 2017
Unaudited Unaudited Audited
Six months ended Year ended
30 June 30 June 31 December
R million 2017 2016 2016
Revenue (note 2) 4 052 5 055 9 373
Trading profit/(loss) before items listed below 459 (396) (468)
Realised and unrealised exchange losses on
translation of long-term receivables, excluding
fair value adjustment - (38) (89)
Fair value adjustment on net long-term
receivables - 63 338
Impairment of property, plant and equipment
(note 4) (1 185) (3 615) (2 460)
Available-for-sale financial asset - reclassification
from other comprehensive income - 33 33
Compensation receivable from third party in
respect of impairment of property, plant and
equipment (note 4) (87) - 289
Operating loss before net finance
expenses (note 3) (813) (3 953) (2 357)
Net finance expenses (note 5) (853) (909) (1 394)
Finance expenses Interest expense (884) (638) (1 406)
Realised and unrealised
losses on derivative financial
instruments (4) (296) (45)
Finance income Interest income 35 25 57
Share of loss of equity accounted investee
(net of tax) (4) (20) (6)
Loss before tax (1 670) (4 882) (3 757)
Income tax expense/(credit) 40 (88) (11)
Loss for the period (1 710) (4 794) (3 746)
Other comprehensive loss
Items that are or may be reclassified
subsequently to profit or loss
Foreign currency translation differences (584) (816) (2 370)
Change in fair value of available-for-sale
financial asset - (9) (9)
Available-for-sale financial asset -
reclassification to profit or loss - (33) (33)
Related income tax - 7 7
Total comprehensive loss for the period (2 294) (5 645) (6 151)
Total comprehensive loss for the period
attributable to:
Equity holders of the company (1 180) (2 848) (3 055)
Non-controlling interests (1 114) (2 797) (3 096)
(2 294) (5 645) (6 151)
Loss for the period attributable to:
Equity holders of the company (862) (2 369) (1 743)
Non-controlling interests (848) (2 425) (2 003)
(1 710) (4 794) (3 746)
Loss per share (cents) (486,7) (1 337,7) (984,4)
Diluted loss per share (cents) (486,7) (1 337,7) (984,4)
Number of shares in issue (million) 177,1 177,1 177,1
Weighted average number of shares in issue
(million) 177,1 177,1 177,1
Period-end rate of exchange:
SA rand to US dollar 12,99 14,88 13,58
Average rate of exchange for the period:
SA rand to US dollar 13,28 15,39 14,72
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
for the six months ended 30 June 2017
Audited
Unaudited Unaudited Restated
Six months ended Year ended
30 June 30 June 31 December
R million 2017 2016 2016
Cash flows from operating activities
Cash generated from operations (before items
listed below) 3 455 3 974 7 479
Increase in container leasing equipment (371) (3 414) (7 635)
Finance income received 35 25 57
Finance lease income received 50 103 167
Finance expenses paid (710) (626) (1 236)
Decrease in finance leases 195 405 795
Receipts from long-term receivables - 98 928
Payments to third parties in respect of long-term
receivables (36) (10) (49)
Dividends paid to equity holders of the company (88) (390) (531)
Dividends paid to non-controlling interests - (218) (231)
Income tax paid (31) (24) (205)
Net cash inflow/(outflow) from operating activities (2 499) (77) (461)
Cash flows from investing activities
Acquisition of property, plant and equipment (2) (10) (22)
Proceeds on disposal of available-for-sale
financial asset - 36 36
Increase in restricted cash (368) (14) (372)
Net cash (outflow)/inflow from investing activities (370) 12 (358)
Cash flows from financing activities
Interest-bearing borrowings repaid (note 11) (19 201) (3 066) (8 681)
Interest-bearing borrowings raised (note 11) 18 008 2 863 8 574
Debt issuance costs incurred (284) (24) (88)
Net cash outflow from financing activities (1 477) (227) (195)
Net increase/(decrease) in cash and
cash equivalents before exchange rate
fluctuations 652 (292) (1 014)
Cash and cash equivalents at the beginning
of the period 2 837 4 241 4 241
Effects of exchange rate fluctuations on cash
and cash equivalents (105) (169) (390)
Cash and cash equivalents at the end
of the period 3 384 3 780 2 837
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the six months ended 30 June 2017
Equity holders of the company
Gain/Loss
Foreign Share- on changes
currency based in ownership Non-
Share Share Fair value translation payment interests in Retained controlling Total
R million (unaudited) capital premium reserve reserve reserve subsidiaries income Total interests equity
