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ROLFES HOLDINGS LIMITED - Unaudited condensed consolidated interim results for the period ended 31 December 2018

Release Date: 04/03/2019 13:30
Code(s): RLF     PDF:  
 
Wrap Text
Unaudited condensed consolidated interim results for the period ended 31 December 2018

ROLFES HOLDINGS LIMITED
(Registration number 2000/002715/06)
Incorporated in South Africa
Share code: RLF
ISIN: ZAE000159836
("Rolfes" or "the group")

UNAUDITED CONDENSED CONSOLIDATED INTERIM RESULTS
FOR THE PERIOD ENDED 31 december 2018

PERFORMANCE SUMMARY
Rolfes is a leading black empowered, industry-compliant supplier of agricultural, food, industrial and 
water chemical management solutions for the local and international markets.

Key features
- Revenue from continuing operations increased by 13,5% to R833,1 million
  (31 December 2017: R734,0 million)

- Headline earnings increased by 32,9% to 19,46 cents per share
  (31 December 2017: 14,64 cents per share)

- Cash from operations increased by 19,9% to R71,8 million 
  (31 December 2017: R59,9 million)

- Interim dividend declared of 4 cents per share

- Proceeds received on the finalisation of the sale of the silica mine and foreign 
  operations rationalised

COMMENTARY
STRATEGIC OVERVIEW 
Rolfes is a leading black empowered, industry-compliant supplier of agricultural, food, industrial and 
water chemical management solutions for the local and international markets.

As part of its core organic growth strategy, the Group concentrates on the expansion of its product ranges. 
While the Group will continue to seek acquisitions which have a high barrier to entry, management's priority 
remains to focus on the core businesses, their stability, organic growth and real returns.

DIVISIONAL STRUCTURE 
AGRICULTURAL
The Agricultural division develops, manufactures and distributes products that promote plant root and foliar 
health, soil nutrition, disease prevention and control as well as various other agricultural remedies into 
the agricultural industry. 

FOOD CHEMICALS
Bragan Chemicals is an additive and ingredient supplier, the division imports and locally procures chemical
commodities. Through bulk importation and distribution of additives, ingredients and chemicals we supply 
to our clients who focus on food manufacturing. 

INDUSTRIAL CHEMICALS
The Chemicals division distributes various products and additives including solvents, lacquer thinners, 
surfactants, cleaning solvents, water treatment products, creosotes and waxes into the industrial manufacturing, 
construction and water industry. The division further develops, manufactures and provides leather chemicals 
and treatment solutions into the leather tanning industry.

COLOUR
Rolfes Colour supplies organic and inorganic products,  additives, in-plant and point-of-sale dispersions and 
pigments to all sectors of the paint industry.

WATER
Rolfes Water provides total industrial water management solutions, including specialised water purification 
solutions and products for the commercial cooling sector and the industrial sector. Opportunities exist 
within petrochemical, primary metals, sugar and mining industries. 

GROUP FINANCIAL REVIEW
Revenue increased by 13,5% to R833,1 million (December 2017: R734,0 million). Revenue was positively impacted 
by increased volumes in certain divisions but these could only be achieved at a lower margin; the market was 
tough and pricing was key so as to maintain, and in some areas gain, market share. Pressure on margins, 
specifically in the Food Chemical division, resulted in a lower translation of revenue through to gross 
profit. In terms of the general economic environment the Group saw a strong first four months followed by 
a slow down thereafter. 

Gross profit increased by 3,0% to R171,9 million (December 2017: R166,9 million) and resulted in a gross margin of
20,6% which represents a decline from the comparative period of 22,7%. The reduction in margin percentage was due
to pricing pressure in the food Chemical division and the decrease in sales relating to the higher margin 
products in the Agri division.

Operating profit from continuing operations increased by 27,6% to R60,9 million (December 2017: R47,7 million) at an
operating margin of 7,3% of revenue (December 2017: 6,5%). It should, however, be noted that the comparative period was
impacted by once-off impairments and non-recurring costs without which the operating profit and margin would have been
R66,7 million and 9,1% respectively. The current period included a share-based payment expense of R2,1 million (December
2017: Rnil), trading losses of R4,1 million  relating to the businesses in Zambia and Europe. The return on capital for
both businesses was unsatisfactory; the European business is in the final stages of being closed and the Zambia business
has been restructured as a distributorship by a local partner.

Headline earnings increased by 32,9% to 19,46 cents per share (31 December 2017: 14,64 cents per share) and earnings
per shares increased by 31,2% to 19,30 cents per share (31 December 2017: 14,71 cents per share).

The directors believe that, in the past, normalised headline earnings per share from continuing operations were the
most meaningful measure for evaluating the Group's operational performance. In the current year there were no items 
having an affect on operating profit which required adjustment and therefore the term and reference to normalised 
headline earnings is only utilised for comparative purposes. Headline earnings from continuing operations decreased 
by 22,2% to 18,91 cents per share when compared to the prior year normalised result of 24,32 cents per share.

This unaudited condensed consolidated interim results announcement does not contain the full information 
of the normalised headline earnings for the comparative period. The full information is included as an 
annexure to the results booklet which is available on the Company's website hosted at www.rolfesza.com, 
at the Company's registered office, as well as the offices of the sponsor, for inspection during normal 
office hours at no charge. Any investment decisions by investors should be based on consideration of 
the full results booklet. 

The weighted average number of shares in issue for the year was 161 301 468 and remained unchanged from the
comparative period.

