RNS Number:5054W
CSR Ld
28 May 2002
CSR PRELIMINARY FINAL REPORT FOR THE
YEAR ENDED 31 MARCH 2002
Table of Contents
Page
Review of Operations 1
Operations Summary
• Rinker Materials Corporation 4
• Construction Materials - Australia & Asia 4
• Building Materials - Australia, New Zealand & Asia 5
• Sugar 6
• Aluminium 6
Financial Performance Summary 8
Australian Stock Exchange Limited - Preliminary final statement (ASX Information)
• Consolidated statement of financial performance 10
• Consolidated statement of financial position 12
• Consolidated statement of cash flows 13
• Consolidated statement of financial performance
information 14
• Industry and geographical segment analysis 15
• Additional information 22
To view press release and CEO presentation go to CSR's website: www.csr.com.au
Review of operations
Company overview
Net profit after tax (PAT) for the year ended 31 March 2002 (YEM02) was A$553
million, up 9.4% on the previous year, before significant items*.
Earnings per share (EPS) before significant items rose 16.3% to 58.5 cents.
After significant items, PAT was down 12.9% and EPS was down 7.4%.
Directors declared an increased final dividend of 13 cents, up 8%. Franking was
increased to 70%, from 40% previously. The dividend is payable on 4 July.
Other highlights
Measure YEM02 result Increase
Sales revenue A$6,985 m 8.7%
EBIT A$926 m 0.3%
EBITDA A$1,379 m 3.0%
Net operating cash flow A$1,195 m 16.7%
Net operating cash flow/share A$1.26 23.5%
Free cash flow ** A$846 m 15.6%
Return on funds employed (ROFE) 15.5% +0.9 pp
Return on equity (ROE) 13.7% +1.0 pp
Shareholder value added was again positive and up on the previous year.
The result was lifted by another strong performance from the US subsidiary,
Rinker Materials Corporation (Rinker) - with earnings before interest and tax
(EBIT) up 8% in US$ - and Sugar (EBIT up A$58 million), together with an
improved result from Construction Materials, and a weaker A$ currency. These
positive factors offset reduced earnings due to the sale of the Gove alumina
interest (GAL) - which contributed A$67 million EBIT in YEM01 - and a decline
in profit from Building Materials, due to the fall in Australian housing
activity in the first half.
As previously announced, YEM02 PAT included a one-off tax refund benefit of A$41
million, following a Federal Court decision on the tax treatment of a settlement
with insurers. Likewise, a one-off A$27 million gain from sugar terminal shares
had benefited YEM01 PAT.
Financial position
Net debt was A$1,738 million, down 17.2% from A$2,100 million last year.
Gearing (net debt / net debt plus equity) improved from 34.0% to 29.7%. Interest
cover was 8.5 times, up from 6.8 times.
Overview
This was a very satisfactory result given the economic uncertainty in the US and
the slowdown in Australia. Overall, it was a year of consolidation following
Rinker's A$1.3 billion in acquisitions in YEM01. Rinker continued to grow in US
heavy building materials, but more cautiously, due to some unpredictability
about the economic outlook.
Particularly pleasing was the strong growth in both earnings per share - which
has risen an average of 22% p.a. compound over the past five years - and return
on equity. Lifting ROE has been a key objective.
Rinker (United States) again performed well. The Florida operations continued
to deliver an exceptional result. The turnaround in the Nevada business -
following the July 2001 acquisition of the Hanson operations in Las Vegas - is
ahead of expectations, and offers significant growth potential. Overall, the
acquisitions are performing to target.
* Significant items were previously described as abnormals. In YEM01, CSR
recorded an abnormal profit of A$129 million following the sale of its Gove
alumina interest (GAL).
** EBITDA after deducting tax and net interest paid, operating capital and
change in working capital
Construction Materials (Australia, Asia) improved with steady sales, despite a
further decline in engineering and commercial construction in Australia, and
lower concrete and pipe prices. The business is delivering below its cost of
capital and needs to improve significantly. Its concrete and aggregate prices
increased from 1 April 2002 and the business is preparing for the coming upturn
in activity. Further customer service initiatives are underway.
Building Materials (Australia, New Zealand & Asia) had a year of two very
different halves - a post-GST slump for housing in the first half, followed by a
strong pick up in approvals in the second half, although activity levels have
lagged behind. The Housing Industry Association attributes the lag, which is
mainly in NSW (45% of Building Materials' sales revenue), to factors including
the HIH insurance collapse and council delays.
The Asian businesses (particularly Tianjin Readymix quarry and concrete in
China), performed much better, delivering a combined EBIT of A$9 million, versus
a A$3 million loss last year.
Business Performance
• Rinker EBIT was up 16% to A$598 million (up 8% in US$ to US$306
million). Rinker EBITDA was up 18% to A$898 million (up 10% in US$). Sales
rose 15% to A$4,116 million (up 7% in US$). Margins increased: EBIT/sales to
14.5% from 14.4% and EBITDA/sales to 21.8% from 21.2%. US$ ROFE was 16.1% from
15.0%. Comparable $US sales (adjusted for YEM02 acquisitions and divestments)
rose 3% and EBIT rose 7%.
Product prices were up 1-5% and profit rose in all Rinker's major businesses :
• Quarries S.E. (Florida, Georgia, Tennessee, Kentucky) EBIT up 26%,
volumes up 15%
• Florida Materials (concrete & block) EBIT up 21%, concrete volumes up
4%, block 10%
• Cement EBIT up 8%, volumes up 11%
• Hydro Conduit pipe business EBIT up 11%, volumes up 13%.
The small Polypipe and Prestress businesses, both heavily exposed to the
significant decline in commercial activity during the year, recorded losses.
Gypsum Supply profit fell US$8 million as US wallboard market volumes and prices
fell, and the previous supply shortage eased.
