YORK TIMBER HOLDINGS LIMITED - Unaudited condensed consolidated interim financial results for the six months ended 31 December 2018

Release Date: 25/03/2019 07:05
Code(s): YRK
 
Wrap Text
Unaudited condensed consolidated interim financial results for the six months ended 31 December 2018

York Timber Holdings Limited
(Incorporated in the Republic of South Africa)
Registration number: 1916/004890/06
JSE share code: YRK
ISIN: ZAE000133450
(York, the Company or the Group)

Unaudited condensed consolidated interim financial results 
for the six months ended 31 December 2018

Salient features
- Production interrupted by industrial action
- Revenue down 11%
- Debt reduced by R70 million
- Cash generated from operations decreased by 52% to R36 million
- Cash in bank at reporting date of R124,5 million
- Biological asset value down 1% 

Commentary
Review of the six months
- Over the reporting period, York lost a combined 192 production days of the 
available 655 days across all its processing operations due to strikes.
- The strike was resolved on 11 January 2019 and all operations are fully 
functional.
- During this challenging period, the focus was on managing the business' 
cash flow and honouring the Company's obligations.
- All debt covenants were met during the reporting period and, over the
comparable period, debt reduced by R70 million.
- The Company ended the reporting period with R124,5 million cash.
- Revenue that was not generated during this reporting period will be 
recovered as postponed sales because York's customer base remained intact.

Strike
During the period under review, the National Union of Metalworkers of South
Africa (NUMSA) was recognised as the majority union at the Company and a
recognition agreement will be concluded between NUMSA and the Company. All 
other unions' and interested and affected parties' rights and representation 
will be respected and accommodated and bargaining will effectively take 
place at plant level going forward.

Operational results
Sales and production volumes decreased by 11% compared to the comparative period
of the previous year. Plywood was imported to service local customers during the
strike while the Wholesale Division continued trading. Harvesting activity in
the Escarpment was stalled when the processing plants were experiencing strikes.
Harvesting operations at other regions were scaled back during the reporting 
period. These operations are scheduled to normalise over the remainder of the 
financial year.

During the 2018 calendar year, York experienced the highest incidence of fires 
in recent times, despite this it suffered the least amount of hectares damaged. 
This is due to our improved fire prevention measures and investment in 
firefighting equipment and technologies.

Over the reporting period, an increase in the minimum wage rate was implemented 
for forestry contractors to ensure compliance with legislation and this 
contributed to the higher administrative expenses. Security costs increased 
abnormally due to additional strike response units being employed to safeguard 
the Company's assets. Increases in short term insurance and escalations in 
diesel costs also contributed to the increase in administrative expenses. 
Other operating gains received were from South African Special Risk Insurance 
Association (SASRIA) insurance payment towards Jessievale's finished goods
warehouse that was burnt in May 2018. The new Jessievale finished goods 
warehouse will be completed during the remainder of the financial year. 
This will improve the Company's storage capacity and enhance the drymill 
throughput of the Jessievale sawmill. In preparation for the coming fire 
season, York took delivery of two firefighting units fitted with the latest 
compressed air foam system.

Restructuring will be undertaken to align the Company structure with the 
current scale of operations. The Remanufacturing Division did not meet the 
required expectations and therefore the best options going forward are being 
considered.

A new enterprise resource planning system has been selected and will be 
implemented during the remainder of the calendar year. The costs for the 
hardware of the system amounted to R4,1 million under financial assets.

Fair value adjustments for the year reflect a 1% decrease in the biological 
asset value, mostly due to the delayed start in the planting season following 
the late rains, which resulted in a higher number of temporary unplanted 
areas as at 31 December 2018. Subsequent to the reporting period, good rains 
have fallen and planting targets will be met for the 2019 financial year.

Balance sheet and cash flows
Capital expenditure was applied towards the enhancement of cost efficiencies. 
Log transport vehicles were purchased to unlock synergies within the supply 
chain. Changes in working capital resulted from a decrease in debtors due 
to lower sales. Creditors reduced as the standing timber purchased from the 
South African Forestry Company Limited was harvested and paid. Even with the 
arrival of the imported plywood in December 2018, stock decreased during the 
reporting period. Cash was applied to service debt repayments and contribute 
towards the Company's self-insurance fund. Cash at the end of the period 
of R124,5 million was up 20% from the comparative point in time in the previous 
period. Investments in property, plant and equipment are the result of the 
construction of the Jessievale finished goods warehouse following its 
destruction by fire during the April/May 2018 strike. The new building is 
partly financed from insurance receipts and working capital.

Net asset value per share decreased slightly to R9,70 per share from the 
comparative period.

