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MAGONTEC LIMITED — Interim / Quarterly Report 2014
Jul 27, 2014
65327_rns_2014-07-27_1da61dd4-b9a1-48b0-82de-f6298315d6d3.pdf
Interim / Quarterly Report
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Limited
Office No.10 Level 8 139 Macquarie St Sydney NSW 2000 Australia Ph:+ 61 2 8231 7085 FAX: +61 2 9252 8960
28 July 2014
Company Announcements Office Australian Stock Exchange Limited 20 Bridge Street Sydney, NSW, 2000
Dear Sirs,
Appendix 4C – Quarter Ended 30 June 2014
The quarterly cash flow statement for the quarter ended 30 June 2014 is attached.
The Company’s audited financial results and report for the 6 months ended 30 June 2014 will be released by 31 August 2014.
The accompanying cash flow statement is based on preliminary management accounting data pending completion of audited accounts at 30 June 2014. Any variation between the cash flow statement in this Appendix 4C and the ultimate audited cash flow statement will be accounted for in the Company’s half year report. In the meantime a short commentary on the preliminary cash flow report is provided.
The industry in which Magontec Limited operates is characterised by lengthy credit sales terms unmatched by similar terms on purchases. As at the end of the period under review the Company’s working capital levels were substantially higher than in previous periods.
After isolating the increase in working capital assets, the underlying operation in the first half of 2014, was cash positive. Furthermore, to assist the Company to better manage its working capital requirements in China and elsewhere around the World we are in the process of finalising a significant global facility with a European bank.
The main cause of the rise in working capital stems from the Company’s Chinese operations where domestic demand and sales into the export markets have been below previous periods. This has resulted in a rise in inventories at the Company’s primary alloying facility in Shanxi Province. The impact of the slowdown in domestic Chinese demand on inventories has also been felt in sluggish trade debtor collections.
While some of these effects are cyclical in nature others appear more entrenched and not easily addressed prior to our move to Qinghai. However it seems likely that the raw material inventory buildup has occurred at a time of low pricing with pure magnesium purchases in the first half of 2014 dropping below ¥15,000 for much of the period.
The attached cash flow statement shows that in the six months to 30 June 2014 net cash used in operating activities was $4,258,267. A breakdown of the Company’s working capital demand in the relevant 6-month period is provided in the table below.
| Group Working Capital Demand | |
|---|---|
| Inventory Trade and Sundry Debtors Creditors & Accruals Provisions Other Net workingcapital demand |
Total Demand Movement Effect on Working Capital at 30 Jun 14 to 30 Jun 14 AUD AUD 28,641,414 5,692,492 Increase in working capital 25,102,526 (813,315) Decrease in working capital (18,572,338) 315,277 Increase in working capital (229,104) 982,137 Increase in working capital (371,022) 87,288 Increase in working capital 34,571,475 6,263,880 |
It should be noted that the increased demand in working capital is greater than the net cash used in operating activities indicating that, but for cash tied up in working capital assets, the underlying operation is cash positive.
Yours Sincerely
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Nicholas Andrews Executive Chairman Magontec Limited
Limited
QUARTERLY CASHFLOW - APPENDIX 4C for the Period Ended 30 June 2014
Magontec Limited
ABN: 51 010 441 666 Registered & Principal Office: Office 10, Level 8, 139 Macquarie Street, Sydney, NSW 2000 Australia
Issued Capital (as at 30 June 2014)
Ordinary Shares (ASX Code MGL) 1,115,043,832 fully paid Ordinary shares on issue
Options: Nil
Substantial Shareholders
Tel: +61 2 8231 7085 Fax: +61 2 9252 8960 Website: www.magontec.com Email: [email protected]
Non-Executive Directors (as at 30 June 2014)
Zhongjun Li Kangmin Xie Andre Labuschagne
Independent Directors (as at 30 June 2014)
Robert Shaw Robert Kaye
| Major Shareholders | No. of shares |
Percent |
|---|---|---|
| Qinghai Salt Lake Magnesium Industry Limited |
330,535,784 | 29.64 |
| Straits Mine Management Pty Limited |
173,787,648 | 15.59 |
| Citicorp Nominees Pty Limited | 89,482,006 | 8.03 |
| KWE(HK)Investment Development Co Limited |
55,797,298 | 5.00 |
Share Registry Services
Boardroom Pty Limited Level 7, 207 Kent St Sydney NSW 2000
Postal:
Management Team
Nicholas Andrews Executive Chairman
John Talbot Chief Financial Officer
Company Secretary John Talbot
GPO Box 3993 Sydney NSW 2001
Tel: 1300 737 760 or International: +61 2 9290 9600 Fax: 1300 653 459 Website: http://www.boardroomlimited.com.au
The current share price can be obtained from the ASX Website
Appendix 4C Magontec Limited 30 June 2014 Quarterly Report
Appendix 4C
Quarterly Report
Introduced 31/3/2000. Amended 30/9/2001.