• Construction Materials EBIT rose 11% to A$57 million on steady sales.
Second half EBIT was up strongly over last year. ROFE was 7.8%, from 6.8%.
• Building Materials second half EBIT was also up strongly (27%) over
the first half, but the total YEM02 result of A$109 million was down 19% on the
previous year, which had included the GST-induced housing boom. Sales fell 6%.
ROFE was 17.8%, down from 22.4%.
• Sugar EBIT rose 347% to A$74 million, on much improved raw sugar
prices. The cane crop was up slightly at 11.6 million tonnes, but was still
disappointing. Distilleries EBIT rose 23%, due to higher margins and strong
export sales. Refining EBIT recovered strongly in the second half (up 56% over
the first half) but fell 12% for the year.
• Aluminium EBIT was A$110 million, down 48% on the previous result,
which included A$67 million in GAL earnings. Hedging insulated the business from
fluctuating prices and currency.
Strategy
For the past four years the CSR group strategy has been to grow internationally
in heavy building materials, whilst concurrently working to separate the non
heavy building materials assets in a way that has delivered value for our
shareholders. Good progress has been made :
• 22 divestments, totaling A$1.5 billion
• 24 acquisitions, totaling A$1.8 billion - integrated successfully and
earning to plan
• Around three quarters of group EBIT now comes from heavy building
materials, and
• Total return to shareholders has risen an average 30% p.a. compound
for the past three years.
Despite this improvement, substantial value is still to be realized. After a
year of consolidation in YEM02, CSR is now vigorously pursuing its tandem
strategy of growth and restructuring, in order to unlock this value for existing
shareholders.
A number of options are currently being evaluated to progress the restructure of
the group. The recently announced Federal demerger legislation is expected to
facilitate this and options to be evaluated will include the creation of two
separate Australian listed companies. As always, the driver of any
restructuring will be delivering value for shareholders.
With regard to growth, the group has substantial financial flexibility and
Rinker is actively investigating further acquisitions in the US, including a
number of significant step out opportunities. The company remains positive
about the heavy building materials sector and opportunities for value-creating
growth in the US. CSR also continues to look at opportunities in Asia and
Europe.
Outlook for YEM03
The US economy appears to be recovering, and predictions are for a gradual
upturn, helped by the US$51 billion stimulus package and the ongoing TEA-21
road-funding program. Housing and commercial construction are expected to
decline during this year, with commercial expected to recover from 2004.
Infrastructure spending remains strong. Overall, US construction activity is
currently forecast to be down about 2%.
Asia is slowly improving and in Australia, we are seeing gradual progress
towards a significant engineering construction upturn from 2004. Commercial
activity is expected to improve from this year. Construction Materials is 70%
exposed to these two sectors. Construction Materials' aggregate and concrete
prices are improving.
Building Materials is almost 75% exposed to housing, which remains strong.
Starts are forecast to fall in the latter half of the year as interest rates
increase. A similar level of activity to last year is expected.
Sugar prices have fallen on expectations of a large Brazilian crop, although the
current drought there may impact later. The Australian crop should also be
larger, but lower prices will severely affect profitability. Initiatives to
reduce earnings volatility and improve returns are underway.
Aluminium profit should be similar to last year, due to hedging.
The group's expectation is for another solid result this year. Achieving an
improvement in last year's normalised earnings - that is, excluding the A$41
million one-off tax refund benefit - will be challenging. The aim will be to
offset the impact of a higher A$, low sugar prices, and the expected slowdown in
US construction, with the improvement in Construction Materials, ongoing
operational improvement and contributions from any acquisitions.
Group priorities will be to develop further international growth opportunities,
to pursue ongoing restructuring, and to continue lifting the business
performance, in order to deliver additional value for CSR shareholders.
OPERATIONS SUMMARY
Rinker Materials Corporation
USA
Performance summary
• Trading revenue A$4,116 million, up 15% on the previous year
(US$2,104 million, up 7%).
• Earnings before interest and tax (EBIT) A$598 million, up 16%
(US$306 million, up 8%).
• Earnings before interest, tax, depreciation and amortisation
(EBITDA) A$898 million, up 18% (US$459 million, up 10%).
• Profit margins - EBIT : trading revenue 14.5%, the previous year
14.4%. EBITDA : trading revenue 21.8%, the previous year 21.2%.
Features
• Rinker had a good year, especially in quarries and pre-mixed
concrete in the south eastern US and in cement - assisted by federal transport
infrastructure spending. Nevada improved strongly.
• Rinker Materials Corporation changed its name from CSR America, Inc.
following customer surveys.
Progress against priorities
• Grow through bolt-on acquisitions and, if opportunities present,
major acquisitions; investigate new geographic markets: Bolt-on acquisitions
included five quarries, six pre-mixed concrete plants, a block plant as well as
buying out the joint venture partner in five concrete pipe plants.
• Reduce costs through operational improvement: Cut costs by A$80
million.
• Improve safety and environmental performance: Recordable injury
frequency fell 31%. Level 1 and 2 minor and significant environmental incidents
rose by six to 11; there was one level 3 serious incident, down 75%.
Key objectives
• Grow through bolt-on acquisitions and, as opportunities present,
major acquisitions; investigate new geographic markets.
• Reduce costs through operational improvement.
• Improve safety and environmental performance.
Construction Materials
Australia and Asia
Performance summary
• Trading revenue A$926 million, the previous year A$923 million.
• Earnings before interest and tax A$57 million, up 11%.
• Earnings before interest, tax, depreciation and amortisation A$104
million, up 2%.
• Profit margins - EBIT : trading revenue 6.1%, up from 5.6%. EBITDA :
trading revenue 11.2%, the previous year 11.0%.
Features
• Australian civil construction fell 6%. Total construction (in areas
affecting CSR) fell 2%.
• In October, we appointed a new general manager, Karl H Watson Jr,
previously vice president of Rinker's Florida Materials division.