GROUP CASH FLOW PERFORMANCE
Cash generated from operations increased by 19,9% to R71,8 million (31 December 2017: R59,9 million). 
Net working capital increased by R79,0 million and is represented by an increase in inventory of R3,1 million, 
an increase in trade and other receivables of R50,3 million and a decrease in accounts and other payables of 
R25,6 million. Subsequent to period end significant cash was received from debtors, in respect of peak season 
sales, and will have a positive impact on the net working capital movement in the next reporting period. 
Inventory levels as at 31 December 2018 are R338,6 million compared to R351,4 million for December 2017. 
The management of working capital remains a key focus area with the priority of ensuring the businesses have 
sufficient stock to trade over peak periods. Net finance costs amounting to R14,2 million increased by 8,7% 
from R13,0 million in 2017; this is a direct result of the increased net debt which was R226,4 million as at 
31 December 2018 compared to R202,1 million as at 31 December 2017. The increased debt arose due to the need 
for more appropriate inventory levels being in place during the peak seasons in October and November 2018 and 
the reduction in account payables. 

Tax paid amounted to R11,1 million. Dividends paid amounting to R6,5 million represents the 4 cent paid as a final
dividend for the 2018 financial year. Cash utilised in investing activities comprised investment in product development,
predominantly relating to the Agricultural division, amounting to R3,1 million (31 December 2017: R3,6 million) and
additions to property, plant and equipment amounted to R5,0 million (31 December 2017: R2,5 million). Total proceeds 
of R11,6 million were received in respect of the "sale of assets and liabilities held for sale" comprises R8,0 million 
in respect of the Silica mine discontinued and subsequently sold and R3,6 million in respect of the properties owned 
in Botswana.

There remains continued focus on managing the return on capital employed at a business unit level so as to maximise
returns for shareholders. 

OPERATIONAL REVIEW 
AGRICULTURAL 
Revenue increased by 1,7% to R167,1 million (December 2017: R164,3 million). Gross profit margin was maintained at
29,4% (December 2017: 29,4%). The division's performance initially reflected an improved position due to the recovery 
in the Western Cape but the lack of rain inland resulted in subdued sales in November and December 2018. 

Operating profit declined by 10,5% to R17,5 million (December 2017: R19,5 million) due to general cost pressures and
closure of Agchem Europe. Management is focussing on efficiencies and revenue growth. The business has a fairly fixed
cost base and an increase in revenue would result in a flow through to operating profit. 

FOOD CHEMICALS
Revenue increased by 13,6% to R395,6 million (December 2017: R348,2 million) mainly due to higher stock levels
available for sale and a drive to win deals and maintain/improve market share in a tough environment. Gross profit margins
decreased to 15,5% (December 2017: 17,9%) as a direct result of pricing strategies and exchange rate movement. The gross
profit amounted to R61,5 million compared to the prior year of R62,4 million. Management are continuously trying to balance
margin percentage with market share and believe the strategy applied to be appropriate. 

Net operating profit for the year amounted to R38,9 million (December 2017: R38,7 million). 

INDUSTRIAL CHEMICALS
Revenue increased by 15,1% to R221,5 million (December 2017: R192,4 million). Gross margin decreased to 17,9%
(December 2017: 20,0% ) resulting in a gross profit of R39,5 million (December 2017: R38,4 million); an increase 
of R1,1 million. The decrease in gross margin was consistent across both the bulk industrial chemicals and the 
more specialised leather solutions due to a competitive environment with pricing pressure across the board. 

Operating costs remained well controlled and resulted in a net operating profit of R20,7 million (December 2017: 
R20,5 million). The results are impacted by R0,9 million legal fees in preparation for court proceedings relating 
to the case previously disclosed under provision for claims. The matter is ongoing and the court case proceeded 
on 28 January 2019 but the matter has been postponed in favour of a binding arbitration process.

COLOUR
Revenue increased by 19,3% to R43,9 million (December 2017: R36,8 million) gross profit achieved was R7,2 million
representing a margin of 16,3%. The Colour division was previously impacted by inventory impairments. The focus 
is on the reintroduction of a full basket of goods while targeting a reduced working capital requirement over a 
period of time. The management team has made reasonable progress in this regard with inventory reducing to 
R24,7 million (December 2017: R32,4 million). 

The division delivered an operating profit for the first time in years and although modest at R1,2 million the
business is heading in the right direction. Improving working capital utilisation and the return on capital 
remains a focus area. 

WATER 
Revenue decreased by 16,3% to R20,1 million (December 2017: R24,0 million) as the comparative period still had 
a contribution from the Botswana business which has since closed. The lower revenue is disappointing as the 
business relies significantly on tenders which in the current environment are continuously delayed. The quality 
of business, however, has significantly improved and has resulted in an increase in gross profit of R1,0 million. 

The Water business, which has a predominantly fixed cost base and strong intellectual property, had numerous 
successes recently and despite the long lead time for tender awards, momentum is being gained.

OTHER
The Other division within the segmental analysis includes the Jet Park property, Zambia and head office expenses. 
The operating loss for this segment amounted to R17,4 million (December 2017: R21,2 million); it should however 
be noted that the comparative period included non-recurring costs. 

OPERATING ENVIRONMENT AND PROSPECTS 
Our strategy remains focused on developing sustainable businesses delivering long term growth. The group has 
made good progress in a tough operating environment and have concentrated on maximising market share and working 
capital management during this time. The rationalisation of foreign operations was the final step in refining our 
strategy and going back to basics. We will continue to focus on our South African businesses by adding new products, 
leveraging off our customer base and distribution capabilities, and increase our African revenues through direct 
exports. In the current difficult economic environment the Board expects the Group to continue trading 
satisfactorily. 

Any forward looking statements in this announcement have not been reviewed and reported on by the Company's 
auditors. 

DIVIDENDS
Notice is given that an interim gross cash dividend of 4 cents per share in respect of the six months ended 
31 December 2018 has been declared payable, from income reserves, to the holders of ordinary shares recorded 
in the books of the Company on Friday, 5 April 2019. The details of the dividend are presented under 
note 6 subsequent events. 

