RNS Number:9621P
Tanjong PLC
19 September 2003
TANJONG public limited company
(Incorporated in England 1926 - No. 210874)
(Registered as a foreign company in Malaysia - No. 990903-V)
QUARTERLY REPORT FOR THE SECOND QUARTER ENDED 31 JULY 2003
Condensed Group Profit and Loss Account
3 months ended 6 months ended
in RM'000 Note 31-Jul-03 31-Jul-02 31-Jul-03 31-Jul-02
(Unaudited) (Unaudited)
Group turnover 8 644,440 636,352 1,267,138 1,245,357
Operating costs (471,222) (491,601) (953,292) (977,425)
Group operating profit 8 173,218 144,751 313,846 267,932
Share of associated undertakings and
joint venture 1,586 427 1,819 990
Group operating profit after share of
174,804 145,178 315,665 268,922
Net interest expense and
investment charge (18,142) (13,385) (38,108) (24,125)
Profit on ordinary activities before 156,662 131,793 277,557 244,797
taxation
Taxation (44,191) (40,621) (77,227) (75,230)
Profit on ordinary activities after 112,471 91,172 200,330 169,567
taxation
Minority interests (1,707) (10,539) (5,612) (17,661)
Net profit for the period 110,764 80,633 194,718 151,906
Earnings per share (sen)
- Basic 28.5 20.9 50.2 39.5
- Diluted 28.5 20.8 50.1 39.3
The condensed group balance sheet should be read in conjunction with the Group's
annual financial statements for the year ended 31 January 2003.
Condensed Group Balance Sheet
As at As at
31-Jul-03 31-Jan-03
in RM'000 (Unaudited) (Audited)
Tangible assets 2,643,729 2,553,804
Investment property 365,000 365,000
Intangible assets 54,794 56,682
Investments in associate and joint venture 28,593 31,155
Long term investments 5,880 6,356
Current Assets
Stocks 107,311 114,889
Debtors 288,760 205,908
Investments and short term placements 1,024,556 708,190
Cash at bank and in hand 14,482 13,798
1,435,109 1,042,785
Current Liabilities
Creditors 304,202 324,817
Short term borrowings 53,985 362,368
Taxation 15,206 14,601
Dividends payable 62,451 78,061
435,844 779,847
Net current assets 999,265 262,938
Long term liabilities
Borrowings and other long term 1,809,395 984,389
liabilities
Deferred taxation 230,530 200,108
2,057,336 2,091,438
Capital and Reserves
Paid up share capital 139,557 138,102
Share premium account 133,118 109,733
Revaluation reserve 9,915 9,915
Profit and loss account 1,698,344 1,568,220
Equity shareholders' funds 1,980,934 1,825,970
Minority interests 76,402 265,468
2,057,336 2,091,438
Net tangible assets per share (RM) 4.94 4.57
The condensed group balance sheet should be read in conjunction with the Group's
annual financial statements for the year ended 31 January 2003.
Condensed Group Cash Flow Statement
6 months ended
in RM'000 31-Jul-03 31-Jul-02
(Unaudited)
Reconciliation of operating profit to operating cash flows:
Group operating profit 313,846 267,932
Depreciation & amortisation 87,719 65,479
Adjustment for other non-cash items (150) -
401,415 333,411
Changes in working capital (78,532) (49,258)
Net cash inflow from operating activities 322,883 284,153
Returns on investments and servicing of finance:
Interest received 11,626 7,994
Interest paid (35,266) (31,649)
Dividend received from current asset 600 314
investments
Net cash outflow from returns
on investments and servicing of finance (23,040) (23,341)
Malaysian and other taxes paid (57,408) (37,297)
Capital expenditure (14,141) (6,062)
Free cashflow 228,294 217,453
Acquisitions and disposals:
Construction of a power generation plant (115,255) (211,316)
Long term investment (454) -
Acquisition of minority interests in a (267,805) -
subsidiary
Repayment from a joint venture 4,500 -
New investment in an associate company - (435)
Net cash outflow from acquisitions and disposals (379,014) (211,751)
Equity dividends paid (78,528) -
Management of liquid resources:
Increase in funds placed on deposits (311,339) (143,551)
Decrease/(Increase) in current asset 151 (20,116)
investments
-
Net cash outflow from management of liquid resources (311,188) (163,667)
Financing:
Issue of ordinary shares 24,840 35,802
Net increase in borrowings 516,280 127,939
Net cash inflow from financing 541,120 163,741
Decrease in cash and bank balances 684 5,776
Cash and bank balances at beginning of the year 13,798 14,451
Cash and bank balances at period end 14,482 20,227
The condensed group cash flow statement should be read in conjunction with the
Group's annual financial statements for the year ended 31 January 2003.
