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AVI LIMITED - Results for the six months ended 31 December 2018

Release Date: 11/03/2019 07:05
Code(s): AVI     PDF:  
 
Wrap Text
Results for the six months ended 31 December 2018

AVI LIMITED
ISIN: ZAE000049433  JSE and A2X share code: AVI 
Registration number: 1944/017201/06
("AVI" or "the Group" or "the Company")

For more information, please visit our website: http://www.avi.co.za/investor/results-and-presentations/current-year

RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2018

KEY FEATURES

- Like-for-like revenue growth of 0,2%:
  - Pressure on sales volumes in constrained consumer environment most notably in December
  - Carefully balanced value versus volume across key categories
- Gross profit margins protected despite the difficult environment
- Selling and administrative costs well managed, up 3,1% on a like-for-like basis, including:
  - Restructuring costs at Green Cross
  - Unrealised loss from mark-to-market of I&J's fuel hedges
- Operating profit down 6,4% on a like-for-like basis
- Cash generated by operations up 0,9% on a like-for-like basis
- Continued investment to grow and sustain our businesses with capital expenditure of R290,4 million    
- Negligible impact of new accounting standards on headline earnings
- Headline earnings per share down 6,2% to 305,5 cents
- Interim dividend cover maintained, interim dividend of 165 cents per share

AVI has adopted the following new accounting standards with effect from 1 July 2018:
- IFRS 15 - Revenue from Contracts with Customers;
- IFRS 16 - Leases;
- IFRS 9 - Financial Instruments.

While the impact at a headline earnings level is negligible for AVI, IFRS 15 and 16 have a material impact on many of
the items reported in the financial statements, rendering direct comparison to last year's results meaningless for these
lines. Additional tables and schedules have been included in this report to assist in comparing the results to those
for last year on a like-for-like basis. Where comparisons to prior year results are made on a like-for-like basis in 
the commentary, this is before taking reclassifications in terms of the new revenue and lease accounting standards into
account. The illustrative F19 information presented on a like-for-like basis is the responsibility of the directors 
of AVI, and does not constitute financial information fairly presented in accordance with International Financial 
Reporting Standards.

GROUP OVERVIEW
Group revenue for the semester was 0,2% higher than for the same period last year on a like-for-like basis. The
trading environment remained difficult with continued pressure on consumer spending resulting in sales volume weakness 
in many of our businesses, exacerbated by competitor discounting in some categories. In particular, December's sales 
volumes were lower than last year particularly in Spitz, which was unable to repeat record December 2017 sales volumes. 
Selling prices were increased in selected categories where there was a need to ameliorate accumulated cost pressures, 
but were maintained throughout the period for the most part.

Gross profit margins were well protected reflecting generally low raw material cost inflation and good cost control,
with the consolidated gross profit margin decreasing slightly from 45,0% to 44,3% on a like-for-like basis.

Despite tight management of selling and administrative costs, which increased by 3,1% on a like-for-like basis,
like-for-like operating profit was 6,4% lower than for the first semester of the last financial year due to the impact 
of lower sales volumes, provisions for the significant restructuring at Green Cross, and an unfavourable movement in the
mark-to-market adjustment on I&J's fuel hedges as a result of the low oil price at the end of the period. 

The new accounting standards had a negligible impact on headline earnings. Headline earnings declined by 5,6% from
R1,06 billion to R1,00 billion with the decrease in operating profit partially offset by an increase in earnings from 
I&J's Australian joint venture. Headline earnings per share decreased 6,2% from 325,6 cents to 305,5 cents with a 
0,6% increase in the weighted average number of shares in issue due to the vesting of employee share options, including 
the AVI Black Staff Empowerment Scheme.

Cash generated by operations increased by 0,9% to R1,57 billion on a like-for-like basis. Working capital rose 
R57,8 million due mostly to higher stock on hand resulting from constrained sales volumes in the second quarter of 
the financial year. Capital expenditure amounted to R290,4 million, reflecting continued investment across the Group 
to sustain and improve our businesses. Other material cash outflows during the period were an ordinary dividend of 
R855,9 million, a special dividend of R822,9 million and taxation of R344,5 million. Net debt at the end of 
December 2018 was R2,51 billion compared to R1,21 billion at the end of December 2017, including R466,5 million 
of lease liabilities recognised in terms of the new lease accounting standard adopted on 1 July 2018.

DIVIDEND 
Cash generation remains healthy and AVI has maintained its normal interim dividend cover. Accordingly, an interim
dividend of 165 cents per share has been declared.

SEGMENTAL REVIEW
Segmental revenue and operating profit for each business are presented below on a like-for-like basis.

Six months ended 31 December
                                                 Segmental revenue                 Segmental operating profit
                                           2018         2017           %         2018         2017           %    
                                             Rm           Rm      change           Rm           Rm      change    
Food & Beverage brands                  5 548,6      5 413,6         2,5      1 042,7      1 054,9        (1,2)   
Entyce Beverages                        2 116,9      2 039,0         3,8        467,0        424,3        10,1    
Snackworks                              2 258,4      2 176,5         3,8        429,2        452,0        (5,0)   
I&J                                     1 173,3      1 198,1        (2,1)       146,5        178,6       (18,0)   
Fashion brands                          1 763,8      1 886,8        (6,5)       399,2        482,7       (17,3)   
Personal Care                             624,5        631,4        (1,1)       128,4        140,3        (8,5)   
Footwear and Apparel                    1 139,3      1 255,4        (9,2)       270,8        342,4       (20,9)   
Corporate                                     -            -                    (10,3)        (7,4)               
Group like-for-like                     7 312,4      7 300,4         0,2      1 431,6      1 530,2        (6,4)   
Impact of new accounting standards       (243,8)           -                     24,0            -                
Group as reported                       7 068,6      7 300,4        (3,2)     1 455,6      1 530,2        (4,9)   

Entyce Beverages
Revenue increased 3,8% to R2,12 billion while operating profit increased 10,1% to R467,0 million with the operating
profit margin at 22,1% compared to 20,8% in the prior year.

Tea revenue grew by 2,3% due mainly to selling price increases taken in the prior financial year in response to higher
rooibos and black tea prices, offset by a 3,5% decrease in volumes. The premium Five Roses and Freshpak tea brands
performed well in terms of margin contribution but saw increasing volume pressure at higher price points with some demand
moving to lower priced offerings. Gross profit margin improved with lower black tea input costs ameliorating some of the
pressure from increased rooibos raw material prices. Operating profit growth was healthy and the operating profit margin
improved.

Coffee revenue and operating profit were lower than last year, due mainly to margin pressure on mixed instant coffee
and sales volume pressure on premium coffee from sustained aggressive competitor activity. The out of home and affordable
coffee categories both achieved growth for the semester, and the overall profitability of the coffee business remains
sound.

Creamer benefited from a significant increase in demand following competitor supply issues and sales volumes were
22,5% higher than in the first half of last year. Profit margins improved due to the volume leverage and contributed to
strong operating profit growth for the semester.

Snackworks
Revenue of R2,26 billion was 3,8% higher than last year while operating profit decreased 5,0%, from R452,0 million to
R429,2 million. The operating profit margin decreased from 20,8% to 19,0%.

Biscuits revenue grew by 4,4% due to a 3,9% increase in sales volumes, however the gross profit margin decreased due
to a temporary period of poor yields in the Isando factory and commissioning write-offs in the Westmead factory where 
the new chocolate lines are ramping up to normal production. Notwithstanding tightly controlled selling and administrative
costs, this resulted in a decrease in operating profit and the operating profit margin for the semester.

Snacks revenue grew 1,8% due mainly to 1,9% growth in sales volumes. Gross profit margin was slightly lower than last
year, yielding a small increase in gross profit that was insufficient to cover the increase in selling and
administrative costs, resulting in a small decrease in operating profit and the operating profit margin.

