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Yorkor Limited - Media Release

Release Date: 10/09/2002 12:07
Code(s): YRK
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Yorkor Limited - Media Release Exports help yorkCor post four-fold increase in mid term earnings A sharp improvement in exports and tighter asset management allowed Yorkcor to post a four-fold increase in earnings for the six months to 30 June 2002. "The sawn timber industry has never looked better," says chairman Solly Tucker, in a particularly upbeat review for the period. "Yorkcor has begun to harvest the fruits of its improved strategic position and operational capability." Earnings rose to R1,3 million from R325,000 for the corresponding period in 2001, with a matching improvement in headline earnings per share to 11,9c (2001: 2,9c). This was achieved on a 24% increase in revenue to R41,7 million, and a 22,2% improvement in the group sales margin - boosted by the growing focus on value-added products and the upturn in market demand. There was a dramatic improvement in cash generation to R6,7 million for the interim period (2001: an outflow of R243 000). Tucker says the drop in the current ratio from 1,57 to 1,12 masks gains accomplished by tighter working capital management. Interest bearing debt was retired and group gearing dropped from 29% to 9%, resulting in a halving in the interest burden. Unused banking facilities at the end of the half-year stood at about R13 million. "We were braced for better market conditions this year, as forecast," adds Tucker. "Business, at last, is brisk. A key factor has been the surge in exports of sawn timber, especially `show wood` for the furniture industry. The advent of hospitable niche timber markets was good for the small and, like Yorkcor, the medium-sized operator. We expect Yorkcor`s second half performance to be even better." It was a busy period for Yorkcor: apart from the much improved financial results, the group notched up another victory in its legal battle to defend its evergreen supply contracts with State forestry group Safcol, and joined Paharpur Cooling Towers of India in a bid for the Komatiland forests, 75% of which are up for privatisation. Paharpur is listed as a reserve bidder. The privatisation of these forests was thrown into disarray by media allegations of corruption involving a Department of Public Enterprises official. Yorkcor continues to defend its evergreen contracts, and in June 2002 the Competition Tribunal dismissed an attempt by Safcol and the Competition Commission to strike down these contracts. Another attempt by Safcol to terminate one of Yorkcor`s evergreen contracts was heard in the High Court in April 2002. Judgment is expected shortly. Yorkcor`s black economic empowerment initiative, Madiba Mills, is unique in being almost 100% staffed and run by people drawn from previously disadvantaged groups. Madiba Mills now competes successfully in the fiercely contested lumber milling market, and Yorkcor plans to replicate its business model as part of the plan to nurture downstream empowerment enterprises benefiting from the Komatiland forests. This will unlock widespread opportunity amongst communities in hard-pressed rural areas in Mpumalanga and Limpopo. The company continues to trade under a cautionary released on 15 July 2002, which advised shareholders that it was negotiating the amount of compensation payable for the termination of one of Yorkcor`s evergreen contracts in 2006. The government has agreed that compensation is due: only the quantum is to be determined, if not by agreement then by arbitration. Although negotiations have narrowed many of the differences, the quantification is being referred to arbitration, which stipulates finality by 31 December 2002. Shareholders are therefore advised to continue exercising caution in dealing in the company`s shares until a further announcement is made. Looking ahead, Tucker says the directors, "expect the group to acquit itself as well in the second half of 2002 as it did in the first half". Ends.Yorkcor/ mrelease/ Interim results.mr.v3 ISSUED FOR: Yorkcor Limited CONTACT: Solly Tucker (012) 804 9730/083 456 9900 FAX NO: (012) 804 8611 E-MAIL: Sol@yorkkcor.co.za WEBSITE: www.yorkcor.co.za ISSUED BY: TISH STEWART PR ASSOCIATES CONTACT: Tish Stewart (011) 325 4195 Cell: 082 443 6399
FAX NO: (011) 325-4199 E-MAIL: Tish@tspr.co.za DATE: 10 September 2002 Date: 10/09/2002 12:04:47 PM Supplied by www.sharenet.co.za Produced by the JSE SENS Department

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