Six months ended 30 June 2017
Balance at 1 January 2017 1 43 - 4 483 408 504 2 760 8 199 6 218 14 417
Total comprehensive loss for the period
Loss for the period - - - - - - (862) (862) (848) (1 710)
Other comprehensive loss for the period
Foreign currency translation differences - - - (318) - - - (318) (266) (584)
Total comprehensive loss for the period - - - (318) - - (862) (1 180) (1 114) (2 294)
Transactions with owners, recorded directly in equity
Contributions by/(distributions to) owners
Share-based payments - - - - 15 - - 15 17 32
Dividends - - - - - - (88) (88) - (88)
Total contributions by/(distributions to) owners - - - - 15 - (88) (73) 17 (56)
Changes in ownership interests in subsidiaries - - - - - (3) - (3) 3 -
Total transactions with owners - - - - 15 (3) (88) (76) 20 (56)
Balance at 30 June 2017 1 43 - 4 165 423 501 1 810 6 943 5 124 12 067
Six months ended 30 June 2016
Balance at 1 January 2016 1 43 35 5 760 374 533 5 034 11 780 9 479 21 259
Total comprehensive loss for the period
Loss for the period - - - - - - (2 369) (2 369) (2 425) (4 794)
Other comprehensive loss for the period
Foreign currency translation differences - - - (444) - - - (444) (372) (816)
Available-for-sale financial asset - change in fair value
net of tax - - (7) - - - - (7) - (7)
Available-for-sale financial asset - reclassification to profit
or loss - - (28) - - - - (28) - (28)
Total comprehensive loss for the period - - (35) (444) - - (2 369) (2 848) (2 797) (5 645)
Transactions with owners, recorded directly in equity
Contributions by/(distributions to) owners
Share-based payments - - - - 21 - - 21 22 43
Dividends - - - - - - (390) (390) (218) (608)
Total contributions by/(distributions to) owners - - - - 21 - (390) (369) (196) (565)
Changes in ownership interests in subsidiaries - - - - - (7) - (7) 7 -
Total transactions with owners - - - - 21 (7) (390) (376) (189) (565)
Balance at 30 June 2016 1 43 - 5 316 395 526 2 275 8 556 6 493 15 049
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
for the six months ended 30 June 2017
1. The condensed consolidated interim financial statements are prepared in accordance with
IFRS, IAS 34 Interim Financial Reporting, the SAICA Financial Reporting Guides as issued by
the Accounting Practices Committee, the Financial Pronouncements as issued by Financial
Reporting Standards Council and the requirements of the Companies Act of South Africa.
The accounting policies applied in the preparation of these interim financial statements are
in terms of IFRS and are consistent with those applied in the previous consolidated annual
financial statements.
Unaudited Unaudited Audited
Six months ended Year ended
30 June 30 June 31 December
R million 2017 2016 2016
2. Revenue
Goods sold 956 1 078 2 202
Leasing income 3 024 3 934 7 101
Management fees 72 80 158
Finance income - 1 1
4 052 5 093 9 462
Realised and unrealised exchange differences - (38) (89)
4 052 5 055 9 373
3. Operating loss before net finance expenses
Other significant items which have been included in
operating loss before net finance expenses:
Depreciation 1 991 2 377 4 861
Impairment losses incurred - financial assets 16 463 628
(Write-up)/Write-down of inventories (32) 734 527
4. Impairment of property, plant and equipment
Container leasing equipment
Impairment recognised at end of reporting
period 1 234 3 615 2 107
Impairment recognised in respect of containers
on operating leases not recovered from
defaulting customers 38 - 353
Reversal of impairment provided on containers
on operating leases with defaulting customers,
as containers recovered during the period (87) - -
1 185 3 615 2 460
As a result of the reversal of the impairment provided on containers on operating leases with
defaulting customers the compensation receivable from third party has been reduced by
R87 million.
A net impairment has been recognised at 30 June 2017, reducing the carrying value of container
leasing equipment to its recoverable amount. For the purposes of calculating the impairment
loss, the container fleets were grouped by ownership entity and then by cash-generating
units ("CGUs"). CGUs were defined as containers grouped by container type, as cash flows
for the same type of containers are independent of cash flows of different container types,
and are interchangeable with any other container of the same type within the container fleet.