CHANGES TO THE BOARD 
No changes to the Board during the current period.

On behalf of the Board

MS Teke            RM Buttle
Chairman            Chief Executive Officer

4 March 2019 

UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
as at
                                                                Unaudited         Unaudited         Audited     
                                                              31 December       31 December         30 June     
                                                                     2018              2017            2018    
                                                                    R'000             R'000           R'000    
ASSETS                                                                                                         
Non-current assets                                                354 536           398 853         356 432    
Property, plant and equipment                                      88 118           103 443          86 612    
Intangible assets and goodwill                                    251 284           269 985         251 688    
Deferred tax asset                                                 15 134            25 425          18 132    
Current assets                                                    704 979           737 606         667 216    
Inventories                                                       338 586           351 361         334 739    
Trade and other receivables                                       299 923           304 162         250 533    
Derivative asset                                                       90                 -           6 454    
Cash and cash equivalents                                          57 295            76 800          43 148    
Current tax asset                                                   9 085             5 283          10 205    
                                                                  704 979           737 606         645 079    
Assets classified as held for sale                                      -                 -          22 137    
Total assets                                                    1 059 515         1 136 459       1 023 648    
EQUITY AND LIABILITIES                                                                                         
Capital and reserves                                                                                           
Stated capital                                                    207 721           207 721         207 721    
Retained earnings                                                 284 993           299 056         260 313    
Share-based payment reserve                                         4 548                 -           2 496    
Foreign currency translation reserve                               (1 062)             (423)         (1 679)   
Owners of the parent                                              496 200           506 354         468 851    
Non-controlling interest                                                -            (5 327)              -    
Total equity                                                      496 200           501 027         468 851    
Non-current liabilities                                           281 540           283 771         233 509    
Interest-bearing liabilities                                      256 765           244 389         208 395    
Deferred tax liability                                             16 698            25 676          17 155    
Provisions                                                          8 077            13 706           7 959    
Current liabilities                                               281 775           351 661         321 288    
Trade and other payables                                          253 982           304 365         284 143    
Derivative liability                                                  380             9 338               -    
Interest-bearing liabilities                                       26 895            34 547          26 562    
Current tax liability                                                 518             3 411             835    
                                                                  281 775           351 661         311 540    
Liabilities directly associated with                       
assets classified as held for sale                                      -                 -           9 748    
Total equity and liabilities                                    1 059 515         1 136 459       1 023 648    
Ratios                                                                                                         
NAV per share                                                        3,08              3,11            2,91    
Tangible NAV per share                                               1,52              1,43            1,35    


UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
for the period ended
                                                                Unaudited         Unaudited         Audited
                                                                 6 months          6 months       12 months 
                                                              31 December       31 December         30 June     
                                                                     2018              2017            2018    
                                                                    R'000             R'000           R'000    
Continuing operations                                                                                          
Revenue                                                           833 084           734 015       1 421 648    
Cost of sales                                                    (661 108)         (567 068)     (1 132 489)   
Gross profit                                                      171 976           166 947         289 159    
Other income                                                        5 920             5 789          13 988    
Operating expenses                                               (114 465)         (123 024)       (256 469)   
Impairment of trade and other receivables                            (524)           (2 023)         (3 511)   
Share-based payment expense                                        (2 052)                -          (2 496)   
Operating profit before interest                                   60 855            47 689          40 671    
Finance income                                                        763               430           1 309    
Finance cost                                                      (14 947)          (13 476)        (29 558)   
Profit before taxation                                             46 671            34 643          12 422    
Income tax                                                        (15 771)           (9 092)        (12 717)   
(Loss)/profit from continuing operations                           30 900            25 551            (295)   
Discontinued operations                                                                                        
Loss from discontinued operations, net of tax                         232            (3 990)           (583)   
(Loss)/profit                                                      31 132            21 561            (878)   
Other comprehensive (loss)/income, net of taxation                                                             
Items that may be reclassified subsequently to profit or loss                                                  
Exchange differences on translating of foreign operations             617               274            (982)   
Total comprehensive (loss)/income                                  31 749            21 835          (1 860)   
(Loss)/profit for the year attributable to:                                                                    
Owners of the parent                                               31 132            23 719           1 494    
Non-controlling interest                                                -            (2 158)         (2 372)   
                                                                   31 132            21 561            (878)   
Total comprehensive (loss)/income attributable to:                                                             
Owners of parent                                                   31 749            23 993             512    
Non-controlling interest                                                -            (2 158)         (2 372)   
                                                                   31 749            21 835          (1 860)   