Changes to the directorate
During the period under review Messrs Thabo Mokgatlha and Gavin Tipper and 
Ms Maserame Mouyeme resigned as independent non-executive directors and 
Mr Paul Botha resigned as non-executive director. Messrs Andries Brink 
and Maxwell Nyanteh and Ms Hetisani Mbanyele-Ntshinga were appointed as 
independent non-executive directors, with effect from 14 February 2019.

Outlook
York continues to focus on cash generation through cost-efficiencies
and optimisation of its supply chain. York is in the process of selling 
an outlier plantation and is furthermore awaiting final payment from 
SASRIA in respect of Jessievale's burnt warehouse. York has commenced 
with the following:
- Restructuring of poor performing divisions; and
- Aligning the Human Resources Division with the operations to effectively 
and speedily address employees' matters.

In the absence of a significant improvement in economic growth, the South 
African market will most likely remain subdued. The lumber demand for the 
major product category that York produces remains firm and the export of 
plywood will continue contributing towards earnings.

Consolidated statement of financial position 
as at 31 December 2018
                                                  31 Dec 2017   30 Jun 2018
                                    31 Dec 2018     Unaudited       Audited
                                      Unaudited      Restated      Restated
                                          R'000         R'000         R'000
Assets
Non-current assets
Biological assets (note 5)            2 443 572     2 618 711     2 498 082
Investment property                      26 481        26 731        26 731
Property, plant and equipment           917 988       936 930       920 265
Goodwill                                565 442       565 442       565 442
Intangible assets                           305           673           463
Deferred tax                              4 591         8 612         3 780
Other financial assets                   46 610        32 020        39 707
Total non-current assets              4 004 989     4 189 119     4 054 470
Current assets
Biological assets (note 5)              400 357       239 587       420 468
Inventories                             276 113       347 645       300 356
Current tax receivable                    1 309        12 885         3 363
Trade and other receivables             144 870       210 708       258 731
Cash and cash equivalents               125 506       104 005       152 039
Total current assets                    948 155       914 830     1 134 957
Total assets                          4 953 144     5 103 949     5 189 427
Equity and liabilities
Equity
Share capital                            15 802        15 802        15 802
Share premium                         1 464 430     1 464 430     1 464 430
Reserves                                    959         (489)         (353) 
Retained income                       1 585 575     1 595 880     1 650 404
Total equity                          3 066 766     3 075 623     3 130 283
Liabilities
Non-current liabilities
Deferred tax                            836 070       860 297       862 141
Lease liability                          11 145        17 522        14 984
Loans from related parties                    -         1 527             - 
Loans and borrowings                    554 915       650 105       636 836
Provisions                               15 040        13 900        14 623
Retirement benefit obligations           26 847        25 755        26 430
Total non-current liabilities         1 444 017     1 569 106     1 555 014
Current liabilities
Current tax payable                          86           920            15
Cash-settled share-based payments             -        17 073             -
Loans and borrowings                    209 609       184 660       167 759
Lease liability                           7 654         6 457         7 415
Trade and other payables                224 001       250 110       328 932
Bank overdraft                            1 011             -             9
Total current liabilities               442 361       459 220       504 130
Total liabilities                     1 886 378     2 028 326     2 059 144
Total equity and liabilities          4 953 144     5 103 949     5 189 427


Consolidated statement of profit or loss and other comprehensive income
for the six months ended 31 December 2018
                                                   Six months          Year
                                     Six months         ended         ended
                                          ended   31 Dec 2017   30 Jun 2018
                                    31 Dec 2018     Unaudited       Audited
                                      Unaudited      Restated      Restated
                                          R'000         R'000         R'000
Revenue                                 800 227       899 396     1 812 350
Cost of sales                          (608 699)     (595 982)   (1 259 719) 
Gross profit                            191 528       303 414       552 631
Other operating income                   16 158         5 718        23 097
Other operating gains                     2 733             -         5 009
Administration expenses                (253 972)     (224 251)     (384 693) 
Operating (loss)/profit                 (43 553)       84 881       196 044
Fair value adjustment                   (11 831)       74 046        71 327
(Loss)/profit before finance
costs                                   (55 384)      158 927       267 371
Investment income                         2 851         2 230         4 899
Finance costs                           (39 106)      (43 477)      (84 325) 
(Loss)/profit before taxation           (91 639)      117 680       187 945
Taxation                                 26 810       (33 927)      (49 659)
(Loss)/profit for the period            (64 829)       83 753       138 286
Other comprehensive loss:
Remeasurement of defined benefit
liability                                     -             -          (663)
Taxation related to remeasurement 
of defined benefit liability                  -             -           185
Other comprehensive loss for the
period net of taxation                        -             -          (478)
Total comprehensive (loss)/income       (64 829)       83 753       137 808
Earnings per share (cents) (note 8)         (20)           27            44
Diluted earnings per share (cents) 
(note 8)                                    (20)           27            44
Headline earnings per share (cents) 
(note 9)                                    (20)           27            45
Diluted headline earnings per share         (20)           27            45
(cents) (note 9)