I&J
Revenue decreased by 2,1% from R1,20 billion to R1,17 billion while operating profit decreased from R178,6 million to
R146,5 million. The operating profit margin decreased from 14,9% to 12,5%.

The revenue decrease is mainly attributable to lower fish trading and by-catch sales, while core hake revenue was
slightly up on last year, despite lower quota, due to an improved sales mix and better export exchange rates achieved.

Fishing performance was inconsistent, with an initial period of good catch rates and improved size mix offset by lower
catch rates in the second quarter. Gross profit margin was in line with last year.

Selling and administrative costs excluding unrealised losses on fuel hedges were lower than last year, however the low
oil price at the end of the period resulted in an unfavourable movement in the mark-to-market adjustment on I&J's fuel
hedges that largely accounts for the decrease in operating profit.

Personal Care
Indigo's revenue decreased by 1,1% from R631,4 million to R624,5 million due mainly to volume pressure on fragranced
body sprays resulting from aggressive discounting by competitors, mostly in the first quarter of the financial year. 
This was partially offset by good growth in roll-ons and body lotions and recovery in some export markets. The gross 
profit margin decreased slightly due to changes in the sales mix and together with lower sales volumes resulted in 
a decrease in operating profit from R140,3 million to R128,4 million. The operating profit margin decreased from 
22,2% to 20,6%.

Footwear and Apparel 
Revenue in the Footwear and Apparel category decreased by 9,2% to R1,14 billion while operating profit decreased by
20,9% from R342,4 million to R270,8 million. The operating profit margin decreased from 27,3% to 23,8%.

The Spitz business saw revenue decline by 7,8% due largely to an 8,2% drop in footwear sales volumes. Selling prices
of core ranges have not been increased since April 2016, however consumer demand was subdued and the business was not
able to repeat last year's record December sales performance. Gross profit margin was maintained in line with last year 
and selling and administrative expenses increased by only 1,3%, however the lower volumes and consequent decline in gross
profit resulted in a 15,4% decrease in operating profit, from R334,6 million to R283,1 million. The operating profit
margin decreased from 32,3% to 29,7%.

Green Cross revenue decreased by 20,4% largely due to lower sales volumes. Sales volumes were impacted by soft demand
and widespread discounting in the mid-price comfort footwear segment, exacerbated by poor performance of the summer
range in retail doors. Fixed costs were tightly managed and decreased compared to last year, before taking restructuring
costs into account. In November Green Cross embarked on a consultation process with affected employees following an
in-principle decision to stop all manufacturing operations at its facility in Epping, Cape Town. Restructuring provisions 
of approximately R15 million have been included in the first half result pending finalisation of the consultation process.
Including these costs, Green Cross recorded an operating loss of R18,8 million compared to a profit of R4,4 million last
year. Cash flow for the period was positive due mainly to a further reduction in stock levels.

OUTLOOK
The trading environment is expected to remain difficult, with constrained consumer spending. Our expectation is that
many of our categories will continue to have low, or even negative, growth rates until there is a meaningful improvement
in the economy. Notwithstanding this, our brands remain healthy and appealing to many consumers and the majority of the
second semester's import requirements have been covered at rates that support sound levels of profitability, subject to
acceptable demand and sales volumes. There is a reasonable prospect of a stronger second semester than in the prior year
should current sales volumes be sustained and I&J's catch rates remain as per forecasts. We will continue to react
quickly to market changes as we pursue the most appropriate balance of price, sales volumes and profit margins for each 
of our brands.

We will sustain investment that underpins our manufacturing capacity, product quality and service levels. In addition
to the savings being realised from restructuring completed in the prior and current financial years, we will continue 
to review organisational structures and fixed overhead costs to identify opportunities to improve operational
effectiveness and reduce our cost base. AVI International, supported by our South African manufacturing capabilities, 
remains focused on steadily building our brands' shares in export markets while sustaining strong profit margins.

I&J's prospects remain materially dependent on fishing performance and exchange rates. Notwithstanding some periods of
poor catch rates in the first semester, we remain of the view that the performance of the hake resource is set to
improve over the next few years. Export exchange rates secured for the second semester are at levels that support sound
profitability and the more recent Rand weakness provides some upside potential. The hake long-term rights application
process, to allocate rights from 2021, has commenced but without much structure or detail to date, and is not expected to
impact on operations in this financial year.

The Green Cross consultation process should be completed before the end of the year allowing for more accurate
recognition of restructuring costs.

The Board is confident that AVI remains well positioned to compete effectively; prudently manage fixed and variable
costs; and, recognising the challenging environment, be alert for appropriate acquisition opportunities both domestically
and regionally.

The above outlook statements have not been reviewed or reported on by AVI's auditors.

Gavin Tipper            Simon Crutchley
Chairman                CEO

11 March 2019


CONDENSED CONSOLIDATED BALANCE SHEET
                                                                                   Unaudited at            Audited    
                                                                                   31 December          at 30 June    
                                                                               2018*          2017            2018    
                                                                                 Rm             Rm              Rm    
Assets                                                                                                                
Non-current assets                                                                                                    
Property, plant and equipment                                               3 475,1        3 455,8         3 403,6    
Right-of-use assets                                                           370,1              -               -    
Intangible assets and goodwill                                                916,8          993,3           926,2    
Investments                                                                   384,9          365,3           360,0    
Deferred taxation                                                              31,1           17,2            24,3    
                                                                            5 178,0        4 831,6         4 714,1    
Current assets                                                                                                        
Inventories and biological assets                                           2 183,4        1 869,2         2 165,4    
Trade and other receivables including derivatives                           1 949,2        2 423,4         2 442,3    
Cash and cash equivalents                                                     335,3          334,2           342,8    
                                                                            4 467,9        4 626,8         4 950,5    
Total assets                                                                9 645,9        9 458,4         9 664,6    
Equity and liabilities                                                                                                
Capital and reserves                                                                                                  
Total equity                                                                4 439,7        5 129,8         5 146,4    
Non-current liabilities                                                                                               
Cash-settled share-based payment liability                                     38,9              -            38,9    
Lease liabilities                                                             300,1              -               -    
Operating lease straight-line liabilities                                         -           13,6            14,3    
Employee benefit liabilities                                                  389,4          386,6           382,3    
Deferred taxation                                                             424,5          405,9           389,2    
                                                                            1 152,9          806,1           824,7    
Current liabilities                                                                                                   
Current borrowings including short-term portion of lease liabilities        2 547,2        1 542,9         1 612,6    
Trade and other payables including derivatives                              1 444,3        1 897,6         2 031,8    
Current tax liabilities                                                        61,8           82,0            49,1    
                                                                            4 053,3        3 522,5         3 693,5    
Total equity and liabilities                                                9 645,9        9 458,4         9 664,6    

Movement in net debt                                                                                                  
Opening balance                                                             1 269,8        1 444,1         1 444,1    
IFRS 16 lease liability movements                                             466,5              -               -    
Short-term funding raised/(repaid)                                            768,2         (147,9)          (78,2)    
Decrease/(increase) in cash and cash equivalents                                6,2          (91,2)          (95,3)    
Translation of cash equivalents of foreign subsidiaries                         1,3            3,7            (0,8)    
Net debt**                                                                  2 512,0        1 208,7         1 269,8    

*  These figures include the impact of changes in accounting policies following the implementation of new 
   accounting standards in the current year (refer to note 9). The annexure sets out the financial statements 
   on a like-for-like basis.                                                    
** Comprises current borrowings plus long-term lease liabilities, less cash and cash equivalents.


CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
                                                                       Unaudited                           Audited    
                                                                    six months ended                    year ended    
                                                                       31 December                         30 June    
                                                                 2018*           2017            %            2018    
                                                                   Rm              Rm       change              Rm    
Revenue                                                       7 068,6         7 300,4         (3,2)       13 437,5    
Cost of sales                                                (4 103,6)       (4 018,4)         2,1        (7 498,0)    
Gross profit                                                  2 965,0         3 282,0         (9,7)        5 939,5    
Selling and administrative expenses                          (1 509,4)       (1 751,8)       (13,8)       (3 387,0)    
Operating profit before capital items                         1 455,6         1 530,2         (4,9)        2 552,5    
Interest received                                                 3,4             2,4         41,7             5,7    
Finance costs                                                   (97,8)          (74,3)        31,6          (132,4)    
Share of equity-accounted earnings of joint ventures             37,1            25,4         46,1            56,3    
Capital items                                                   (11,1)            3,4       (426,5)         (136,6)    
Profit before taxation                                        1 387,2         1 487,1         (6,7)        2 345,5    
Taxation                                                       (393,0)         (423,6)        (7,2)         (669,7)    
Profit for the period                                           994,2         1 063,5         (6,5)        1 675,8    
Profit attributable to:                                                                                               
Owners of AVI                                                   994,2         1 063,5         (6,5)        1 675,8    
Other comprehensive (loss)/income, net of tax                   (14,3)          (59,4)                        33,0    
Items that are or may be subsequently                   
reclassified to profit or loss                                                  
Foreign currency translation differences                         (9,2)          (29,4)                         3,8    
Cash flow hedging reserve                                        (7,1)          (41,7)                        29,0    
Taxation on items that are or may be                    
subsequently reclassified to profit or loss                       2,0            11,7                         (8,1)    
Items that will never be reclassified to profit or loss                                                               
Actuarial gain recognised                                           -               -                         11,5    
Taxation on items that will never be                    
reclassified to profit or loss                                      -               -                         (3,2)    
Total comprehensive income for the period                       979,9         1 004,1         (2,4)        1 708,8    
Total comprehensive income attributable to:                                                                           
Owners of AVI                                                   979,9         1 004,1         (2,4)        1 708,8    
Depreciation and amortisation of                        
property, plant and equipment, right-of-use assets,     
fishing rights and trademarks included                  
in operating profit                                             296,6           207,5         42,9           412,9    
Earnings per share                                                                                                    
Basic earnings per share (cents)#                               303,2           326,2         (7,1)          513,1    
Diluted basic earnings per share (cents)##                      301,7           324,2         (6,9)          510,1    
Headline earnings per share (cents)#                            305,5           325,6         (6,2)          543,1    
Diluted headline earnings per share (cents)##                   304,1           323,6         (6,0)          540,0    

#  Basic earnings and headline earnings per share are calculated on a weighted average of 327 951 933 
   (31 December 2017: 325 996 202 and 30 June 2018: 326 624 426) ordinary shares in issue.
## Diluted basic earnings and diluted headline earnings per share are calculated on a weighted average of 
   329 528 005 (31 December 2017: 328 029 825 and 30 June 2018: 328 520 186) ordinary shares in issue.
*  These figures include the impact of changes in accounting policies following the implementation of new  
   accounting standards in the current year (refer to note 9). The annexure sets out the financial statements  
   on a like-for-like basis.


CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
                                                                       Unaudited                           Audited
                                                                    six months ended                    year ended   
                                                                       31 December                         30 June
                                                                 2018*           2017            %            2018
                                                                   Rm              Rm       change              Rm     
Operating activities                                                                                                   
Cash generated by operations                                  1 677,6         1 560,3          7,5         2 691,9    
Interest paid                                                   (97,8)          (74,3)        31,6          (132,4)    
Taxation paid                                                  (344,5)         (330,0)         4,4          (620,9)    
Net cash available from operating activities                  1 235,3         1 156,0          6,9         1 938,6    

Investing activities                                                                                                  
Interest received                                                 3,4             2,4         41,7             5,7    
Property, plant and equipment acquired                         (290,4)         (193,2)        50,3          (419,9)    
Additions to intangible assets                                   (3,3)              -                        (14,6)    
Proceeds from disposals of property,                                       
plant and equipment                                              10,6             3,0        253,3            14,8    
Contributions to Enterprise and Supplier                                   
Development initiatives                                            -               -                         (8,6)    
Movement in joint ventures and other investments                 10,9            19,1        (42,9)           83,9    
Net cash used in investing activities                          (268,8)         (168,7)        59,3          (338,7)    

Financing activities                                                                                                  
Proceeds from shareholder funding                                21,2            47,2        (55,1)           59,9    
Short-term funding raised/(repaid)                              768,2          (147,9)      (619,4)          (78,2)    
Lease liabilities repaid                                        (83,3)              -                            -    
Payment to I&J BBBEE shareholders                                   -               -                        (65,0)    
Ordinary dividends paid                                        (855,9)         (795,4)         7,6        (1 421,3)    
Special dividend paid                                          (822,9)              -                            -    
Net cash used in financing activities                          (972,7)         (896,1)         8,5        (1 504,6)    

Decrease/(increase) in cash and cash equivalents                 (6,2)           91,2       (106,8)           95,3    
Cash and cash equivalents at beginning of period                342,8           246,7                        246,7    
                                                                336,6           337,9                        342,0    
Translation of cash equivalents of foreign subsidiaries          (1,3)           (3,7)       (64,9)            0,8    
Cash and cash equivalents at end of period                      335,3           334,2                        342,8    

* These figures include the impact of changes in accounting policies following the implementation of new 
  accounting standards in the current year (refer to note 9). The annexure sets out the financial statements 
  on a like-for-like basis.


CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
                                                                                                   I&J                 
                                                    Share                                        BBBEE                
                                              capital and   Treasury              Retained      share-       Total    
                                                  premium     shares   Reserves   earnings     holders      equity    
                                                       Rm         Rm         Rm         Rm          Rm          Rm    
Six months ended 31 December 2018                                                                                     
Balance at 1 July 2018                              280,3     (486,5)     534,1    4 925,1      (106,6)    5 146,4    
Impact of changes in                                                                         
accounting policies (note 9)                            -          -          -      (56,9)          -       (56,9)    
Balance at 1 July 2018 (restated)                   280,3     (486,5)     534,1    4 868,2      (106,6)    5 089,5    
Profit for the period                                   -          -          -      994,2           -       994,2    
Other comprehensive income                                                                                            
Foreign currency translation differences                -          -       (9,2)         -           -        (9,2)    
Cash flow hedging reserve, net of tax                   -          -       (5,1)         -           -        (5,1)    
Total other comprehensive income                        -          -      (14,3)         -           -       (14,3)    
Total comprehensive income for the period               -          -      (14,3)     994,2           -       979,9    
Transactions with owners, recorded                                                           
directly in equity                                                                           
Share-based payments                                    -          -       18,9          -           -        18,9    
Deferred taxation on Group                                                                   
share scheme recharge                                   -          -        9,0          -           -         9,0    
Dividends paid                                          -          -          -   (1 678,8)          -    (1 678,8)    
Own ordinary shares sold by                                                                  
AVI Share Trusts                                        -       21,9          -       (0,7)          -        21,2    
Total contributions by and                                                                   
distributions to owners                                 -       21,9       27,9   (1 679,5)          -    (1 629,7)    
Balance at 31 December 2018                         280,3     (464,6)     547,7    4 182,9      (106,6)    4 439,7    
Six months ended 31 December 2017                                                                                     

