[miningmx.com] – TRANS Hex warned shareholders it would post an interim net loss of R53.9m which set against the R32.9m profit in the previous financial year represents a damaging R86.8m turnaround in fortunes.
The announcement issued to the Johannesburg Stock Exchange stripped a fifth off Trans Hex’s value. The stock ended 80 cents/share lower, equal to R84m in value, to close at R3.18 per share.
Some R57.1m in cash flowed out of the business period-on-period with Trans Hex set to post a cash position of R294.6m as of end-September.
The company, which has been waiting more than three years to complete the purchase of De Beers’ Namaqualand mine, said the interim loss was owing to “grade under-performance at the group’s South African operations and the effects of a 21-day strike over pay increases by members of the National Union of Mineworkers”.
The bottom line is an expected loss per share of 51 cents which compares to a 31.6c/share profit previously. Headline share losses would total 51 cents against a 21.5 cents/share profit at the interim stage in the 2012 financial year. Trans Hex said it was due to report its full figures on or about November 1.
All the damage was suffered at the group’s South African operations which generated a a loss before tax of R88,6m compared to profit of R34,2m in the corresponding reporting period in 2012. The Angola operations performed better.
Trans Hex has been held back by interminable delays to a proposed transaction in which its 50%-held Emerald Panther Investments is to buy De Beers’ stake in Namaqualand Mines for a revised sum of R166m (R83m attributable to Trans Hex).
A recalculation on De Beers’ environmental liabilities, and the South African government permitting mean that even if Trans Hex complete the deal as anticipated in the third quarter of the calendar year (about now), the deal will have taken three, long years to consummate.
At least the company’s shareholders are loyal “It’s a good investment,” said Piet Viljoen who leads asset management company, Re:CM and which is one of Trans Hex’s largest shareholders. “There is hard net asset value of R5/share in there, cash of R4/share, and free cash flow equal to 30c to 40c/share. It’s a small company, not recognised, but we’re very happy,’ said Viljoen in a Miningmx interview published on September 20.