Consolidated statement of changes in equity 
for the six months ended 31 December 2018
                                                                     Share-
                                                                      based
                                          Share         Share       payment
                                        capital       premium       reserve
                                          R'000         R'000         R'000
Opening balance as previously
reported                                 15 802     1 464 430             -
Adjustment:
Change in accounting policy                   -             -             -
Balance as at 1 July 2017
restated                                 15 802     1 464 430             -
Profit for the year                           -             -             - 
Other comprehensive loss
Change in defined benefit plan,
net of tax                                    -             -             -
Total other comprehensive loss                -             -             - 
Total comprehensive income for
the year and total transactions
with owners                                   -             -             -
Employees' share option scheme                -             -           614
Opening balance as previously reported   15 802     1 464 430           614
Adjustment:
Change in accounting policy                   -             -             - 
Balance as at 30 June 2018 restated      15 802     1 464 430           614
Loss for the period                           -             -             - 
Other comprehensive income
Change in defined benefit plan,
net of tax                                    -             -             -
Total other comprehensive income              -             -             - 
Total comprehensive loss for the
period and total transactions
with owners                                   -             -             -
Employees' share option scheme                -             -         1 312
Balance as at 31 December 2018
(unaudited)                              15 802     1 464 430         1 926


                                        Defined
                                        benefit
                                           plan      Retained         Total
                                        reserve        income        equity
                                          R'000         R'000         R'000
Opening balance as previously reported     (489)    1 512 822     2 992 565
Adjustment:
Change in accounting policy                   -          (704)         (704)
Balance as at 1 July 2017 restated         (489)    1 512 118     2 991 861
Profit for the year                           -       138 286       138 286
Other comprehensive loss
Change in defined benefit plan,
net of tax                                 (478)            -          (478)
Total other comprehensive loss             (478)            -          (478) 
Total comprehensive income for
the year and total transactions
with owners                                (478)      138 286       137 808
Employees' share option scheme                -             -           614
Opening balance as previously reported     (967)    1 652 556     3 132 435
Adjustment:
Change in accounting policy                   -        (2 152)       (2 152) 
Balance as at 30 June 2018 restated        (967)    1 650 404     3 130 283
Loss for the period                           -       (64 829)      (64 829) 
Other comprehensive income
Change in defined benefit plan, net of tax    -             -             -
Total other comprehensive income              -             -             - 
Total comprehensive loss for the
period and total transactions with owners     -       (64 829)      (64 829)
Employees' share option scheme                -             -         1 312
Balance as at 31 December 2018
(unaudited)                                (967)    1 585 575     3 066 766


Consolidated statement of cash flows
for the six months ended 31 December 2018
                                                   Six months          Year
                                     Six months         ended         ended
                                          ended   31 Dec 2017   30 Jun 2018
                                    31 Dec 2018     Unaudited       Audited
                                      Unaudited      Restated      Restated
                                          R'000         R'000         R'000
Cash flows from operating activities
Cash generated from operations
(note 6)                                 36 317        75 470       295 902
Investment income                         2 851         2 230         4 899
Finance costs                           (38 034)      (42 201)      (78 155) 
Taxation refunded/(paid)                  2 054       (9 265)       (11 950)
Net cash from operating activities        3 188        26 234       210 696
Cash flows applied to investing 
activities
Purchase of property, plant and
equipment                               (44 868)      (43 117)      (64 680)
Purchase of intangible assets                 -             -           (24) 
Proceeds from disposal of
property, plant and equipment                 1           101           103
Proceeds from disposal of
investment property                         250             -             -
Repayment of loans from related parties       -             -        (4 580)
Purchase of financial assets             (6 903)          (55)      (14 563) 
Proceeds on sale of financial assets          -             -         6 821
Purchase of biological assets                 -             -       (71 811) 
Harvesting of purchased
biological assets                        62 790        44 266        59 081
Acquisition of subsidiaries net
of cash acquired                              -             -        (6 087)
Net cash generated from/(applied
to) investing activities                 11 270         1 195       (95 740)
Cash flows from financing activities
Net repayment of loans and
borrowings                              (40 071)      (77 537)     (107 707)
Movement in cash settled 
share-based payment                           -             -        (6 971)
Repayment of lease liability             (4 673)       (3 924)      (12 034)
Net cash applied to financing
activities                              (44 744)      (81 461)     (126 712)
Total cash movement for the period      (30 286)      (54 032)      (11 756) 
Cash at beginning of the period         152 030       159 347       159 347
Effect of exchange rate movement
on cash balances                          2 751        (1 310)        4 439
Cash at end of the period               124 495      104 005       152 030