RECONCILIATION OF EARNINGS HEADLINE EARNINGS AND DIVIDENDS PROPOSED/PAID                     
                                                                Unaudited         Unaudited         Audited     
                                                                  for the           for the         for the    
                                                             period ended      period ended    period ended    
                                                              31 December       31 December         30 June     
                                                                     2018              2017            2018    
                                                                    R'000             R'000           R'000    
Continuing operations                                                                                          
Earnings                                                           30 900            27 709           2 077    
Adjusted for:                                                                                                  
(Gain) from sale of property, plant and equipment (net)              (423)              (99)           (756)   
(Gain) from sale of property, plant and equipment (gross)            (587)             (139)         (1 050)   
(Gain) from sale of property, plant and equipment (tax)               164                40             294    
Loss from sale of property, plant and equipment (net)                  23                 -               -    
Loss from sale of property, plant and equipment (gross)                32                 -               -    
Loss from sale of property, plant and equipment (tax)                  (9)                -               -    
Impairment property, plant and equipment (gross)                        -                 -           2 364    
Impairment goodwill (gross)                                             -                 -          16 652    
Headline earnings                                                  30 500            27 610          20 337    
Opening balance (number of shares) ('000)                         161 943           161 943         161 943    
Treasury share (number of shares) ('000)                             (641)             (641)           (641)   
Weighted average number of shares used in basic earnings                                     
per share and headline earnings per share ('000)                  161 302           161 302         161 302    
Dilutive shares                                                     1 763                 -             648    
Weighted average number of shares used in diluted earnings                                   
per share and diluted headline earnings per share ('000)          163 065               161             162    
- Earnings (basic) (cents)                                          19,16             17,18            1,29    
- Earnings (diluted) (cents)                                        18,95             17,18            1,28    
- Headline earnings (basic) (cents)                                 18,91             17,12           12,61    
- Headline earnings (diluted) (cents)                               18,70             17,12           12,56    
Discontinued operations                                                                                        
Earnings                                                              232            (3 990)           (583)   
Adjusted for:                                                                                                  
(Gain) from sale of property, plant and equipment (net)                 -                (4)             (3)   
(Gain) from sale of property, plant and equipment (gross)               -                (4)             (4)   
(Gain) from sale of property, plant and equipment (tax)                 -                 -               1    
Loss from sale of property, plant and equipment (net)                 655                 -               -    
Loss from sale of property, plant and equipment (gross)               910                 -               -    
Loss from sale of property, plant and equipment (tax)                (255)                -               -    
                                                                                                               
Headline earnings                                                     887            (3 994)           (586)   
Opening balance (number of shares) ('000)                         161 943           161 943         161 943    
Treasury share (number of shares) ('000)                             (641)             (641)           (641)   
Weighted average number of shares used in basic earnings                                     
per share and headline earnings per share ('000)                  161 302           161 302         161 302    
Dilutive shares                                                     1 763                 -             648    
Weighted average number of shares used in diluted earnings                                   
per share and diluted headline earnings per share ('000)          163 065           161 302         161 950    
- Earnings (basic) (cents)                                           0,14             (2,47)          (0,36)   
- Earnings (diluted) (cents)                                         0,14             (2,47)          (0,36)   
- Headline earnings (basic) (cents)                                  0,55             (2,48)          (0,36)   
- Headline earnings (diluted) (cents)                                0,54             (2,48)          (0,36)   
                                                                                                               
                                                                                     GROUP   
                                                                Unaudited         Unaudited         Audited     
                                                                  for the           for the         for the    
                                                             period ended      period ended    period ended    
                                                              31 December       31 December         30 June     
                                                                     2018              2017            2018    
                                                                    R'000             R'000           R'000    
Earnings                                                           31 132            23 719           1 494    
Adjusted for:                                                                                                  
(Gain) from sale of property, plant and equipment (net)              (423)             (103)           (759)   
(Gain) from sale of property, plant and equipment (gross)            (587)             (143)         (1 054)   
(Gain) from sale of property, plant and equipment (tax)               164                40             295    
Loss from sale of property, plant and equipment (net)                 679                 -               -    
Loss from sale of property, plant and equipment (gross)               943                 -               -    
Loss from sale of property, plant and equipment (tax)                (264)                -               -    
Impairment property, plant and equipment (gross)                        -                 -           2 364    
Impairment intangible assets and goodwill (gross)                       -                 -          16 652    
Headline earnings                                                  31 388            23 616          19 751    
Opening balance (number of shares) (?000)                         161 943           161 943         161 943    
Treasury share (number of shares) (?000)                             (641)             (641)           (641)   
Weighted average number of shares used in basic earnings                                     
per share and headline earnings per share (?000)                  161 302           161 302         161 302    
Dilutive shares                                                     1 763                 -             648    
Weighted average number of shares used in diluted earnings                                   
per share and diluted headline earnings per share (?000)          163 065           161 302         161 950    
- Earnings (basic) (cents)                                          19,30             14,71            0,93    
- Earnings (diluted) (cents)                                        19,09             14,71            0,92    
- Headline earnings (basic) (cents)                                 19,46             14,64           12,24    
- Headline earnings (diluted) (cents)                               19,25             14,64           12,20    
Dividends                                                                                                      
- Interim proposed/paid (cents)                                         4                 4               4    
- Final paid (cents)                                                    -                 -               4    


CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the period ended
                                                                     Reserves
                                                               Share-           Foreign                                     
                                                                based          currency              Non-                   
                                  Stated       Retained       payment       translation       controlling          Total     
                                 capital       earnings       reserve           reserve          interest         equity    
                                   R'000          R'000         R'000             R'000             R'000          R'000    
Balance at 30 June 2017         
(audited)                        207 721        281 778             -              (697)           (3 169)       485 633    
Total comprehensive             
income for the year                    -         23 719             -               274            (2 158)        21 835    
Dividends paid                         -         (6 441)            -                 -                 -         (6 441)   
Balance at 31 December 2017     
(unaudited)                      207 721        299 056             -              (423)           (5 327)       501 027    
Total comprehensive             
(loss)/income for the year             -        (22 225)            -            (1 256)             (214)       (23 695)   
Share-based payment expense            -              -         2 496                 -                 -          2 496    
Dividends paid                         -         (6 478)            -                 -                 -         (6 478)   
Acquisition of non-controlling  
interest                               -        (10 040)            -                 -             5 541         (4 499)   
Balance at 30 June 2018         
 (audited)                       207 721        260 313         2 496            (1 679)                -        468 851    
Total comprehensive             
income for the year                    -         31 132             -               617                 -         31 749    
Dividends paid                         -         (6 452)            -                 -                 -         (6 452)   
Share-based payment expense            -              -         2 052                 -                 -          2 052    
Balance at 31 December 2018     
(unaudited)                      207 721        284 993         4 548            (1 062)                -        496 200    


