Wrap Text
Summarised Unaudited Interim Financial Statements for the Period Ended 31 August 2017 and Dividend Announcement
Cargo Carriers Limited
Registration number: 1959/003254/06
Incorporated in the Republic of South Africa
JSE share code: CRG ISIN: ZAE000001764
("Cargo Carriers" or "the company" or "the group")
Building today for TOMORROW
SUMMARISED UNAUDITED INTERIM FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 AUGUST 2017 AND DIVIDEND ANNOUNCEMENT
Financials
Condensed consolidated statement of comprehensive income
Unaudited Unaudited Audited
31 August 31 August 28 February
2017 2016 2017
R000 R000 R000
Continuing operations
Revenue
- transport services 309 551 288 496 576 106
- other income 3 276 1 764 5 603
312 827 290 260 581 709
Costs and expenses
- operating and administration costs (185 395) (177 890) (364 830)
- employment costs (92 876) (92 431) (178 994)
- depreciation of property, plant and equipment (19 281) (15 515) (33 455)
(297 552) (285 836) (577 279)
Profit from operating activities 15 275 4 423 4 430
Profit/(loss) on disposal of property, plant and equipment 581 (2 196) (4 566)
Impairment of assets (2 000) (2 052) (6 999)
Revaluation of investment properties - - 2 555
Dividend income - - 856
Profits from associates and joint ventures 1 688 2 490 5 425
Profit before finance income and finance cost 15 544 2 665 1 701
Finance income 6 233 6 226 12 944
Finance expense (6 468) (5 102) (12 892)
Profit before tax from continuing operations 15 309 3 789 1 753
Taxation (3 326) (4 547) (3 986)
Profit/(loss) for the year from continuing operations 11 983 (759) (2 233)
Discontinued operations
Profit on sale of discontinued operations - 25 201 24 542
Profit for the year 11 983 24 442 22 309
Other comprehensive income (continuing):
Items not to be reclassified to profit or loss in
subsequent periods:
Revaluation of owner occupied properties (continuing) - - 3 825
Income tax effect (continuing) - - (663)
Other comprehensive income to be reclassified to profit or
loss in subsequent periods:
Exchange differences on translation of foreign operations 79 (790) (2 121)
Other comprehensive income/(loss) for the period, net of tax 79 (790) 1 041
Total comprehensive income for the period, net of tax 12 062 23 652 23 350
Profit for the period from continuing activities attributable to:
Equity holders of the parent 11 997 (756) (2 228)
Non-controlling interest (14) (3) (5)
11 983 (759) (2 233)
Profit for the period from continuing and discontinued
operations attributable to:
Equity holders of the parent 11 997 24 445 22 314
Non-controlling interest (14) (3) (5)
11 983 24 442 22 309
Total comprehensive income, net of tax attributable to:
Equity holders of the parent 12 076 23 655 23 355
Non-controlling interest from continuing operations (14) (3) (5)
12 062 23 652 23 350
Condensed consolidated statement of financial position
Unaudited Unaudited Audited
31 August 31 August 28 February
2017 2016 2017
R000 R000 R000
ASSETS
Non-current assets 439 790 431 939 457 106
Property, plant and equipment 333 934 362 747 351 511
Investment properties 58 570 25 989 58 570
Investment in associates 34 206 31 771 33 350
Investment in joint ventures 13 080 11 370 13 675
Deferred taxation - 62 -
Current assets 321 972 313 603 315 646
Inventories 9 242 8 959 8 722
Trade and other receivables 142 330 136 905 95 894
Cash and short-term deposits 170 400 164 624 211 030
Taxation - 3 114 -
Disposal group and non-current assets held for sale 3 867 2 543 6 172
