K1 Ventures total assets of $638.1 million at 30 June 2013 increased by $10.6 million compared to the previous year end driven by cash distributions received from investments including the sale of MMR, partially offset by dividends paid to shareholders. The increase in fixed assets resulted from the purchase of rail
equipment and locomotive upgrades at Helm. The decrease in investments mainly arose from the sale of MMR. The decrease in stocks was mainly due to the disposal of held for sale six-axle locomotives.Group total liabilities of $256.1 million at 30 June 2013 were $1.5 million lower than the previous year end. The increase in provision for taxation includes $10.4 million attributable to the sale of MMR during the current year. This includes a reversal of $6.2 million deferred tax liability recorded at the prior year end.
REVIEW OF GROUP PERFORMANCE
K1 Ventures’ revenue of $168.0 million for the year ended 30 June 2013 was $89.3 million above the prior year driven by $55.6 million from the sale of the Group’s investment in MMR and an increase in investment income of $18.9 million which was primarily attributable to a distribution received from KUH of $27.7 million.
Revenue from transportation leasing and related activities of $72.1 million was $15.0 million above the prior year due to the sale of inventory and held for sale locomotives as well as higher railcar leasing revenue partially offset by a decline in locomotive leasing revenue. Revenue related to the sale of inventory and locomotive parts increased by $17.5 million over the prior year.
Group operating profit was $71.2 million for the year ended 30 June 2013 compared to a loss of $58.7 million in the prior year, and Group profit before tax was $69.1 million compared to loss of $60.6 million in the prior year. The improvement in Group profit before tax was driven by $29.8 million from the sale of MMR, higher investment income and the absence of impairment losses at Helm which was present in the prior year. The increase in raw materials and consumables are costs associated with the increase in revenue from the sale of inventory and locomotive parts at Helm. Group EBITDA of $106.7 million was $52.4 million above the prior year.
Group taxation was $13.8 million compared to a taxation credit of $61.2 million in the prior year. Included in previous year’s tax credit was a write-back of the Group tax provision of $44.3 million and a tax benefit of $11.4 million related to the fixed assets and other intangibles impairment losses at Helm.
After taking into account income tax and non-controlling interests, net profit attributable to shareholders was $54.6 million for the year ended 30 June 2013 compared to $11.9 million in the previous year.
As a result of continued weakness in the six-axle locomotive leasing market, the Group’s operating subsidiary, Helm Corporation, is evaluating its entire fleet of six-axle locomotives. Helm remains focused on overall fleet management and continues to be focused on opportunities for rail equipment acquisitions primarily in the railcar sector.
The Board has determined that the Company will not be making any new investments, but will focus its efforts on managing the current portfolio of assets and, at the appropriate time, realizing such assets.
K1 Ventures will rewarding shareholders one-tier final dividend of 2.0 cents per share, in respect of the financial year ended 30 June 2013 for approval by shareholders at the next Annual General Meeting to be convened.
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