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Howden Africa Holdings Limited HY 2012 results
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Howden Africa Holdings Limited HY 2012 results

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Howden Africa Holdings Limited HY 2012 results

Howden Africa Holdings Limited HY 2012 results

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    Howden Africa Holdings Limited HY 2012 results Howden Africa Holdings Limited HY 2012 results Document Transcript

    • UNAUDITED INTERIM FINANCIAL RESULTS: for the six months ended 30 June 2012
    • HOWDEN Unaudited interim financial results for the six months ended 30 June 2012 Howden Africa Holdings Limited (HAHL) (Incorporated in the Republic of South Africa) (Registration number 1996/002982/06) Share code: HWN ISIN code: ZAE 000010583 (“Howden” or “the Company” or “the Group”) Directors: IH Brander (Chairman)#**, T Bärwald (Chief Executive Officer)† , J Brown#**, M Malebye**, S Badat**, K Johnson#, Humphrey Mathe** (#British † German **Non-executive) Company secretary: C Miller Registered office: 1a Booysens Road, Booysens, 2091 Postal address: PO Box 2239, Johannesburg, 2000 Transfer secretaries: Computershare Investor Services (Pty) Limited 70 Marshall Street, Johannesburg, 2001 Sponsor: PricewaterhouseCoopers Corporate Finance (Pty) Limited OUR VISION: To be Africa’s leading application engineer, providing lifetime solutions in air and gas handling Operating profit R110,9 million Increased by 93,3% from R57,4 million in 2011 Revenue R647,1 million Increased by 48,9% from R434,5 million in 2011 Headline earnings per share 130,60 cents Increased by 97,9% from 65,99 cents in 2011
    • 1 COMMENTARY Overview Howden Africa has benefited from a continuation of improved market conditions and improvements in efficiencies to generate significant improvements in operating profit and cash flows for the first half of 2012. Earnings per share of 130,60 cents is 97,9% up on the corresponding period last year. Results Revenue of R647,1 million for the first half of 2012 is 48,9% ahead of the equivalent period in 2011 of R434,5 million, as both the Fans and Heat Exchangers and Environmental Control business divisions performed strongly. The performance of the Environmental Control division was particularly strong with a 145,3% increase in revenue compared to the first half of 2011 as it successfully executed major projects won in 2011. Orders received of R594,5 million for the first half of 2012 is 9,5% ahead of the corresponding period last year. There has been good order intake experienced, especially for mine main ventilation and de-dusting supplies in South Africa and the rest of Africa and for power generation and petrochemical service and spares work in South Africa. Operating profit (EBIT) of R110,9 million is a significant improvement over the R57,4 million to June 2011, as a result of improvements in project execution and initiatives to optimise the utilisation of resources and materials. Headline earnings per share of 130,6 cents is 97,9% up on the corresponding period last year reflecting better sales and efficiency gains. Howden’s continuing focus on sustainable working capital management has resulted in a solid cash flow performance in the first half of 2012. Cash generated from operations was R84,8 million. Accounting policies The interim financial results to June 2012 have been prepared in accordance with International Financial Reporting Standards (IFRS), IAS 34 Interim Financial Reporting, the AC 500 series of Accounting Standards, JSE Listings Requirements and the Companies Act of South Africa, 2008. The accounting policies are consistent with those applied in the prior period. Review of operations Fans and Heat Exchangers division The Fans and Heat Exchangers division had a successful first six months in 2012, increasing both revenue and operating profit compared to the corresponding period in 2011. Revenue was up by 32,6% to R492,7 million. This increase in revenue, combined with enhanced project management, improved cost efficiencies and an exceptional increase in profit related to projects within the oil and gas industry have resulted in a 61,8% increase in operating profit to R103,1 million. Orders received during the first half of 2012 is R468,2 million. There has been good order intake experienced, especially for mine main ventilation fan supplies in South Africa and the rest of Africa, and for spares and service within power generation. Environmental Control division The Environmental Control division secured a number of major orders in 2011, particularly for mineral process plant upgrades, which resulted in a better performance in the first half of 2012 compared to the corresponding period. Revenue increased to R154,3 million, a 145,3% increase on the first half of 2011. Operating profit increased from a loss of R2,1 million in the previous period to a profit of R13,1 million.