• Construction Materials has been restructured as 58 performance cells
with profit responsibility.
Progress against priorities
• Increase rate of improvement in efficiency and cost reduction:
Operational improvement reduced costs by A$5 million.
• Continue to manage the slowdown in the construction cycle. Prepare
to take swift and value adding advantage of the upturn: We upgraded plants while
continuing to ensure they are optimally located. Employee numbers fell.
Marketing and pricing discipline was better but more improvement is needed.
• Improve safety and environmental performance: Recordable injury
frequency fell 32%. Level 1 and 2 minor and significant environmental incidents
fell 37%.
Key objectives
• Restore profit levels above the cost of capital. More disciplined
management of profit margins. Lift prices.
• Localise the businesses, focusing on customers.
• Improve safety and environmental performance.
Building Materials
Australia, New Zealand and Asia
Performance summary
• Trading revenue A$806 million, 6% down.
• Earnings before interest and tax A$109 million, 19% down.
• Earnings before interest, tax, depreciation and amortisation A$143
million, down 18%.
• Profit margins - EBIT : trading revenue 13.5%, the previous year
15.7%. EBITDA : trading revenue 17.7%, the previous year 20.2%.
Features
• Progressed with transition to high performance (cell) structure.
• New Sydney concrete roof tile plant now commissioning.
• Key Australian building unions endorsed new building codes, enabling
our biosoluble insulation to be installed in high rise dwellings and commercial
buildings.
• Operational improvements cut costs by A$12 million.
Progress against priorities
• Intensify efforts to improve further the servicing of our customers
and the quality of our sales force: New programs successfully implemented in all
businesses.
• Closely manage pricing, while maintaining market share: Pricing
tightly managed in all businesses, although prices fell for plasterboard and
Australian glasswool insulation.
• Tightly control operating capital to ensure only value creating
projects are implemented: Continued to be tightly managed.
• Improve safety and environmental performance: Recordable injury
frequency fell 7%. Level 1 and 2 minor and significant environmental incidents
rose 35%. There was one level 3 serious incident.
Key objectives
• Increase effectiveness of our sales force and the servicing of our
customers.
• Closely manage pricing, while maintaining market share.
• Tightly control operating capital.
• Improve safety and environmental performance.
Sugar
Australia
Performance summary
• Trading revenue A$694 million, up 31%.
• Earnings before interest and tax A$74 million, up from A$16 million.
• Earnings before interest, tax, depreciation and amortisation A$110
million, up from A$54 million.
• Profit margins - EBIT : trading revenue 10.6%, up from 3.1%. EBITDA
: trading revenue rose to 15.9% from 10.1%.
Features
• The sugarcane crop was disappointing, with 11.6 million tonnes
milled, up 2%.
• A major sugar industry improvement program is under way. We are
working with sugarcane growers, harvesters and other millers to minimise
industry costs and optimise output for mutual benefit.
• Mills management was restructured on a regional basis as part of a
high performance way of working.
• We continued investigating expansion of renewable energy production.
Progress against priorities
• Continue to investigate options for separating the sugar operations
from the group's building materials businesses: So far unsuccessful, but CSR
continues to work on solutions to realise value for shareholders.
• Continue to cut costs and improve operations: Operational
improvements cut costs by A$5 million.
• Achieve mill efficiencies: A poor crop and milling delays limited
operational efficiency gains.
• Improve safety and environmental performance: Recordable injury
frequency fell 18%. The number of level 1 and 2 minor and significant
environmental incidents was unchanged.
Key objectives this year
• Obtain commitment and cooperation from the others in the Australian
sugar industry for productivity initiatives.
• Get renewable energy projects under way.
• Improve safety and environmental performance.
Aluminium
Australia
Performance summary
• Trading revenue of A$443 million was down 15%, following the January
2001 sale of Gove Aluminium Ltd - GAL (70% CSR).
• Earnings before interest and tax A$110 million, the previous year
A$212 million (A$145 million excluding GAL).
• Earnings before interest, tax, depreciation and amortisation A$132
million, the previous year A$241 million (A$167 million ex GAL).
• Profit margins - EBIT : trading revenue 24.8%, the previous year
40.6%. EBITDA : trading revenue 29.7%, the previous year 46.4%.
• CSR's share of the Gove Aluminium Finance - GAF (70% CSR) - net
profit after tax and before finance was A$58 million, the previous year A$98
million (A$67 million ex GAL).
Features
• Aluminium demand fell in GAF's key markets in Japan and other Asian
countries.
• The world price averaged US$1,412 a tonne, down 9%, but CSR's
hedging protected returns.
Progress against priorities
• Continue to manage CSR's aluminium investment to achieve the best
outcome for shareholders: The business performed well in difficult market
conditions.
• Take advantage of opportunities to hedge the world market aluminium
price and US$ revenue: We continue to hedge our exposure to aluminium prices and
US$ exchange rates for the next two to three years - to provide a base level of
profitability and reduce volatility of earnings.
Key objectives
• Continue to manage CSR's aluminium investment to achieve the best
outcome for shareholders.
• Continue to hedge the world market aluminium price and US$ revenue.
