CMO - Interim Results
Chrometco Limited
(Incorporated in the Republic of South Africa)
(Registration number 2002/026265/06)
Share code: CMO
ISIN: ZAE007020249
("Chrometco" or "the Group")
UNREVIEWED CONDENSED CONSOLIDATED FINANCIAL RESULTS FOR THE SIX MONTHS ENDED 31 AUGUST 2018
Condensed consolidated statement of financial position
|
Unreviewed as at 31 Aug 2018 |
Reviewed as at 31 Aug 2017 |
Audited as at |
||||
|
R'000 |
R'000 |
|||||
|
Assets |
||||||
|
Non-current assets |
1,142,935 |
903,540 |
1,129,336 |
|||
|
Property, plant and equipment |
1,017,277 |
817,027 |
962,653 |
|||
|
Intangible assets |
15 582 |
16,194 |
15,857 |
|||
|
Goodwill |
40,465 |
8,314 |
40,465 |
|||
|
Other financial assets |
39,056 |
55,159 |
82,844 |
|||
|
Deferred taxation |
21,155 |
1,989 |
21,722 |
|||
|
Environmental rehabilitation obligation investments |
9,400 |
4,857 |
5,796 |
|||
|
Current assets |
327,300 |
262,316 |
355,722 |
|||
|
Trade and other receivables |
28,022 |
58,227 |
24,470 |
|||
|
Inventory |
134,385 |
65,325 |
164,088 |
|||
|
Cash and cash equivalents |
33,152 |
9,243 |
34,885 |
|||
|
Non-current disposal group held-for-sale |
131,742 |
129,522 |
132,279 |
|||
|
Total assets |
1,470,235 |
1,165,856 |
1,485,059 |
|||
|
EQUITY AND LIABILITIES |
||||||
|
Capital and reserves |
708,665 |
440,151 |
515,206 |
|||
|
Stated capital |
388,512 |
388,512 |
388,512 |
|||
|
(Accumulated loss)/ retained earnings |
(12 180) |
(37 489) |
(49,607) |
|||
|
Non-controlling interest |
332,333 |
89,127 |
176,301 |
|||
|
Non-current liabilities |
344,031 |
545,968 |
570,726 |
|||
|
Deferred taxation |
158,700 |
132,273 |
139,368 |
|||
|
Borrowings |
5 |
84,425 |
330,977 |
331,364 |
||
|
Other financial liability |
60,675 |
74,451 |
53,053 |
|||
|
Finance lease liability |
27,763 |
6,014 |
34,961 |
|||
|
Environmental rehabilitation provision |
12,468 |
2,253 |
11,980 |
|||
|
Current liabilities |
417,539 |
179,737 |
399,127 |
|||
|
Cash and cash equivalents |
- |
- |
85,547 |
|||
|
Trade and other payables |
326,529 |
142,440 |
232,555 |
|||
|
Finance lease liability |
61,320 |
3,507 |
44,508 |
|||
|
Non-current disposal group held-for-sale |
29,690 |
33,790 |
36,517 |
|||
|
Total equity and liabilities |
1,470,235 |
1,165,856 |
1,485,059 |
|
Condensed consolidated statement of comprehensive income |
||||||
|
Unreviewed 6 months ending 31 Aug 2018 |
Reviewed 6 months ending 31 Aug 2017 |
Audited 12 months ending 28 Feb 2018 |
||||
|
R'000 |
R'000 |
R'000 |
||||
|
Revenue |
715,792 |
18,221 |
336,764 |
|||
|
Cost of sales |
(467,133) |
(19,860) |
(254,015) |
|||
|
Gross profit/(loss) |
248,659 |
(1,639) |
82,749 |
|||
|
Amortisation and depreciation |
(100,632) |
(10,550) |
(46,953) |
|||
|
Other income |
6,852 |
1,064 |
10,897 |
|||
|
Other expenses |
(47,059) |
(2,319) |
(19,844) |
|||
|
Salaries |
(48,265) |
(1,912) |
(16,833) |
|||
|
Professional fees |
(10,598) |
(3,457) |
(7,186) |
|||
|
Maintenance expenses |
(1,408) |
(57) |
(2,870) |
|||
|
Gain on bargain purchase |
