SacOil swings to H1 profit on investment income, cost reductions

22nd November 2013

By: Natalie Greve

Creamer Media Contributing Editor Online


Font size: - +

After posting a loss of R11.8-million for the first six months of 2012, dual-listed SacOil has swung to a profit of R27-million for the six months ended August 31, 2013, attributed chiefly to an increase in investment income and decreases in finance and operating costs.

The Africa-focused oil and gas company’s balance sheet was further boosted by income of R43.7-million in foreign exchange gains, which arose on the remeasurement of dollar balances.

A 50% decline in operating costs from R23.2-million in the first half of the 2012 fiscal year to R11.5-million in the period under review, on the back of decreased corporate, remuneration, consulting, legal and travel and accommodation costs, also bolstered margins.

In contrast, a 21% overall decrease in “other” income was primarily attributable to the once-off profit on disposal of the 6.67% interest in its Democratic Republic of Congo-based Block III operation, as well as a once-off break fee received from a third party in the corresponding prior period.

In addition, investment income for the period under review comprised interest income from loans of R34.2-million, interest earned on cash and cash equivalents of R200 000 and imputed interest income of R12.5-million, arising from the unwinding of the time-value discount applied to the contingent consideration for Block III.

“Investment income increased by R19.7-million relative to the corresponding prior period, reflective of an increase in the amounts advanced to Energy Equity Resources, the compounding effect of the interest accruals and the impact of the weak rand,” SacOil CEO Roger Rees said in a statement on Friday.

The group's finance costs of R10.5-million, an increase on the R21.5-million posted in the first six months of the 2012 fiscal period, related to interest on the two $1-million loans, acquired in September and October last year, to fund working capital requirements and work programme commitments for the company’s Nigerian assets, which the company said would start producing revenue in 18 to 24 months.

During the period under review, the group incurred further interest charges of R32.6-million on the loan, which had been capitalised to the exploration and evaluation asset, as it related to a qualifying asset.

Meanwhile, taxation decreased by 13% to R41.7-million, as taxation in the corresponding prior period was comparatively higher as a result of the once-off capital gains tax incurred on the disposal of the interest in Block III.

Exploration and evaluation assets increased by R43.8-million to R206.7-million during the period under review as a result of the group capitalising exploration expenditures, which amounted to R11.2-million, and borrowing costs totalling R32.6-million in relation to the Nigerian operation.

“The overall increase of 20% in other financial assets, under noncurrent assets, is primarily a result of foreign exchange gains and interest amounting to R70.4-million on the contingent consideration and on the loan due from Energy Equity Resources,” commented Rees.

SacOil, which also had operations in Malawi and Botswana, said it would continue to evaluate opportunities to secure high-impact acreage in other established and prolific hydrocarbon basins in Africa.

Edited by Tracy Hancock
Creamer Media Contributing Editor


Latest News

Anglo American CE Duncan Wanblad.
Anglo helping to restore Amazon-like rainforest near Brazil iron-ore mine
Updated 2 hours 57 minutes ago By: Martin Creamer
Image of Icasa chairperson Councillor Mothibi Ramusi
Icasa officially appoints new chairperson
22nd April 2024 By: Natasha Odendaal


Booyco Electronics
Booyco Electronics

Booyco Electronics, South African pioneer of Proximity Detection Systems, offers safety solutions for underground and surface mining, quarrying,...

Condra Cranes
Condra Cranes

ISO-certified Condra manufactures overhead cranes, portal cranes, cantilever cranes and crane components: hoists, drives, end-carriages, brakes and...


Latest Multimedia

sponsored by

Magazine round up | 19 April 2024
Magazine round up | 19 April 2024
19th April 2024

Option 1 (equivalent of R125 a month):

Receive a weekly copy of Creamer Media's Engineering News & Mining Weekly magazine
(print copy for those in South Africa and e-magazine for those outside of South Africa)
Receive daily email newsletters
Access to full search results
Access archive of magazine back copies
Access to Projects in Progress
Access to ONE Research Report of your choice in PDF format

Option 2 (equivalent of R375 a month):

All benefits from Option 1
Access to Creamer Media's Research Channel Africa for ALL Research Reports, in PDF format, on various industrial and mining sectors including Electricity; Water; Energy Transition; Hydrogen; Roads, Rail and Ports; Coal; Gold; Platinum; Battery Metals; etc.

Already a subscriber?

Forgotten your password?







sq:0.148 0.198s - 137pq - 2rq
Subscribe Now