The recoverable amount of a CGU has been calculated based on its value in use. The pre-tax
discount rates used to discount the future estimated cash flows were 5,8% (June 2016: 5,0% and
December 2016: 4,3%) and 6,2% (June 2016: 6,8% and December 2016: 5,1%) for Textainer
and TAC, respectively. Projected future cash flows were estimated using the assumptions that
are part of the long-term planning forecasts of the entities concerned.
Some of the significant estimates and assumptions used to determine future estimated cash
flows were: estimated future lease rates, estimated utilisation, remaining useful lives, remaining
on-hire periods for expired fixed-term leases, estimated future lease rates, direct container
expenses and estimated disposal prices of containers. In performing the impairment analysis,
assumptions used reflected the contractually stipulated per diem rates, with renewal based
on current market rates. Although the assumptions used in the projected future cash flow
have improved as a result of strong improvements in container leasing market conditions in
the six months ended 30 June 2017, a further impairment of the container fleets owned by
Textainer and TAC was incurred as a result of the higher WACC rate used to discount future
cash flows. The factors impacting the WACC rate are detailed in the commentary above.
The recoverable amounts and impairment amounts of the CGUs which were impaired are as
follows:
Unaudited Unaudited Audited
Six months ended Six months ended Year ended
30 June 2017 30 June 2016 31 December 2016
Recover- Recover- Recover-
able Impair- able Impair- able Impair-
R million amount ment amount ment amount ment
20' Flatrack 196 (3) 201 24 205 11
20' Dry freight 13 219 120 16 883 1 087 15 462 503
20' Refrigerated 218 27 213 7 261 2
20' Open top - - 170 1 - -
40' Flatrack 26 4 575 3 - -
40' Hi cube 16 339 175 19 231 2 267 18 974 1 363
40' Dry freight - - 2 692 77 2 563 (9)
40' Refrigerated 9 490 911 11 391 147 11 166 234
40' Open top - - 415 1 - -
45' Hi cube - - 467 1 12 3
39 488 1 234 52 238 3 615 48 643 2 107
Unaudited Unaudited Audited
Six months ended Year ended
30 June 30 June 31 December
R million 2017 2016 2016
5. Net finance expenses
Finance expenses 888 934 1 451
Interest expense - Textainer 848 581 1 189
Interest expense - TAC 36 57 217
Realised and unrealised losses on derivative
financial instruments 4 296 45
Finance income
Interest income - cash and cash equivalents (35) (25) (57)
853 909 1 394
6. Headline loss
Loss attributable to equity holders of the company (862) (2 369) (1 743)
Impairment of property, plant and equipment (note 4) 1 185 3 615 2 460
Compensation receivable from third party in respect
of impairment of property, plant and equipment
(note 4) 87 - (289)
Available-for-sale financial - asset reclassification
from other comprehensive income - (33) (33)
Total tax effects of adjustments (21) (50) (31)
Total non-controlling interests' share of adjustments (645) (1 737) (1 135)
Headline loss (256) (574) (771)
Weighted average number of shares in
issue (million) 177,1 177,1 177,1
Headline loss per share (cents) (144,5) (324,1) (435,1)
Diluted headline loss per share (cents) (144,5) (324,1) (435,1)
Adjusted headline loss:
Headline loss (as above) (256) (574) (771)
Net unrealised foreign exchange losses on
translation of long-term receivables - 24 -
Total tax effects of adjustments - (7) -
Adjusted headline loss (256) (557) (771)
Undiluted adjusted headline loss per share (cents) (144,5) (314,6) 435,1
Diluted adjusted headline loss per share (cents) (144,5) (314,6) 435,1
7. Segmental reporting
Revenue
Reportable segments
Containers - finance (including exchange
differences) - (36) (86)
Containers - owning, leasing, management and
trading 4 052 5 091 9 459
4 052 5 055 9 373
Operating loss before net finance expenses
Reportable segments
Containers - finance (14) 21 240
Containers - owning, leasing, management and
trading (725) (3 987) (2 523)
(739) (3 966) (2 283)
Unallocated (74) 13 (74)
(813) (3 953) (2 357)
Loss before tax
Reportable segments
Containers - finance (14) 21 240
Containers - owning, leasing, management and
trading (1 614) (4 938) (3 975)
(1 628) (4 917) (3 735)
Unallocated (42) 35 (22)
(1 670) (4 882) (3 757)
Assets
Capital expenditure incurred by the container
owning, leasing, management and
trading segment 283 3 830 7 210
As a result of the repayment of the long-term receivables during 2016, and the final settlement
of the amounts due to third parties in respect of long-term receivables taking place during the
current financial year, the container - finance segment will no longer be reported as a separate
segment with effect from the 2018 financial year.