CONSOLIDATED STATEMENT OF CASH FLOWS
for the period ended
                                                                                    GROUP
                                                                Unaudited         Unaudited         Audited    
                                                                 6 months          6 months       12 months    
                                                              31 December       31 December         30 June     
                                                                     2018              2017            2018    
Cash flow (utilised in)/generated from:                                                                        
Cash generated from operations                                     71 827            59 895         102 688    
Net working capital movement                                      (79 042)          (46 215)        (38 446)   
Operating activities                                               (7 215)           13 680          64 242    
Net finance cost paid                                             (13 896)          (13 115)        (28 138)   
Tax paid                                                          (11 146)          (16 643)        (26 334)   
Cash (utilised in)/generated from operations                                                  
available for investment and redistribution                       (32 257)          (16 078)          9 770    
Dividends paid                                                     (6 452)           (6 452)        (12 919)   
Cash flow from/(utilised in) investing activities                   3 538            (6 157)         (9 747)   
- Investment in property, plant and equipment                      (5 041)           (2 526)         (3 895)   
- Investment in intangible assets                                  (3 071)           (3 631)         (5 852)   
- Proceeds from sale of assets and                                                            
  liabilities held for sale                                        11 650                 -               -    
Cash flow from/(utilised in) financing activities                  48 703            33 244         (14 486)   
- Interest-bearing liabilities raised                              62 823            43 244          10 537    
- Interest-bearing liabilities repaid                             (14 120)          (10 000)        (20 523)   
- Minority buy-outs                                                     -                 -          (4 500)   
Cash generated/(deficit) for the period                            13 532             4 557         (27 382)   
Effects of exchange rate fluctuations on                                                      
translation of foreign operations                                     615               273          (1 440)   
Cash and cash equivalents                                                                                      
- Beginning of the period                                          43 148            71 970          71 970    
- End of the period                                                57 295            76 800          43 148    


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

1.  BASIS OF ACCOUNTING AND PREPARATION 
1.1 INTRODUCTION
    The unaudited condensed consolidated interim  financial statements are prepared in accordance with the requirements 
    of the JSE Limited's Listings Requirements for reports and the requirements of the Companies Act of South Africa. 
    The Listings Requirements require 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 Pronouncements as 
    issued by 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 preparation of these interim 
    financial statements are in terms of IFRS and are consistent with those applied in the previous consolidated 
    audited financial statements, except for the changes noted below.

1.2 CHANGES IN ACCOUNTING POLICIES
    The adoption of IFRS 9 Financial Instruments and IFRS 15 Revenue from Contracts from Customers, which became 
    effective from 1 July 2018 for the Group, has not had a material impact on the financial position or performance 
    of the Group. No transition adjustments have been recognised in retained earnings.

    IFRS 9 Financial Instruments
    IFRS 9 is the new financial instrument accounting standard and includes the requirements for classification and
    measurement of financial assets, the impairment and derecognition of financial assets, as well as general 
    hedge accounting. 

    The classification and measurement of the Group's financial assets has remained the same as under IAS 39, 
    except for:
    - the measurement of the loss allowances relating to trade and other receivables.
    
    The Group has elected to measure loss allowances for trade receivables at an amount equal to lifetime expected 
    credit losses (ECLs).
    
    ECLs are a probability-weighted estimate of credit losses. Credit losses are measured as the present value of 
    all cash shortfalls. ECLs are discounted at the effective interest rate of the financial asset.
    
    Loss allowances for financial assets measured at amortised costs are deducted from the gross carrying amount 
    of the assets. Impairment losses related to trade receivables are presented separately in profit or loss. 
    As a result, the Group reclassified impairment losses amounting to R2,0 million (Jun 2018: R3,5 million), 
    recognised under IAS 39, from operating expenses to impairment loss on trade receivables in profit or loss.
    
    The Group has taken an exemption not to restate comparative information for prior periods in respect of 
    measurement, i.e. impairment, requirements. Accordingly, there was no amount recognised in retained earnings 
    and the information presented in 2017 does not reflect the requirements of IFRS 9 but rather those of IAS 39.
    
    IFRS 15 Revenue from Contracts with Customers
    IFRS 15 establishes a five-step model for entities to use in accounting for revenue arising from contracts with
    customers. The new standard is based on the principle that revenue is recognised at an amount that reflects 
    the consideration to which the entity expects to be entitled in exchange for transferring goods or services 
    to a customer. The new standard supersedes all current revenue recognition requirements under IFRS.
    
    The Group adopted IFRS 15 using the cumulative effect method (without practical expedients). Accordingly, the
    information presented for 2017 has not been restated. A full analysis was performed on the revenue streams 
    of the Group, concluding that there is no material change to revenue recognition under IFRS 15 from IAS 18.
    
2.  FINANCIAL PREPARATION AND REVIEW
    The unaudited condensed consolidated interim financial statements for the period ended 31 December 2018 have 
    been prepared by Rolfes Holding Limited's Group financial reporting team. This process was supervised by the 
    Group's Chief Financial Officer, Mr AP Broodryk, and approved by the Rolfes Holdings Limited Board of 
    directors on 4 March 2019.
    