Condensed Group Statement of Changes in Equity
Non-distributable Distributable
Profit and Total as at 31 July
Share Share Revaluation Loss 2003 2002
in RM'000 Capital Premium Reserve Account (Unaudited)
Balance 138,102 109,733 9,915 1,568,220 1,825,970 1,575,304
brought
forward
Movements
during the
period:
Net profit for - - - 194,718 194,718 151,906
the period
Issuance of
shares arising
from
exercise of 1,455 23,385 - - 24,840 35,778
share options
Dividends - - - (62,451) (62,451) (38,598)
Dividend
entitlements
for new shares
issued between
declaration
and
book closure - - - (467) (467) (713)
date
Exchange
differences on
foreign
currency net - - - (1,676) (1,676) (274)
investments
Balance 139,557 133,118 9,915 1,698,344 1,980,934 1,723,403
carried
forward
The condensed group statement of changes in equity should be read in conjunction
with the Group's annual financial statements for the year ended 31 January 2003.
Part A Explanatory notes in compliance with MASB Statement 26
1. Basis of preparation
The Quarterly Report has been prepared in accordance with the reporting
requirements outlined in Malaysian Accounting Standards Board ("MASB")
Standard No. 26 - "Interim Financial Reporting" and Paragraph 9.22 of the
Kuala Lumpur Stock Exchange Listing Requirements and should be read in
conjunction with the Group's annual audited financial statements for the
year ended 31 January 2003.
The accounting policies adopted by the Group comply with United Kingdom
Generally Accepted Accounting Practices ("UK GAAP).
2. Qualification of preceding annual financial statements
There was no audit qualification to the preceding annual audited financial
statements of the Group.
3. Seasonal / cyclical factors
The principal business operations of the Group are not materially affected
by seasonal or cyclical factors.
4. Unusual items
There were no unusual items affecting assets, liabilities, equity, net
income, or cash flows during the period under review.
5. Material changes in estimates of amounts reported
There were no material changes in estimates of amounts reported in the
prior financial year.
6. Movements in debt and equity securities
6.1 Issuance and repayment of debt securities
The details of movements in debt securities are as follows:
in RM'000 Total amount in nominal value
Current Quarter Year to Date
Date Nature of debt security Issued Repaid Issued Repaid
2003
7 Mar Serial Bonds - - 500,000 -
19 Mar Serial Bonds - - 330,000 -
25 May Commercial Papers 1,000 - 1,000 -
11 Jun Al-Murabahah Commercial Papers - (11,000) - (11,000)
26 Jun Commercial Papers - (1,000) - (1,000)
1,000 (12,000) 831,000 (12,000)
6.2 Issuance of equity securities
in RM'000 Current Quarter Year to Date
Number Number
of shares of shares
'000 RM'mil '000 RM'mil
Ordinary shares at 7.5 pence 2,957 23.7 3,111 24.8
7. Dividend paid
A final gross dividend of 28 sen per share less Malaysian income tax at 28%
in respect of financial year ended 31 January 2003 was paid on 22 July
2003.
8. Segmental results
6 months ended 6 months ended
31-Jul-03 31-Jul-02
Operating Operating
in RM' 000 Turnover profit/(loss) Turnover profit/(loss)
Malaysia
Numbers Forecast Operations ("NFO") 738,040 79,420 730,372 102,849
Power Generation 479,189 224,006 463,380 152,595
Racing Totalisator Operations ("RTO") 10,370 (2,169) 10,692 19
Property Investment 23,825 14,989 22,561 14,266
1,251,424 316,246 1,227,005 269,729
People's Republic of China
Liquefied Petroleum Gas ("LPG") 20,058 (1,162) 22,626 (763)
Segment totals 1,271,482 315,084 1,249,631 268,966
Inter-segment elimination (4,344) (4,274)
Non-segmental expenditure (1,238) (1,034)
1,267,138 313,846 1,245,357 267,932
9. Valuations of property, plant and equipment
The valuation of the investment property of RM365 million held by the Group
has been brought forward without amendments from the previous annual
audited financial statements.
