HIGHLIGHTS

SUMMARY

To meet the many requirements of regulatory authorities, annual reports have become lengthy, complex and very technical. To provide a convenient overview of the 2004 annual report of Trencor, this insert contains highlights from that report. It is not in substitution of the report, nor does it form part thereof. For a full appreciation of the company’s activities and results, you are advised to read the annual report.

HIGHLIGHTS 

GROUP

• Trading profit, after net interest, increased by 34% from US$35 million in 2003 to US$47 million. In rand terms, despite the strengthening of the currency, it increased by 12% to R305 million (2003: R273 million).
  
• Valuation adjustment against the long-term receivables has been reduced by a net R155 million in recognition of the favourable conditions currently being experienced in the container leasing industry and the improved outlook for the collectability and timing of receipts from the long-term receivables.
  
• Once-off financial effect of the settlement of the dispute with the South African Revenue Service (‘SARS’) over the tax treatment of our export partners has been brought to account.
  
• Stronger rand again resulted in unrealised losses on translation of net receivables of R232 million (2003: R519 million).
  
• Discount rate applied to rand amounts attributable to third parties in respect of long-term receivables reduced from 12% p.a. to 10% p.a. which had an adverse effect of R42 million on pre-tax profit.
  
• Headline earnings per share, after taking account of the above, were 20,1 US cents (2003: 5,6 US cents). Expressed in rand, headline earnings per share were 61,8 cents per share (2003: 108,2 cents loss).
  
• Dividend declared: 12 SA cents per share payable on 11 April 2005.
  

TEXTAINER

• Headline earnings increased by 57% to US$46 million. This follows an 81% increase in 2003.
  
• Average fleet utilisation in 2004 was 93%; utilisation at 31 December 2004, excluding new production in manufacturers’ yards, was 97%.
  
• 150 000 TEU (20-foot equivalent unit) of new containers added to the fleet in 2004.
  
• Textainer purchased 79 000 units owned by Xtra International and which were being managed by Textainer, for US$85 million.
  
• 67% of the total managed fleet of 1,14 million TEU is on long-term lease.
  
• Almost 70% of the 484 000 TEU owned by Textainer itself is on long-term lease.
  

TRENSTAR

• Acquired the beer keg fleet of Coors UK in June 2004, increasing the number of kegs owned and managed in the UK by TrenStar to 4,1 million.
  
• Despite revenue increasing by 28% to US$51 million in 2004, delays in closing certain significant contracts adversely affected attainment of profitability.
  

FORECAST

• Increase in US-dollar earnings for 2005.
  
• In rand terms, earnings will depend on the US$/R exchange rate during the year and the translation of long-term receivables into rand at 31 December 2005.

ABRIDGED GROUP CHART

Trencor 73%		Textainer	Holding company listed on the JSE Securities Exchange South Africa Container owning, leasing and management
100%		Trencor Services	Corporate administration and financing
100%		Trencor Containers	Collection of long-term receivables
44%		TAC	Container owning
54% 100%		TrenStar TrenStar SA	The TrenStar group provides customers with returnable packaging equipment and other mobile assets in the supply chain and elsewhere, applying tracking technology and software systems

CONDENSED FINANCIAL STATEMENTS

As virtually all of the group’s revenue and assets and much of its expenditure are denominated in currencies other than rand (principally US dollars), condensed income statements and balance sheets are also presented in US dollars in order to provide a fuller appreciation of the group’s results and financial position. The rand values have been extracted from the audited financial statements. The dollar statements have not been audited.

INCOME STATEMENTS  

FOR THE YEAR ENDED 31 DECEMBER 2004
		R MILLION				US$ MILLION
		2004		2003		2004		2003
	TRADING PROFIT FROM CONTINUING OPERATIONS BEFORE ITEMS LISTED BELOW	554		517		86		68
	EXCHANGE TRANSLATION LOSSES (NET)	(373)		(771)		(12)		(15)
	CHANGE IN DISCOUNT RATE RELATING TO AMOUNT ATTRIBUTABLE TO THIRD PARTIES IN RESPECT OF LONG-TERM RECEIVABLES	(42)		–		(6)		–
	NET LONG-TERM RECEIVABLE VALUATION ADJUSTMENT	317		335		25		(1)
	OTHER	2		(16)		1		–
	PROFIT FROM OPERATING ACTIVITIES	458		65		94		52
	NET INTEREST EXPENSE	(249)		(244)		(39)		(33)
	ASSOCIATES AND EXCEPTIONAL ITEMS	(36)		78		(5)		10
	PROFIT/(LOSS) BEFORE TAXATION	173		(101)		50		29
	PROFIT AFTER TAXATION	171		14		44		32
	NET PROFIT/(LOSS) FOR THE YEAR	59		(99)		26		17
	BASIC EARNINGS/(LOSS) PER SHARE (CENTS)	38,4		(64,3)		17,0		10,8
	UNDILUTED HEADLINE EARNINGS/(LOSS) PER SHARE (CENTS)	61,8		(108,2)		20,1		5,6
	YEAR-END RATE OF EXCHANGE: SA RAND TO US DOLLAR	5,61		6,62		5,61		6,62