Notes to the consolidated interim financial statements 
for the six months ended 31 December 2018

1. Basis of preparation
These unaudited condensed consolidated interim financial statements have been
prepared in accordance with the JSE Listings Requirements, the Companies Act 
of South Africa, No. 71 of 2008 (as amended) and the Companies Regulations, 
2011. These unaudited condensed consolidated interim financial statements have 
been prepared in accordance with and containing the information required by 
IAS 34 Interim Financial Reporting, as well as the SAICA Financial Reporting 
Guides as issued by the Accounting Practices Committee and Financial 
Pronouncements as issued by Financial Reporting Standards Council. The 
financial results have been compiled under the supervision of Gerald Stoltz 
CA(SA), the Chief Financial Officer.

These unaudited condensed consolidated interim financial results do not 
include all the information required for full annual financial statements, 
and should be read in conjunction with the audited consolidated financial 
statements as at and for the year ended 30 June 2018 which are available on 
the Company's website, www.york.co.za or at the Company's registered office.

The condensed consolidated interim financial results have not been reviewed 
or audited by the Company's external auditor. The interim financial results, 
which have been prepared on the going concern basis, were approved by the 
Board of Directors on 20 March 2019.

There have been no material changes to judgements or estimates of amounts 
reported in prior reporting periods except for the impact of new standards 
adopted. Refer note 12.

The Group financial results are presented in South African Rand, which is 
the Company's functional currency. All financial information presented has 
been rounded to the nearest R'000.

2. Principal accounting policies
The Group has adopted all the new, revised or amended accounting pronouncements
as issued by the International Accounting Standards Board (IASB) which were 
effective for the Group from 1 January 2018. The Group early adopted 
International Financial Reporting Standards (IFRS) 16. The following standards 
had an impact on the Group:
- IFRS 9 Financial Instruments (IFRS 9);
- IFRS 15 Revenue from Contracts with Customers (IFRS 15); and
- IFRS 16 Leases (IFRS 16).

The accounting policies applied in the preparation of the condensed consolidated 
interim financial statements are in terms of IFRS and are consistent with those 
accounting policies applied in the preparation of the 30 June 2018 consolidated 
annual financial statements except as previously stated above. Refer to 
note 12 for details.

3. Additional disclosure items

                                                  31 Dec 2017   30 Jun 2018
                                    31 Dec 2018     Unaudited       Audited
                                      Unaudited      Restated      Restated
                                          R'000         R'000         R'000
Authorised capital commitments
- Contracted, but not provided           11 406         9 498        11 139
- Not contracted                         47 909        13 298        10 149
Capital expenditure                      44 868        43 117        64 680
Depreciation of property, plant
and equipment                            47 126        41 847        87 899
Amortisation of intangible assets           158           235           469

- The Group did not have any litigation settlements during the reporting period.
- The banking facility granted by Absa Bank was secured by a cession of trade
receivables and Credit Insurance Solutions (CIS) insurance and cross-suretyships
of R154 million with Absa, and R5 million with FirstRand. The general banking 
facility of R60 million with Absa and asset and vehicle finance facility of 
R120 million with Absa are available to all companies across the Group. The 
Group did not have any covenant defaults or breaches of its loan agreements 
during the period under review or at the reporting date.
- No movement occurred in the number of shares issued during the period 
under review.

4. Operating segments
The Group has three reportable segments which are the Group's strategic
divisions. The Group operates in three geographic segments, namely South 
Africa, countries within the Southern Africa Development Community (SADC) 
and international (Non-SADC).

The segment analysis is as follows:

                                               Processing plants
                                    31 Dec 2018   31 Dec 2017   30 Jun 2018
                                      Unaudited     Unaudited       Audited
                                                     Restated      Restated
                                          R'000         R'000         R'000
Revenue: External sales                 430 923       574 420     1 165 551
Revenue: Inter-segment sales            136 485       184 009       344 862
Total revenue                           567 408       758 429     1 510 413
Depreciation and amortisation           (29 872)      (26 658)      (54 832) 
Reportable segment profit*              (17 287)       40 211        80 409
Fair value adjustment                         -             -             -
Capital expenditure                      20 157        31 537        38 294