10. Material events subsequent to the end of the financial period
There were no material subsequent events as at the date of this quarterly
report.
11. Changes in the composition of the Group
There have been no significant changes in the composition of the Group
during the financial year.
12. Commitments and contingencies
12.1 Capital commitments as at 31 July 2003
RM'000
Authorised and contracted 176,912
Authorised but not contracted 19,210
196,122
The above commitments relate primarily to :
* project completion costs and other ancillary capital expenditure to
be incurred in relation to the power plant and related facilities of
Panglima Power Sdn Bhd, a subsidiary of the Company;
* the proposed acquisition of assets from CargoLifter AG Group.
12.2 Contingencies
There were no material contingent liabilities or contingent assets
since the last annual balance sheet date.
13. Significant related party disclosures
The following is a summary of material transactions as defined by Financial
Reporting Standard 8, "Related Party Disclosures", which have been
contracted in the ordinary course of business and on normal commercial
terms between the Group and companies that are associated with:
(i) The trust that is associated with the family of Ananda Krishnan
Tatparanandam and foundations ("the Trust") and
ii) The family of Ananda Krishnan Tatparanandam.
The trustee of the Trust is the controlling shareholder of the Company as
defined by the United Kingdom Financial Services Authority Listing Rules.
6 months ended
in RM'000 31-Jul-03 31-Jul-02
Income credited to the Group profit and loss account
Lease rental and tenant service revenue 11,232 10,585
Car park income 409 303
Others 102 25
11,743 10,913
Recovery of expenses and shared overhead costs 3,691 3,336
Expenses charged to the Group profit and loss account
Consultancy services 7,787 6,999
Technical advisory, operations & maintenance services 2,760 3,551
Software support and licence fees 2,310 2,310
Building and property maintenance services 1,543 1,533
Closed circuit television broadcasting services 1,176 1,078
Sponsorship of events 947 321
Equipment lease rentals 840 840
Telecommunication and related services 726 678
Bloodstock management, service fees, accounting & clerical services 587 218
Other services 529 227
19,205 17,755
Part B Explanatory notes in compliance with KLSE Listing Requirements
(Part A of Appendix 9B)
14. Review of performance
14.1 Material factors affecting current quarter's results
The increase in the current quarter's profit before taxation as compared to
the corresponding quarter in the previous year is mainly due to the full
quarter's contribution of Panglima Power Sdn Bhd ("Panglima") which
successfully converted its 460MW Open Cycle Gas Turbine power plant into a
720MW Combined Cycle Gas Turbine ("CCGT") power plant on 31 March 2003.
14.2 Material factors affecting financial year to date results
Group turnover for the six month period increased by RM21.7 million
from RM1,245.4 million in the corresponding period in the previous
year ("corresponding period") to RM1,267.1 million. Group operating
profit is, at RM313.8 million, higher by RM45.9 million or 17.1%.
The increased Group turnover is mainly attributable to the additional
contribution by Panglima's CCGT power plant referred to above. The
corresponding increase in Panglima's capacity billings has contributed
to the increase in Power Generation's operating profit from RM152.6
million to RM224.0 million.
Consumer demand for NFO products has improved as a result of increased
enforcement activities against unauthorised operators which were
carried out during the current quarter. NFO operating profit has
however reduced from RM102.8 million in the corresponding period to
RM79.4 million in the current period due to reduced operating margins
arising from the revision to the prize payout structure and an
increase in Betting and Sweepstake Duties on 1 January 2003.
Net interest expense and investment charge have increased from RM24.1
million to RM38.1 million, largely due to increased interest expense
on additional borrowings. As at 31 July 2003, Group borrowings
totalled RM1.86 billion as compared to RM1.27 billion in the
corresponding period, as additional borrowings have been taken to
finance the development of the Panglima power plant.