Total assets 765 629 748 085 778 924
EQUITY AND LIABILITIES
Share capital 194 194 194
Non-distributable reserves 56 720 54 524 56 641
Distributable reserves 429 258 421 641 418 098
Equity attributable to equity holders of the parent 486 172 476 359 474 933
Non-controlling interest 1 188 1 193 1 202
Total equity 487 360 477 553 476 135
Non-current liabilities 152 106 143 864 167 491
Deferred taxation 63 960 70 016 66 820
Employee benefit obligations 4 061 2 111 1 995
Interest-bearing loans and borrowings 84 085 71 737 98 676
Current liabilities 126 163 126 668 135 298
Trade and other payables 83 300 89 136 95 310
Employee benefit obligations 5 359 6 311 5 333
Interest-bearing loans and borrowings 27 325 31 221 34 215
Taxation 10 179 - 440
Total equity and liabilities 765 629 748 085 778 924
Condensed statement of changes in equity
Foreign
Asset currency Share-
re- trans- based
Share valuation lation payments
capital reserve* reserve* reserve*
GROUP R000 R000 R000 R000
Balance at 194 59 590 (1 523) -
29 February 2016
Total comprehensive income - - (790) -
- Loss for the period from continuing operations - - - -
- Profit for the period from discontinued operations - - - -
- Other comprehensive loss - - (790) -
Dividends paid - - - -
Disposal of subsidiary - (10 367) 7 614 -
Balance at 31 August 2016 194 49 223 5 301 -
Total comprehensive income - 3 162 (1 331) -
- (Loss)/profit for the period from continuing operations - - - -
- Loss for the period from discontinued operations - - - -
- Other comprehensive income/(loss) from
continuing operations - 3 162 (1 331) -
Unclaimed dividends - - - -
Dividends paid - - - -
Issue of ordinary shares 12 247 - - -
Treasury shares (12 247) - - -
Share-based employment costs - - - 286
Balance at 28 February 2017 194 52 385 3 970 286
Total comprehensive income/(loss) - - 79 -
- Profit/(loss) for the period - - - -
- Other comprehensive income - - 79 -
Dividends paid - - - -
Balance at 31 August 2017 194 52 385 4 049 286
*Represents non-distributable reserves.
Condensed statement of changes in equity continued
Equity
attribu-
table to
equity
Distribut- holders Non-
able of the controlling Total
reserve parent interest equity
GROUP R000 R000 R000 R000
Balance at 397 911 456 172 1 942 458 114
29 February 2016
Total comprehensive income 24 445 23 655 (3) 23 652
- Loss for the period from continuing operations (756) (756) (3) (759)
- Profit for the period from discontinued operations 25 201 25 201 - 25 201
- Other comprehensive loss - (790) - (790)
Dividends paid (4 212) (4 212) - (4 212)
Disposal of subsidiary 3 497 745 (745) -
Balance at 31 August 2016 421 641 476 360 1 193 477 553
Total comprehensive income (2 134) (303) 8 (295)
- (Loss)/profit for the period from continuing operations (1 475) (1 475) 8 (1 467)
- Loss for the period from discontinued operations (659) (659) - (659)
- Other comprehensive income/(loss) from
continuing operations - 1 831 - 1 831
Unclaimed dividends (19) (19) - (19)
Dividends paid (1 390) (1 390) - (1 390)
Issue of ordinary shares - 12 247 - 12 247
Treasury shares - (12 247) - (12 247)
Share-based employment costs - 286 - 286
Balance at 28 February 2017 418 098 474 933 1 202 476 135
Total comprehensive income/(loss) 11 997 12 076 (14) 12 062
- Profit/(loss) for the period 11 997 11 997 (14) 11 983
- Other comprehensive income - 79 - 79
Dividends paid (837) (837) - (837)
Balance at 31 August 2017 429 258 486 172 1 188 487 360
*Represents non-distributable reserves.