    • HOWDEN Unaudited interim financial results for the six months ended 30 June 2012 2 COMMENTARY continued There was an increase in order intake to R126,4 million for the first six months ended June 2012, compared to R53,1 million in the corresponding period in 2011. Large-scale environmental control legislation and general environmental pressure and awareness in Africa continue and should further improve opportunities for this division over the next few years. Outlook The trading outlook is generally cautiously optimistic in the heavy engineering sector of mining, mineral process plants and aftermarket, but less so in the medium industrial and building industry where trading conditions remain subdued. Subsequent events There are no known material events under this category. Dividends The directors have resolved to declare an interim gross dividend of 25,00 cents per share for the six month period ending 30 June 2012. The last date to trade cum dividend is Friday, 5 October 2012. Shares start trading ex dividend on Monday, 8 October 2012. The record date is Friday, 12 October 2012, and payment will be on Monday, 15 October 2012. No share certificates are to be dematerialised or rematerialised between Monday, 8 October 2012 and Friday, 12 October 2012, both days inclusive. In terms of the dividend tax amendments effective 1 April 2012, the following additional information is disclosed: (a) Local dividend tax rate is 15%. (b) No STC credits available for utilisation. (c) In respect of the interim dividend the net local dividend amount is: (i) 21,25 cents per share for shareholders liable to pay the new dividends tax; and (ii) 25,00 cents per share for shareholders exempt from paying the new dividends tax. (d) The issued share capital of Howden is 65 729 109 ordinary shares. (e) The Howden tax reference number is 9624/001/71/6. Directorate Mr Kevin Johnson was appointed to the board of directors as an executive director with effect from 1 March 2012. Mr Humphrey Mathe was appointed to the board of directors as an independent non-executive director with effect from 1 July 2012. Unaudited interim financial results The Company’s auditors, Ernst & Young, have not reviewed or audited the interim financial results for the six months ended 30 June 2012. The Group financial results were prepared under the supervision of the Chief Financial Officer, Mr K Johnson. For and on behalf of the board of directors. IH Brander T Bärwald Chairman Chief Executive Officer 30 August 2012
    • 3 Condensed consolidated statement of comprehensive income for the period ended 30 June 2012 Six months ended 30 June 2012 (Unaudited) R’000 Six months ended 30 June 2011 (Unaudited) R’000 Change % Twelve months ended 31 December 2011 (Audited) R’000 Revenue 647 124 434 471 48,9 988 400 Gross profit 182 818 125 281 45,9 316 677 Operating profit 110 963 57 414 93,3 169 853 Finance income 8 030 5 863 14 791 Finance costs (290) (1 669) (2 734) Profit before income tax 118 703 61 608 92,7 181 910 Income tax expense (32 859) (18 230) (54 414) Profit for the period 85 844 43 378 97,9 127 496 Other comprehensive income Currency translation differences 177 – – Pension fund plan surplus/(loss)* – 1 608 (2 473) Income tax relating to components of other comprehensive income – (450) 692 Other comprehensive income for the period, net of tax 177 1 158 (1 781) Total comprehensive income for the period 86 021 44 536 93,1 125 715 Cents Cents Cents Earnings per share – basic and diluted 130,60 65,99 97,9 193,97 * The pension fund valuation was not obtained for the 2012 interim reporting period.
