Wrap Text
Condensed Consolidated Unaudited Interim Financial Statements for 31 August 2018 & Dividend annoucement
Cargo Carriers Limited
Registration number: 1959/003254/06
Incorporated in the Republic of South Africa
JSE share code: CRG ISIN: ZAE000001764
("Cargo Carriers" or "the company" or "the group")
CONDENSED CONSOLIDATED UNAUDITED INTERIM FINANCIAL STATEMENTS FOR THE PERIOD
ENDED 31 AUGUST 2018 AND DIVIDEND ANNOUNCEMENT
Condensed consolidated statement of comprehensive income
Unaudited Unaudited Audited
31 August 31 August 28 February
2018 2017 2018
R000 R000 R000
Revenue
- transport services 315 498 306 755 629 392
- supply chain and consulting services 20 965 4 498 9 514
- other income* 3 451 1 574 6 692
339 914 312 827 645 598
Costs and expenses
- operating and administration costs (207 020) (185 395) (393 795)
- employment costs (101 880) (92 876) (191 518)
- depreciation of property, plant and equipment (19 298) (19 281) (38 633)
(328 199) (297 552) (623 946)
Profit from operating activities 11 715 15 275 21 652
(Loss)/profit on disposal of property, plant and equipment (692) 581 765
Impairment (2 010) (2 000) (8 517)
Revaluation of investment properties - - 5 035
Dividend income 2 000 - -
Profits from associates and joint ventures 4 145 1 688 4 471
Profit before finance income and finance cost 15 158 15 544 23 406
Finance income 6 039 6 233 12 329
Finance expense (4 947) (6 468) (12 019)
Profit before tax 16 251 15 309 23 716
Taxation (1 162) (3 326) 393
Profit for the year 15 088 11 983 24 109
Earnings per share
Basic and diluted earnings per share (cents) 77.6 61.8 124.8
Basic and diluted headline earnings per share (cents) 87.5 67.0 141.8
Dividends per share (cents)
- paid during the period 29.5 4.0 6.0
- declared after the period 7.3 6.4 29.5
Total dividends 36.8 10.4 35.5
*Additional rental income from equipment in the current year.
Unaudited Unaudited Audited
31 August 31 August 28 February
2018 2017 2018
R000 R000 R000
Profit for the year 15 088 11 983 24 109
Other comprehensive income:
Items not to be reclassified to profit or loss in
subsequent periods:
Revaluation of owner occupied properties - - 1 397
Income tax effect - - (168)
Other comprehensive income to be reclassified to profit
or loss in subsequent periods:
Exchange differences on translation of foreign operations (1 800) 79 (2 569)
Other comprehensive loss/(income) for the year, net of tax (1 800) 79 (1 340)
Total comprehensive income for the year, net of tax 13 288 12 062 22 769
Profit for the year attributable to:
Equity holders of the parent 15 048 11 997 24 206
Non-controlling interest 40 (14) (97)
15 088 11 983 24 109
Total comprehensive income, net of tax attributable to:
Equity holders of the parent 13 248 12 076 22 866
Non-controlling interest 40 (14) (97)
13 288 12 062 (22 769)
Condensed consolidated statement of financial position
Unaudited Unaudited Audited
31 August 31 August 28 February
2018 2017 2018
R000 R000 R000
ASSETS
Non-current assets 427 286 439 790 430 191
Property, plant and equipment 306 344 333 934 312 612
Investment properties 63 605 58 570 63 605
Investment in associates 37 460 34 206 34 656
Investment in joint ventures 15 050 13 080 14 208
Deferred taxation 4 827 - 5 110
Current assets 344 363 321 972 332 281
Inventories 11 271 9 242 8 867
Trade and other receivables 166 662 142 330 109 683
Taxation 1 717 - -
Cash and short-term deposits 164 713 170 400 213 731
Non-current assets held for sale 289 3 867 589
Total assets 771 938 765 629 763 061
EQUITY AND LIABILITIES
Share capital 194 194 194
Non-distributable reserves 57 623 56 720 55 824
Distributable reserves 449 465 429 258 440 316
Equity attributable to equity holders of the parent 507 282 486 172 496 334
Non-controlling interest 1 145 1 188 1 105
Total equity 508 427 487 360 497 439
Non-current liabilities 123 602 152 106 145 209
Deferred taxation 65 322 63 960 65 411
Employee benefit obligations 3 257 4 061 2 501
