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CARGO CARRIERS LIMITED - Condensed Consolidated Unaudited Interim Financial Statements for 31 August 2018 & Dividend annoucement

Release Date: 17/10/2018 11:50
Code(s): CRG     PDF:  
 
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Condensed Consolidated Unaudited Interim Financial Statements for  31 August 2018 & Dividend annoucement

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")


CONDENSED CONSOLIDATED UNAUDITED INTERIM FINANCIAL STATEMENTS FOR THE PERIOD 
ENDED 31 AUGUST 2018 AND DIVIDEND ANNOUNCEMENT

Condensed consolidated statement of comprehensive income 
                                                                       Unaudited       Unaudited           Audited     
                                                                       31 August       31 August       28 February     
                                                                            2018            2017              2018    
                                                                            R000            R000              R000    
Revenue                                                                                                               
- transport services                                                     315 498         306 755           629 392    
- supply chain and consulting services                                    20 965           4 498             9 514    
- other income*                                                            3 451           1 574             6 692    
                                                                         339 914         312 827           645 598    
Costs and expenses                                                                                                    
- operating and administration costs                                    (207 020)       (185 395)         (393 795)    
- employment costs                                                      (101 880)        (92 876)         (191 518)    
- depreciation of property, plant and equipment                          (19 298)        (19 281)          (38 633)    
                                                                        (328 199)       (297 552)         (623 946)    
Profit from operating activities                                          11 715          15 275            21 652    
(Loss)/profit on disposal of property, plant and equipment                  (692)            581               765    
Impairment                                                                (2 010)         (2 000)           (8 517)    
Revaluation of investment properties                                           -               -             5 035    
Dividend income                                                            2 000               -                 -    
Profits from associates and joint ventures                                 4 145           1 688             4 471    
Profit before finance income and finance cost                             15 158          15 544            23 406    
Finance income                                                             6 039           6 233            12 329    
Finance expense                                                           (4 947)         (6 468)          (12 019)    
Profit before tax                                                         16 251          15 309            23 716    
Taxation                                                                  (1 162)         (3 326)              393    
Profit for the year                                                       15 088          11 983            24 109    
Earnings per share                                                                                                    
Basic and diluted earnings per share (cents)                                77.6            61.8             124.8    
Basic and diluted headline earnings per share (cents)                       87.5            67.0             141.8    
Dividends per share (cents)                                                                                           
- paid during the period                                                    29.5             4.0               6.0    
- declared after the period                                                  7.3             6.4              29.5    
Total dividends                                                             36.8            10.4              35.5    
*Additional rental income from equipment in the current year.                                                         
                                                                       Unaudited       Unaudited           Audited     
                                                                       31 August       31 August       28 February     
                                                                            2018            2017              2018    
                                                                            R000            R000              R000    
Profit for the year                                                       15 088          11 983            24 109    
Other comprehensive income:                                                                                           
Items not to be reclassified to profit or loss in 
subsequent periods:                                                 
Revaluation of owner occupied properties                                       -               -             1 397    
Income tax effect                                                              -               -             (168)    
Other comprehensive income to be reclassified to profit 
or loss in subsequent periods:                                     
Exchange differences on translation of foreign operations                 (1 800)             79            (2 569)    
Other comprehensive loss/(income) for the year, net of tax                (1 800)             79            (1 340)    
Total comprehensive income for the year, net of tax                       13 288          12 062            22 769    
Profit for the year attributable to:                                                                                  
Equity holders of the parent                                              15 048          11 997            24 206    
Non-controlling interest                                                      40             (14)              (97)    
                                                                          15 088          11 983            24 109    
Total comprehensive income, net of tax attributable to:                                                               
Equity holders of the parent                                              13 248          12 076            22 866    
Non-controlling interest                                                      40             (14)              (97)    
                                                                          13 288          12 062           (22 769)    