Unaudited Unaudited Audited
30 June 2017 30 June 2016 31 December 2016
Carrying Fair Carrying Fair Carrying Fair
R million amount value amount value amount value
8. Financial instruments
The carrying amounts and fair values of financial assets a nd financial liabilities are as follows:
Assets
Designated at fair value through
profit or loss
Long-term receivables - - 576 576 - -
Held for trading
Derivative financial instruments 65 65 - - 63 63
Loans and receivables
Restricted cash 1 065 1 065 445 445 737 737
Trade and other receivables 1 365 1 365 1 515 1 515 1 731 1 731
Cash and cash equivalents 3 384 3 384 3 780 3 780 2 837 2 837
Other
Net investment in finance leases 1 193 1202 2 774 2 741 1 450 1 451
7 072 7 081 9 090 9 057 6 818 6 819
Liabilities
Liabilities at amortised cost:
Interest-bearing borrowings
(excluding debt issuance costs) 38 268 38 917 45 749 45 301 41 926 41 300
Trade and other payables 548 548 1 592 1 592 719 719
Designated at fair value through
profit or loss:
Amounts attributable to third
parties in respect of long-term
receivables 5 5 82 82 65 65
Held for trading:
Derivative financial instruments 5 5 248 248 17 17
38 826 39 475 47 671 47 223 42 727 42 101
9. Change in estimate
Residual values of the container fleets were reassessed at 30 June 2017. In accordance
with IAS 16 Property, Plant and Equipment, residual values are the estimated amounts
that the entities 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 at the end of their useful lives. The reassessment
of residual values are accounted for prospectively as a change in accounting estimate from
the date of change in estimate, in accordance with IAS 8 Accounting Policies, Changes
in Accounting Estimates and Errors. The consequence of the reassessment of residual
values at 30 June 2017 is an estimated reduction of R760 million in the depreciation
charge for the remainder of the year 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 for the next six months to market factors
prevailing at 30 June 2017. Changes in these factors will influence the depreciation that
may be charged in future periods.
10. Event after the reporting period
On 6 September 2017, Textainer refinanced its R15,5 billion warehouse facility used
to acquire intermodal containers to extend the term and lower the interest rate of the
facility. The facility incorporates a three-year revolving period that was extended to
August 2020. Pricing on the facility consists of a spread over the London Interbank
Offered Rate (LIBOR). The spread was reduced from 2,25% to 1,90%.
11. Restatement - Cash flow
In compiling the consolidated statement of cash flows for the financial year ended 31 December 2016, interest-bearing
borrowings raised amounting to R7 629 million were netted off against interest-bearing borrowings repaid which
resulted in both interest-bearing borrowings raised and repaid being understated by an equal amount of R7 629 million.
The restatement in the current period has no impact on earnings per share or headline earnings per share, and net cash
flows of the group have remained as previously reported.
Amount
previously Restated
R million reported Change amount
Condensed consolidated statement of cash flows
for the year ended 31 December 2016
Cash generated from operations 7 479 - 7 479
Others (7 940) (7 940)
Net cash outflow from operating activities (461) - (461)
Cash inflow from investing activities (358) - (358)
Cash flows from financing activities
Interest-bearing borrowings repaid (1 052) (7 629) (8 681)
Interest-bearing borrowings raised 945 7 629 8 574
Debt issuance costs incurred (88) - (88)
Net cash outflow from financing activities (195) - (195)
Net decrease in cash and cash equivalents
before exchange rate fluctuation (1 014) - (1 014)
Cash and cash equivalents at the beginning
of the year 4 241 - 4 241
Effects of exchange rate fluctuations on
cash and cash equivalents (390) - (390)
Cash and cash equivalents at the end of the year 2 837 - 2 837
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 unaudited amounts stated in US dollars have been prepared by management and have been calculated
by translating the assets and liabilities at the period-end rate of exchange, income statement items at the average
rate of exchange with the difference allocated to the foreign currency translation reserve included in equity.