    • HOWDEN Unaudited interim financial results for the six months ended 30 June 2012 4 Condensed consolidated statement of financial position as at 30 June 2012 Six months ended 30 June 2012 (Unaudited) R’000 Six months ended 30 June 2011 (Unaudited) R’000 Twelve months ended 31 December 2011 (Audited) R’000 ASSETS Non-current assets 191 103 200 268 211 669 Property, plant and equipment and intangible assets 125 760 122 427 123 255 Pension fund plan asset 32 216 32 970 30 424 Cash and cash equivalents – 5 306 20 012 Other non-current assets 33 127 39 565 37 978 Current assets 977 363 713 067 764 739 Inventories 325 878 215 072 263 538 Trade and other receivables 339 600 299 336 278 129 Cash and cash equivalents 311 885 198 659 223 072 TOTAL ASSETS 1 168 466 913 335 976 408 EQUITY Share capital and reserves Share capital and reserves 246 312 207 283 275 316 Total equity 246 312 207 283 275 316 LIABILITIES Non-current liabilities 165 396 443 240 120 161 Current liabilities 756 758 262 812 580 931 Total liabilities 922 154 706 052 701 092 TOTAL EQUITY AND LIABILITIES 1 168 466 913 335 976 408
    • 5 Other group salient features for the period ended 30 June 2012 Six months ended 30 June 2012 (Unaudited) R’000 Six months ended 30 June 2011 (Unaudited) R’000 Change % Twelve months ended 31 December 2011 (Audited) R’000 Net asset value per share (cents) 374,74 315,36 18,8 418,87 Depreciation 3 002 2 737 6 541 Amortisation 1 227 1 054 2 308 Capital expenditure 6 745 4 541 10 698 Capital commitments – Authorised and contracted – 2 617 1 562 Number of shares in issue (000's) 65 729 65 729 65 729 Earnings per share (cents) 130,60 65,99 97,9 193,97 Headline earnings per share (cents) 130,60 65,94 98,0 194,00 Dividends per share – dividend paid (cents) – 15,00 15,00 – special dividend paid (cents) – – – – interim dividend paid (cents) – – 20,00 Reconciliation of headline earnings Profit for the period 85 844 43 378 127 496 (Profit)/loss on disposal of property, plant and equipment – (33) 17 Headline earnings 85 844 43 345 98,0 127 513
    • HOWDEN Unaudited interim financial results for the six months ended 30 June 2012 6 Condensed consolidated statement of changes in equity for the period ended 30 June 2012 Six months ended 30 June 2012 (Unaudited) R’000 Six months ended 30 June 2011 (Unaudited) R’000 Twelve months ended 31 December 2011 (Audited) R’000 Share capital and reserves at the beginning of the period 275 316 275 606 172 606 Total comprehensive income for the period 86 021 44 536 125 715 Dividends declared (115 026) – – Dividends paid – (9 859) (23 005) Share capital and reserves at the end of the period 246 312 207 283 275 316
    • 7 Condensed consolidated statement of cash flows for the period ended 30 June 2012 Six months ended 30 June 2012 (Unaudited) R’000 Six months ended 30 June 2011 (Unaudited) R’000 Twelve months ended 31 December 2011 (Audited) R’000 Cash flow from operating activities Cash generated from operations 84 807 100 472 220 912 Interest paid – (1 669) (2 551) Income tax paid (17 302) (12 888) (43 085) Net cash generated from operating activities 67 505 85 915 175 276 Cash flow from investing activities Interest received 8 030 5 863 9 710 Purchases of property, plant and equipment (6 745) (4 233) (10 338) Purchases of intangible assets – (308) (360) Proceeds from disposal of property, plant and equipment 11 123 337 Net cash generated/(utilised) from investing activities 1 296 1 445 (651) Cash flow from financing activities Repayment of borrowings – – (35 000) Dividends paid – (9 859) (23 005) Net cash used in financing activities – (9 859) (58 005) Net increase in cash and cash equivalents 68 801 77 501 116 620 Cash and cash equivalents at the beginning of the period 243 084 126 464 126 464 Cash and cash equivalents at the end of the period 311 885 203 965 243 084
    • HOWDEN Unaudited interim financial results for the six months ended 30 June 2012 8 Segmental analysis by operating division for the period ended 30 June 2012 Six months ended 30 June 2012 (Unaudited) R’000 Six months ended 30 June 2011 (Unaudited) R’000 Change % Twelve months ended 31 December 2011 (Audited) R’000 Revenue Fans and Heat Exchangers 492 774 371 542 859 246 Environmental Control 154 350 62 929 129 154 647 124 434 471 48,9 988 400 Orders received Fans and Heat Exchangers 468 179 490 054 914 972 Environmental Control 126 366 53 113 326 877 594 545 543 167 9,5 1 241 849 Operating profit Fans and Heat Exchangers 103 141 63 749 169 108 Environmental Control 13 079 (2 112) 8 763 116 220 61 637 177 871 Central operations (5 257) (4 223) (8 018) Total operating profit 110 963 57 414 93,3 169 853 Intersegmental sales Fans and Heat Exchangers 20 827 5 812 17 300 Environmental Control 6 718 24 415 47 660 27 545 30 227 (8,9) 64 960
    • BASTION GRAPHICS
    • www.howden.co.za