                                                   Wholesale
                                    31 Dec 2018   31 Dec 2017   30 Jun 2018
                                      Unaudited     Unaudited       Audited
                                                     Restated      Restated
                                          R'000         R'000         R'000
Revenue: External sales                 324 804       298 105       594 667
Revenue: Inter-segment sales                  -             -             - 
Total revenue                           324 804       298 105       594 667
Depreciation and amortisation            (3 903)       (4 034)       (7 182) 
Reportable segment profit*                4 703        11 285        13 697
Fair value adjustment                         -             -             -
Capital expenditure                         180         3 994         6 469


                                               Forestry and fleet
                                    31 Dec 2018   31 Dec 2017   30 Jun 2018
                                      Unaudited     Unaudited       Audited
                                                     Restated      Restated
                                          R'000         R'000         R'000
Revenue: External sales                  40 791        24 518        54 809
Revenue: Inter-segment sales            283 462       371 271       739 547
Total revenue                           324 253       395 789       794 356
Depreciation and amortisation           (10 899)       (9 317)      (20 593) 
Reportable segment profit*               17 305        97 156       162 892
Fair value adjustment                   (11 831)       74 046        77 303
Capital expenditure                      18 771         6 130        17 621


                                          Total before unallocated and 
                                           inter-segment elimination
                                    31 Dec 2018   31 Dec 2017   30 Jun 2018
                                      Unaudited     Unaudited       Audited
                                                     Restated      Restated
                                          R'000         R'000         R'000
Revenue: External sales                 796 518       897 043     1 815 027
Revenue: Inter-segment sales            419 947       555 280     1 084 409
Total revenue                         1 216 465     1 452 323     2 899 436
Depreciation and amortisation           (44 674)      (40 009)      (82 607) 
Reportable segment profit*                4 721       148 652       256 998
Fair value adjustment                   (11 831)       74 046        77 303
Capital expenditure                      39 108        41 661        62 384

*Being earnings before interest, taxation, depreciation, amortisation, 
impairment and fair value adjustments (EBITDA).

                                                  31 Dec 2017   30 Jun 2018
                                    31 Dec 2018     Unaudited       Audited
                                      Unaudited      Restated      Restated
                                          R'000         R'000         R'000
Reconciliation of reportable 
segment profit or loss                    
Total EBITDA for reportable segments      4 721       148 652       256 998
Depreciation, amortisation and 
impairment                              (47 284)      (42 082)      (88 368)
Unallocated amounts                        (990)      (21 689)       27 414
Operating (loss)/profit                 (43 553)       84 881       196 044


                                                  31 Dec 2017   30 Jun 2018
                                    31 Dec 2018     Unaudited       Audited
                                      Unaudited      Restated      Restated
                                          R'000         R'000         R'000
Revenue per geographical area
of customer
South Africa (SA)                       690 007       767 561     1 499 236
Southern Africa Development
Community (SADC) excluding SA            68 858        99 883       179 166
International (Non-SADC)*                41 362        31 952       133 948
Total                                   800 227       899 396     1 812 350

*International sales refer to plywood to the United Kingdom, Belgium, 
Italy and the United States of America.

5. Biological assets
                                    31 Dec 2018   31 Dec 2017   30 Jun 2018
                                      Unaudited     Unaudited       Audited
                                          R'000         R'000         R'000
Change in discounted cash flows 
(DCF) value attributable to:
Opening balance                       2 918 550     2 828 518     2 828 518
Growth                                 (121 823)      (44 045)       85 450
Revenue and price                       (11 581)      128 572        83 351
Operating cost                           41 566       (21 927)      (33 968) 
Discount rate                            80 007        11 445       (57 530) 
Purchased plantations                         -             -        71 811
Standing timber harvested               (62 790)      (44 265)      (59 082)
Closing balance                       2 843 929     2 858 298     2 918 550
Classified as non-current assets      2 443 572     2 618 711     2 498 082
Classified as current assets**          400 357       239 587       420 468

**Being the biological assets to be harvested and sold in the 12 months 
after the reporting date.

                                    31 Dec 2018   31 Dec 2017   30 Jun 2018
                                      Unaudited     Unaudited       Audited
                                             m3            m3            m3
Reconciliation of standing volume 
(excluding purchased plantations)
Opening balance                       5 946 639     6 001 889     6 001 889
Increase due to growth and
enumeration                             490 840       390 220       704 236
Decrease due to harvesting             (310 106)     (417 817)     (759 486) 
Closing balance                       6 127 373     5 974 292     5 946 639