Condensed consolidated statement of cash flows
Unaudited Unaudited Audited
31 August 31 August 28 February
2017 2016 2017
R000 R000 R000
Cash receipts from customers 262 144 332 778 566 029
Cash paid to suppliers and employees (287 036) (355 876) (521 944)
Cash (utilised)/generated by operations (24 892) (23 098) 44 085
Finance income received 6 233 6 226 12 944
Finance costs paid (6 468) (5 102) (12 892)
Taxation received/(paid) 3 321 (15 681) (16 003)
Dividend income received - - 856
Dividend paid (837) (4 211) (5 620)
Net cash (outflow)/inflow from operating activities (22 643) (41 865) 23 370
Net cash inflow/(outflow) from investing activities 3 441 (15 537) (62 982)
- Proceeds on disposal of investment in subsidiary - 26 312 25 652
- Decrease in loans to joint venture and associate (261) (219) (809)
- Replacement of tangible assets (10 136) (51 462) (101 124)
- Proceeds on sale of tangible assets 13 838 9 832 13 299
Net cash (outflow)/inflow from financing activities (21 481) 42 866 72 798
Secured loans repaid (21 481) (27 126) (39 667)
Secured loans raised - 69 992 112 465
Net (decrease)/increase in cash (40 683) (14 536) 33 186
Net cash at the beginning of the year 211 030 180 349 180 349
Net foreign exchange difference 53 (1 190) (2 505)
Net cash at the end of the year 170 400 164 624 211 030
Financial information
Unaudited Unaudited Audited
31 August 31 August 28 February
2017 2016 2017
R000 R000 R000
Dividends per ordinary share (cents)
- paid during the period 4 20 8
- declared after the period 6 8 4
Total dividends 10 28 12
Earnings per ordinary share
Basic and diluted earnings per ordinary share
(continuing operations) (cents) 61.8 (3.9) (11.5)
Basic and diluted earnings per ordinary share
(discontinued operations) (cents) - 129.8 126.5
Basic and diluted earnings per ordinary share
(total operations) (cents) 61.8 125.9 115.0
Headline earnings per ordinary share
Basic and diluted headline earnings per ordinary share
(continuing operations) (cents) 67.0 11.9 18.3
Basic and diluted headline earnings per ordinary share
(discontinued operations) (cents) - 18.2 28.3
Basic and diluted headline earnings per ordinary share
(total operations) (cents) 67.0 30.0 46.6
Reconciliation:
Basic and diluted earnings per ordinary share
(total operations) (cents) 61.8 125.9 115.0
Adjustments (cents):
Continuing operations 5.2 15.8 29.8
(Profit)/loss on disposal of property, plant and equipment (2.2) 8.1 16.9
Impairment of assets 7.4 7.6 26.0
Revaluation of investment properties - - (13.1)
Discontinued operations - (111.7) (98.2)
Profit on the disposal of subsidiary - (111.7) (98.2)
Basic and diluted headline earnings per ordinary share (cents) 67.0 30.0 46.6
Group borrowings
Borrowing capacity of the group at 50% of total equity 243 681 238 777 238 068
Net interest-bearing loans and borrowings (58 990) (61 666) (78 139)
Borrowing capacity of the group utilised at year-end - - -
Capital commitments - - -
Net asset value per ordinary share (cents) 2 506 2 455 2 448
Closing ordinary shares in issue 21 052 21 052 21 052
Treasury shares held in trust 594 594 594
Treasury shares - employee ownership plan shares in issue 1 052 1 052 1 052
Weighted average ordinary shares in issue 19 406 19 406 19 406
Segment analysis
Unaudited Unaudited Audited
31 August 31 August 28 February
2017 2016 2017
R000 R000 R000
Revenue
Fuel and Powders 106 645 116 922 234 087
Chemical and Steel 164 734 154 384 303 182
Sugar 24 358 10 813 24 816
Supply Chain Services 17 090 8 141 19 624
312 827 290 260 581 709
Profit before finance income and finance cost
Fuel and Powders (4 882) 480 (2 677)
Chemical and Steel 18 506 13 197 19 230
Sugar 5 194 (7 465) (7 274)
Supply Chain Services (3 274) (3 547) (7 580)
Continuing operations 15 544 2 665 1 701
Discontinued operations - 25 201 24 542
15 544 27 866 26 243
Commentary
The focus of the group this year has been on driving operational and cost efficiency within the business, maintaining
a strong balance sheet, as well as a refresh of our key operational management system.
