UNAUDITED INTERIM FINANCIAL RESULTS: for the six months ended 30 June 2012

Transcription

1 UNAUDITED INTERIM FINANCIAL RESULTS: for the six months

2 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 (Incorporated in the Republic of South Africa) (Registration number 1996/002982/06) Share code: HWN ISIN code: ZAE ( 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) Howden Africa Holdings Limited (HAHL) 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 HOWDEN Unaudited interim financial results for the six months

3 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 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 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 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, 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 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 Operating profit increased from a loss of R2,1 million in the previous period to a profit of R13,1 million. 1

4 COMMENTARY continued There was an increase in order intake to R126,4 million for the first six months June 2012, compared to R53,1 million in the corresponding period in 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. The last date to trade cum dividend is Friday, 5 October Shares start trading ex dividend on Monday, 8 October The record date is Friday, 12 October 2012, and payment will be on Monday, 15 October 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 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 Mr Humphrey Mathe was appointed to the board of directors as an independent non-executive director with effect from 1 July Unaudited interim financial results The Company s auditors, Ernst & Young, have not reviewed or audited the interim financial results for the six months. 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 Chairman 30 August 2012 T Bärwald Chief Executive Officer HOWDEN Unaudited interim financial results for the six months 2

5 Condensed consolidated statement of comprehensive income for the period 30 June 2011 Change % Twelve months 31 December 2011 (Audited) Revenue , Gross profit , Operating profit , Finance income Finance costs (290) (1 669) (2 734) Profit before income tax , Income tax expense (32 859) (18 230) (54 414) Profit for the period , Other comprehensive income Currency translation differences 177 Pension fund plan surplus/(loss)* (2 473) Income tax relating to components of other comprehensive income (450) 692 Other comprehensive income for the period, net of tax (1 781) Total comprehensive income for the period , 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. 3

6 Condensed consolidated statement of financial position as at 30 June 2011 Twelve months 31 December 2011 (Audited) ASSETS Non-current assets Property, plant and equipment and intangible assets Pension fund plan asset Cash and cash equivalents Other non-current assets Current assets Inventories Trade and other receivables Cash and cash equivalents TOTAL ASSETS EQUITY Share capital and reserves Share capital and reserves Total equity LIABILITIES Non-current liabilities Current liabilities Total liabilities TOTAL EQUITY AND LIABILITIES HOWDEN Unaudited interim financial results for the six months 4

7 Other group salient features for the period 30 June 2011 Change % Twelve months 31 December 2011 (Audited) Net asset value per share (cents) 374,74 315,36 18,8 418,87 Depreciation Amortisation Capital expenditure Capital commitments Authorised and contracted Number of shares in issue (000's) 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 (Profit)/loss on disposal of property, plant and equipment (33) 17 Headline earnings ,

8 Condensed consolidated statement of changes in equity for the period 30 June 2011 Twelve months 31 December 2011 (Audited) Share capital and reserves at the beginning of the period Total comprehensive income for the period Dividends declared ( ) Dividends paid (9 859) (23 005) Share capital and reserves at the end of the period HOWDEN Unaudited interim financial results for the six months 6

9 Condensed consolidated statement of cash flows for the period Cash flow from operating activities 30 June 2011 Twelve months 31 December 2011 (Audited) Cash generated from operations Interest paid (1 669) (2 551) Income tax paid (17 302) (12 888) (43 085) Net cash generated from operating activities Cash flow from investing activities Interest received 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 Net cash generated/(utilised) from investing activities (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 Cash and cash equivalents at the beginning of the period Cash and cash equivalents at the end of the period

10 Segmental analysis by operating division for the period 30 June 2011 Change % Twelve months 31 December 2011 (Audited) Revenue Fans and Heat Exchangers Environmental Control , Orders received Fans and Heat Exchangers Environmental Control , Operating profit Fans and Heat Exchangers Environmental Control (2 112) Central operations (5 257) (4 223) (8 018) Total operating profit , Intersegmental sales Fans and Heat Exchangers Environmental Control (8,9) HOWDEN Unaudited interim financial results for the six months 8

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