The additional key assumptions underlying the discounted cash flow valuation 
have been updated as follows:
- Volumes: The expected yields per log class are calculated with reference 
to growth models relevant to the planted area. The growth models are derived 
from actual trial data that has been measured annually since 1976. A 
merchandising model, using the modelled tree shapes at various ages, is 
used to divide the trees into predefined products as basis for calculating 
log yields.
- Volume adjustment factor: Due to the susceptibility of the plantations to 
the environment, an adjustment factor is used to reduce the volumes obtained 
from the merchandising model. This percentage is based mainly on factors such 
as animal damage and damage due to natural elements, such as wind, rain, hail, 
droughts and fires. An adjustment factor of 10% (2017: 10%) has been used.
- Log prices: The price per cubic metre per log class is based on current and 
future expected market prices per log class. It was assumed that prices will 
increase at 5,50% over the next year at 5,30% over the following year, and at
5,50% over the long term (2017: 6% p.a. over the next year, 6% over the
following year, and at 6% p.a. over the long term). Log prices are computed as 
a weighted average of external market prices and internal prices charged to 
the Company's processing operations. Internal prices are generally lower than 
external prices and are limited to levels that result in the profitability of 
the processing operations.
- Operating costs: The costs are based on the unit cost of the forest management
activities required for the trees to reach the age of felling. The costs 
include the current and expected future costs of harvesting, maintenance and 
risk management, as well as an appropriate amount of fixed overhead costs. The 
costs exclude the costs necessary to get the asset to the market. An inflation 
rate of 5,50% over the next year, 5,30% over the following year, and 5,50% over 
the long term (2017: 6% p.a. over the next year, 6% over the following year, 
and 6% p.a. over the long term) was used.
- Costs to sell: Costs to sell are the incremental costs directly attributable 
to the disposal of an asset, excluding finance costs and income taxes. The 
only costs to sell applied are harvesting costs, which are included under 
operating costs. No other selling costs are included.
- Discount rate: The directors used a comparable forestry group of companies'
Beta to calculate the after-tax weighted average cost of capital (WACC), 
which was applied to the after-taxation net cash flows.

6. Cash generated from operations
                                                  31 Dec 2017   30 Jun 2018
                                    31 Dec 2018     Unaudited       Audited
                                      Unaudited      Restated      Restated
                                          R'000         R'000         R'000
(Loss)/profit before taxation           (91 639)      117 680       187 945
Adjustments for:
Depreciation, amortisation and
impairments                              47 284        42 082        88 368
Loss/(profit) on disposal of assets 
and bargain gain purchase                    18            37         (570)
(Profit)/loss on foreign exchange        (2 751)        1 310       (4 439)
Investment income                        (2 851)       (2 230)      (4 899) 
Finance costs                            39 106        43 477       84 325
Fair value adjustments                   11 831       (74 046)     (71 327)
Movement in retirement benefit
liabilities                                 417           421          433
Movement in provisions                      417             -          723
Share-based payment expense: Cash             -         8 993       (1 109)
Share-based payment expense: Equity       1 312             -          614
Changes in working capital
Inventories                              24 243        (7 952)      39 336
Trade and other receivables             113 861        (3 725)     (51 739) 
Trade and other payables               (104 931)      (50 577)      28 241
Cash generated from operations           36 317        75 470      295 902

7. Related parties
The Group's related parties are its subsidiaries and key management, including
directors. No businesses were acquired or disposed of during the six month
period.

8. Earnings per share
                                                  31 Dec 2017   30 Jun 2018
                                    31 Dec 2018     Unaudited       Audited
                                      Unaudited      Restated      Restated
Basic earnings attributable to 
ordinary shareholders (R'000) 
(refer to note 12 for restatement 
of earnings on adoption of 
new standards)                          (64 829)       83 753       138 286
Reconciliation of weighted 
average number of ordinary shares
Issued number of shares                 316 048       316 048       316 048
Bonus element of share-based payment        841             -           826
Weighted average number of
ordinary shares ('000)                  316 889       316 048       316 874
Earnings per share (cents)                  (20)           27            44
Diluted earnings per share (cents)          (20)           27            44

The bonus element of the share-based payment had a dilutive effect on the 
shares (2017: none).

9. Headline earnings per share
                                                  31 Dec 2017   30 Jun 2018
                                    31 Dec 2018     Unaudited       Audited
                                      Unaudited      Restated      Restated
                                          R'000         R'000         R'000
Reconciliation of headline earnings
Basic earnings attributable to
ordinary shareholders                   (64 829)       83 753       138 286
Loss on sale of assets (net of tax)          13            27           128
Bargain purchase                              -             -          (747) 
Fair value adjustment on deemed
disposal of joint arrangement                 -             -         5 976
Headline earnings for the period        (64 816)       83 780       143 643
Weighted average number of
ordinary shares ('000)                  316 889       316 048       316 874
Headline earnings per share (cents)         (20)           27            45
Diluted earnings per share (cents)          (20)           27            45

The bonus element of the share-based payment had a dilutive effect on the 
shares (2017: none).