Interest-bearing loans and borrowings 54 667 84 085 76 941
Share-based liability 356 - 356
Current liabilities 139 909 126 163 120 413
Trade and other payables 89 837 83 300 91 015
Employee benefit obligations 5 988 5 359 5 539
Interest-bearing loans and borrowings 44 084 27 325 21 754
Taxation - 10 179 2 105
Total equity and liabilities 771 938 765 629 763 061
Condensed statement of changes in equity
Equity
attribu-
Foreign table to
currency Share- equity Non-
Asset re- trans- based Distribu- holders con-
Share valuation lation payments table of the trolling Total
capital reserve* reserve* reserve* reserve parent interest equity
GROUP R000 R000 R000 R000 R000 R000 R000 R000
Balance as at 194 52 385 3 970 286 418 098 474 933 1 201 476 135
28 February 2017
Total comprehensive income - - 79 - 11 997 12 076 (14) 12 062
- Profit/(loss) for the year - - - - 11 997 11 997 (14) 11 983
- Other comprehensive income/(loss) - - 79 - - 79 - 79
Dividends paid - - - - (837) (837) - (837)
Balance as at 194 52 385 4 049 286 429 258 486 172 1 188 487 360
31 August 2017
Total comprehensive income - 1 229 (2 648) - 12 209 10 790 (83) 10 707
- Profit/(loss) for the year - - - - 12 209 12 209 (83) 12 126
- Other comprehensive income/(loss) - 1 229 (2 648) - - (1 419) - (1 419)
Dividends paid - - - - (1 151) (1 151) - (1 151)
Share-based employment costs - - - 523 - 523 - 523
Balance as at 194 53 614 1 401 809 440 316 496 334 1 105 497 439
28 February 2018
Total comprehensive income - - 1 800 - 15 048 16 848 40 16 888
- Profit for the year - - - - 15 048 15 048 40 15 088
- Other comprehensive income - - 1 800 - - 1 800 - 1 800
Dividends paid - - - - (5 900) (5 900) - (5 900)
Balance as at 194 53 614 3 200 809 449 465 507 282 1 145 508 427
31 August 2018
*Represents non-distributable reserves.
Condensed consolidated statement of cash flows
Unaudited Unaudited Audited
31 August 31 August 28 February
2018 2017 2018
R000 R000 R000
Cash receipts from customers 282 935 262 144 631 809
Cash paid to suppliers and employees (313 216) (287 036) (586 343)
Cash (utilised)/generated from operations (30 281) (24 892) 45 466
Finance income received 6 039 6 233 12 329
Finance expense paid (4 947) (6 468) (12 019)
Tax (paid)/received (2 104) 3 321 (4 234)
Dividend paid (5 900) (837) (1 988)
Dividend income received 2 000 - -
Cash (outflow)/inflow from operating activities (35 193) (22 643) 39 554
Cash (outflow)/inflow from investing activities (11 680) 3 441 (1 515)
- (Increase)/decrease in loans to associates and joint ventures (195) (261) 2 156
- Purchase of property, plant and equipment (15 699) (10 136) (14 966)
- Proceeds from sale of property, plant and equipment 4 214 13 838 11 295
Cash inflow/(outflow) from financing activities 56 (21 481) (34 196)
Interest-bearing loans and borrowings repaid and accruals (8 188) (21 481) (37 220)
Interest-bearing loans and borrowings raised 8 244 - 3 024
(Decrease)/increase in cash and cash equivalents (46 817) (40 683) 3 843
Cash and cash equivalents at the beginning of the year 213 731 211 030 211 030
Foreign exchange movement on cash balances (2 200) 53 (1 142)
Cash and cash equivalents at the end of the year 164 713 170 400 213 731
Financial information
Unaudited Unaudited Audited
31 August 31 August 28 February
2018 2017 2018
R000 R000 R000
Reconciliation between profit for the year and headline earnings
Profit attributable to equity holders of the parent 15 048 11 997 24 206
Adjustments:
Loss/(profit) on disposal of property, plant and equipment 659 (581) 1 598
- income tax effect (185) 163 (447)
Impairment of assets 2 010 2 000 8 973
- income tax effect (563) (560) (2 512)
Revaluation of investment properties - - (5 035)
- income tax effect - - 720
Basic and diluted headline earnings for the year 16 971 13 018 27 502
Group borrowings
Borrowing capacity of the group at 50% of total equity 254 214 243 681 248 720