- |
9,923 |
9,923 |
|||
|
Impairment |
(216) |
(120,535) |
(153,530) |
|||
|
Profit/(loss) before interest and taxation |
47,332 |
(129,482) |
(143,647) |
|||
|
Investment income |
3,321 |
598 |
8,337 |
|||
|
Finance charges |
(12,674) |
(2,133) |
(15,479) |
|||
|
Profit/(loss) before taxation |
37,979 |
(131,017) |
(150,789) |
|||
|
Taxation |
(10,751) |
29,785 |
39,435 |
|||
|
Profit/(loss) for the year |
27,228 |
(101,233) |
(111,354) |
|||
|
Other comprehensive income |
- |
- |
- |
|||
|
Total comprehensive income loss for the year |
- |
(101,233) |
(111,354) |
|||
|
Profit/(loss) and total comprehensive profit/(loss) for the year |
27,228 |
- |
- |
|||
|
Attributable to owners of the parent |
1,653 |
(67,204) |
(79,323) |
|||
|
Attributable to non-controlling interest |
25,575 |
(34,028) |
(32,031) |
|||
|
Basic profit/(loss) per share (cents) |
0.09 |
(13.73) |
(9.58) |
|||
|
Diluted profit/(loss) per share (cents) |
0.09 |
(13.73) |
(9.58) |
|||
|
Headline profit/(loss) per share (cents) |
7 |
0.10 |
(1.62) |
(1.56) |
||
|
Diluted headline profit/(loss) per share (cents) |
7 |
0.10 |
(1.62) |
(1.56) |
||
|
Condensed consolidated statement of cash flows |
||||||
|
Unreviewed 6 months ending 31 Aug 2018 |
Reviewed 6 months ending 31 Aug 2017 |
Audited 12 months ending 28 Feb 2018 |
||||
|
R'000 |
R'000 |
R'000 |
||||
|
Cash flows from operating activities |
||||||
|
Cash utilised by operations and exploration activities |
275,788 |
1,748 |
87,047 |
|||
|
Operating profit/(loss) before working capital changes |
148,333 |
(8,863) |
36,571 |
|||
|
Working capital changes |
127,455 |
10,611 |
50,476 |
|||
|
Interest received |
- |
598 |
4,695 |
|||
|
Finance cost |
- |
(88) |
- |
|||
|
Tax paid |
(5,617) |
(629) |
(2,663) |
|||
|
Net inflow from operating activities |
270,171 |
1,629 |
89,079 |
|||
|
Cash flows from investing activities |
||||||
|
Property, plant and equipment additions |
(111,115) |
(11,338) |
(114,855) |
|||
|
Sale of property, plant and equipment |
70 |
- |
- |
|||
|
Contributions to Guardrisk |
(3,139) |
(1,483) |
(2,152) |
|||
|
Cash obtained as part of acquisitions |
- |
16,118 |
16,118 |
|||
|
Net loans raised |
(28,639) |
(1) |
(8,166) |
|||
|
Net cash (outflow)/inflow from investing activities |
(142,823) |
3 296 |
(109,054) |
|||
|
Cash flows from financing activities |
||||||
|
Shares issued |
- |
5,000 |
5,188 |
|||
|
Group loan drawdown/(repayment) |
7,622 |
(3,000) |
(3,000) |
|||
|
Finance lease payments |
(41,027) |
(242) |
(17,489) |
|||
|
Deferred tax settled |
203 |
- |
- |
|||
|
Borrowings - settled on acquisition |
- |
- |
(5,514) |
|||
|
Loans raised |
(10,334) |
- |
(12,431) |
|||
|
Net cash (outflow)/inflow from financing activities |
(43,536) |
1,758 |
(33,245) |
|||
|
Net increase/(decrease) in cash and cash equivalents |
83,812 |
6 683 |
(53,221) |
|||
|
Cash and cash equivalents at beginning of year |
(50,660) |
2,560 |
2,560 |
|||
|
Cash and cash equivalents at end of year |
33,152 |
9,243 |