Despite the challenging economic environment, particularly within the cement and mining industries, revenue increased
by 7% to R312 million (August 2016: R290 million), and EBIT increased from R2.7 million to R15.5 million, representing
a 483% increase.
We have maintained our strong liquidity position which has improved from 2.48 to 2.55, while solvency remained at
2.75. In addition, total debt has reduced by R24.5 million to R278 million (February 2017: R303 million).
Operational performance
Overall the operational performance of the group was good, with significant improvements in the Chemicals & Steel and
Sugar segments. The Fuel & Powders segment has performed poorly, although the Fuel business has performed acceptably,
the Powders business has struggled due to significant pressures experienced within the cement industry.
Chemicals & Steel have increased revenue by R10 million (7%) to R165 million (August 2016: R154 million), with an
EBIT increase of R5 million to R18 million (August 2016: R13 million). This represents 40% growth over the prior year.
An increased focus on service and operating efficiency with our customers has contributed to this positive result.
Sugar has generated revenue of R24 million (August 2016: R11 million) and an EBIT of R5 million profit
(August 2016: R8 million loss), having benefited from late seasonal rain and new business gained.
Total revenue for the Fuel & Powders segment was R107 million (August 2016: R117 million), largely driven by
reduced demand within the powders sector, which resulted in a loss of R5 million (August 2016: R480 000 profit).
Challenges experienced within the cement industry included:
- Increased price competition, particularly in inland markets;
- Higher level of imports from Pakistan and China; and
- Increased competition for critical skills.
As a result, the division has experienced immense pressure for rate reductions coupled with lower demand.
Supply Chain Services has improved revenue by R9 million to R17 million (August 2016: R8 million), with an EBIT loss
of R3 million (August 2016: R3 million loss). This is due to our continued strategic investment in our warehousing
capability and capacity which has been part of a multi-year phased roll-out approach. We believe the leveraging of
our in-house technology provides a competitive edge that will enhance our customers' businesses.
Our associate and joint venture partnerships have yielded satisfactory results, contributing R1.6 million
(August 2016: R2.5 million) to the overall operating profit result.
Earnings per ordinary share
Basic and diluted earnings per ordinary share from continuing operations is 61.8 cents (August 2016: (3.9) cents).
This is a 65.7 cents increase from the prior year. The headline earnings per ordinary share from continuing
operations is 67.0 cents (August 2016: 11.9 cents).
Prospects
The group has identified key operational and strategic objectives for the remaining six months. Opportunities for
organic and inorganic growth are being evaluated, key areas in which operational efficiencies can be obtained have
been defined and monitored. There is a strong focus on improving our BBBEE scorecard in light of the revised sector
charter codes, although this is not yet effective.
Preparation of results and accounting policies
The interim condensed consolidated financial statements for the period ended 31 August 2017 have been prepared in
accordance with the framework concepts and the recognition and measurement criteria of International Financial Reporting
Standards (IFRS), IAS 34 Interim Financial Reporting, the SAICA Financial Reporting Guides as issued by the Accounting
Practices Committee and Financial Pronouncements as issued by the Financial Reporting Standards Council, the Listings
Requirements of the Johannesburg Stock Exchange and the requirements of the Companies Act 71 of 2008.
The initial assessments of IFRS 9 Financial Instruments, IFRS 15 Revenue from Contracts with Customers and IFRS 16 Leases
have identified the following impacts to the financial results:
- IFRS 9: The impact on measurement and classification of financial assets and provisions is not anticipated to have a
material effect on the financial performance or position as there are no complex financial instruments within the
group. Financial instruments currently consist of accounts receivable, accounts payable and interest-bearing borrowings
in the form of finance leases.