Balance at 1 July 2017                              280,3     (541,9)     449,9    4 666,1        (2,7)    4 851,7    
Profit for the period                                   -          -          -    1 063,5           -     1 063,5    
Other comprehensive income                                                                                            
Foreign currency translation differences                -          -      (29,4)         -           -       (29,4)    
Cash flow hedging reserve, net of tax                   -          -      (30,0)         -           -       (30,0)    
Total other comprehensive income                        -          -      (59,4)         -           -       (59,4)    
Total comprehensive income for the period               -          -      (59,4)   1 063,5           -     1 004,1    
Transactions with owners,                                                                    
recorded directly in equity                                                                     
Share-based payments                                    -          -       17,6          -           -        17,6    
Deferred taxation on Group                                                                   
share scheme recharge                                   -          -        4,6          -           -         4,6    
Dividends paid                                          -          -          -     (795,4)          -      (795,4)    
Own ordinary shares sold by                                                                  
AVI Share Trusts                                        -       44,5          -        2,7           -        47,2    
Total contributions by and                                                                   
distributions to owners                                 -       44,5       22,2     (792,7)          -      (726,0)    
Balance at 31 December 2017                         280,3     (497,4)     412,7    4 936,9        (2,7)    5 129,8    

Year ended 30 June 2018                                                                                               
Balance at 1 July 2017                              280,3     (541,9)     449,9    4 666,1        (2,7)    4 851,7    
Profit for the year                                     -          -          -    1 675,8           -     1 675,8    
Other comprehensive income                                                                                            
Foreign currency translation differences                -          -        3,8          -           -         3,8    
Actuarial gain recognised, net of tax                   -          -        8,3          -           -         8,3    
Cash flow hedging reserve, net of tax                   -          -       20,9          -           -        20,9    
Total other comprehensive income                        -          -       33,0          -           -        33,0    
Total comprehensive income for the period               -          -       33,0    1 675,8           -     1 708,8    
Transactions with owners,                                                                    
recorded directly in equity                                                                     
Share-based payments                                    -          -       37,0          -           -        37,0    
Deferred taxation on Group                                                                   
share scheme recharge                                   -          -       14,2          -           -        14,2    
Dividends paid                                          -          -          -   (1 421,3)          -    (1 421,3)    
Own ordinary shares sold by                                                                  
AVI Share Trusts                                        -       55,4          -        4,5           -        59,9    
I&J BBBEE shareholders                                  -          -          -          -      (103,9)     (103,9)    
Total contributions by and                                                                   
distributions to owners                                 -       55,4       51,2   (1 416,8)     (103,9)   (1 414,1)    
Balance at 30 June 2018                             280,3     (486,5)     534,1    4 925,1      (106,6)    5 146,4    
                                              

SUPPLEMENTARY NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

For the six months ended 31 December 2018
AVI Limited ("AVI" or "the Company") is a South African registered company. These condensed consolidated 
interim financial statements comprise the Company and its subsidiaries (together referred to as "the Group") 
and the Group's interest in joint ventures.
1.  Statement of compliance
    The condensed consolidated interim financial statements have been prepared in accordance with the 
    recognition and measurement criteria of International Financial Reporting Standards, the presentation 
    and disclosure requirements of IAS 34 Interim Financial Reporting, the SAICA Financial Reporting Guides 
    as issued by the Accounting Practices Committee, the Financial Reporting Pronouncements as issued by the 
    Financial Reporting Standards Council, the Listings Requirements of the JSE Limited (the "JSE") and the 
    Companies Act of South Africa. These condensed consolidated interim financial statements have not been 
    reviewed or audited by the auditors.

    The condensed consolidated interim financial statements are prepared in millions of South African 
    Rands ("Rm") on the historical cost basis, except for derivative financial instruments, biological assets 
    and liabilities for cash settled share-based payment arrangements, which are measured at fair value.

    The accounting policies used in the preparation of these interim financial statements are in terms of 
    International Financial Reporting Standards and are consistent with those applied in preparing the 
    interim financial statements for the six months ended 31 December 2017 and the annual financial 
    statements for the year ended 30 June 2018 except for the changes due to the adoption of new 
    accounting standards per note 9.

    New standards and interpretations in issue not yet effective
    The standards, amendments and interpretations issued but not yet effective have been assessed for 
    applicability to the Group and management has concluded that they are not applicable to the business 
    of the Group and will therefore have no impact on future financial statements.

2.  Segmental results
    Segmental revenue and operating profit for the six months ended 31 December 2018 presented per the 
    new accounting standards implemented in the current year (refer to note 9):
                                                                                                          
                                                                       Unaudited                           Audited    
                                                                    six months ended                    year ended    
                                                                      31 December                          30 June    
                                                                 2018            2017                         2018    
                                                          As reported     As reported            %     As reported    
                                                                   Rm              Rm       change              Rm    
    Segmental revenue                                                                                                 
    Food & Beverage brands                                    5 345,1         5 413,6         (1,3)       10 282,5    
    Entyce Beverages                                          2 032,7         2 039,0         (0,3)        3 834,1    
    Snackworks                                                2 130,6         2 176,5         (2,1)        3 960,8    
    I&J                                                       1 181,8         1 198,1         (1,4)        2 487,6    
    Fashion brands                                            1 723,5         1 886,8         (8,7)        3 155,0    
    Personal Care                                               584,2           631,4         (7,5)        1 190,6    
    Footwear and Apparel                                      1 139,3         1 255,4         (9,2)        1 964,4    
    Group                                                     7 068,6         7 300,4         (3,2)       13 437,5    
    Segmental operating profit before capital items                                                                   
    Food & Beverage brands                                    1 051,0         1 054,9         (0,4)        1 922,6    
    Entyce Beverages                                            468,1           424,3         10,3           792,6    
    Snackworks                                                  430,1           452,0         (4,8)          705,0    
    I&J                                                         152,8           178,6        (14,4)          425,0    
    Fashion brands                                              414,9           482,7        (14,0)          645,0    
    Personal Care                                               128,4           140,3         (8,5)          250,3    
    Footwear and Apparel                                        286,5           342,4        (16,3)          394,7    
    Corporate and consolidation                                 (10,3)           (7,4)       (39,2)          (15,1)    
    Group                                                     1 455,6         1 530,2         (4,9)        2 552,5    

    Segmental revenue and operating profit for the six months ended 31 December 2018 presented per the old 
    basis of accounting, excluding the impact of the new accounting standards implemented in the 
    current year:
                                                                                                          
                                                                     Unaudited                             Audited    
                                                                  six months ended                      year ended    
                                                                    31 December                            30 June    
                                                                 2018            2017                         2018    
                                                        Like-for-like     As reported            %     As reported    
                                                                   Rm              Rm       change              Rm
    Segmental revenue                                                                                                  
    Food & Beverage brands                                    5 548,6         5 413,6          2,5        10 282,5    
    Entyce Beverages                                          2 116,9         2 039,0          3,8         3 834,1    
    Snackworks                                                2 258,4         2 176,5          3,8         3 960,8    
    I&J                                                       1 173,3         1 198,1         (2,1)        2 487,6    
    Fashion brands                                            1 763,8         1 886,8         (6,5)        3 155,0    
    Personal Care                                               624,5           631,4         (1,1)        1 190,6    
    Footwear and Apparel                                      1 139,3         1 255,4         (9,2)        1 964,4    
    Group                                                     7 312,4         7 300,4          0,2        13 437,5    
    Segmental operating profit before capital items                                                                   
    Food & Beverage brands                                    1 042,7         1 054,9         (1,2)        1 922,6    
    Entyce Beverages                                            467,0           424,3         10,1           792,6    
    Snackworks                                                  429,2           452,0         (5,0)          705,0    
    I&J                                                         146,5           178,6        (18,0)          425,0    
    Fashion brands                                              399,2           482,7        (17,3)          645,0    
    Personal Care                                               128,4           140,3         (8,5)          250,3    
    Footwear and Apparel                                        270,8           342,4        (20,9)          394,7    
    Corporate and consolidation                                 (10,3)           (7,4)       (39,2)          (15,1)    
    Group                                                     1 431,6         1 530,2         (6,4)        2 552,5    

3.  Revenue
    Following the implementation of IFRS 15 on 1 July 2018 (refer to note 9), AVI is required to disaggregate 
    revenue from contracts with customers ("revenue") into categories that depict how the nature, amount, 
    timing and uncertainty of revenue and related cash flows are affected by economic factors.