10. Core earnings per share
                                                  31 Dec 2017   30 Jun 2018
                                    31 Dec 2018     Unaudited       Audited
                                      Unaudited      Restated      Restated
                                          R'000         R'000         R'000
Reconciliation of core earnings
Basic earnings attributable to
ordinary shareholders                   (64 829)       83 753       138 286
Fair value adjustment on
biological assets (net of tax)            8 518       (53 313)      (55 658)
Core earnings for the period            (56 311)       30 440        82 628
Weighted average number of
ordinary shares ('000)                  316 889       316 048       316 874
Core earnings per share (cents)             (18)           10            26
Diluted earnings per share (cents)          (18)           10            26

11. Subsequent events
There were no subsequent events.

12. Changes in accounting policies
The Group adopted the following new accounting standards as issued by the 
IASB, which came into effect for financial years beginning on or after 
1 January 2018:
- IFRS 15 Revenue from Contracts with Customers; and
- IFRS 9 Financial Instruments.

The Group early adopted the following new accounting standard as issued by 
the IASB, which came into effect for financial years beginning on or 
after 1 January 2019:
- IFRS 16 Leases.

Adoption of IFRS 15
The Group principally generates revenue from the sale of timber and plywood
products in the South African, SADC and International markets. IFRS 15 
establishes a comprehensive framework for determining whether revenue should 
be recognised and how much and when revenue should be recognised. It replaces 
IAS 18 where revenue was recognised around an analysis of the transfer of 
risks and rewards.

The core principle of IFRS 15 is that an entity should recognise revenue to 
depict the transfer of promised goods or services to customers for an amount 
that reflects the consideration to which the entity expects to be entitled in 
exchange for those goods or services. The Group now recognises revenue when 
it transfers control over a product or service to a customer at the standalone 
selling price allocated to the performance obligation in the contract.

For local timber sales, revenue is recognised when the goods leave the premises 
at the standalone selling prices. When the customer collects the goods at the 
premises, York no longer directs the use of the goods and the client accepts 
responsibility. When York arranges the transport of goods on behalf of the
customer, York acts as an agent. The transport provider insures the freight 
and York can no longer direct the use of the goods and the customer has the 
present obligation to pay for the goods. For International plywood sales the 
Group recognises the revenue for goods when the original shipping documents, 
for clearance at destination port, is released. 
Changes in accounting policies from the adoption of IFRS 15 have been 
applied retrospectively.

Adoption of IFRS 9
The adoption of IFRS 9 had the following impact on the Group:
- Change from the IAS 39 incurred loss model to the expected credit loss 
model; and
- Change in classification of the measurement categories for financial
instruments.

Before adopting IFRS 9, the Group calculated the allowance for credit losses 
using the incurred loss model. Under the incurred loss model, the Group assessed
whether there was any objective evidence of impairment at the end of each 
reporting period. Under IFRS 9 the Group calculated the expected credit loss 
under the simplified approach using a provision matrix.

The expected credit loss is calculated by applying an expected loss ratio to 
each age receivable group. The loss ratio is calculated as the historical 
payment profile and adjusted for macro-economic forecasts. A default expected 
credit loss ratio is applied to ageing periods of 90 days and older.

Changes in accounting policies from the adoption of IFRS 9 have been applied 
retrospectively.

IFRS 9 introduced new measurement categories for financial assets. From 
1 January 2018 the Group classifies financial assets in the IFRS 9 
measurement categories.

Financial asset               IAS 39 category           IFRS 9 category
Self-insurance fund           Loans and receivables     Financial asset at 
                                                        amortised cost
Trade and other receivables   Loans and receivables     Financial asset at 
                                                        amortised cost

Adoption of IFRS 16
The adoption of IFRS 16 had the following impact on the Group:
- Recognition of right of use assets and depreciation; and
- Recognition of lease liabilities and finance cost.

Effective 1 January 2019, the Group early adopted IFRS 16, which specifies 
how to recognise, measure, present and disclose leases using the full 
retrospective approach. The standard provides a single lessee accounting model, 
requiring lessees to recognise assets and liabilities for all significant 
leases.

The Company recognises a right-of-use asset and a lease liability at the 
commencement date of the lease. The right of use asset is initially measured 
based on the initial amount of the lease liability. The assets are depreciated 
over the lease term using the straight-line method. Lease terms range from 
two to five years.

The lease liability is measured at the present value of the lease payments, 
discounted using the Group's incremental borrowing rate adjusted for asset 
specific risks and the lease term. The lease liability is measured at amortised 
cost using the effective interest method.