Net interest-bearing loans and borrowings (98 751) (58 990) (98 695)
Borrowing capacity of the group utilised at year-end - - -
Capital commitments - - -
Net asset value per share (cents) 2 617 2 506 2 564
Closing ordinary shares in issue 21 052 21 052 21 052
Treasury shares held in trust 594 594 594
Treasury shares - employee ownership plan shares in issue 1 052 1 052 1 052
Weighted average ordinary shares in issue 19 406 19 406 19 406
Segmental analysis
Unaudited Unaudited Audited
31 August 31 August 28 February
2018 2017 2018
R000 R000 R000
Revenue
Fuel and Powders 108 185 106 645 221 417
Chemical and Steel 173 117 164 734 336 446
Agriculture 35 302 24 358 46 372
Supply Chain Services 23 310 17 090 41 363
339 914 312 827 645 598
Profit before finance income and finance cost
Fuel and Powders (8 236) (4 882) (6 171)
Chemical and Steel 13 313 18 506 34 313
Agriculture 7 362 5 194 1 117
Supply Chain Services 2 719 (3 274) (5 853)
15 158 15 544 23 406
Assets and liabilities
Unaudited Unaudited Audited
31 August 31 August 28 February
2018 2017 2018
R000 R000 R000
Allocation of total assets
Fuel and Powders 245 687 261 009 261 704
Chemicals and Steel 393 145 403 179 397 661
Agriculture 80 169 59 615 54 808
Supply Chain Services 52 937 41 827 48 888
Allocation of total liabilities
Fuel and Powders 83 868 89 833 91 101
Chemicals and Steel 134 205 138 764 138 427
Agriculture 27 367 20 518 19 079
Supply Chain Services 18 071 14 396 17 015
Changes in accounting policies
Revenue and financial instruments
The Group adopted IFRS 15 Revenue from Contracts with Customers (IFRS 15) and IFRS 9 Financial Instruments (IFRS 9)
with a date of initial application of 1 March 2018. As a result, the group has changed its accounting policies
relating to these financial reporting processes as detailed below.
The group has elected not to restate comparative information in both cases and has assessed the cumulative effect
of initially applying the new standards to the opening balance of equity at the date of initial application, which
is immaterial as reflected below.
No adjustments have been made to the opening balance of retained earnings as the impact of the new standard is
immaterial.
The following table summarises the potential impact of adopting IFRS 15 and IFRS 9 on the group's consolidated
financial statements:
Consolidated statement of changes in equity Equity
attributable
to equity Non-
Distributable holders controlling
reserves of the parent interest
R000 R000 R000
Balance at 28 February 2018 440 316 496 334 1 105
Impact of change in accounting policy for IFRS 15 75 75 -
Impact of change in accounting policy for IFRS 9 551 551 -
Balance at 1 March 2018 if restated 440 942 496 960 1 105
Commentary
During the six-month period ended 31 August 2018, the group has continued to focus on strengthening customer
relations, expansion via organic growth, capitalising on the investment in warehousing and improving its
BBBEE scorecard.
Operational performance
While the economic environment has remained challenging there has been growth within the group with revenue
increasing by 9% to R339.9 million (August 2017: R312.8 million). Profit before tax (PBT) has also improved by
7% to R16.2 million from R15.2 million.
Agriculture and Supply Chain Services have performed well, with revenue growing by 45% (R10.9 million) and 36%
(R6.2 million) respectively. Growth in earnings before interest and tax (EBIT) for Agriculture is 40% at R7.3 million
(August 2017: R5.2 million) and Supply Chain Services is 184% at R2.7 million (August 2017: R3.2 million loss).
Despite adverse weather conditions, the Agriculture segment has managed to improve its revenue and EBIT through
operating efficiently, organic growth of existing business and securing new business.
The group is also beginning to see the rewards of investing in the warehousing sector with its contribution being
R19 million to the overall Supply Chain segment revenue of R23 million.