    The following table sets out revenue by geographical market:
                                                                   Unaudited
                                                        Six months ended 31 December 2018
                                  Entyce                                     Personal         Footwear                 
    Geographical market        Beverages      Snackworks           I&J           Care      and Apparel       Total    
                                      Rm              Rm            Rm             Rm               Rm          Rm    
    South Africa                 1 769,1         1 908,8         425,4          518,7          1 131,7     5 753,7    
    Other African countries        260,3           216,4          19,3           65,5              7,6       569,1    
    Rest of the world                3,3             5,4         737,1              -                -       745,8    
    Total revenue                2 032,7         2 130,6       1 181,8          584,2          1 139,3     7 068,6    

    The majority of revenue comprises revenue from the sale of goods. Less than 2% of total revenue compromises 
    income arising from services, rental agreements and trademark licence agreements.

4.  Determination of headline earnings
                                                                     Unaudited                             Audited    
                                                                  six months ended                      year ended    
                                                                     31 December                           30 June    
                                                               2018*           2017            %              2018    
                                                                 Rm              Rm       change                Rm
    Profit for the year attributable to owners of AVI         994,2         1 063,5         (6,5)          1 675,8    
    Total capital items after taxation                          7,8            (2,1)                          98,1    
    Net loss/(gain) on disposal of property,                                                         
    plant and equipment                                         0,4            (3,4)                         (13,4)    
    Impairment of property, plant and equipment                10,7               -                              -    
    Impairment of Green Cross trademark**                         -               -                          150,0    
    Taxation attributable to capital items                     (3,3)            1,3                          (38,5)    
    Headline earnings                                       1 002,0         1 061,4         (5,6)          1 773,9    
    Headline earnings per ordinary share (cents)              305,5           325,6         (6,2)            543,1    
    Diluted headline earnings per ordinary share (cents)      304,1           323,6         (6,0)            540,0    
                                                                                                                      
                                                             Number          Number            %            Number    
                                                          of shares       of shares       change         of shares    
    Weighted average number of ordinary shares          327 951 933     325 996 202          0,6       326 624 426    
    Weighted average diluted number of 
    ordinary shares                                     329 528 005     328 029 825          0,5       328 520 186    

    *  These figures include the impact of changes in accounting policies following the implementation of new 
       accounting standards in the current year (refer to note 9).
    ** The Green Cross trademark was recognised on acquisition of the business on 1 March 2012. As part of the 
       annual review for the year ended 30 June 2018 of the carrying amounts of trademarks with indefinite 
       useful lives, an impairment of R150 million was raised against the trademark in recognition of the 
       longer period required to grow the business to AVI's target profitability in the current constrained 
       environment.

5.  Cash generated by operations
                                                                     Unaudited                             Audited
                                                                  six months ended                      year ended
                                                                     31 December                           30 June   
                                                               2018*           2017            %              2018
                                                                 Rm              Rm       change                Rm
    Cash generated by operations before working                                                       
    capital changes                                         1 735,4         1 736,4         (0,1)          3 031,2    
    Change in working capital                                 (57,8)         (176,1)       (67,2)           (339,3)    
    Cash generated by operations                            1 677,6         1 560,3          7,5           2 691,9    

    * These figures include the impact of changes in accounting policies following the implementation of new 
      accounting standards in the current year (refer to note 9).

    Prior to preparing the results for the year ended 30 June 2018, adjustments for non-cash items took into 
    account the income statement charge for incentive provisions and earnings-linked performance bonuses, as 
    well as the current service cost and interest cost relating to the Group's post-retirement medical aid 
    obligation, without adjusting for related cash payments. This has been correctly accounted for in the 
    current year, however, the prior year has been restated. Accordingly, an adjustment of R134,1 million 
    has been processed between "Cash generated by operations before working capital changes" and "Changes in 
    working capital" as reported in the prior year, to more appropriately account for cash payments within 
    "Cash generated by operations before working capital changes". "Cash generated by operations" 
    remains unchanged.
    
6.  Commitments
                                                                                 Unaudited                 Audited    
                                                                              six months ended          year ended    
                                                                                 31 December               30 June    
                                                                              2018         2017               2018    
                                                                                Rm           Rm                 Rm    
                                                                                                                      
    Capital expenditure commitments for property, plant and equipment        183,2        251,1              371,4    
    Contracted for                                                           103,3        153,5              143,3    
    Authorised but not contracted for                                         79,9         97,6              228,1    

    It is anticipated that this expenditure will be financed by cash resources, cash generated from operating 
    activities and existing borrowing facilities. Other contractual commitments have been entered into in the 
    normal course of business.

7.  Fair value classification and measurement                    
    The Group measures derivative foreign exchange contracts, fuel swaps and biological assets at fair value.

    The fair value of foreign exchange contracts and fuel swaps is determined using a forward pricing model with 
    reference to quotes from financial institutions. Significant inputs into the Level 2 fair value measurement 
    include yield curves as well as market interest rates and foreign exchange rates. The estimated fair values 
    of recognised financial instruments approximate their carrying amounts based on the nature or maturity 
    period of the financial instruments.                                                

    Biological assets comprise abalone which is farmed by I&J. These assets are disclosed as Level 3 financial 
    instruments with their fair value determined using a combination of the market comparison and cost 
    technique as prescribed by IAS 41.                                                

    There were no transfers between Levels 1, 2 or 3 of the fair value hierarchy during the six months 
    ended 31 December 2018.

8.  Post-reporting date events
    No significant events that meet the requirements of IAS 10 have occurred since the reporting date.

9.  Changes in accounting policies            
    The Group has changed its accounting policies following the adoption of the following new accounting 
    standards, including any consequential amendments to other standards, in the preparation of these interim 
    results. The annexure to these condensed consolidated financial statements sets out the results for the 
    six months ended 31 December 2018 per the old basis of accounting.            

    IFRS 15 - Revenue from Contracts with Customers            
    This standard combines, enhances and replaces previous guidance on recognising revenue with a single 
    revenue standard that introduces a new revenue recognition model for contracts with customers.

    The standard is mandatory for accounting periods beginning on or after 1 January 2018 and therefore 
    has been adopted by AVI for the year ended 30 June 2019. The Group has applied the standard 
    retrospectively and assessed the cumulative effect of initially applying the standard on 1 July 2018 
    to be Rnil, without any adjustment to retained earnings on this date.            

    The core principle of IFRS 15 is that an entity recognises revenue from contracts with customers to 
    depict the transfer of control of promised goods or services to customers for an amount that 
    reflects the consideration to which an entity expects to be entitled to in exchange for those 
    goods or services. The model features a contract-based five step analysis of transactions to 
    determine whether, how much and when revenue is recognised.            

    The implementation of the new standard has not impacted the measurement and timing of revenue recognition, 
    however, it had the following impact on the presentation of the consolidated financial statements:
    (i) An amount of R278,9 million in payments to customers for the six months ended 31 December 2018 
        previously treated as selling and distribution costs has been reclassified as a deduction from 
        revenue due to clarity provided by IFRS 15 regarding "identifiable" and "separable" not provided 
        by IAS 18.            

    Related to this, an amount of R427,5 million of accruals and provisions for payments to customers as 
    at 31 December 2018, previously included in trade and other payables has been offset against trade 
    and other receivables.            

    (ii) An amount of R35,1 million relating to transport and insurance costs for the six months 
         ended 31 December 2018 previously offset against revenue has been reallocated to cost of sales 
         due to clarity provided by IFRS 15 regarding agent versus principal.            

    IFRS 9 - Financial Instruments            
    IFRS 9 addresses the accounting principles for the financial reporting of financial assets and financial
    liabilities, including classification, measurement, impairment, derecognition and hedge accounting. 
    IFRS 9 replaces earlier versions of IFRS 9 and completes the IASB's project to replace IAS 39 Financial 
    Instruments: Recognition and Measurement.            

