BSI Steel Limited HY 2014 results

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BSI Steel Limited HY 2014 results

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BSI Steel Limited HY 2014 results

  1. 1. Unaudited Condensed Financial Results Salient Features Revenue 29% EBITDA 109% HEPS 208% NTAV 83 cents per share BSi Steel Limited (Incorporated in the Republic of South Africa) (Registration number 2001/023164/06) (JSE code: BSS ISIN: ZAE000125134) (“BSi” or “the company” or “the group”) six month period ended 30 September 2013
  2. 2. Profit for the period 44 295 14 347 29 106 Other comprehensive income Foreign currency translation reserve 24 012 12 947 39 655 Total comprehensive income 68 307 27 294 68 761 Revenue 1 773 284 1 370 378 2 804 940 Gross profit 316 977 220 163 468 014 Other costs (221 017) (174 196) (375 233) Earnings before interest, taxation, depreciation and amortisation (“EBITDA”) 95 960 45 967 92 781 Depreciation and amortisation (13 451) (9 219) (20 974) Profit before interest and taxation 82 509 36 748 71 807 (Loss)/Profit on disposal of assets (369) (112) (364) Interest received 2 074 775 2 112 Interest paid (31 432) (24 250) (46 490) Profit before taxation 52 782 13 161 27 065 Taxation 8 487 (1 186) (2 041) Profit for the year 44 295 14 347 29 106 Profit attributable to ordinary shareholders 44 297 14 491 29 081 Profit attributable to minority shareholders (2) (144) 25 44 295 14 347 29 106 Reconciliation of headline earnings: Earnings attributable to ordinary shareholders 44 297 14 491 29 081 Loss/(Profit) on disposal of property, plant & equipment 368 112 364 Tax impact of adjustments (103) (31) (102) Headline earnings attributable to ordinary shareholders (basic and diluted) 44 562 14 572 29 343 Weightedaveragesharesinissueonwhichearningsarebased(000)(1) 702 020 706 668 706 447 Earnings per share (cents) 6.3 2.1 4.1 Headline earnings per share (cents) (basic and diluted) 6.4 2.1 4.2 Notes: (1) The weighted average number of shares in issue for 30 September 2013 is based on the weighted number of shares held by the public during the period under review. AngelaSmith HumanResources P.O.Box 101096, Scottsville, 3209 Eden Park Drive, Murrayfield Park, Mkondeni, Pietermaritzburg 3201 Switchboard +27 (33) 846 2222 Direct +27 (33) 846 2230 Fax +27 (33) 846 2294 Cell +27 82 306 6111 Email: angela.smith@bsisteel.com www.bsisteel.com Audited 12 months 31 March 2013 R’000 Unaudited 6 months 30 September 2012 R’000 Unaudited 6 months 30 September 2013 R’000 Condensed Income Statement UNAUDITED CONDENSED FINANCIAL RESULTS SIX MONTH PERIOD ENDED 30 SEPTEMBER 2013 Condensed Statement of Comprehensive Income Audited 12 months 31 March 2013 R’000 Unaudited 6 months 30 September 2012 R’000 Unaudited 6 months 30 September 2013 R’000
  3. 3. ASSETS Non current assets Property, plant and equipment 377 303 350 437 366 116 Goodwill 14 706 14 706 14 706 Intangible assets 16 412 18 473 17 805 Investments in joint ventures 3 - - Deferred taxation 16 940 9 936 18 342 425 364 393 552 416 969 Current assets Current tax receivable 3 127 2 970 3 354 Inventories 452 788 349 606 429 640 Other financial assets 6 978 - - Trade and other receivables 689 366 619 540 671 173 Cash and cash equivalents 80 597 93 464 47 902 1 232 856 1 065 580 1 152 069 Total assets 1 658 220 1 459 132 1 569 038 EQUITY AND LIABILITIES Equity Total shareholders’ equity 613 470 511 449 545 799 Non-controlling interest 251 84 253 613 721 511 533 546 052 Liabilities Non-current liabilities Other financial liabilities 97 332 106 798 107 648 Deferred tax 8 094 4 795 5 092 Provisions 6 755 6 829 5 511 112 181 118 422 118 251 Current liabilities Current tax payable 12 525 1 250 8 689 Other financial liabilities 40 612 47 007 39 101 Trade and other payables 552 785 358 254 409 843 Loans from shareholders 100 100 100 Bank overdraft 326 296 422 566 447 002 932 318 829 177 904 735 Total liabilities 1 044 499 947 599 1 022 986 Total equity and liabilities 1 658 220 1 459 132 1 569 038 Number of shares in issue (000) 701 810 706 668 703 544 Net asset value per share (cents) 87.4 72.4 77.6 Net tangible asset value per share (cents) 83.0 67.7 73.0 AngelaSmith HumanResources P.O.Box 101096, Scottsville, 3209 Eden Park Drive, Murrayfield Park, Mkondeni, Pietermaritzburg 3201 Switchboard +27 (33) 846 2222 Direct +27 (33) 846 2230 Fax +27 (33) 846 2294 Cell +27 82 306 6111 Email: angela.smith@bsisteel.com www.bsisteel.com Condensed Statements of Financial Position UNAUDITED CONDENSED FINANCIAL RESULTS SIX MONTH PERIOD ENDED 30 SEPTEMBER 2013 Audited 12 months 31 March 2013 R’000 Unaudited 6 months 30 September 2012 R’000 Unaudited 6 months 30 September 2013 R’000