Financial performance summary
Year ended 31 March 2002 2001 % Change
(A$ million unless indicated)
For the year (1)
Trading revenue 6984.7 6424.0 9
Operating profit before finance, 925.8 922.6 -
and income tax and significant items (EBIT)
Net profit after significant items 552.6 634.1 -13
Net profit before significant items 552.6 504.9 9
Net cash from operating activities 1194.8 1024.2 17
Capital investment 583.9 1659.7 -65
Per share (A cents)
Earnings after significant items 58.5 63.2 -7
Earnings before significant items 58.5 50.3 16
Dividend 24.0 23.0 4
Key measures (2)
EBIT/Trading revenue (%) 13.3 14.4
Return on funds employed before significant items (%) 15.5 14.6
Interest cover (times) 8.5 6.8
Gearing at 31 March
Net debt: equity plus net debt (%) 29.7 34.0
Net debt: equity (%) 42.3 51.5
(1) Significant items include all items previously classified as abnormal
(2) All ratios are calculated before items previously recorded as
abnormal
Australian Stock Exchange Limited
Preliminary final statement
CSR Limited
ABN 90 000 001 276
For the financial year ended 31 March 2002
For announcement to the market
Item A$ million
1.1 Revenues from ordinary activities up 2 % 7194.8
1.20 Profit from ordinary activities after tax (before down 10 % 615.3
amortisation of goodwill) attributable to members
1.23 Profit from ordinary activities after tax down 13 % 552.6
attributable to members
2.5(d) Profit from extraordinary items after tax _
attributable to members
1.11 Net profit for the period attributable to members down 13 % 552.6
Final dividend per share:
15.4 Current year 13 cents (70% franked at 30% tax rate)
15.5 Previous corresponding year 12 cents (40% franked at 30% tax rate)
15.2 Registrable transfers received by 6 June 2002 up to
the times specified in the Listing Rules and SCH
Business Rules will be registered before entitlements
to the dividend are determined.
Consolidated statement of financial performance
Year ended 31 March
(A$ million) 2002 2001
Trading revenue 6984.7 6424.0
Other revenue from ordinary activities 210.1 614.0
1.1 Total revenues from ordinary activities 7194.8 7038.0
1.2 Expenses from ordinary activities (6289.6) (6083.8)
1.3 Borrowing costs (132.1) (155.4)
1.4 Share of net profit of associates and joint venture entities 45.4 49.4
(equal to item 16.7)
1.5 Profit from ordinary activities before tax 818.5 848.2
1.6 Income tax on ordinary activities (243.7) (179.1)
1.7 Profit from ordinary activities after tax 574.8 669.1
1.8 Profit from extraordinary items after tax - -
1.9 Net profit 574.8 669.1
1.10 Net profit attributable to outside equity interests (22.2) (35.0)
1.11 Net profit attributable to members 552.6 634.1
Consolidated retained profits
1.12 Retained profits at the beginning of the financial period 1273.9 860.8
1.13 Net profit attributable to members (item 1.11) 552.6 634.1
1.14 Net transfers from reserves 0.8 1.5
1.15 Net effect of changes in accounting policies - -
1.16 Dividends and other equity distributions paid or payable (225.0) (222.5)
1.17 Retained profits at the end of the financial period 1602.3 1273.9
Year ended 31 March (A$ million) 2002 2001
Profit restated to exclude amortisation of goodwill
1.18 Profit from ordinary activities after tax before outside equity
interests (items 1.7) and amortisation of goodwill 637.5 719.8
1.19 Less outside equity interests 22.2 35.0
1.20 Profit from ordinary activities after tax (before amortisation of 615.3 684.8
goodwill) attributable to members
1.21 Profit from ordinary activities attributable to members 574.8 669.1
1.22 Less outside equity interests 22.2 35.0
1.23 Profit from ordinary activities after tax,
attributable to members 552.6 634.1
1.24 Significant items of revenue and expense were
Sale of Gove Aluminium Limited - 235.4
Asset write-downs and rationalisation costs from - (113.1)
plans to restructure businesses and dispose of
surplus assets
Increase in product liability provision - (65.0)
Profit before income tax - 57.3
Income tax benefit - 66.3
Outside equity interests benefit - 5.6
Net profit after tax - 129.2
Intangible items
2.1 Amortisation of goodwill 72.0 57.7
less income tax benefit 9.3 7.0
less outside equity interests - -
Net amortisation of goodwill 62.7 50.7
2.2 Amortisation of other intangibles 11.3 8.9
less income tax benefit 3.7 3.0
less outside equity interests - -
Net amortisation of other intangibles 7.6 5.9
2.3 Total net amortisation of intangibles 70.3 56.6
2.4/2.5 Total extraordinary items for year ended
31 March 2002 and 2001 are nil.
3.1 Comparison of half year profits
3.2 Consolidated profit from ordinary activities after tax, 277.0 271.1
attributable to members reported in
the 1st half year (item 1.23 in half yearly report)
Consolidated profit from ordinary activities after tax, 275.6 363.0
attributable to members for the 2nd half year
552.6 634.1
Consolidated statement of financial position
(A$ million) As at As at As at
31 March 2002 31 March 2001 30 September 2001
Current assets
4.1 Cash 156.6 200.2 213.7
4.2 Receivables 988.0 971.4 1206.5
4.4 Inventories 572.5 629.9 632.4
4.5 Other current assets 25.5 37.6 38.3
4.6 Total current assets 1742.6 1839.1 2090.9
Non-current assets
4.7 Receivables 50.9 79.7 54.8
4.8 Investments accounted for using equity method 316.6 334.8 320.6
4.9 Other investments 40.2 92.0 89.9
4.10 Inventories 129.2 99.3 114.5
4.13 Property, plant and equipment (net) 4137.9 4273.4 4352.6
4.14 Intangibles (net) 1111.6 1233.5 1223.7
4.15 Other non-current assets 421.7 509.8 465.0
4.16 Total non-current assets 6208.1 6622.5 6621.1
4.17 Total assets 7950.7 8461.6 8712.0
Current liabilities