3.  SEGMENT REPORT
    Segmental analysis for the year ended 31 December 2018
                                                                                                                Dis-                
                            Agri-                                                                 Total    continued                
                          culture       Food   Chemicals     Colour      Water      Other   (continuing)     (Silica)      Total    
                         Dec 2018   Dec 2018    Dec 2018   Dec 2018   Dec 2018   Dec 2018      Dec 2018     Dec 2018    Dec 2018    
                            R'000      R'000       R'000      R'000      R'000      R'000         R'000        R'000       R'000    
    Total revenue         167 062    395 568     221 502     43 883     20 138     18 258       866 411            -     866 411    
    - External revenue    165 405    390 082     197 885     41 395     20 059     18 258       833 084            -     833 084    
    - Inter-segment                                                                                                   
      revenue               1 657      5 486      23 617      2 488         79          -        33 327            -      33 327    
    Gross profit           49 256     61 519      39 547      7 158     12 905      1 591       171 976            -     171 976    
    EBITDA                 20 366     39 659      21 179      1 706        800    (13 962)       69 748          (25)     69 723    
    HEPS adjustments          255        (18)        147        (14)       177          8           555         (910)       (355)   
    Depreciation                                                                                                      
    and amortisation       (3 144)      (788)       (643)      (509)      (953)    (1 357)       (7 394)           -      (7 394)   
    Share-based                                                                                                       
    payment expense             -          -           -          -          -     (2 052)       (2 052)           -      (2 052)   
    PBIT                   17 477     38 853      20 683      1 183         24    (17 363)       60 857         (935)     59 922    
    Total assets          324 543    440 996     162 463     54 654     37 431     37 500     1 057 587        1 928   1 059 515    
    Total liabilities     (65 674)  (143 240)    (69 901)   (10 922)   (11 657)  (261 563)     (562 957)        (358)   (563 315)   
    NAV                   258 869    297 756      92 562     43 732     25 774   (224 063)      494 630        1 570     496 200    
    Inventories            97 804    157 145      56 311     24 667      3 789     (1 129)      338 587            -     338 587    
    Trade receivables      65 969    143 297      59 226     15 209      6 210      6 882       296 793          416     297 209    
    Trade payables        (46 328)  (136 104)    (56 260)    (8 321)    (8 959)    23 323      (232 649)        (176)   (232 825)   
    Net working capital   117 445    164 338      59 277     31 555      1 040     29 076       402 731          240     402 971    


    Segmental analysis for the year ended 31 December 2017
                                                                                                                Dis-               
                            Agri-                                                                 Total    continued               
                          culture       Food   Chemicals     Colour      Water      Other   (continuing)     (Silica)      Total   
                         Dec 2017   Dec 2017    Dec 2017   Dec 2017   Dec 2017   Dec 2017      Dec 2017     Dec 2017    Dec 2017   
                            R'000      R'000       R'000      R'000      R'000      R'000         R'000        R'000       R'000    
    Total revenue         164 301    348 187     192 431     36 757     24 046     15 537       781 259        1 263     782 522    
    - External revenue    160 859    336 761     167 582     31 857     21 419     15 537       734 015        1 263     735 278    
    - Inter-segment                                                                                                   
      revenue               3 442     11 426      24 849      4 900      2 627          -        47 244            -      47 244    
    Gross profit/(loss)    48 292     62 437      38 419      3 760     11 899      2 139       166 946       (2 327)    164 619    
    EBITDA                 22 386     39 152      21 223     (3 483)    (4 897)   (20 554)       53 827       (4 149)     49 678    
    HEPS adjustments            -        (64)          -        125         79          -           140            4         144    
    Depreciation                                                                                                      
    and amortisation       (2 853)      (411)       (701)      (654)    (1 030)      (628)       (6 277)        (645)     (6 922)   
    IFRS 2 expense              -          -           -          -          -          -             -            -           -    
    PBIT                   19 533     38 677      20 522     (4 012)    (5 848)   (21 182)       47 690       (4 790)     42 900    
    Total assets          337 986    414 241     180 758     69 498     54 715     58 230     1 115 428       21 031   1 136 459    
    Total liabilities    (105 293)  (137 525)    (90 872)   (18 919)   (18 340)  (247 382)     (618 331)     (17 101)   (635 432)   
    NAV                   232 693    276 716      89 886     50 579     36 375   (189 152)      497 097        3 930     501 027    
    Inventories           100 018    139 189      61 124     32 379      4 244      3 871       340 825       10 537     351 362    
    Trade receivables      80 850    133 463      70 783     11 012     11 356    (18 339)      289 125          657     289 782    
    Trade payables        (74 913)  (124 423)    (78 755)   (16 446)    (7 380)    32 293      (269 624)      (1 557)   (271 181)   
    Net working capital   105 955    148 229      53 152     26 945      8 220     17 825       360 326        9 637     369 963    


    Segmental analysis for the year ended 30 June 2018
                                                                                                                Dis-
                            Agri-                                                                 Total    continued
                          culture       Food   Chemicals     Colour      Water      Other   (continuing)     (Silica)      Total
                         Jun 2018   Jun 2018    Jun 2018   Jun 2018   Jun 2018   Jun 2018      Jun 2018     Jun 2018    Jun 2018
                            R'000      R'000       R'000      R'000      R'000      R'000         R'000        R'000       R'000    
    Total revenue         285 810    673 108     396 301     74 713     41 944     29 900     1 501 776        1 307   1 503 083    
    - External revenue    276 502    656 779     355 410     63 244     39 812     29 900     1 421 647        1 307   1 422 954    
    - Inter-segment                                                                                                   
      revenue               9 308     16 329      40 891     11 469      2 132          -        80 129            -      80 129    
    Gross profit           67 080    110 217      77 609      7 928     22 758      3 568       289 160            -     289 160    
    EBITDA                 18 029     64 171      39 918     (3 700)    (7 628)   (35 265)       75 525          (77)     75 448    
    HEPS adjustments         (714)       (76)        (83)    (5 621)    (5 328)    (6 144)      (17 966)           4     (17 962)   
    Depreciation                                                                                                      
    and amortisation       (6 353)    (1 192)     (1 386)    (1 386)    (2 300)    (1 775)      (14 392)        (753)    (15 145)   
    IFRS 2 expense           (317)      (319)       (476)         -       (239)    (1 145)       (2 496)           -      (2 496)   
    PBIT                   10 645     62 584      37 973    (10 707)   (15 495)   (44 329)       40 671         (826)     39 845    
    Total assets          276 479    383 922     198 724     52 851     39 882     50 978     1 002 836       20 812   1 023 648    
    Total liabilities     (60 430)  (137 646)    (96 780)    (7 331)   (11 227)  (229 713)     (543 127)     (11 670)   (554 797)   
    NAV                   216 049    246 276     101 944     45 520     28 655   (178 735)      459 709        9 142     468 851    
    Inventories            82 430    127 288      86 306     29 790      3 726      5 198       334 738            -     334 738    
    Trade receivables      45 721    111 506      58 677     11 629      6 162       (289)      233 406          638     234 044    
    Trade payables        (35 872)  (129 510)    (82 021)    (4 632)    (5 355)     8 285      (249 105)        (716)   (249 821)   
    Net working capital    92 278    109 284      62 962     36 787      4 533     13 194       319 039          (78)    318 961    


