CAF.V(Canaf Group Inc.) Year End Results. Financials + MD&A
Ending October 31st 2017, Released February 23rd 2018
Note – Q1 2018 Results Will Be Released End Of March 2018
All Information Below Can Be Found On SEDAR
Price: $0.09
Common Shares: 47,426,195
Warrants/Options: 0
Website: www.canafgroup.com
Financials (ALL IN US DOLLARS)
ASSETS
Cash: $453,609
Trade Receivables: $1,314,828
Sales Tax Receivable: $357
Inventories: $472,221
Prepaid Expenses: $36,220
Property, Plant & Equipment: $1,037,996
Intangible: $1
Total Assets: $3,315,323
LIABILTIES
Trade Payables: $757,875
Sales Tax Payable: $32,010
Income Tax Payable: $77,805
Current Portion Of Bank Loan: $310,819
Remaining Bank Loan: $106,063
Deferred Tax Liability: $122,022
Total Liabilities: $1,406,594
Asset/Debt Ratio: 2.36:1
Revenue
Sales: $10,699,117
Cost: $9,476,007
Gross Profit: $1,223,110
G&A Expense: $417,951
Bank Interest: $86,837
Total Expenses: $504,788
Income: $718,322
Interest Income: $17,962
Income Tax Expense: $194,476
Net Income: $541,808
Foreign Currency Loss: $439,664
Converted From USD to CAD
$439,664 X 1.25 = $549,580 CAD
Earnings Per Share: $549,580 / 47,426,195 = $0.012 cents
MD&A Highlights
OVERALL PERFORMANCE AND OUTLOOK
The outlook and profitability for the coming year remains strong and the Corporation expects to continue to generate positive free cash flow during the fiscal year-end 2018 and, as it accumulates cash and reduces its gearing and increases its efficiencies, will continue to look at investment in related business opportunities in South Africa; a country which many now regard as one with a very positive outlook for 2018 following its recent change of President.
The fiscal year ended 31 October 2017 saw the Corporation recover from significantly reduced sales between mid-2015 to mid-2016, when depressed global commodity prices affected the Corporation’s customers negatively, which was reflected in one customer closing down for 7 months of the year and another reducing demand by 50%
Revenue for the year ended October 31, 2017 was $10,669,117 (2016 $4,703,528) a $5,965,589 127% increase, and the Corporation returned to profitability with net comprehensive income for year ended October 31, 2017 of $439,664 (2016 net comprehensive loss $162,065) a $601,729 favourable variance. The results reflect the previously reported turnaround from increased demand with sales remaining strong.
During 2016, the Corporation commissioned a new, and more efficient, calcining facility, which began to produce saleable product during Q2, 2016. The new facility reduced operating costs and improved margins and profits as demand also increased. Management believes it is in a stronger position with Quantum being one of a few suppliers of a low volatile reductant, a situation, which has allowed the Corporation to emerge as a dominant player in South Africa
Operations generated $587,509 in cash during the year ended October 31, 2017 (2016 used $11,722) as the Corporation recovered from 8 months of depressed sales and demand for their product, which started in Q3, 2015.
The bank loan bears interest at 10.25% per annum, matures on January 7, 2019, and is secured by the Company’s furnace acquired with the proceeds from the loan. The bank loan is repayable in blended monthly payments of Rand 391,624 ($27,690 translated at October 31, 2017 exchange rate). During the year ended October 31, 2017, the Company incurred interest expense totaling $86,837 (2016 – $71,721).
UPDATE ON UGANDAN CLAIM AGAINST KILEMBE MINES LIMITED
In August 2006, Canaf, then known as Uganda Gold Mining, announced the termination of any further investment into its Kilembe Copper-Cobalt Project in Uganda. Since 2007, the Corporation has been engaged in an Arbitration with Kilembe Mines Limited, (“KML”), whereby the Corporation seeks general damages, special damages and costs of the Arbitration from KML for breach of contract.
The legal work, carried out my MMAKS Advocates, Kampala, against KML is at no cost to the Corporation, but any award in favor of the Corporation will be distributed to both MMAKS and Canaf. Despite the fact that the claim against KML Corporation remains active, the Corporation is unable to give an indication of either the quantum or any likely date by which the Arbitration will be concluded. |