4.18 Payables 745.3 824.2 855.3
4.19 Interest bearing liabilities 104.0 70.1 73.4
4.20 Provisions 369.9 426.3 515.1
4.22 Total current liabilities 1219.2 1320.6 1443.8
Non-current liabilities
4.23 Payables 43.2 33.1 52.1
4.24 Interest bearing liabilities 1790.7 2230.0 2269.8
4.25 Provisions 793.2 796.9 804.5
4.27 Total non-current liabilities 2627.1 3060.0 3126.4
4.28 Total liabilities 3846.3 4380.6 4570.2
4.29 Net assets 4104.4 4081.0 4141.8
Shareholders' equity
4.30 Contributed equity 2139.4 2322.4 2164.9
4.31 Reserves 281.1 386.8 419.5
4.32 Retained profits 1602.3 1273.9 1448.3
4.33 Shareholders' equity attributable to members of CSR 4022.8 3983.1 4032.7
Limited
4.34 Outside equity interests in controlled entities 81.6 97.9 109.1
4.35 Total shareholders' equity 4104.4 4081.0 4141.8
4.36 CSR has no preference shares on issue
5 Exploration and evaluation expenditure capitalised:- Not material
6 Development properties:- Not material
Consolidated statement of cash flows
Year ended 31 March
(A$ million) 2002 2001
Cash flows from operating activities
7.1 Receipts from customers 7258.3 6719.2
7.2 Payments to suppliers and employees (5987.1) (5545.3)
7.3 Dividends and distributions from associate entities 52.3 37.7
7.4 Other dividends received 2.3 1.4
7.5 Interest received 27.8 24.7
7.7 Tax refund from Australian Taxation Office 33.0 -
7.7 Income taxes paid (191.8) (213.5)
7.9 Net cash from operating activities 1194.8 1024.2
Cash flows from investing activities
7.10 Purchase of property, plant, equipment and other non-current (427.0) (391.1)
assets
7.11 Proceeds from sale of property, plant, equipment and
other non-current assets
120.6 92.4
7.12 Purchase of controlled entities and businesses net of cash (158.5) (1093.1)
acquired
7.12 Return of capital from associated entities - 5.6
7.13 Proceeds from sale of interests in controlled entities and 15.5 783.7
businesses
7.14 Loans and receivables advanced (1.2) (2.1)
7.15 Loans and receivables repaid 13.3 25.1
7.17 Net cash used in investing activities
(437.3) (579.5)
Cash flows from financing activities
7.18 Proceeds from issue of shares 22.9 14.4
7.18 Share buyback (208.5) (340.7)
7.19 Net (repayment of ) proceeds from borrowings (243.0) 436.2
7.21 Dividends paid (256.2) (276.5)
7.22 Interest and other finance costs paid (118.3) (167.5)
7.22 Hedging of foreign operations 3.3 (56.1)
7.23 Net cash used in financing activities (799.8) (390.2)
7.24 Net (decrease) increase in cash held (42.3) 54.5
7.25 Net cash at beginning of financial year 199.5 120.7
7.26 Effects of exchange rate changes (0.6) 24.3
7.27 Net cash at end of financial year 156.6 199.5
Components of cash
8.1 Cash at banks and on hand 68.2 85.7
8.2 Short-term loans and deposits 88.4 114.5
156.6 200.2
8.3 Bank overdrafts - (0.7)
8.5 Net cash at end of financial year 156.6 199.5
During the year ended 31 March 2002, CSR Limited issued shares to employees of CSR
Limited and its controlled entities under the terms of the Universal Share Option Plan.
These shares were funded by employee loans of A$2.6 million (2001 A$1.7 million) from
CSR Limited.
During the year ended 31 March 2001, CSR Limited was gifted shares in Sugar Terminals
Limited which CSR valued at A$27.5 million. The receipt of these shares has been
recorded as revenue and recognised as an asset.
During the year ended 31 March 2001, the purchase of the assets of a controlled entity
was partially financed by the assumption of a A$158.4 million debt in the controlled
entity.
Consolidated statement of financial performance information
Year ended 31 March (A$ million unless indicated) 2002 2001 % Change
Ratios 11.4 12.1
9.1 Profit before tax/revenue
Consolidated profit from ordinary activities before tax (item 1.5)
as a percentage of trading revenue (item 1.1)
9.2 Profit after tax/shareholders' funds (%) 13.7 15.9
Consolidated net profit from ordinary activities after tax attributable to
members (item 1.11) as a percentage of equity (similarly attributable)
the end of the period (item 4.33)
10.1 Earnings per share (cents)
a Basic earnings per share 58.5 63.2 -7
b Diluted earnings per share 57.8 62.5 -8
c Weighted average number of ordinary shares outstanding during 944.8 1003.3 -6
the period used in the calculation of basic earnings per share (million)
11.1 Net tangible asset backing per ordinary share (A$) 3.34 2.98 12
Details of specific receipts, outlays, revenues and expenses
for the year
12.1 Interest revenue included in determination of item 1.5 24.8 23.7 5
12.2 Interest revenue included in item 12.1 but not yet received 1.0 2.0 -50
12.3 Interest costs excluded from borrowing costs and capitalised in asset 1.8 1.5 20
values
12.4 Outlays (other than those arising from the acquisition of an existing - - -
business) capitalised in intangibles
12.5 Depreciation and amortisation (excluding amortisation of intangibles) 369.6 348.8 6
12.6 Other specific relevant items not shown in item 1.24
Cost of goods sold 4437.5 4097.2 8
Warehouse and distribution costs 1015.2 874.1 16
Selling costs 161.8 156.7 3
Administration costs 516.3 466.1 11
Other expenses from ordinary activities 158.8 489.7 -68
13 Control gained over entities having material effect
No controlled entities were acquired during the period which
increased consolidated after tax operating profit by more than 5%
compared with the previous corresponding year.
Loss of controlled entities having material effect
No controlled entities were disposed of during the period which
decreased consolidated after tax operating profit by more than
5% compared with the previous corresponding year.