- IFRS 15: All contracts have been identified and the initial assessment of the performance obligations indicates
minor impact to revenue recognition as the majority of contracts are transport service-related which encompasses same
day delivery while there are no multiple performance obligations within a contract.
- IFRS 16: The majority of leases are finance leases for vehicles which are recognised on the statement of financial
position already (as lessee). Properties leased as lessee will be accounted for on the single "on-statement of financial
position" model, with the interest expense on the lease liability and depreciation expense on the right-of-use of
assets, recognised separately. Where properties are leased as lessor on an operating lease basis, it is anticipated
that the disclosure and measurement will remain unchanged and in line with the current accounting policy and IAS 17.
The group will adopt the modified retrospective model for IFRS 9 and IFRS 15.
The accounting policies are consistent with those applied in the prior year financial statements and the carrying
amounts of financial instruments approximate their fair value. These results have not been audited nor have they been
reviewed by the group's auditors, Ernst & Young Inc. The interim condensed consolidated financial statements were
compiled under the supervision of the chief financial officer, Mr J Kriel CA (SA).
Changes to the board
Ms Amanda Gcabashe and Mr Freeman Nomvalo were appointed as independent non-executive directors with effect from
30 March 2017 and Ms Ndumi Medupe was appointed as an independent director with effect from 5 May 2017.
Mrs Matsotso Vuso retired from the board with effect from 27 July 2017.
Events after the reporting period
Subsequent to the period end, it was announced that Mr Lekau (Solly) Letsoalo has been appointed to the position of
CEO with effect from 8 January 2018.
Dividend declaration
The board has decided to declare a gross interim cash dividend (number 53) of 6 cents per share (2016: 8.0 cents) for
the period ended 31 August 2017. The dividend has been declared out of income reserves.
The dividend will be subject to a dividend withholding tax rate of 20% or 1.2 cents per ordinary share. Shareholders,
unless exempt or qualifying for a reduced withholding tax rate, will receive a net dividend of 4.8 cents per share
(2016: 6.8 cents).
Cargo Carriers' tax reference number is 9900156713 and the number of ordinary shares in issue at the declaration date
is 21 052 632, of which 1 646 342 are treasury shares.
The salient dates for the dividend are as follows:
Last day to trade "cum" the cash dividend (LDT) Tuesday, 14 November 2017
Shares commence trading "ex" the dividend Wednesday, 15 November 2017
Record date (date shareholders recorded in share register) Friday, 17 November 2017
Payment date Monday, 20 November 2017
Shareholders may not dematerialise or rematerialise their share certificates between Wednesday, 15 November 2017
and Friday, 17 November 2017, both dates inclusive.
Registered office
11A Grace Road, Mountainview, Observatory, Johannesburg, 2198
Directors
SP Mzimela* (Chairperson), AE Franklin*, BB Fraser#, V Raseroka*, SF Nomvalo*, A Gcabashe*, N Medupe*,
GD Bolton (Executive), MJ Bolton (CEO), J Kriel (CFO)
#non-executive director *independent non-executive director
Appointments
A Gcabashe 30 March 2017
F Nomvalo 30 March 2017
N Medupe 5 May 2017
Retirement
MJ Vuso 27 July 2017
Company secretary
Arbor Capital Company Secretarial (Pty) Limited
24 October 2017
Transfer secretaries
Computershare Investor Services (Pty) Limited
Rosebank Towers, 15 Biermann Avenue, Rosebank, 2196
(PO Box 61051, Marshalltown, 2107)
Sponsor
Arbor Capital Sponsors (Pty) Limited
Website
http://www.cargocarriers.co.za
Date: 25/10/2017 03:23:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
Sharenet Sites 