| Name of entity Magontec Limited ABN Quarter ended (“current quarter”) 51 010 441 666 30 June 2014 Quarter Ended 30 June 2014 Year to date (6 months) $A $A 1.1 Cash flows from operating activities a Receipts from customers $31,947,824 $67,057,178 b Payments to suppliers and employees ($34,329,887) ($71,092,584) c Interest received ($187,601) ($149,648) d Interest expense $256,167 ($61,136) e Taxation $533,004 ($12,077) f Net cash (used)/generated in operating activities ($1,780,495) ($4,258,267) 1.2 Cash flows from investing activities a Movement in security deposits $0 $0 b Payment for property, plant & equipment ($34,582) ($216,893) c Group Information Technology software ($7,644) ($35,232) d Other $0 $0 e Net cash provided by/(used in) investing activities ($42,226) ($252,125) |
Name of entity Magontec Limited ABN Quarter ended (“current quarter”) 51 010 441 666 30 June 2014 Quarter Ended 30 June 2014 Year to date (6 months) $A $A 1.1 Cash flows from operating activities a Receipts from customers $31,947,824 $67,057,178 b Payments to suppliers and employees ($34,329,887) ($71,092,584) c Interest received ($187,601) ($149,648) d Interest expense $256,167 ($61,136) e Taxation $533,004 ($12,077) f Net cash (used)/generated in operating activities ($1,780,495) ($4,258,267) 1.2 Cash flows from investing activities a Movement in security deposits $0 $0 b Payment for property, plant & equipment ($34,582) ($216,893) c Group Information Technology software ($7,644) ($35,232) d Other $0 $0 e Net cash provided by/(used in) investing activities ($42,226) ($252,125) |
Name of entity Magontec Limited ABN Quarter ended (“current quarter”) 51 010 441 666 30 June 2014 Quarter Ended 30 June 2014 Year to date (6 months) $A $A 1.1 Cash flows from operating activities a Receipts from customers $31,947,824 $67,057,178 b Payments to suppliers and employees ($34,329,887) ($71,092,584) c Interest received ($187,601) ($149,648) d Interest expense $256,167 ($61,136) e Taxation $533,004 ($12,077) f Net cash (used)/generated in operating activities ($1,780,495) ($4,258,267) 1.2 Cash flows from investing activities a Movement in security deposits $0 $0 b Payment for property, plant & equipment ($34,582) ($216,893) c Group Information Technology software ($7,644) ($35,232) d Other $0 $0 e Net cash provided by/(used in) investing activities ($42,226) ($252,125) |
Name of entity Magontec Limited ABN Quarter ended (“current quarter”) 51 010 441 666 30 June 2014 Quarter Ended 30 June 2014 Year to date (6 months) $A $A 1.1 Cash flows from operating activities a Receipts from customers $31,947,824 $67,057,178 b Payments to suppliers and employees ($34,329,887) ($71,092,584) c Interest received ($187,601) ($149,648) d Interest expense $256,167 ($61,136) e Taxation $533,004 ($12,077) f Net cash (used)/generated in operating activities ($1,780,495) ($4,258,267) 1.2 Cash flows from investing activities a Movement in security deposits $0 $0 b Payment for property, plant & equipment ($34,582) ($216,893) c Group Information Technology software ($7,644) ($35,232) d Other $0 $0 e Net cash provided by/(used in) investing activities ($42,226) ($252,125) |
Name of entity Magontec Limited ABN Quarter ended (“current quarter”) 51 010 441 666 30 June 2014 Quarter Ended 30 June 2014 Year to date (6 months) $A $A 1.1 Cash flows from operating activities a Receipts from customers $31,947,824 $67,057,178 b Payments to suppliers and employees ($34,329,887) ($71,092,584) c Interest received ($187,601) ($149,648) d Interest expense $256,167 ($61,136) e Taxation $533,004 ($12,077) f Net cash (used)/generated in operating activities ($1,780,495) ($4,258,267) 1.2 Cash flows from investing activities a Movement in security deposits $0 $0 b Payment for property, plant & equipment ($34,582) ($216,893) c Group Information Technology software ($7,644) ($35,232) d Other $0 $0 e Net cash provided by/(used in) investing activities ($42,226) ($252,125) |