Industry segment analysis
Profit from ordinary activities Outside equity Net profit
Year ended 31 March before income tax Income tax interests
(A$ million except 2002 % 2001 % 2002 2001 2002 2001 2002 2001
percentages)
Rinker Materials 598.5 65 515.5 56 232.8 200.5 0.7 (0.1) 365.0 315.1
Corporation
Construction 56.7 6 51.2 6 8.9 10.6 1.1 (0.6) 46.7 41.2
Materials
Building Materials 108.8 12 135.1 14 32.8 45.5 1.1 (0.3) 74.9 89.9
Sugar 73.8 8 16.5 2 16.5 4.0 - - 57.3 12.5
Aluminium 110.0 12 211.5 23 31.4 73.1 20.4 40.5 58.2 97.9
Corporate costs (34.3) (4) (32.0) (4) (9.9) (13.3) - - (24.4) (18.7)
Other unallocateda 12.3 1 24.8 3 (27.7) (18.4) - - 40.0 43.2
Segment totals 925.8 100 922.6 100 284.8 302.0 23.3 39.5 617.7 581.1
Finance expense (107.3) (131.7) (41.1) (56.6) (1.1) 1.1 (65.1) (76.2)
Consolidated before 818.5 790.9 243.7 245.4 22.2 40.6 552.6 504.9
significant items
Significant items - 57.3 - (66.3) - (5.6) - 129.2
Consolidated after 818.5 848.2 243.7 179.1 22.2 35.0 552.6 634.1
significant items
Profit marginsc
Year ended 31 March Total assets Trading revenueb 2002 2001
(A$ million except 2002 % 2001 % 2002 % 2001 % % %
percentages)
Rinker Materials 4445.8 57 4739.9 57 4115.5 59 3589.5 56 14.5 14.4
Corporation
Construction 978.2 13 1004.7 12 925.5 13 922.5 15 6.1 5.6
Materials
Building Materials 782.8 10 763.9 9 806.3 12 859.6 13 13.5 15.7
Sugar 906.4 12 971.6 12 693.7 10 529.3 8 10.6 3.1
Aluminium 403.3 5 448.6 6 443.2 6 520.4 8 24.8 40.6
Unallocated 277.6 3 332.7 4 0.5 2.7 - -
Segment totals 7794.1 100 8261.4 100 6984.7 100 6424.0 100 13.3 14.4
Finance 156.6 200.2
Consolidated 7950.7 8461.6 6984.7 6424.0
Geographic segment analysis
Profit from ordinary activities
before finance, income tax
Year ended 31 March Total and
assets Trading revenue significant items
(A$ million) 2002 2001 2002 2001 2002 2001
Australia 3169.2 3324.1 2718.5 2702.8 308.9 401.6
North America 4445.8 4739.9 4115.5 3589.5 598.5 515.5
New Zealand 47.2 46.1 31.5 29.6 9.8 8.6
Asia 131.9 151.3 119.2 102.1 8.6 (3.1)
Segment totals 7794.1 8261.4 6984.7 6424.0 925.8 922.6
a Includes profit (loss) on major asset sales, product liability charges, and
certain rationalisation costs.
b Inter-segment sales are negligible.
c Profit from ordinary activities before finance, income tax and significant
items as a percentage of trading revenue.
Year ended 31 March 2002 2001 % Change
(A$ million unless indicated)
Dividends:
15.1 A final dividend has been declared, provided for and is
payable on 4 July 2002.
15.2 Registrable transfers received by CSR's external share registrar,
Computershare Investor Services Pty Limited, on 6 June 2002 up to
the times specified in the Listing Rules and SCH Business Rules will
be registered before entitlements to the dividend are determined.
Share register: Computershare Investor Services Pty Limited
Level 3
60 Carrington Street,
Sydney NSW 2000 Australia.
GPO Box 7045,
Sydney NSW 1115 Australia.
15.3 A final dividend has been declared.
Final dividend per share
15.4 current year: 13 cents (70% franked at 30% tax rate)
As the unfranked part of this dividend derives from the foreign
dividend account, no withholding
tax is payable by non-resident holders or by nominee holders on
behalf of non-resident beneficiaries.
15.5 previous year: 12 cents (40% franked at 30% tax rate)
Interim dividend per share
15.6 current year: 11 cents (40% franked at 30% tax rate)
15.7 previous year: 11 cents (one third franked at 34% tax rate)
15.8 Total annual ordinary dividend per
share 24.0 23.0 4
15.9 CSR does not have any preference shares on issue
15.12 Total annual ordinary dividend 225.0 222.5 1
The dividend reinvestment plan remains suspended until further notice.
Year ended 31 March 2002 2001
(A$ million unless indicated)
Investments accounted for using equity method
Details of aggregate share of profits (losses) of associate entities:
16.1 Profit from ordinary activities before income tax 61.5 65.4
16.2 Income tax expense (16.1) (16.0)
16.3 Profit from ordinary activities after income tax 45.4 49.4
16.4 Extraordinary items net of tax - -
16.5 Net profit 45.4 49.4
16.6 Outside equity interest - -
16.7 Net profit attributable to members 45.4 49.4
Material interests in entities which are not controlled entities:
17.1/2 CSR Limited and its controlled entities have an interest which is material from its viewpoint, in the following
associated entities.
Australian Cement Holdings Pty Ltd
Percentage of issued
capital held at 31 March 50.0 50.0
Contribution to net 21.1 15.1
profit attributable to members
New Zealand Sugar Company Limited
Percentage of issued capital held at 31 March 50.0 50.0
Contribution to net
profit attributable to members 6.5 6.3
Sugar Australia joint venture
Percentage of interest held at 31 March 50.0 50.0
Contribution to net profit attributable
to members (1) 9.2 11.4
(1) CSR Limited as a joint venturer incurred a tax expense of A$2.7 million
(2001 A$3.9 million) as a result of this period's profit. This expense is included under item 1.6 but
excluded from item 16.2.
17.3/4 CSR Limited and its controlled entities do not have any other
material interests.