The Chemicals & Steel segment achieved a 5% increase in revenue. EBIT has, however, decreased by 28%. This is largely
due to rate and cost pressure.
Fuel & Powders has underperformed as the cement industry continues to be significantly depressed. The EBIT loss was
R8.2 million (August 2017: R4.8 million loss).
Financial position
The group's liquidity and solvency ratios remain strong at 2.46 and 2.93 respectively. (February 2018: 2.76 and 2.93).
Earnings per share
Basic and diluted earnings per share is 77.6 cents. This is a 26% increase from the prior year.
The headline earnings per share improved to 87.5 cents, a 30.6% increase.
Changes to the board
Mr MJ Bolton's role changed from executive director to non-executive director with effect from 17 March 2018.
Mr AE Franklin retired from the board on 26 July 2018.
Broad-based black economic empowerment
The group is proud to announce that it has improved its BBBEE status from level 3 to level 2, and a scorecard
improvement from 75 to 95 points. The black ownership percentage has also improved to 53%.
Prospects
We anticipate that the cement industry will remain a challenge in the second half of the year. There is a positive
outlook for the rest of the business. Our focus will remain on efficiency, cost management and growth.
Preparation of results and accounting policies
The condensed consolidated interim financial statements are prepared in accordance with International Financial
Reporting Standards (IFRS), IAS 34 Interim Financial Reporting, the SAICA Financial Reporting Guides as issued by the
Accounting Practices Committee and Financial Pronouncements as issued by Financial Reporting Standards Council and the
requirements of the Companies Act of South Africa.
Management has completed the process of consulting with the required expertise to assess the impact of IFRS 16 on the
group's results. A right of use asset and a lease liability will be recognised for previously reported operating leases.
The impact on the statement of financial position will be between 0.5% and 1% of the total asset value.
IFRS 15 and IFRS 9 have not had a material impact on the financial statements and hence the opening balances have not
been restated.
Except for the effects of the implementation of the accounting policies referred to above, the rest of the accounting
policies are consistent with those applied in the prior year financial statements and the carrying amounts of financial
instruments approximates their fair values. These results have not been audited nor have they been reviewed by the
group's auditors, Ernst & Young Inc. The interim condensed consolidated financial statements were compiled under the
supervision of the chief financial officer, Mr J Kriel CA(SA).
Events after the reporting period
There were no significant events after the reporting period.
Dividend declaration
The board has resolved to declare a gross interim cash dividend (number 55) of 7.3 cents per share (2017: 6.4 cents)
for the period ended 31 August 2018. The dividend has been declared out of income reserves.
The dividend will be subject to a dividend withholding tax rate of 20% or 1.46 cents per ordinary share. Shareholders,
unless exempt or qualifying for a reduced withholding tax rate, will receive a net dividend of 5.84 cents per share
(2017: 5.5 cents).
Cargo Carriers tax reference number is 9900156713 and the number of ordinary shares in issue at the declaration date
is 21 052 632, of which 1 646 342 are treasury shares.
The salient dates for the dividend are as follows:
Last day to trade "cum" the cash dividend (LDT) Tuesday, 6 November 2018
Shares commence trading "ex" the dividend Wednesday, 7 November 2018
Record date (date shareholders recorded in share register) Friday, 9 November 2018
Payment date Monday, 12 November 2018
Shareholders may not dematerialise or rematerialise their share certificates between Wednesday, 7 November 2018
and Friday, 9 November 2018, both dates inclusive.
Registered office
11A Grace Road, Mountainview, Observatory, Johannesburg, 2198
Directors
SP Mzimela* (Chairperson), MJ Bolton#, BB Fraser#, V Raseroka*, SF Nomvalo*, A Gcabashe*, N Medupe*, GD Bolton
(Executive), LS Letsoalo (CEO), J Kriel (CFO)
#non-executive director *independent non-executive director
Retirement
AE Franklin 26 July 2018
By order of the board
Arbor Capital Company Secretarial (Pty) Ltd
17 October 2018
Transfer secretaries
Computershare Investor Services (Pty) Ltd
Rosebank Towers, 15 Biermann Avenue, Rosebank, 2196
(PO Box 61051, Marshalltown, 2107)
Sponsor
Arbor Capital Sponsors (Pty) Ltd
Website
www.cargocarriers.co.za
Date: 17/10/2018 11:50:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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