Condensed consolidated statement of financial position 
                                                                       Unaudited       Unaudited           Audited     
                                                                       31 August       31 August       28 February     
                                                                            2018            2017              2018    
                                                                            R000            R000              R000    
ASSETS                                                                                                                
Non-current assets                                                       427 286         439 790           430 191    
Property, plant and equipment                                            306 344         333 934           312 612    
Investment properties                                                     63 605          58 570            63 605    
Investment in associates                                                  37 460          34 206            34 656    
Investment in joint ventures                                              15 050          13 080            14 208    
Deferred taxation                                                          4 827               -             5 110    
Current assets                                                           344 363         321 972           332 281    
Inventories                                                               11 271           9 242             8 867    
Trade and other receivables                                              166 662         142 330           109 683    
Taxation                                                                   1 717               -                 -    
Cash and short-term deposits                                             164 713         170 400           213 731    
Non-current assets held for sale                                             289           3 867               589    
Total assets                                                             771 938         765 629           763 061    
EQUITY AND LIABILITIES                                                                                                
Share capital                                                                194             194               194    
Non-distributable reserves                                                57 623          56 720            55 824    
Distributable reserves                                                   449 465         429 258           440 316    
Equity attributable to equity holders of the parent                      507 282         486 172           496 334    
Non-controlling interest                                                   1 145           1 188             1 105    
Total equity                                                             508 427         487 360           497 439    
Non-current liabilities                                                  123 602         152 106           145 209    
Deferred taxation                                                         65 322          63 960            65 411    
Employee benefit obligations                                               3 257           4 061             2 501    
Interest-bearing loans and borrowings                                     54 667          84 085            76 941    
Share-based liability                                                        356               -               356    
Current liabilities                                                      139 909         126 163           120 413    
Trade and other payables                                                  89 837          83 300            91 015    
Employee benefit obligations                                               5 988           5 359             5 539    
Interest-bearing loans and borrowings                                     44 084          27 325            21 754    
Taxation                                                                       -          10 179             2 105    
Total equity and liabilities                                             771 938         765 629           763 061    


Condensed statement of changes in equity
                                                                                                   Equity                            
                                                                                                 attribu-                           
                                                              Foreign                            table to                            
                                                             currency      Share-                  equity        Non-                
                                                Asset re-      trans-       based   Distribu-     holders        con-               
                                       Share    valuation      lation    payments       table      of the    trolling      Total     
                                     capital      reserve*    reserve*    reserve*    reserve      parent    interest     equity    
GROUP                                   R000         R000        R000        R000        R000        R000        R000       R000    
Balance as at                            194       52 385       3 970         286     418 098     474 933       1 201    476 135    
28 February 2017                                                                                                                    
Total comprehensive income                 -            -          79           -      11 997      12 076         (14)    12 062    
- Profit/(loss) for the year               -            -           -           -      11 997      11 997         (14)    11 983    
- Other comprehensive income/(loss)        -            -          79           -           -          79           -         79    
Dividends paid                             -            -           -           -        (837)       (837)          -       (837)    
Balance as at                            194       52 385       4 049         286     429 258     486 172       1 188    487 360    
31 August 2017                                                                                                                      
Total comprehensive income                 -        1 229      (2 648)          -      12 209      10 790         (83)    10 707    
- Profit/(loss) for the year               -            -           -           -      12 209      12 209         (83)    12 126    
- Other comprehensive income/(loss)        -        1 229      (2 648)          -           -      (1 419)          -     (1 419)    
Dividends paid                             -            -           -           -      (1 151)     (1 151)          -     (1 151)   
Share-based employment costs               -            -           -         523           -         523           -        523    
Balance as at                            194       53 614       1 401         809     440 316     496 334       1 105    497 439    
28 February 2018                                                                                                                    
Total comprehensive income                 -            -       1 800           -      15 048      16 848          40     16 888    
- Profit for the year                      -            -           -           -      15 048      15 048          40     15 088    
- Other comprehensive income               -            -       1 800           -           -       1 800           -      1 800    
Dividends paid                             -            -           -           -      (5 900)     (5 900)          -     (5 900)    
Balance as at                            194       53 614       3 200         809     449 465     507 282       1 145    508 427    
31 August 2018
*Represents non-distributable reserves.


Condensed consolidated statement of cash flows
                                                                       Unaudited       Unaudited           Audited     
                                                                       31 August       31 August       28 February     
                                                                            2018            2017              2018    
                                                                            R000            R000              R000    
Cash receipts from customers                                             282 935         262 144           631 809    
Cash paid to suppliers and employees                                    (313 216)       (287 036)         (586 343)    
Cash (utilised)/generated from operations                                (30 281)        (24 892)           45 466    
Finance income received                                                    6 039           6 233            12 329    
Finance expense paid                                                      (4 947)         (6 468)          (12 019)    
Tax (paid)/received                                                       (2 104)          3 321            (4 234)    
Dividend paid                                                             (5 900)           (837)           (1 988)    
Dividend income received                                                   2 000               -                 -    
Cash (outflow)/inflow from operating activities                          (35 193)        (22 643)           39 554    
Cash (outflow)/inflow from investing activities                          (11 680)          3 441            (1 515)    
- (Increase)/decrease in loans to associates and joint ventures             (195)           (261)            2 156    
- Purchase of property, plant and equipment                              (15 699)        (10 136)          (14 966)    
- Proceeds from sale of property, plant and equipment                      4 214          13 838            11 295    
Cash inflow/(outflow) from financing activities                               56         (21 481)          (34 196)    
Interest-bearing loans and borrowings repaid and accruals                 (8 188)        (21 481)          (37 220)    
Interest-bearing loans and borrowings raised                               8 244               -             3 024    
(Decrease)/increase in cash and cash equivalents                         (46 817)        (40 683)            3 843    
Cash and cash equivalents at the beginning of the year                   213 731         211 030           211 030    
Foreign exchange movement on cash balances                                (2 200)             53            (1 142)    
Cash and cash equivalents at the end of the year                         164 713         170 400           213 731    