18 Issued and quoted securities
Number Number Issue Paid-up
Category of securities issued quoted price value
(A$) (A$)
ORDINARY SHARES (Item 18.3)
Fully paid sharesa
On issue/quoted at 31 March 2001 963 738 421 963 738 421
Movements during the year (Item 18.4)
Partly to fully paidb 326 000 326 000 4.82 4.82
Executive Share Option Plan (options 5 029 166 5 029 166 3.98 3.98
converted)
Universal Share/Option Planc 822 100 822 100 4.86 4.86
Share buybackd (34 081 215) (34 081 215) 6.12k 6.12 k
Issued/quoted during the year (27 903 949) (27 903 949)
On issue/quoted at 31 March 2002 935 834 472 935 834 472
Movements since year end
Share buybackd (1 100 000) (1 100 000) 6.05k 6.05k
On issue/quoted at 21 May 2002 934 734 472 934 734 472
Partly paid sharesb
On issue at 31 March 2001 843 000 4.79 0.10
Partly to fully paid (326 000) 4.82 4.82
On issue at 31 March 2002 517 000 4.76 0.10
Movements since year end
Partly to fully paid -
On issue at 21 May 2002 517 000 0.10
18 Issued and quoted securities (continued)
Number Number Issue Paid-up
Category of securities issued quoted pricef value
(A$) (A$)
Optionse
On issue at 31 March 2001 14 857 500
1998 issue g 5 972 500 3.86
converted to fully paid shares (3 097 500) 3.86
lapsed (50 000) -
remaining 2 825 000 3.86
1998 issue h 2 500 000 3.86 0.01
converted to fully paid shares (700 000) 3.86 -
lapsed (450 000) -
remaining 1 350 000 3.86 0.01
1999 issue g 2 855 000 4.34
converted to fully paid shares (931 666) 4.40
lapsed (20 000) -
remaining 1 903 334 4.33
2000 issued g 200 000 4.04
converted to fully paid shares (50 000) 4.04
lapsed - -
remaining 150 000 4.04
2000 issued i 3 330 000 4.49
converted to fully paid shares (250 000) 4.47
lapsed (265 000) -
remaining 2 815 000 4.50
2001 issued ij 3 710 000 6.96
converted to fully paid shares - -
lapsed (60 000) 7.03
remaining 3 650 000 6.96
On issue at 31 March 2002 12 693 334
On issue at 21 May 2002 12 693 334
18 Issued and quoted securities (continued)
a Ordinary fully paid shares are listed on the Australian and London stock
exchanges and are traded in sponsored American Depositary Receipt form on the
over-the-counter market in the United States. Fully paid ordinary shares carry
one vote per share and the right to dividends.
b Ordinary shares were issued between 1986 and 1990 under the now superseded
Executive Share/Option Plan. The shares are partly paid to A$0.10, are entitled
to one-thirtieth of the dividend, and have no voting rights. Issue prices ranged
between A$3.00 and A$5.35 per share.
c. Ordinary fully paid shares were issued in August, September and October
2001 under the employee Universal Share/Option Plan. For tax reasons, shares
cannot be sold by participants within three years of allotment, unless they
finish their employment with the company. Offers of 100 or 200 fully paid shares
were made to all eligible employees (6,612). 4,129 accepted the offer with 2,026
purchasing shares under the loan option and 2,103 purchasing shares under the
alternative option, subscribing for 100 shares and receiving a further 100
shares at no cost.
d. On 1 June 2000 CSR commenced a twelve month share buyback of up to 10% of
its fully paid shares. A total of 89.0 million shares were repurchased under the
original buyback. On 1 June 2001 CSR commenced a further twelve month share
buyback of up to 10% of its fully paid shares. A total of 22.7 million shares
have been repurchased under this further buyback.
e. The holders of the options do not have any right, by virtue of the options,
to participate in any share or other interest issue of CSR or any other body
corporate, but the amount payable on exercise or number of shares issued may be
varied as a result of pro-rata rights or bonus issues.
f. The issue price is the CSR share market price at the time of each issue,
hence no cost was recognised in the statement of financial performance.
g. Options issued under the Executive Share Option Plan approved at the 1998
annual general meeting. Options have been issued in 1998 and 1999 and June 2000
and are eligible for conversion progressively over varying periods as from mid
2000 to mid 2005. The conversion of each portion of options to shares is
conditional on the percentage growth in the cumulative value of a notional
investment in CSR exceeding the growth of an equivalent investment in the ASX
All Industrials Accumulation Index, measured over defined periods. Options are
issued at the CSR share market price at the time of issue. The obligation to pay
this amount is deferred until these options are exercised or lapse.
h. Options issued to Rinker Materials Corporation executives on the same basis
as set out in Note g. above, except that the options are paid to A$0.01 with the
balance of the issue price payable when the options are exercised.
i. Options issued under the Executive Share Option Plan approved at the 1998
annual general meeting and amended at the 2000 annual general meeting. Options
have been issued in August 2000, December 2000, June 2001, August 2001 and
December 2001 and are eligible for conversion progressively over varying periods
as from mid 2002 to end 2005. The conversion of options to shares is conditional
on the percentage growth in the cumulative value of a notional investment in CSR
exceeding the growth of an equivalent investment in the ASX All Industrials
Accumulation Index (including manufacturing and industrial organisations, but
excluding such companies as banks, finance, insurance, investment, financial
services, media, property trusts, telecommunications, leisure and tourism),
measured over defined periods. Options are issued at the CSR share market price
at the time of issue. The obligation to pay this amount is deferred until these
options are exercised or lapse.
j. In calendar year 2001, 3,710,000 options were offered to 153
executives.
k. Average price of shares bought back over the period
20 Comments by directors
i. Material factors affecting financial performance of CSR Limited and its
controlled entities for the year ended 31 March 2002 are included on pages 1 -
7.
ii. There has been no event since the end of the relevant year which has had
a material effect on the matters already reported.
iii. The Directors expect that dividends for at least the next year will be
partially franked.
iv. CSR has adopted Accounting Standard AASB 1041 "Revaluation of Non-Current
Assets" and has reverted to the cost basis of measurement. The directors have
deemed the carrying amount of property, plant and equipment as at 1 April 2001
to be cost (previously at independent and directors' valuations). This change in
accounting policy does not affect the carrying amount of non-current assets
recorded in the financial statements. However, the balance of the asset
revaluation reserve recorded in the financial statements as at 1 April 2001
relating to the previous revaluation of property, plant and equipment amounting
to A$11.9 million, is no longer available to absorb any future write-downs.