    The standard is mandatory for accounting periods beginning on or after 1 January 2018 and has therefore 
    been adopted by AVI for the year ended 30 June 2019. The Group has applied the standard retrospectively 
    as at 1 July 2018, however, with no restatement of comparative information for prior years. AVI has 
    elected to retain the hedge accounting requirements of IAS 39.            

    IFRS 9 replaces the current IAS 39 categories of financial assets with three principle classification 
    categories - measured at amortised cost, fair value through other comprehensive income and fair value 
    through profit or loss. Financial assets held by the Group have been assessed, considering contractual 
    cash flow characteristics and the business models for managing financial assets and it was concluded
    that there is no impact on the measurement of financial assets as a result of the adoption of IFRS 9.

    IFRS 9 replaces the "incurred loss" model of IAS 39 with a forward looking "expected credit loss" model 
    to measure impairment losses on financial assets. The majority of the Group's financial assets are 
    trade receivables for which IFRS 9 requires the simplified approach to be applied, measuring the 
    impairment loss allowance based on lifetime expected credit loss. Further to this, as a practical 
    expedient, AVI has applied a provision matrix assessing historical credit losses per aged bucket of 
    trade debtors and overlayed this with AVI's assessment of general economic conditions to estimate 
    expected future losses. The implementation of IFRS 9 resulted in a R4,5 million increase in the 
    impairment loss allowance on 1 July 2018, and a R3,2 million decrease in retained earnings after 
    adjusting for deferred tax of R1,3 million.            

    IFRS 16 - Leases                          
    IFRS 16 sets out the principles for the recognition, measurement, presentation and disclosure of leases
    for both parties to a contract, i.e. the customer ("lessee") and the supplier ("lessor"). IFRS 16 replaces
    the previous leases standard, IAS 17, and related interpretations.            

    The standard is mandatory for accounting periods beginning on or after 1 January 2019, however the Group 
    has early adopted the standard for the year ended 30 June 2019 with the date of initial application 
    1 July 2018. The Group has applied the standard retrospectively recognising the cumulative effect of 
    initially applying the standard in retained earnings at the date of initial application (modified 
    retrospective approach).            

    IFRS 16 has one model for lessees which results in leases previously classified as operating leases and 
    recorded off-balance sheet being capitalised on the balance sheet, requiring a lessee to recognise a 
    right-of-use asset and a concomitant lease liability. The standard has the most significant impact in 
    AVI's retail businesses which lease all their retail doors.            

    As prescribed by IFRS 16, lease liabilities are measured at the present value of remaining lease payments 
    discounted at the incremental borrowing rate at the date of initial application. AVI elected to measure 
    right-of-use assets on transition date at their carrying amounts as if IFRS 16 had applied since the 
    lease commencement dates, discounted using the incremental borrowing rate at the date of initial application. 
    Right-of-use assets relating to new leases are measured as the amount of initial measurement of the lease 
    liability plus initial direct costs.            
    
    As part of the modified retrospective transition approach, AVI has elected to apply the practical 
    expedient which allows a single discount rate to be applied to a portfolio of leases with reasonably 
    similar characteristics.            

    As an accounting policy election, AVI has applied the following recognition exemptions which allow for 
    certain lease payments to be expensed over the lease term as opposed to recognising a right-of-use asset
    and related lease liability on the lease commencement date:            
    - Short-term leases - these are leases with a lease term of 12 months or less; and            
    - Leases of low value assets - these are leases where the underlying asset is of low value.            

    At transition date, the adoption of IFRS 16 resulted in the recognition of right-of-use assets to the 
    value of R367,1 million and lease liabilities of R465,0 million. This, together with the derecognition 
    of operating lease straight-line liabilities of R23,3 million and adjustments for deferred tax, resulted 
    in a R53,7 million decrease in retained earnings on transition date.            

    As a result of adopting IFRS 16, operating profit for the six months ended 31 December 2018 has increased 
    by R24,0 million due to the replacement of operating lease expenses with depreciation on right-of-use 
    assets. This increase is partly offset by an interest expense on lease liabilities of R20,6 million, 
    resulting in an after-tax gain in earnings of R2,4 million. On the statement of cash flows, lease 
    payments of R103,9 million, previously included in cash generated by operations, have been disclosed 
    under financing activities (R83,3 million relating to the principal portion of lease payments) and 
    interest paid (R20,6 million).            

    Opening retained earnings impact of change in accounting policies            
    The impact of the change in accounting policies on retained earnings at 1 July 2018 due to the adoption 
    of the new accounting standards is as follows:            
                                                                                                   Increase/    
                                                                                                   (decrease)     
                                                                                                 in retained     
                                                                                                    earnings    
                                                                                                          Rm    
    Adoption of IFRS 15 - Revenue from Contracts with Customers                                            -    
    Adoption of IFRS 9 - Financial Instruments                                                          (3,2)    
    Adoption of IFRS 16 - Leases                                                                       (53,7)    
                                                                                                       (56,9)    

10. Dividend declaration                           
    Notice is hereby given that a gross interim ordinary dividend No 92 of 165 cents per share 
    for the six months ended 31 December 2018 has been declared payable to shareholders of ordinary 
    shares. The dividend has been declared out of income reserves and will be subject to dividend 
    withholding tax at a rate of 20%. Consequently a net interim dividend of 132 cents per 
    share will be distributed to those shareholders who are not exempt from paying dividend tax. 
    In terms of dividend tax legislation, the dividend tax amount due will be withheld and paid over 
    to the South African Revenue Service by a nominee company, stockbroker or Central Securities 
    Depository Participant ("CSDP") (collectively "regulated intermediary") on behalf of shareholders. 
    However, all shareholders should declare their status to their regulated intermediary, as they may 
    qualify for a reduced dividend tax rate or exemption. AVI's issued share capital at the declaration 
    date is 352 665 190 ordinary shares. AVI's tax reference number is 9500/046/71/0. The salient dates 
    relating to the payment of the dividend are as follows:            

    Last day to trade cum dividend on the JSE              Monday, 15 April 2019
    First trading day ex dividend on the JSE              Tuesday, 16 April 2019
    Record date                                          Thursday, 18 April 2019
    Payment date                                          Tuesday, 23 April 2019            

    In accordance with the requirements of Strate Limited, no share certificates may be dematerialised 
    or rematerialised between Tuesday, 16 April 2019, and Thursday, 18 April 2019, both days inclusive.

    Dividends in respect of certificated shareholders will be transferred electronically to shareholders'
    bank accounts on payment date. In the absence of specific mandates, dividend cheques will be posted 
    to shareholders. Shareholders who hold dematerialised shares will have their accounts at their CSDP 
    or broker credited on Tuesday, 23 April 2019.            

11. Preparation of financial statements            
    These condensed consolidated interim financial statements have been prepared under the supervision 
    of Owen Cressey CA(SA), the AVI Group Chief Financial Officer.            