4.  REVENUE
    The Group manufactures or procures and sells:
    - Speciality fertilisers, adjuvants and remedies from its Agriculture division.
    - Food ingredient chemicals and personal care chemicals from its Food as well as Other divisions.
    - Industrial solvents and commodity chemicals, speciality chemicals as well as water treatment chemicals 
      from its Chemicals and Other divisions.
    - Solvent and water-based products as well as traded products from its Colour and Other divisions.
    - The Water division provides value-added services and solutions (including chemicals products) to its 
      customers in the commercial cooling and industrial and mining industries.
    
    Sales from these products are recognised when control is transferred to the customer. Transfer of control is 
    dependent on each contract. In some contracts, transfer of control of the product takes place when the product 
    is collected from Group entities while in others it is upon delivery to the customer.
    
    The Group does not have any contracts where the period between the transfer of the promised goods to the 
    customer and payment by the customer exceeds one year. As a consequence, as allowed by the practical expedient
    in IFRS 15, the Group does not adjust any of the transaction prices for the time value of money.

    Revenue from providing services (in the Water division) is recognised over a period of time. Revenue is 
    recognised based on the actual services and goods provided to the customer as a proportion of the total 
    services to be provided because the customer receives and uses the benefits simultaneously. Invoicing is 
    done monthly on actual services provided to date and the consideration is payable when invoiced. There is 
    not a practice to invoice in advance for performance obligations and accordingly at the reporting date 
    there are no outstanding performance obligations.
    
    Estimates of revenues, costs or extent of progress toward completion are revised if circumstances change. 
    Any resulting increases or decreases in estimated revenues or costs are reflected in profit or loss in the 
    period in which the circumstances that give rise to the revision become known by management.
    
    Revenue per regions for the period ended 31 December 2018
                                                                                                   Continuing      
                         Agricultural        Food    Chemicals     Colour      Water      Other    operations      
                             Dec 2018    Dec 2018     Dec 2018   Dec 2018   Dec 2018   Dec 2018      Dec 2018        
                                R'000       R'000        R'000      R'000      R'000      R'000         R'000           
   South Africa               153 541     353 241      212 375     41 753     20 138          -       781 048         
   Africa                       5 222      42 327        9 127      2 130          -     18 258        77 064          
   International                8 299           -            -          -          -          -         8 299           
   Total (gross)              167 062     395 568      221 502     43 883     20 138     18 258       866 411         
   - Inter-segment                                                                                
     revenue                    1 657       5 486       23 617     2 488          79          -        33 327          
   - External revenue         165 405     390 082      197 885    41 395      20 059     18 258       833 084         

    Revenue per regions for the year ended 31 December 2017
                                                                                                   Continuing                   
                         Agricultural        Food    Chemicals     Colour      Water      Other    operations                   
                             Dec 2017    Dec 2017     Dec 2017   Dec 2017   Dec 2017   Dec 2017      Dec 2017                   
                                R'000       R'000        R'000      R'000      R'000      R'000         R'000                   
    South Africa              139 988     311 103      179 513     32 968     22 016          -       685 588         
    Africa                     11 927      37 084       12 918      3 208      2 030     15 537        82 704          
    International              12 386           -            -        581          -          -        12 967          
    Total (gross)             164 301     348 187      192 431     36 757     24 046     15 537       781 259         
    - Inter-segment                                                       
      revenue                   3 442      11 426       24 849      4 900      2 627          -        47 244          
    - External revenue        160 859     336 761      167 582     31 857     21 419     15 537       734 015         

    Revenue per regions for the year ended 30 June 2018
                                                                                                   Continuing
                         Agricultural        Food    Chemicals     Colour      Water      Other    operations    
                             Jun 2018    Jun 2018     Jun 2018   Jun 2018   Jun 2018   Jun 2018      Jun 2018    
                                R'000       R'000        R'000      R'000      R'000      R'000         R'000    
    South-Africa              243 509     598 297      369 511     64 905     40 011          -     1 316 233    
    Africa                     18 302      74 811       26 673      8 019      1 933     29 900       159 638    
    International              23 999           -          117      1 789          -          -        25 905    
    Total (gross)             285 810     673 108      396 301     74 713     41 944     29 900     1 501 776    
    - Inter-segment                                                         
      revenue                   9 308      16 329       40 891     11 469      2 132          -        80 129    
    - External revenue        276 502     656 779      355 410     63 244     39 812     29 900     1 421 647    