(50,660) |
|||
|
Condensed consolidated statement of changes in equity |
|||||
|
Stated |
(Accumulated loss)/ retained earnings |
Non- |
Total |
||
|
R'000 |
R'000 |
R'000 |
R'000 |
||
|
Balance at 1 March 2017 |
158,062 |
29,715 |
21,239 |
209,016 |
|
|
Shares issued |
230,450 |
- |
- |
230,450 |
|
|
Acquisition of subsidiary with non-controlling interests |
- |
- |
132,702 |
132,702 |
|
|
Non-controlling interest share of loss for the six months ended 31 August 2017 |
- |
- |
(34,028) |
(34,028) |
|
|
Total comprehensive loss for the six months ended 31 August 2018 |
- |
(67 204) |
- |
(67 204) |
|
|
Balance at 31 August 2017 |
388,512 |
(37 489) |
119,913 |
470,936 |
|
|
Non-controlling interest share of profits for the six months ended 28 February 2018 |
- |
- |
1,997 |
1,997 |
|
|
Transaction with Onicastar |
- |
- |
54,391 |
54,391 |
|
|
Total comprehensive loss for the six months ended 28 February 2018 |
- |
(12,118) |
- |
(12,118) |
|
|
Balance at 28 February 2018 |
388,512 |
(49 607) |
176,301 |
515,206 |
|
|
Non-controlling interest share of profits for the six months ended 31 August 2018 |
- |
- |
25,575 |
25,575 |
|
|
Total comprehensive profit for the six months ended 31 August 2018 |
- |
1,653 |
- |
1,653 |
|
|
Transaction with shareholders |
6 |
- |
35,774 |
130,456 |
166,230 |
|
Balance at 31 August 2018 |
388,512 |
(12 180) |
332,332 |
708,664 |
|
1. Nature of business
The Group is a mining and exploration company which focuses on Chrome mining in South Africa.
2. The interim condensed consolidated financial statements for the period ended 31 August 2018 have been prepared by the Group’s financial reporting team, supervised by Chrometco’s Chief Financial Officer, Mr. Marcel Naude CA(SA) and approved by the Chrometco’s board of directors. The directors take full responsibility for the preparation of the report and that the financial information has been correctly extracted from the underlying interim financial statements.
3. Basis of preparation
The condensed consolidated financial statements for the six months ended 31 August 2018 have been prepared in accordance with IAS 34 Interim Financial Reporting, the SAICA Financial Reporting Guides as issued by the Accounting Practices Committee, the Financial Reporting Pronouncements as issued by the Financial Reporting Accountants Council, the JSE Limited’s Listings Requirements and the South African Companies Act, 71 of 2008, as amended.
The accounting policies and methods of computation applied in the preparation of the condensed consolidated financial statements are in terms of IFRS and are consistent with those applied in the previous consolidated annual financial statements.
4. Unreviewed and unaudited
The condensed consolidated financial statements for the period ended 31 August 2018 have not been reviewed or audited. The condensed consolidated financial statements presented in this SENS announcement do not include the information required pursuant to paragraph 16A(j) of IAS 34.