For the period under review, Group profit attributable to shareholders
increased by 28.2% from RM151.9 million to RM194.7 million. Net
earnings per share has correspondingly increased from 39.5 sen to
50.2 sen.
15. Variation of current quarter's profit before tax to preceding quarter
The current quarter's profit before taxation of RM156.7 million is higher
than the preceding quarter's profit before taxation of RM120.9 million due
mainly to the increased profit contribution of Panglima, which commenced
combined cycle operations on 31 March 2003.
16. Current year prospects
The overall performance of the Group for the remainder of the financial
year will depend mainly on the performance of the NFO and the Power
Generation segments. Since the end of the quarter under review, the demand
for NFO products has remained at recent levels and the Power Generation
segment continues to perform in line with expectations. Barring unforeseen
circumstances, the Board of Directors anticipates a satisfactory overall
performance for the Group for the remainder of this financial year.
17. Variance to profit forecast or shortfall in profit guarantee only
applicable to the final quarter)
The Group did not issue a profit forecast during the period under review.
18. Taxation
Current Quarter Year to Date
in RM'000 31/7/2003 31/7/2002 31/7/2003 31/7/2002
Malaysian Taxation
Income tax
- Current year 24,649 24,088 49,825 48,828
- Prior year (3) - (49) -
24,646 24,088 49,776 48,828
Deferred tax 19,544 16,367 30,544 26,076
44,190 40,455 80,320 74,904
Foreign Taxation 1 166 (3,093) 326
44,191 40,621 77,227 75,230
The effective tax rate for the current quarter is higher at 28.2% mainly
due to losses of subsidiaries not available for relief at Group level and
non-deductibility of certain other items for tax purposes.
19. Sale of unquoted investments and/or properties
There were no disposals of unquoted investments and/or properties during
the period under review.
20. Quoted securities
Current Year to Date
Quarter
RM'000 RM'000
(a) Summary of dealings in quoted securities for the period ended
31 July 2003: -
(i) Total purchase consideration 5,695 5,695
(ii) Total sale proceeds 1,544 2,197
(iii) Total profit on disposal 258 384
(b) Investments in quoted securities as at the end of the
reporting period:
(i) At cost 73,949
(ii) At carrying value/book value; and 67,799
(iii) At market value 85,680
21. Status of corporate proposals announced but not completed
(a) Status of corporate proposals announced during the quarter
Subsequent to the announcement to Kuala Lumpur Stock Exchange and
London Stock Exchange dated 11 July 2003 whereby a Conditional
Purchase and Loan Contract was entered into with the liquidator of
CargoLifter AG Group, the Group advanced EURO2.5 million (RM10.8
million) as deposit for the purchase consideration of the assets of
the CargoLifter AG Group.
(b) Status of utilisation of proceeds raised from corporate proposals
Panglima had during the previous quarter issued serial bonds with a
total nominal value of RM830 million. These serial bonds form part of
the RM1.22 billion financing facility obtained for the development of
Panglima's 720MW Combined Cycle Gas Turbine power plant.
22. Group borrowings and debt securities
Short Long
Term Term Total
RM'000 RM'000 RM'000
Secured
Al-Murabahah Commercial Papers * 13,985 - 13,985
Al-Bai' Bithaman Ajil
Islamic Debt Securities ("BaIDS") * 30,000 420,000 450,000
Al-Murabahah Medium Term Notes * - 55,000 55,000
Serial bonds ** - 830,000 830,000
Syndicated loan 10,000 148,240 158,240
53,985 1,453,240 1,507,225
Unsecured
Redeemable bonds - 350,000 350,000
As at 31 July 2003 53,985 1,803,240 1,857,225
* These debt securities are secured by way of assignment of its rights,
title, benefits and interest in and under certain insurances procured by
Pahlawan Power Sdn Bhd in relation to its property, assets and business and
all amounts standing to the credit of its finance service reserve account.
** These debts are undertaken by Panglima and are secured against a debenture
over its assets and properties, a charge over its landed properties, an
assignment of its rights, title, benefits and interest in and under certain
insurances and project agreements and an assignment of all amounts standing
to the credit of a designated project and debt service reserve accounts of
Panglima.