11 March 2019

ADMINISTRATION AND PRINCIPAL SUBSIDIARIES

ADMINISTRATION                   PRINCIPAL SUBSIDIARIES          Fashion Brands                         
Company registration             Food & Beverage Brands          Personal Care                          
AVI Limited ("AVI")              National Brands Limited         Indigo Brands Proprietary Limited         
Reg no: 1944/017201/06           Reg no: 1948/029389/06          Reg no: 2003/009934/07                 
Share code: AVI                  (incorporating Entyce                                                  
ISIN: ZAE000049433               Beverages and Snackworks)       16 - 20 Evans Avenue                   
                                                                 Epping 1 7460                          
Company Secretary                30 Sloane Street                                                       
Sureya Scheepers                 Bryanston 2021                  PO Box 3460                            
                                                                 Cape Town 8000                         
Business address and             PO Box 5159                                                            
registered office                Rivonia 2128                    Managing director                      
2 Harries Road                                                   John Knox                              
Illovo                           Managing director               Telephone: +27 (0)21 507 8500          
Johannesburg 2196                Gaynor Poretti                  Telefax: +27 (0)21 507 8501            
South Africa                     Telephone: +27 (0)11 707 7200                                          
                                 Telefax: +27 (0)11 707 7799     Footwear and Apparel                   
Postal address                                                   A&D Spitz Proprietary Limited          
PO Box 1897                      I&J                             Reg no: 1999/025520/07                 
Saxonwold 2132                   Irvin & Johnson Holding                                                
South Africa                     Company Proprietary Limited     29 Eaton Avenue                        
                                 Reg no: 2004/013127/07          Bryanston 2021                         
Telephone: +27 (0)11 502 1300                                                                         
Telefax: +27 (0)11 502 1301      1 Davidson Street               PO Box 782916                        
E-mail: info@avi.co.za           Woodstock                       Sandton 2145                         
Website: http://www.avi.co.za           Cape Town 7925                                                       
                                                                 Acting managing director             
Auditors                         PO Box 1628                     Simon Crutchley                      
Ernst & Young Inc.               Cape Town 8000                  Telephone: +27 (0)11 707 7300        
                                                                 Telefax: +27 (0)11 707 7763          
Sponsor                          Managing director                                                    
The Standard Bank of             Jonty Jankovich                 Green Cross Manufacturers
South Africa Limited             Telephone: +27 (0)21 440 7800   Proprietary Limited                   
                                 Telefax: +27 (0)21 440 7270     Reg no: 1994/008549/07                
Commercial bankers                                                                                     
Standard Bank                                                    26 - 30 Benbow Avenue                 
Nedbank                                                          Epping Industria                      
                                                                 7460                                  
Transfer secretaries                                                                                   
Computershare Investor                                           PO Box 396                            
Services Proprietary Limited                                     Epping Industria 7475                 
Business address                                                                                       
Rosebank Towers                                                  Acting managing director              
15 Biermann Avenue                                               Simon Crutchley                       
Rosebank                                                         Telephone: +27 (0)21 507 9700         
Johannesburg 2196                                                Telefax: +27 (0)21 507 9707           
                                                                         
Postal address                                                                                     
PO Box 61051                                                                                       
Marshalltown 2107                                                                                  
South Africa                                                                                       
Telephone: +27 (0)11 370 5000                                                                      
Telefax: +27 (0)11 370 5271                                                                        
                             
DIRECTORS                                                                   
Executive                            Independent non-executive                   
Simon Crutchley                      Gavin Tipper1                   
(Chief Executive Officer)            (Chairman)                   
                                                        
Owen Cressey                         James Hersov2                   
(Chief Financial Officer)                               
                                     Adriaan Nuhn1, 4                   
Michael Koursaris                                       
(Business Development Director)      Mike Bosman2                   
                                     
                                     Andisiwe Kawa1, 5
                                     
                                     Abe Thebyane1
                                     
                                     Neo Dongwana2, 3

1 Member of the Remuneration, Nomination and Appointments Committee
2 Member of the Audit and Risk Committee
3 Member of the Social and Ethics Committee
4 Dutch
5 Resigned 27 February 2018

Annexure
This annexure sets out the illustrative financial results for six months ended 31 December 2018 per the 
old basis of accounting, including adjustments to the reported results for the impact of new accounting 
standards implemented in the current year (refer to note 9), to allow for a like-for-like comparison to 
the results reported in prior periods. This illustrative financial information is the responsibility 
of the directors of AVI Limited and does not constitute financial statements fairly presented in 
accordance with IFRS. The financial statements fairly presented in accordance with IFRS are included 
on pages 6 to 18.

Condensed consolidated balance sheet (like-for-like)
                                                           Unaudited at                                 Audited    
                                                           31 December                               at 30 June    
                                                  2018*                            2018                             
                                            As reported   Adjustments**   Like-for-like       2017          2018    
                                                     Rm            Rm                Rm         Rm            Rm    
Assets                                                                                                              
Non-current assets                                                                                                  
Property, plant and equipment                   3 475,1             -           3 475,1    3 455,8       3 403,6    
Right-of-use assets                               370,1        (370,1)                -          -             -    
Intangible assets and goodwill                    916,8             -             916,8      993,3         926,2    
Investments                                       384,9             -             384,9      365,3         360,0    
Deferred taxation                                  31,1          (8,2)             22,9       17,2          24,3    
                                                5 178,0        (378,3)          4 799,7    4 831,6       4 714,1    
Current assets                                                                                                      
Inventories and biological assets               2 183,4             -           2 183,4    1 869,2       2 165,4    
Trade and other receivables                                                                         
including derivatives                           1 949,2         428,8           2 378,0    2 423,4       2 442,3    
Cash and cash equivalents                         335,3             -             335,3      334,2         342,8    
                                                4 467,9         428,8           4 896,7    4 626,8       4 950,5    
Total assets                                    9 645,9          50,5           9 696,4    9 458,4       9 664,6    
Equity and liabilities                                                                                              
Capital and reserves                                                                                                
Total equity                                    4 439,7          54,7           4 494,4    5 129,8       5 146,4    
Non-current liabilities                                                                                             
Cash-settled share-based payment liability         38,9             -              38,9          -          38,9    
Lease liabilities                                 300,1        (300,1)                -          -             -    
Operating lease straight-line liabilities             -          16,0              16,0       13,6          14,3    
Employee benefit liabilities                      389,4             -             389,4      386,6         382,3    
Deferred taxation                                 424,5          12,9             437,4      405,9         389,2    
                                                1 152,9        (271,2)            881,7      806,1         824,7    
Current liabilities                                                                                                 
Current borrowings including short-term                                                             
portion of lease liabilities                    2 547,2        (166,4)          2 380,8    1 542,9       1 612,6    
Trade and other payables                                                                            
including derivatives                           1 444,3         433,4           1 877,7    1 897,6       2 031,8    
Current tax liabilities                            61,8             -              61,8       82,0          49,1    
                                                4 053,3         267,0           4 320,3    3 522,5       3 693,5    
Total equity and liabilities                    9 645,9          50,5           9 696,4    9 458,4       9 664,6    
Movement in net debt                                                                                                
Opening balance                                 1 269,8             -           1 269,8    1 444,1       1 444,1    
IFRS 16 lease liability movements                 466,5        (466,5)                -          -             -    
Short-term funding raised/(repaid)                768,2             -             768,2     (147,9)        (78,2)    
Decrease/(increase) in cash                                                                         
and cash equivalents                                6,2             -               6,2      (91,2)        (95,3)    
Translation of cash equivalents of                                                                  
foreign subsidiaries                                1,3             -               1,3        3,7          (0,8)    
Net debt***                                     2 512,0        (466,5)          2 045,5    1 208,7       1 269,8    

*   These figures include the impact of changes in accounting policies following the implementation of new accounting 
    standards in the current year (refer to note 9).
**  Adjustments include the following:
    - reclassification of accruals and provisions for payments to customers from trade and other receivables to 
      trade and other payables in line with the disclosure applied prior to the implementation of IFRS 15;
    - reversal of the increase in impairment loss allowance recognised against trade receivables following the 
      implementation of IFRS 9;
    - reversal of IFRS 16 right-of-use assets and concomitant lease liabilities, and reinstatement of IAS 17 operating 
      lease straight-line liabilities; and
    - deferred tax adjustments relating to the above.
*** Comprises current borrowings plus long-term lease liabilities, less cash and cash equivalents.

This annexure sets out the illustrative financial results for six months ended 31 December 2018 per the old 
basis of accounting, including adjustments to the reported results for the impact of new accounting standards
implemented in the current year (refer to note 9), to allow for a like-for-like comparison to the results
reported in prior periods. Thi sillustrative financial information is the responsibility of the directors 
of AVI Limited and does not constitute financial statements fairly presented in accordance with IFRS. 
The financial statements fairly presented in accordance with IFRS are included on pages 6 to 18.