Financial information
                                                                       Unaudited       Unaudited           Audited     
                                                                       31 August       31 August       28 February     
                                                                            2018            2017              2018    
                                                                            R000            R000              R000    
Reconciliation between profit for the year and headline earnings                                                      
Profit attributable to equity holders of the parent                       15 048          11 997            24 206    
Adjustments:                                                                                                          
Loss/(profit) on disposal of property, plant and equipment                   659            (581)            1 598    
- income tax effect                                                         (185)            163              (447)   
Impairment of assets                                                       2 010           2 000             8 973    
- income tax effect                                                         (563)           (560)           (2 512)   
Revaluation of investment properties                                           -               -            (5 035)   
- income tax effect                                                            -               -               720    
Basic and diluted headline earnings for the year                          16 971          13 018            27 502    
Group borrowings                                                                                                      
Borrowing capacity of the group at 50% of total equity                   254 214         243 681           248 720    
Net interest-bearing loans and borrowings                                (98 751)        (58 990)          (98 695)    
Borrowing capacity of the group utilised at year-end                           -               -                 -    
Capital commitments                                                            -               -                 -    
Net asset value per share (cents)                                          2 617           2 506             2 564    
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    


Segmental analysis
                                                                       Unaudited       Unaudited           Audited     
                                                                       31 August       31 August       28 February     
                                                                            2018            2017              2018    
                                                                            R000            R000              R000    
Revenue                                                                                                               
Fuel and Powders                                                         108 185         106 645           221 417    
Chemical and Steel                                                       173 117         164 734           336 446    
Agriculture                                                               35 302          24 358            46 372    
Supply Chain Services                                                     23 310          17 090            41 363    
                                                                         339 914         312 827           645 598    
Profit before finance income and finance cost                                                                         
Fuel and Powders                                                          (8 236)         (4 882)           (6 171)    
Chemical and Steel                                                        13 313          18 506            34 313    
Agriculture                                                                7 362           5 194             1 117    
Supply Chain Services                                                      2 719          (3 274)           (5 853)    
                                                                          15 158          15 544            23 406    

                                                                          
Assets and liabilities
                                                                       Unaudited       Unaudited           Audited     
                                                                       31 August       31 August       28 February     
                                                                            2018            2017              2018    
                                                                            R000            R000              R000    
Allocation of total assets                                                                                            
Fuel and Powders                                                         245 687         261 009           261 704    
Chemicals and Steel                                                      393 145         403 179           397 661    
Agriculture                                                               80 169          59 615            54 808    
Supply Chain Services                                                     52 937          41 827            48 888    
Allocation of total liabilities                                                                                       
Fuel and Powders                                                          83 868          89 833            91 101    
Chemicals and Steel                                                      134 205         138 764           138 427    
Agriculture                                                               27 367          20 518            19 079    
Supply Chain Services                                                     18 071          14 396            17 015    


Changes in accounting policies 
Revenue and financial instruments
The Group adopted IFRS 15 Revenue from Contracts with Customers (IFRS 15) and IFRS 9 Financial Instruments (IFRS 9)
with a date of initial application of 1 March 2018. As a result, the group has changed its accounting policies 
relating to these financial reporting processes as detailed below.

The group has elected not to restate comparative information in both cases and has assessed the cumulative effect 
of initially applying the new standards to the opening balance of equity at the date of initial application, which 
is immaterial as reflected below.

No adjustments have been made to the opening balance of retained earnings as the impact of the new standard is
immaterial.

The following table summarises the potential impact of adopting IFRS 15 and IFRS 9 on the group's consolidated
financial statements:

Consolidated statement of changes in equity                                               Equity                      
                                                                                    attributable                       
                                                                                       to equity              Non-    
                                                                Distributable            holders       controlling     
                                                                     reserves      of the parent          interest    
                                                                         R000               R000              R000    
Balance at 28 February 2018                                           440 316            496 334             1 105    
Impact of change in accounting policy for IFRS 15                          75                 75                 -    
Impact of change in accounting policy for IFRS 9                          551                551                 -    
Balance at 1 March 2018 if restated                                   440 942            496 960             1 105    


Commentary
During the six-month period ended 31 August 2018, the group has continued to focus on strengthening customer
relations, expansion via organic growth, capitalising on the investment in warehousing and improving its 
BBBEE scorecard.