|
5. Borrowings |
||||
|
Borrowings roll forward |
||||
|
31-Aug-18 |
28-Feb-18 |
31-Aug-17 |
||
|
R'000 |
R'000 |
R'000 |
||
|
Opening balance: |
331,364 |
330,977 |
- |
|
|
- IDC loan |
252,484 |
252,520 |
- |
|
|
- Related party loan |
78,880 |
78,457 |
- |
|
|
Interest incurred |
4,541 |
11,513 |
1,874 |
|
|
Acquired in a business combination |
- |
- |
329,103 |
|
|
Loan issued |
- |
- |
- |
|
|
Change in estimate |
(6,384) |
(11,126) |
- |
|
|
Transaction with a shareholder (Note 6) |
(245,096) |
- |
- |
|
|
Closing Balance |
84,425 |
331,364 |
330,977 |
|
|
- IDC loan |
84,425 |
252,484 |
252,520 |
|
|
- Related party loan |
- |
78,880 |
78,457 |
|
6. Transaction with shareholders
On 18 May 2018, the final suspensive conditions of the Umnotho WeSizewe Resources (Pty) Ltd (Black Chrome Operations) transaction were completed. Control of this operation was obtained on 18 July 2017, as disclosed in the Annual Financial Statements for the year ended 28 February 2018.These conditions resulted in the conversion of the IDC loan and the acquisition of the assets and liabilities of Sail Resources. These transactions have been recorded as transactions with shareholders.
Conversion of the IDC loan
As part of the business rescue restructuring, R166 million of the borrowings owed to the Industrial Development Corporation were exchanged for equity of Umnotho WeSizewe Resources (Pty) Ltd. These were converted for both Preference shares and Ordinary shares. Consequently, these increased the Non-controlling interest of the Umnotho WeSizewe Resources subsidiary.
Inclusion of the Sail Resources assets and liabilities
The Sail Resources Loan was previously reported as a related party loan. In the current period, ownership was obtained of the Sail Resources assets and liabilities. This constitutes an acquisition of assets and liabilities, and is not a business combination. The intragroup loans previously recognised of R79 million were eliminated on consolidation.
7. Headline loss per share and diluted headline loss per share
|
31-Aug-18 |
31-Aug-17 |
28-Feb-18 |
||
|
Profit/(loss) after taxation attributable to equity holders of the Group |
1,653 |
(67,204) |
(79,323) |
|
|
Gain on bargain purchase |
- |
(9,923) |
(9,923) |
|
|
Impairment, net of tax |
156 |
69,216 |
74,925 |
|
|
Change in estimate |
- |
- |
1,403 |
|
|
Headline earnings/(loss) |
1,809 |
(7,911) |
(12,918) |
|
|
Weighted average number shares in issue |
1,902,103 |
489,549 |
828,182 |
|
|
Diluted weighted average number shares in issue |
1,902,103 |
489,549 |
828,182 |
|
|
Headline loss per share (cents) |
0.10 |
(1.62) |
(1.56) |
|
|
Diluted headline loss per share (cents) |
0.10 |
(1.62) |
(1.56) |
|
8. Going concern
The financial statements have been prepared on the basis of accounting policies applicable to a going concern. This basis presumes that funds will be available to finance future operations and that the realisation of assets and settlement of liabilities, contingent obligations and commitments will occur in the ordinary course of business.
The ability of the company to continue as a going concern is dependent on a number of factors. The most significant of these is that the directors continue to procure funding for the ongoing operations for the company.
9. Mineral Reserves and Mineral Resources
There have been no published changes to the Mineral Reserves and Mineral Resources. These have remained unchanged to those included in the Annual Financial Report dated 28 February 2018.
10. Dividends
No dividend has been declared or paid for the period (28 Feb 2018: R nil).
11. Changes to the Board
During the period, there have been no changes to the Board.
Signed on behalf of the Board of Directors
Marcel Naude CA(SA)
Chief Financial officer
Johannesburg
30 November 2018
Directors:
BL Sibiya+ (Chairman), NL Waisberg (CEO), MC Naude (CFO), NP Thomas+,
LJ Jordaan+
+ independent non-executive
CORPORATE INFORMATION
Designated Advisor:
PSG Capital
Company Secretary:
The Green Board CC
Registered Office
Unit 25 Sunninghill Office Park
4 Peltier Drive
Sunninghill
Gauteng
2196
Postal address
PO Box 1553
Kelvin
2054
Auditors
Moore Stephens