63 INTEGRATED ANNUAL REPORT 2024 strategic value to NCT and to contribute to the profits of the Group. Even with the challenges faced during the 2024 financial year, NCT has achieved acceptable results with a profit before tax of R80.3 million for the Group and R75.6 million for the Co-operative. Operating expenses reflect the cost of running operations without trading at Richards Bay for the latter half of the year, as we incurred continuing fixed costs despite lack of production. Interest on investments of R39 million, an increase of 60% over the prior year, is indicative of another benefit of holding cash reserves. No insurance proceeds have been included in the 2024 results in respect of the fire as the claim was not approved at the end of the financial year and proceeds were not certain. Instead, we have reflected these as a contingent asset as inflows are probable, but timing and quantum are uncertain. These will be included in the new financial year as they are received. Our financial position as at the end of the 2024 financial year is still strong with the Group and Co-operative having liquidity ratios of 3:1 and 2:1 respectively. Property, plant and equipment is showing a small growth which will surprise many members. Although damage to the plant from the fire at the two Richards Bay mills was substantial, additions earlier in the year at the mills and at other operations as well as the initial costs of rebuild are more than the disposals. Biological assets have increased in value due to reduced harvesting while MDPs have remained constant. Current assets have generally decreased across the Group with chips stocks significantly reduced against higher depot stocks and reducing cash balances as we began to utilise reserves to assist members and rebuild after the fire. Reductions in trade receivables as well as trade payables reflect the impact of the fire with less customer receivables due and lower timber payments outstanding to suppliers. As we begin to rebuild our mills in Richards Bay, we will also need to start building up cash reserves again. Both the disaster of the fire as well as the numerous smaller incidents we have experienced during the year and in the few months after year-end have shown us the tremendous value of having cash on hand to be able to keep operations going and to assist members. Once again, our challenge in the new year will be managing the uncontrollable which the NCT team has proven its ability to do over the past year. As we begin the new financial year with different and stranger challenges, NCT will continue to work towards the best possible balance of member-centric and business-centric operations. KERRY MOFFETT | CHIEF FINANCIAL OFFICER
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