Operational performance
While the economic environment has remained challenging there has been growth within the group with revenue 
increasing by 9% to R339.9  million (August 2017: R312.8 million). Profit before tax (PBT) has also improved by 
7% to R16.2 million from R15.2 million.

Agriculture and Supply Chain Services have performed well, with revenue growing by 45% (R10.9 million) and 36% 
(R6.2 million) respectively. Growth in earnings before interest and tax (EBIT) for Agriculture is 40% at R7.3 million 
(August 2017: R5.2 million) and Supply Chain Services is 184% at R2.7 million (August 2017: R3.2 million loss).

Despite adverse weather conditions, the Agriculture segment has managed to improve its revenue and EBIT through
operating efficiently, organic growth of existing business and securing new business.

The group is also beginning to see the rewards of investing in the warehousing sector with its contribution being 
R19 million to the overall Supply Chain segment revenue of R23 million.

The Chemicals & Steel segment achieved a 5% increase in revenue. EBIT has, however, decreased by 28%. This is largely
due to rate and cost pressure.

Fuel & Powders has underperformed as the cement industry continues to be significantly depressed. The EBIT loss was
R8.2 million (August 2017: R4.8 million loss).

Financial position
The group's liquidity and solvency ratios remain strong at 2.46 and 2.93 respectively. (February 2018: 2.76 and 2.93).

Earnings per share
Basic and diluted earnings per share is 77.6 cents. This is a 26% increase from the prior year.

The headline earnings per share improved to 87.5 cents, a 30.6% increase.

Changes to the board
Mr MJ Bolton's role changed from executive director to non-executive director with effect from 17 March 2018. 
Mr AE Franklin retired from the board on 26 July 2018.

Broad-based black economic empowerment
The group is proud to announce that it has improved its BBBEE status from level 3 to level 2, and a scorecard
improvement from 75 to 95 points. The black ownership percentage has also improved to 53%.

Prospects
We anticipate that the cement industry will remain a challenge in the second half of the year. There is a positive
outlook for the rest of the business. Our focus will remain on efficiency, cost management and growth.

Preparation of results and accounting policies
The condensed consolidated interim financial statements are prepared in accordance with 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 Financial Reporting Standards Council and the
requirements of the Companies Act of South Africa. 

Management has completed the process of consulting with the required expertise to assess the impact of IFRS 16 on the
group's results. A right of use asset and a lease liability will be recognised for previously reported operating leases.
The impact on the statement of financial position will be between 0.5% and 1% of the total asset value.

IFRS 15 and IFRS 9 have not had a material impact on the financial statements and hence the opening balances have not
been restated. 

Except for the effects of the implementation of the accounting policies referred to above, the rest of the accounting 
policies are consistent with those applied in the prior year financial statements and the carrying amounts of financial 
instruments approximates their fair values. 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).

Events after the reporting period
There were no significant events after the reporting period.

Dividend declaration
The board has resolved to declare a gross interim cash dividend (number 55) of 7.3 cents per share (2017: 6.4 cents)
for the period ended 31 August 2018. The dividend has been declared out of income reserves.

The dividend will be subject to a dividend withholding tax rate of 20% or 1.46 cents per ordinary share. Shareholders,
unless exempt or qualifying for a reduced withholding tax rate, will receive a net dividend of 5.84 cents per share
(2017: 5.5 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, 6 November 2018    
Shares commence trading "ex" the dividend                                            Wednesday, 7 November 2018    
Record date (date shareholders recorded in share register)                              Friday, 9 November 2018    
Payment date                                                                           Monday, 12 November 2018    

Shareholders may not dematerialise or rematerialise their share certificates between Wednesday, 7 November 2018 
and Friday, 9 November 2018, both dates inclusive.


Registered office
11A Grace Road, Mountainview, Observatory, Johannesburg, 2198 

Directors
SP Mzimela* (Chairperson), MJ Bolton#, BB Fraser#, V Raseroka*, SF Nomvalo*, A Gcabashe*, N Medupe*, GD Bolton
(Executive), LS Letsoalo (CEO), J Kriel (CFO)
#non-executive director *independent non-executive director 

Retirement
AE Franklin 26 July 2018

By order of the board
Arbor Capital Company Secretarial (Pty) Ltd 
17 October 2018

Transfer secretaries
Computershare Investor Services (Pty) Ltd
Rosebank Towers, 15 Biermann Avenue, Rosebank, 2196 
(PO Box 61051, Marshalltown, 2107) 

Sponsor
Arbor Capital Sponsors (Pty) Ltd 

Website
www.cargocarriers.co.za
Date: 17/10/2018 11:50:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
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