The Group has elected to apply the practical expedient not to recognise right 
of use assets and liabilities for short term leases that have lease terms of 
12 months or less and leases for which the underlying asset is of low value. 
The lease payments associated with these leases are recognised as an expense 
in the statement of profit or loss and other comprehensive income on a 
straight-line basis over the lease term.

On adoption of the new accounting standards, the Group restated its financial 
statements as at 31 December 2017 and 30 June 2018 as follows:
                                               
                                    31 Dec 2017     
                                  as previously     Effect of     Effect of
                                       reported       IFRS 16       IFRS 15
                                          R'000         R'000         R'000
Property, plant and equipment           915 919        21 011             -
Deferred tax                           (853 243)          391           819
Inventories                             328 181             -        19 464
Trade and other receivables             212 363             -             - 
Retained income                      (1 600 223)          929         2 106
Lease liability                          (1 647)      (22 332)            -
Trade and other payables               (227 721)            -       (22 389) 
Revenue                                (921 785)            -        22 389
Cost of sales                           615 446             -       (19 464) 
Administration expense                  223 499          (903)            - 
Finance cost                             42 201         1 276             -
Taxation                                 35 232          (138)         (819)

  
                                                    Effect of   31 Dec 2017
                                                       IFRS 9      Restated
                                                        R'000         R'000
Property, plant and equipment                               -       936 930
Deferred tax                                              348      (851 685) 
Inventories                                                 -       347 645
Trade and other receivables                            (1 655)      210 708
Retained income                                         1 308    (1 595 880) 
Lease liability                                             -       (23 979) 
Trade and other payables                                    -      (250 110) 
Revenue                                                     -      (899 396) 
Cost of sales                                               -       595 982
Administration expense                                  1 655       224 251
Finance cost                                                -        43 477
Taxation                                                 (348)       33 927


                                    30 Jun 2018     
                                  as previously     Effect of     Effect of
                                       reported       IFRS 16       IFRS 15
                                          R'000         R'000         R'000
Property, plant and equipment           901 202        19 063             -
Deferred tax                           (859 214)          447           427
Inventories                             296 619            -          3 737
Trade and other receivables             258 619            -              - 
Retained income                      (1 652 556)        1 149         1 098
Lease liability                          (1 741)      (20 658)            - 
Trade and other payables               (323 673)            -        (5 259) 
Revenue                              (1 817 609)            -         5 259
Cost of sales                         1 263 458             -        (3 739) 
Administration expense                  386 691        (1 886)            - 
Finance cost                             81 800         2 525             -
Taxation                                 50 258          (193)         (427)


                                                    Effect of   30 Jun 2018
                                                       IFRS 9      Restated
                                                        R'000         R'000
Property, plant and equipment                               -       920 265
Deferred tax                                              (21)     (858 361) 
Inventories                                                 -       300 356
Trade and other receivables                               112       258 731
Retained income                                           (95)   (1 650 404) 
Lease liability                                             -       (22 399) 
Trade and other payables                                    -      (328 932) 
Revenue                                                     -    (1 812 350) 
Cost of sales                                               -     1 259 719
Administration expense                                   (112)      384 693
Finance cost                                                -        84 325
Taxation                                                   21        49 659

The impact of IFRS 15 on the December 2018 condensed consolidated interim 
financial results is the deferral of revenue until control passes to the 
customer and the realisation of the amounts deferred at June 2018, and for 
IFRS 16 and IFRS 9 the impact is similar to that disclosed for December 2017.

Company information
Registered office and business address
York Corporate Office
3 Main Road, Sabie 1260
Tel: +27 13 764 9200
Fax: +27 13 764 3245

Postal address
PO Box 1191, Sabie 1260

Nature of business and principal activities
Operation of plantations, sawmills, a plywood plant and wholesale lumber sales

Auditor
PricewaterhouseCoopers

Transfer secretaries
Computershare Investor Services Proprietary Limited

Sponsor
One Capital

Directors
Executive directors
Pieter van Zyl
Chief Executive Officer
Gerald Stoltz
Chief Financial Officer

Non-executive directors
Dr Jim Myers* (Chairman, USA)
Paul Botha (resigned: 27 November 2018)
Dr Azar Jammine* 
Shakeel Meer 
Dinga Mncube*
Thabo Mokgatlha* (resigned: 30 November 2018) 
Maserame Mouyeme* (resigned: 30 November 2018)
Gavin Tipper* (resigned: 3 December 2018) 
Andries Brink* (appointed: 14 February 2019) 
Maxwell Nyanteh* (appointed: 14 February 2019)
Hetisani Mbanyele-Ntshinga* (appointed: 14 February 2019)
* Independent

Company Secretary
Sue Hsieh
Email: shsieh@york.co.za

www.york.co.za

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