Condensed consolidated statement of comprehensive income (like-for-like)
                                                                       Unaudited                                           Audited    
                                                                   six months ended                                     year ended    
                                                                      31 December                                          30 June    
                                                      2018*                           2018           2017                     2018    
                                               As reported    Adjustments**  Like-for-like    As reported         %    As reported    
                                                        Rm             Rm               Rm             Rm    change             Rm    
Revenue                                            7 068,6          243,8          7 312,4        7 300,4       0,2       13 437,5    
Cost of sales                                     (4 103,6)          28,6         (4 075,0)      (4 018,4)      1,4       (7 498,0)    
Gross profit                                       2 965,0          272,4          3 237,4        3 282,0      (1,4)       5 939,5    
Selling and administrative expenses               (1 509,4)        (296,4)        (1 805,8)      (1 751,8)      3,1       (3 387,0)    
Operating profit before capital items              1 455,6          (24,0)         1 431,6        1 530,2      (6,4)       2 552,5    
Interest received                                      3,4              -              3,4            2,4      41,7            5,7    
Finance costs                                        (97,8)          20,6            (77,2)         (74,3)      4,0         (132,4)    
Share of equity-accounted                                                                                             
earnings of joint ventures                            37,1              -             37,1           25,4      46,1           56,3    
Capital items                                        (11,1)             -            (11,1)           3,4    (426,5)        (136,6)    
Profit before taxation                             1 387,2           (3,4)         1 383,8        1 487,1      (7,0)       2 345,5    
Taxation                                            (393,0)          (1,0)          (392,0)        (423,6)     (7,5)        (669,7)    
Profit for the period                                994,2           (2,4)           991,8        1 063,5      (6,7)       1 675,8    
Profit attributable to:                                                                                                               
Owners of AVI                                        994,2           (2,4)           991,8        1 063,5      (6,7)       1 675,8    
Other comprehensive (loss)/income, net of tax        (14,3)             -            (14,3)         (59,4)                    33,0    
Items that are or may be subsequently                                                                                 
reclassified to profit or loss                                                                                        
Foreign currency translation differences              (9,2)             -             (9,2)         (29,4)                     3,8    
Cash flow hedging reserve                             (7,1)             -             (7,1)         (41,7)                    29,0    
Taxation on items that are or may be                                                                                  
subsequently reclassified to profit or loss            2,0              -              2,0           11,7                     (8,1)    
Items that will never be reclassified                                                                                 
to profit or loss                                                                                                     
Actuarial gain recognised                                -              -                -              -                     11,5    
Taxation on items that will never be                                                                                  
reclassified to profit or loss                           -              -                -              -                     (3,2)    
Total comprehensive income for the period            979,9           (2,4)           977,5        1 004,1      (2,6)       1 708,8    
Total comprehensive income attributable to:                                                                                          
Owners of AVI                                        979,9           (2,4)           977,5        1 004,1      (2,6)       1 708,8    
Depreciation and amortisation of property,                                                                            
plant and equipment, right-of-use assets,                                                                             
fishing rights and trademarks included in                                                                             
operating profit                                     296,6          (81,8)           214,8          207,5       3,5          412,9    
Headline earnings                                  1 002,0           (2,4)           999,6        1 061,4      (5,8)       1 773,9    
Headline earnings per share (cents)#                 305,5           (0,7)           304,8          325,6      (6,4)         543,1    

*  These figures include the impact of changes in accounting policies following the implementation of new accounting 
   standards in the current year (refer to note 9).
** Adjustments include the following:
   - reclassification of payments to customers from revenue to selling and administrative expenses in line with the 
     disclosure applied prior to the implementation of IFRS 15;
   - reclassification of transport and insurance costs from cost of sales to revenue in line with the disclosure 
     applied prior to the implementation of IFRS 15;
   - reversal of IFRS 16 depreciation on right-of-use assets and finance costs on related lease liabilities, and 
     reinstatement of operating lease straight-line expenses per IAS 17; and
   - deferred tax adjustments relating to the above.
#  Headline earnings per share is calculated on a weighted average of 327 951 933 (31 December 2017: 325 996 202 
   and 30 June 2018: 326 624 426) ordinary shares in issue.

This annexure sets out the illustrative financial results for six months ended 31 December 2018 per the old basis 
of accounting, including adjustments to the reported results for the impact of new accounting standards implemented 
in the current year (refer to note 9), to allow for a like-for-like comparison to the results reported in prior 
periods. This illustrative financial information is the responsibility of the directors of AVI Limited and 
does not constitute financial statements fairly presented in accordance with IFRS. The financial statements 
fairly presented in accordance with IFRS are included on pages 6 to 18.

Condensed consolidated statement of cash flows (like-for-like)
                                                                       Unaudited                                           Audited
                                                                   six months ended                                     year ended
                                                                      31 December                                          30 June  
                                                      2018*                           2018           2017                     2018  
                                               As reported    Adjustments**  Like-for-like    As reported         %    As reported  
                                                        Rm             Rm               Rm             Rm    change             Rm
Operating activities
Cash generated by operations                       1 677,6         (103,9)         1 573,7        1 560,3       0,9        2 691,9  
Interest paid                                        (97,8)          20,6            (77,2)         (74,3)      3,9         (132,4)  

Taxation paid                                       (344,5)             -           (344,5)        (330,0)      4,4         (620,9)  
Net cash available from operating activities       1 235,3          (83,3)         1 152,0        1 156,0      (0,3)       1 938,6    
Investing activities                                                                                                                    
Interest received                                      3,4              -              3,4            2,4      41,7            5,7    
Property, plant and equipment acquired              (290,4)             -           (290,4)        (193,2)     50,3         (419,9)    
Additions to intangible assets                        (3,3)             -             (3,3)             -                    (14,6)    
Proceeds from disposals of property,                                                                        
plant and equipment                                   10,6              -             10,6            3,0     253,3           14,8    
Contributions to Enterprise and                                                                             
Supplier Development initiatives                         -              -                -              -                     (8,6)    
Movement in joint ventures and other investments      10,9              -             10,9           19,1     (42,9)          83,9    
Net cash used in investing activities               (268,8)             -           (268,8)        (168,7)     59,3         (338,7)    

Financing activities                                                                                                                     
Proceeds from shareholder funding                     21,2              -             21,2           47,2     (55,1)          59,9    
Short-term funding raised/(repaid)                   768,2              -            768,2         (147,9)   (619,4)         (78,2)    
Lease liabilities repaid                             (83,3)          83,3                -              -                        -    
Payment to I&J BBBEE shareholders                        -              -                -              -                    (65,0)    
Ordinary dividends paid                             (855,9)             -           (855,9)        (795,4)      7,6       (1 421,3)    
Special dividend paid                               (822,9)             -           (822,9)             -                        -    
Net cash used in financing activities               (972,7)          83,3           (889,4)        (896,1)     (0,7)      (1 504,6)    

Decrease/(increase) in cash and cash equivalents      (6,2)             -             (6,2)          91,2    (106,8)          95,3    
Cash and cash equivalents at beginning of period     342,8              -            342,8          246,7      39,0          246,7    
                                                     336,6              -            336,6          337,9      (0,4)         342,0    
Translation of cash equivalents of                                                                          
foreign subsidiaries                                  (1,3)             -             (1,3)          (3,7)    (64,9)           0,8    
Cash and cash equivalents at end of period           335,3              -            335,3          334,2       0,3          342,8    

*  These figures include the impact of changes in accounting policies following the implementation of new accounting 
   standards in the current year (refer to note 9).
** Adjustments include the following:
   - reclassification of cash flows relating to lease payments from lease liabilities repaid and interest paid 
     (disclosure required by IFRS 16) to cash generated by operations as previously disclosed under IAS 17.

For more information, please visit our website: http://www.avi.co.za

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