23. Off balance sheet financial instruments
Panglima is obliged to make progressive payments in EURO currency pursuant
to the Engineering, Procurement and Construction Contract ("EPC Contract")
entered for the construction and development of the 720MW CCGT power plant
as well as supply contracts in relation to its procurement of materials and
parts. In this respect, Panglima has entered into forward contracts to
hedge the above payments in EURO currency.
At the date of this report, the notional principal amount outstanding under
the forward contracts entered into by Panglima is EURO 36.8 million
(RM161.9 million at forward contract rates ranging between RM4.28 to RM4.45
: EURO 1). The forward contracts are executed with three (3) licensed
financial institutions and are accounted for on a basis which is consistent
with the accounting policies adopted by the Group. These contracts have
various maturity periods straddling over the next eleven months to meet the
payment obligations under the EPC Contract and spare parts procurement.
24. Changes in material litigation
There is no pending material litigation since the last annual balance sheet
date to the date of issue of this quarterly report.
25. Dividend
An interim dividend of 16 sen per share exempt from Malaysian income tax
(2003: 10 sen per share exempt from Malaysian income tax) in respect of the
financial year ending 31 January 2004 amounting to RM62,451,222 (2003 :
RM38,708,414) has been declared payable on 30 October 2003 to shareholders
on record of the Company at the close of business on 17 October 2003
subject to the following paragraphs.
The Register of Members of the Company will be closed from 18 October 2003
to 20 October 2003 (both dates inclusive) for the purpose of determining
each shareholder's entitlement to the dividend.
Each person whose name appears in the Register of Members or the Record of
Depositors as at the close of business on 17 October 2003 (the "Record
Date") shall be entitled to participate in the dividend in respect of those
shares of which they are registered as member or recorded as depositor.
Registrable transfers received by the Company's Branch Registrars in
Malaysia, Signet Share Registration Services Sdn. Bhd. at 11th Floor, Tower
Block, Kompleks Antarabangsa, Jalan Sultan Ismail, 50250 Kuala Lumpur,
Malaysia, or the Company's Principal Registrars in the United Kingdom,
Capita IRG Plc at The Registry, 34, Beckenham Road, Beckenham, Kent, BR3
4TU, England, up to the close of business at 5.00 p.m. (local time) on 17
October 2003 will be registered by the Record Date.
A holder of a securities account maintained with the Malaysian Central
Depository Sdn. Bhd. ("Depositor") shall qualify for entitlement only in
respect of: -
(a) shares deposited into the Depositor's securities account before 12.30
p.m. (Malaysian time) on 15 October 2003 (in respect of shares which
are exempted from mandatory deposit);
(b) shares transferred into the Depositor's securities account before 4.00
p.m. (Malaysian time) on 17 October 2003 in respect of transfers; and
(c) shares bought on the Kuala Lumpur Stock Exchange on a cum entitlement
basis according to the Rules of the Kuala Lumpur Stock Exchange.
25. Dividend
Any employee of the Company who has exercised, or wishes to exercise, an
option to subscribe for shares in the Company granted to such employee
under the Tanjong public limited company Employees' Share Option Scheme No.
2 should note that the shares to be issued upon the exercise of such option
will not confer on any person any entitlement to the dividend unless as at
the Record Date such person is recorded as depositor of such shares under
the Record of Depositors.
Copies of the Unaudited Results of the Tanjong Group for the second quarter
and the half year ended 31 July 2003 are available to the public during
office hours at the Company's registered office in the United Kingdom at
The Registry, 34 Beckenham Road, Beckenham, Kent BR3 4TU, England.
26. Earnings per share ("EPS")
The basic and diluted EPS for the reporting period are computed as follows:
Current Cumulative
Quarter Quarter
Net profit for the quarter (RM'000) 110,764 194,718
Weighted average number of ordinary shares 388,051,313 388,051,313
Dilutive effect * 987,245 987,245
Diluted average number of ordinary shares 389,038,558 389,038,558
Basic EPS (sen) 28.5 50.2
Diluted EPS (sen) 28.5 50.1
* arising from unexercised employee share options over unissued shares which
have a dilutive potential
By order of the Board
Siuagamy Ramasamy 19 September 2003
Group Company Secretary Kuala Lumpur
This information is provided by RNS
The company news service from the London Stock Exchange
END
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