  4. 4. Operating activity cash flows 188 409 111 948 73 579 Cash flows from operations 216 312 139 730 121 451 Interest and taxation (27 903) (27 782) (47 872) Investing activity cash flows (26 954) (64 067) (86 835) Financing activity cash flows (11 395) (2 216) (11 903) Total cash movement for the period 150 060 45 665 (25 159) Cash at beginning of period (399 100) (374 148) (374 148) Effect of exchange rate movement on cash balances 3 341 (619) 207 Total cash at end of period (245 699) (329 102) (399 100) Equity holders’ interest Balance at beginning of year 545 799 483 650 483 650 Total comprehensive income 68 309 27 438 68 736 Profit for the period 44 297 14 491 29 081 Foreign currency translation reserve 24 012 12 947 39 655 Share Based Payment Provision 477 361 (4 970) Purchase of treasury shares (1 115) - (1 617) Balance at end of period 613 470 511 449 545 799 Non-controlling interest Balance at beginning of period 253 228 228 Profit for the period (2) (144) 25 Balance at end of period 251 84 253 Total equity 613 721 511 533 546 052 AngelaSmith HumanResources P.O.Box 101096, Scottsville, 3209 Eden Park Drive, Murrayfield Park, Mkondeni, Pietermaritzburg 3201 Switchboard +27 (33) 846 2222 Direct +27 (33) 846 2230 Fax +27 (33) 846 2294 Cell +27 82 306 6111 Email: angela.smith@bsisteel.com www.bsisteel.com Condensed Statement of Changes in Equity Condensed Cash Flow Statement UNAUDITED CONDENSED FINANCIAL RESULTS SIX MONTH PERIOD ENDED 30 SEPTEMBER 2013 Audited 12 months 31 March 2013 R’000 Unaudited 6 months 30 September 2012 R’000 Unaudited 6 months 30 September 2013 R’000 Audited 12 months 31 March 2013 R’000 Unaudited 6 months 30 September 2012 R’000 Unaudited 6 months 30 September 2013 R’000
  5. 5. Gross revenue Stockists 511 757 427 305 846 582 Bulk Sales 504 674 360 233 775 906 Exporting 686 068 508 640 1 035 495 Other 70 785 74 200 146 957 1 773 284 1 370 378 2 804 940 Profit before interest and taxation Stockists 18 338 6 113 11 764 Bulk Sales 20 295 15 369 31 134 Exporting 42 273 37 368 63 666 Other 1 234 (22 214) (35 121) 82 140 36 636 71 443 Assets Stockists 299 182 226 021 248 376 Bulk Sales 208 935 178 126 240 371 Exporting 525 368 488 683 464 180 Other 630 612 602 491 617 673 Eliminations (5 877) (36 189) (1 562) 1 658 220 1 459 132 1 569 038 AngelaSmith HumanResources P.O.Box 101096, Scottsville, 3209 Eden Park Drive, Murrayfield Park, Mkondeni, Pietermaritzburg 3201 Switchboard +27 (33) 846 2222 Direct +27 (33) 846 2230 Fax +27 (33) 846 2294 Cell +27 82 306 6111 Email: angela.smith@bsisteel.com www.bsisteel.com Condensed Segment Report UNAUDITED CONDENSED FINANCIAL RESULTS SIX MONTH PERIOD ENDED 30 SEPTEMBER 2013 OVERVIEW The interim financial results are presented for the six months ended 30 September 2013. The Group operates in the steel and associated industries with strategically located operations in South Africa, the Democratic Republic of the Congo, Ghana, Mauritius, Mozambique, Switzerland, Zimbabwe and Zambia. BSI markets through three distinct channels, being Stockists, Bulk sales and Exports; all of these divisions are supported by our steel processing operations. The six months under review reflects the continued roll out of the Group’s growth strategy focusing on improving gross margins and managing operating costs – this has borne fruit in the first half of the current financial year. FINANCIAL RESULTS The directors are pleased to report that the group’s strategy to consolidate around investments made over the last 18 months has resulted in a 29% increase in turnover, and an improved gross margin. This increased growth continues to right size the business as it takes advantage of the economies of scale provided by the infrastructure investment of the previous few years. There were no acquisitions during the period under review with all growth being organic. The operating cost-base of the Group continues to reduce as a percentage of turnover, notwithstanding significant increases in transport costs and electricity. We expect further improvements in this area as management continues to focus on reducing cost, without compromising customer satisfaction. Managing working capital remains an area of focus. The Group’s policy of insuring aspects of its debtors book has continued through the period under review. Trading conditions have required that the Group remains vigilant and our immediate goal is to reduce the number of debtor days below 65. During the period, the Group increased its stockholding to protect customers from the erratic supply from the steel mills. As we look forward to a more stable supply regime over the next six months, current stock levels will reduce and will result in corresponding savings in handling and finance costs. The Group continues to enjoy good relationships with its bankers who are integral to our working capital management. PROSPECTS BSI will continue its strategy of reducing operating costs per tonne, while growing in a more measured and controlled manner. In addition, working capital management will remain a priority, to ensure an improved balance sheet and to further reduce finance costs. Whilst the ArcelorMittal furnace breakdown caused huge distortions in supply and demand in the market this year, we are seeing a slow normalisation and the market will stabilise over the next 6 months. This will enable BSI to pursue growth in the bottom-line through improved efficiencies off a higher turnover. Audited 12 months 31 March 2013 R’000 Unaudited 6 months 30 September 2012 R’000 Unaudited 6 months 30 September 2013 R’000