    Revenue (timing of recognition) for the period ended 31 December 2018
                                                                                                   Continuing
                                                                                                   operations
                         Agricultural        Food    Chemicals     Colour      Water      Other         Group
                             Dec 2018    Dec 2018     Dec 2018   Dec 2018   Dec 2018   Dec 2018      Dec 2018    
                                R'000       R'000        R'000      R'000      R'000      R'000         R'000    
    At a point in time        167 062     395 568      221 502     43 883          -     18 258       846 273
    Over a period                   -           -            -          -     20 138          -        20 138
    Total                     167 062     395 568      221 502     43 883     20 138     18 258       866 411
    - Inter-segment                                                                                
      revenue                   1 657       5 486       23 617      2 488         79          -            33 
    - External revenue        165 405     390 082      197 885     41 395     20 059     18 258       833 084         

    Revenue (timing of recognition) for the period 31 December 2017
                                                                                                   Continuing
                                                                                                   operations    
                         Agricultural        Food    Chemicals     Colour      Water      Other         Group    
                             Dec 2017    Dec 2017     Dec 2017   Dec 2017   Dec 2017   Dec 2017      Dec 2017    
                                R'000       R'000        R'000      R'000      R'000      R'000         R'000    
    At a point in time        164 301     348 187      192 431     36 757          -     15 537       757 213         
    Over a period                   -           -            -          -     24 046          -        24 046          
    Total                     164 301     348 186      192 431     36 757     24 046     15 537       781 259         
    - Inter-segment                                                                               
      revenue                   3 442      11 426       24 849      4 900      2 627          -        47 244          
    - External revenue        160 859     336 761      167 582     31 857     21 419     15 537       734 015         

    Revenue (timing of recognition) for the period ended 30 June 2018
                         Agricultural        Food    Chemicals     Colour      Water      Other         Group       
                             Jun 2018    Jun 2018     Jun 2018   Jun 2018   Jun 2018   Jun 2018      Jun 2018       
                                R'000       R'000        R'000      R'000      R'000      R'000         R'000       
    At a point in time        285 810     673 108      396 301     74 713          -     29 900     1 459 832      
    Over a period                   -           -            -          -     41 944          -        41 944         
    Total                     285 810     673 108      396 301     74 713     41 944     29 900     1 501 776      
    - Inter-segment                                                         
      revenue                   9 308      16 329       40 891     11 469      2 132          -        80 129         
    - External revenue        276 502     656 779      355 410     63 244     39 812     29 900     1 421 647      

5.  FAIR VALUE DISCLOSURE
    The Group does not have any material items reported at fair value at the year end. Certain financial 
    instruments, being forward exchange contracts are measured using level 2 inputs, and presented under 
    derivative assets and liabilities.    

6.  SUBSEQUENT EVENTS
    Cash dividend declaration                                           
    In accordance with Board policy to review dividend payments to shareholders at the end of each reporting 
    period, notice is hereby given that the Board declared an interim gross cash dividend of 4 cents per 
    ordinary share for year ended 31 December 2018. The dividend will be payable to shareholders recorded 
    in the register of the Company at the close of business on the record date appearing below.
    
    The number of ordinary shares in issue at the date of this declaration is 161 942 800 (which includes 
    641 332 treasury shares).

    The salient dates applicable to the final dividend are as follows:
    Declaration date                                                Monday, 4 March 2019    
    Last date to trade cum dividend                                Tuesday, 2 April 2019    
    Shares commence trading ex-dividend                          Wednesday, 3 April 2019    
    Record date                                                     Friday, 5 April 2019    
    Payment date                                                    Monday, 8 April 2019    

    In accordance with paragraphs 11.17(c)(i) to (x) and 11.17(c) of the JSE Listings Requirements, the 
    following additional information is disclosed:
    - The local dividend tax rate is 20%;
    - The dividends will be paid from cash reserves;
    - The gross dividend to be used in determining the dividend tax is 4 cents per ordinary share;
    - The dividend tax to be withheld by the Company is equal to 0,8 cents per ordinary share;
    - The gross dividend amount is 4 cents per ordinary share for shareholders exempt from dividend tax;
    - The net dividend amount is 3,2 cents per ordinary share for shareholders not exempt from dividend 
      tax; and
    - Rolfes Holdings Limited's income tax reference number is 9492/089/14/0.

    Where applicable, payment in respect of certificated shareholders will be transferred electronically 
    to shareholders' bank accounts on the payment date. In the absence of specific mandates, payment cheques 
    will be posted to certificated shareholders at their risk on the payment date. Shareholders who have 
    dematerialised their shares will have their accounts at their Central Securities Depository Participant 
    or broker credited on the payment date.    

    No share certificates may be dematerialised or rematerialised between Wednesday, 3 April 2019 and 
    Friday, 5 April 2019 both days inclusive.

    There are no additional material events, other than those reported in this announcement, that have 
    occurred between 31 December 2018 and the date of this report which may have a material impact 
    on the understanding of this report and the financial information presented.


CORPORATE INFORMATION
REGISTERED OFFICE
First floor, The Oval West, Wanderers Office Park 52 Corlett Drive, Illovo, 2196

TRANSFER SECRETARIES
Computershare Investor Services Proprietary Limited

DIRECTORS
MS Teke*, (Chairman), RM Buttle (Chief Executive Officer), AP Broodryk (Chief Financial Officer), 
SS Mafoyane *# (Lead Independent Director), MM Dyasi*#, DM Mncube*#, MG Mokoka*#, CS Seabrooke*, 
JR Winer*
* Non-executive # Independent

COMPANY SECRETARY
CorpStat Governance Services Proprietary Limited

PREPARED BY
RM Buttle and AP Broodryk

SPONSORS
Grindrod Bank Limited

REGISTERED AUDITORS
KPMG Inc.

www.rolfesza.com
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