UNAUDITED CONDENSED CONSOLIDATED INCOME
STATEMENT IN US DOLLARS
for the six months ended 30 June 2017
Unaudited Unaudited Unaudited
Six months ended Year ended
30 June 30 June 31 December
US$ million 2017 2016 2016
Revenue 304,8 330,7 641,8
Trading profit/(loss) before items listed below: 34,4 (27,3) (32,2)
Realised and unrealised exchange losses on
translation of long-term receivables, excluding fair
value adjustment (0,1) (0,3) (0,9)
Fair value adjustment on net long-term
receivables - 3,3 22,1
Impairment of property, plant and equipment (91,3) (242,9) (178,9)
Available-for-sale financial asset - reclassification
from other comprehensive income - 2,1 2,1
Compensation receivable from third party in
respect of impairment of property, plant and
equipment (6,6) - 19,4
Operating loss before net finance expenses (63,6) (265,1) (168,4)
Net finance expenses (64,2) (59,0) (95,1)
Finance expenses Interest expense (66,5) (41,4) (95,9)
-Realised and unrealised
losses on derivative financial
instruments (0,3) (19,3) (3,1)
Finance income Interest income 2,6 1,7 3,9
Share of loss of equity accounted investee (net
of tax) (0,3) (1,3) (0,4)
Loss before tax (128,1) (325,4) (263,9)
Income tax expense/(credit) 2,9 (5,2) 0,2
Loss for the period (131,0) (320,2) (264,1)
Attributable to:
Equity holders of the company (66,0) (158,6) (122,0)
Non-controlling interests (65,0) (161,6) (142,1)
(131,0) (320,2) (264,1)
Number of shares in issue (million) 177,1 177,1 177,1
Weighted average number of shares
in issue (million) 177,1 177,1 177,1
Loss per share (US cents) (37,3) (89,6) (68,9)
Diluted loss per share (US cents) (37,3) (89,6) (68,9)
Headline loss per share (US cents) (11,0) (21,4) (28,5)
Diluted headline loss per share
(US cents) (11,0) (21,4) (28,5)
Adjusted headline loss per share
(US cents) (10,9) (21,3) (28,3)
Diluted adjusted headline loss per share
(US cents) (10,9) (21,3) (28,3)
Period-end rate of exchange:
SA rand to US dollar 12,99 14,88 13,58
Average rate of exchange for the period:
SA rand to US dollar 13,28 15,39 14,72
Trading profit/(loss) from operations comprises:
Textainer and TAC 41,2 (24,9) (23,4)
Other (6,8) (2,4) (8,8)
34,4 (27,3) (32,2)
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF
FINANCIAL POSITION IN US DOLLARS
at 30 June 2017
Unaudited Unaudited Unaudited
30 June 30 June 31 December
US$ million 2017 2016 2016
ASSETS
Property, plant and equipment 3 334,3 3 519,8 3 612,7
Long-term receivables - 30,6 -
Other non-current assets 182,3 193,9 168,5
Total non-current assets 3 516,6 3 744,3 3 781,2
Total current assets 445,2 473,3 425,0
Inventories 34,1 29,5 31,9
Trade and other receivables 118,1 120,7 148,5
Current portion of long-term receivables - 8,1 -
Current portion of net investment in finance
leases 31,4 61,0 34,4
Current tax asset 1,1 - 1,3
Cash and cash equivalents 260,5 254,0 208,9
Total assets 3 961,8 4 217,6 4 206,2
EQUITY
Equity attributable to equity holders of the
company 534,3 575,1 603,7
Non-controlling interests 394,5 436,4 457,8
Total equity 928,8 1 011,5 1 061,5
LIABILITIES
Interest-bearing borrowings 2 575,6 2 952,7 361,8
Amounts attributable to third parties in
respect of long-term receivables - 4,5 -
Derivative financial instruments 0,4 16,7 1,2
Deferred revenue 2,1 2,4 2,3
Deferred tax liabilities 5,1 9,1 4,8
Total non-current liabilities 2 583,2 2 985,4 370,1
Total current liabilities 449,8 220,7 2 774,6
Trade and other payables 42,2 107,0 52,9
Current tax liabilities 10,8 11,3 10,0
Current portion of amounts attributable
to third parties in respect of long-term
receivables 0,4 0,9 4,8
Current portion of interest-bearing
borrowings 396,1 101,2 2 706,6
Current portion of deferred revenue 0,3 0,3 0,3
Total liabilities 3 033,0 3 206,1 3 144,7
Total equity and liabilities 3 961,8 4 217,6 4 206,2
Ratio to total equity:
Total liabilities (%) 326,5 317,0 296,2
Interest-bearing borrowings (%) 319,9 302,0 289,0
Date: 29/09/2017 05:30:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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