|---|---|---|---|---|
| Quarter Ended 30 June 2014 $A |
Year to date (6 months) $A |
|||
| $31,947,824 ($34,329,887) ($187,601) $256,167 $533,004 |
$67,057,178 ($71,092,584) ($149,648) ($61,136) ($12,077) |
|||
| ($1,780,495) | ($4,258,267) | |||
| $0 ($216,893) ($35,232) $0 ($252,125) |
||||
| $0 ($34,582) ($7,644) $0 |
$0 ($216,893) ($35,232) $0 |
|||
| ($42,226) | ($252,125) |
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Appendix 4C Magontec Limited 30 June 2014 Quarterly Report
| 1.3 Cash flows from financing activities a Loans from/ (repayments to) related parties b Principal reduction on debt owing to Straits Mine Management Pty Ltd c Bank Loans d Net capital raised from issue of the Company's shares e Net cash provided by financing activities Net increase (decrease) in cash held 1.4 Cash at beginning of quarter /year to date 1.5 Cash at end of quarter /year to date |
Quarter Ended 30 June 2014 $A $0 $0 ($4,098,827) $773,000 |
Year to date (6 months) $A $0 ($2,100,046) ($819,617) $5,038,661 |
|---|---|---|
| ($3,325,827) | $2,118,998 | |
| ($5,148,549) $10,132,324 |
($2,391,394) $7,375,169 |
|
| $4,983,775 | $4,983,775 |
Payments to directors of the entity and associates of the directors Payments to related entities of the entity and associates of the related entities
| 1.6 (a) (b) |
Aggregate amount of payments to the relevant parties (aggregate fees paid to directors) |
Quarter Ended 30 June 2014 $A |
|---|---|---|
| $35,000 | ||
| 1.7 | Aggregate amount of loans to the relevantparties | Nil |
| 1.8 | Explanation necessary for an understanding of the transactions | |
| Refer to the covering letter to this Appendix from the Executive Chairman and the Company’s audited half year report for the period to 30 June 2014 to be released prior to 31 August 2014 |
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Appendix 4C Magontec Limited 30 June 2014 Quarterly Report
Compliance statement
1
This statement has been prepared under accounting policies which comply with accounting standards as defined in the Corporations Act 2001 (except to the extent that information is not required because of note 2) or other standards acceptable to ASX.
2
This statement does give a true and fair view of the matters disclosed.
Sign here:
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Date: 28 July 2014 Executive Chairman Magontec Limited
name: Mr Nicholas Andrews
Notes
1 The quarterly report provides a basis for informing the market how the entity’s activities have been financed for the past quarter and the effect on its cash position. An entity wanting to disclose additional information is encouraged to do so, in a note or notes attached to this report.
2
The definitions in, and provisions of, AASB 107: Cash Flow Statements apply to this report except for the paragraphs of the Standard set out below.
-
Aus20.1 - reconciliation of cash flows arising from operating activities to operating profit or loss
-
• 39 - 42 - itemised disclosure relating to acquisitions and disposals • 48 - 52 - disclosure of restrictions on use of cash
3
Accounting Standards. ASX will accept, for example, the use of International Accounting Standards for foreign entities. If the standards used do not address a topic, the Australian standard on that topic (if any) must be complied with.
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