21 Annual Meeting
i. To be held at Sydney Convention Centre, Darling Harbour.
ii. On 18 July 2002 at 10.00 am.
iii. CSR's annual report will be released on 19 June 2002.
Year ended 31 March 2002 2001
(A$million)
ADDITIONAL INFORMATION
1 Income tax
The actual income tax expense charged against profit differs from the prima
facie income tax expense calculated on the profit before tax at the current
income tax rate. The major items responsible for the difference are:
Non-tax deductible depreciation and amortisation 18.5 19.8
Non-tax deductible other expenditure 1.4 4.3
Asset disposals and write-downs (6.9) (93.7)
Asian trading (profits) losses not recognised (1.3) 4.2
Equity accounted associates profit/rebates on dividends received (11.4) (13.5)
Research and development concessions (0.4) (0.5)
Tax refund re settlement with insurer in prior years (33.0) -
Income tax over provided in previous years (1.4) (16.8)
Overseas tax rate differential 35.3 3.5
Gift of shares in Sugar Terminals Limited - (9.4)
Other items (2.7) (7.2)
(1.9) (109.3)
2 Gearing analysis
(A$ million except ratios) 31 March 2002 31 March 2001 30 September 2001
Borrowings
Short-term debt and bank overdraft 40.2 35.9 43.2
Current maturities of long-term debt 63.8 34.2 30.2
Long-term debt 1790.7 2230.0 2269.8
Total borrowings 1894.7 2300.1 2343.2
Cash and short-term lending
Cash 68.2 85.7 71.7
Short-term lending 88.4 114.5 142.0
Total cash and short-term lending 156.6 200.2 213.7
Net debt 1738.1 2099.9 2129.5
Total shareholders' equity 4104.4 4081.0 4141.8
Gearing ratios
Net debt: equity plus net debt (%) 29.7 34.0 34.0
Net debt: equity (%) 42.3 51.5 51.4
ADDITIONAL INFORMATION (Continued)
3 Litigation
CSR Limited and/or certain subsidiaries (CSR) were involved in mining asbestos
and manufacturing and marketing products containing asbestos in Australia, and
exporting asbestos to the United States. As a result of these activities, CSR
has been named as a defendant in litigation in Australia and the United States.
In Australia, claims for asbestos induced injury have been made by employees and
ex-employees of CSR, by others such as contractors and transporters and by users
of products containing asbestos. As at 31 March 2002, there were 558 such
claims pending.
In the United States, claims for damages are being made by people who allege
exposure to asbestos fibre liberated either during the manufacture of products
containing asbestos or in the installation or use of those products. As at 31
March 2002, there were 2,271 such claims pending.
CSR has been settling claims since 1989. As at 31 March 2002, CSR had resolved
128,000 claims in the United States, including resolution of 80,000 claims in
mass settlements in West Virginia, Texas and Mississippi, and 1,158 claims in
Australia.
CSR has commenced proceedings in New Jersey against a number of insurers who
issued policies to CSR during the years 1979 to 1986. In those proceedings CSR
seeks indemnity for US asbestos claims and certain other relief. Those
proceedings are being pursued by CSR as speedily as possible.
Provision has been made for all known claims and probable future claims but not
for such claims as cannot presently be reliably measured. CSR cannot determine
with certainty the amount of its ultimate liability with respect to asbestos
related claims or the future impact on its financial condition. However, taking
into account the provision already included in CSR's financial statements, the
status of proceedings in CSR's insurance litigation and current claims
management experience, the directors are of the opinion that asbestos litigation
in the United States and Australia will not have a material adverse impact on
its financial condition.
Other contingent liabilities
CSR Limited acts as an authorised self-insurer in New South Wales, Queensland, Victoria, South Australia, Western
Australia, and the Australian Capital Territory for workers' compensation insurance, as does Rinker Materials
Corporation and certain of its controlled entities in California, Nevada, New Mexico and Washington. Adequate provision
has been made for all known claims and probable future claims that can be reliably measured.
ADDITIONAL INFORMATION (Continued)
4 CSR financial dates
2002
31 May Shares begin trading ex dividend
06 June Record date for entitlement to final dividend
19 June Annual report released and Notice of Meeting and Proxy Form mailed
04 July Final dividend paid
16 July Proxy returns close (10.00 am Sydney)
18 July Annual general meeting in Sydney at 10.00 am, Sydney Convention Centre, Darling Harbour
30 September Half-year end
19 November * Half-year profit and interim dividend announced
25 November * Shares begin trading ex dividend
29 November * Record date for entitlement to interim dividend
16 December * Interim dividend paid
Half-year results summary mailed
2003
31 March Year end
* Indicative dates.
COMPLIANCE STATEMENT
1. This report has been prepared under accounting policies, which comply
with accounting standards as defined in the Corporations Act 2001.
2. This report and the financial statements prepared under the Corporations
Act 2001 use the same accounting policies.
3. This report does give a true and fair view of the matters disclosed.
4. This report is based on financial statements, which have been audited.
5. The audit report on the financial statements does not contain any
qualifications.
6. The entity has a formally constituted audit committee.
Peter Kirby
Managing Director
21 May 2002
This information is provided by RNS
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