  6. 6. AngelaSmith HumanResources P.O.Box 101096, Scottsville, 3209 Eden Park Drive, Murrayfield Park, Mkondeni, Pietermaritzburg 3201 Switchboard +27 (33) 846 2222 Direct +27 (33) 846 2230 Fax +27 (33) 846 2294 Cell +27 82 306 6111 Email: angela.smith@bsisteel.com www.bsisteel.com UNAUDITED CONDENSED FINANCIAL RESULTS SIX MONTH PERIOD ENDED 30 SEPTEMBER 2013 ngelaSmith HumanResources P.O.Box 101096, Scottsville, 3209 Eden Park Drive, Murrayfield Park, Mkondeni, Pietermaritzburg 3201 Switchboard +27 (33) 846 2222 The next 6 months up until the SA Elections may be volatile; however there is a growing confidence that the world economy will continue improving through 2014 and 2015. Steel demand and steel prices are expected to firm continually over this period. The African markets to which BSI is exposed will grow their GDPs 5-10%, and the construction sector in South Africa is showing strong signs of a cyclical upswing after 3 years of low growth. BSI is confident that after many years of market-outperformance from a volume and market share point of view, it can use its position to exploit these opportunities in South Africa and Africa to improve returns for shareholders. This exercise will be conducted in a prudent manner in order to ensure that all our operations deliver strong returns on investment while continuing to grow organically. Market conditions for the steel industry have been extremely challenging over the last 12 months, and it is a reflection on the BSI Group that it has been able to maintain profitability through these trying times. There is growing confidence that the lessons learnt within this recessionary environment will be invaluable for the Group, when conditions inevitably improve, going into the next 2-3 years. The Group has extensive knowledge of global commodity markets and supply chains. We are exploring ways to exploit this knowledge on a low risk, non capital-intensive basis. DIVIDEND POLICY At the half year, no dividend is declared or proposed. SUBSEQUENT EVENTS No material change has taken place in the affairs of the group between the end of the financial period and the date of this report. DIRECTORATE There were no changes to the Board during the interim period. Mr W R Teichmann resigned as a director of the Company on 30 October 2013. STATEMENT ON GOING CONCERN The financial statements have been prepared on the going-concern basis since the directors have every reason to believe that the company has adequate resources in place to continue in operation for the foreseeable future. BASIS OF PREPARATION The results have been prepared containing the information required by IAS 34 Interim Financial Reporting, SAICA Financial Reporting Guides as issued by the Accounting Practices Committee and Financial Pronouncements as issued by the Financial Reporting Standards Council and are in accordance with the Group’s accounting policies, which comply with International Financial Reporting Standards, the Companies Act, 71 of 2008 as amended and the JSE Limited Listings Requirements. The basis of preparation is consistent with that in the prior year. The unaudited condensed consolidated financial statements were authorised for issue by the directors on 7 November 2013 for publication on 7 November 2013. The condensed consolidated financial statements for the six month period ended 30 September 2013 have been prepared by the Financial Director, Mr J R Waller. By order of the Board 7 November 2013 G D G Mackenzie J R Waller CEO Financial Director CORPORATE INFORMATION Chairman: WL Battershill Non-executive directors: I A J Clark, B M Khoza (Alternate - N M Anderson), N G Payne; R G Lewis Executive directors: G D G Mackenzie, J Govender, C Parry*, J R Waller*, * British Registered address: 46 Eden Park Drive, Murrayfield Park, Mkondeni, Pietermaritzburg 3201 Postal address: P O Box 101096, Scottsville, 3209 Company secretary: S J Hackett Telephone: (033) 846 2208 Facsimile: (033) 846 2233 Transfer secretaries: Computershare Investor Services(Pty) Limited Designated Advisor: Sasfin Capital (Adivision of Sasfin Bank Limited)

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