BALANCE SHEETS 

AS AT 31 DECEMBER 2004
			R MILLION				US$ MILLION
			2004		2003		2004		2003
	ASSETS
	PROPERTY, PLANT, EQUIPMENT AND INVESTMENT PROPERTIES		5 596		4 789		997		723
	LONG-TERM RECEIVABLES		1 251		1 446		223		219
	OTHER NON-CURRENT ASSETS		353		396		63		60
	CURRENT ASSETS		996		850		178		128
	TOTAL ASSETS		8 196		7 481		1 461		1 130
	EQUITY AND LIABILITIES
	TOTAL SHAREHOLDERS’ FUNDS		2 034		2 028		363		306
	CONVERTIBLE DEBENTURES		261		261		46		40
	INTEREST-BEARING BORROWINGS		3 947		3 549		704		536
	OTHER NON-CURRENT LIABILITIES		668		744		119		112
	CURRENT LIABILITIES		1 286		899		229		136
	TOTAL EQUITY AND LIABILITIES		8 196		7 481		1 461		1 130
	EQUITY BOOK VALUE PER SHARE (CENTS)		962		980		171		148
	RATIO TO AGGREGATE OF TOTAL SHAREHOLDERS’ FUNDS AND CONVERTIBLE DEBENTURES:
	INTEREST-BEARING DEBT EXCLUDING CONVERTIBLE DEBENTURES
		WITH TEXTAINER AND BLI CONSOLIDATED	187%		174%		187%		174%
		WITH TEXTAINER AND BLI NOTIONALLY EQUITY ACCOUNTED	17%		24%		17%		24%

NET PROFIT/(LOSS) ATTRIBUTABLE TO THE VARIOUS CLASSES OF BUSINESS OF THE GROUP

FOR THE YEAR ENDED 31 DECEMBER 2004
			R MILLION
			2004		2003
	CONTAINER OPERATIONS
		SALES AND FINANCE	25		57
		TEXTAINER	215		161
		EXCHANGE TRANSLATION LOSSES	(162)		(598)
		NET LONG-TERM RECEIVABLE VALUATION ADJUSTMENT	79		234
	TRENSTAR		(61)		(70)
	INTEREST AND OTHER		1		46
	EXCEPTIONAL ITEMS		(38)		71
			59		(99)

GENERAL

SETTLEMENT OF INCOME TAX QUERIES

As reported on 22 December 2004, Trencor and SARS concluded an agreement that disposed of the income tax queries raised by SARS on some of the group’s export partners relating to the tax treatment of their participation in the container export trade through export partnerships. The agreement did not involve any admission by either SARS or Trencor and its partners as to the correctness of the other parties’ contentions.

In terms of the agreement, the tax treatment of the export partners up to and including their 2004 tax years will be as contended for by Trencor and its export partners. At the end of each of their respective first tax years ending on or after 1 January 2005, the export partners collectively will, in effect, accelerate payment of approximately R305 million in aggregate to SARS, being a portion of the taxes which Trencor and its partners had contended should be paid over the following four to five years. Beyond the four to five year period, the tax treatment of the partners will continue on the basis contended for by Trencor and its export partners. It should be noted that of the amount of R305 million to be paid in 2005, approximately R68 million would have been paid in that year in any event.

ANALYSIS OF SHAREHOLDERS AT 31 DECEMBER 2004

		NUMBER	%
		OF HOLDERS	HOLDING
	MOBILE INDUSTRIES LTD	1	47
	INVESTMENT AND INSURANCE COMPANIES	142	37
	RETIREMENT FUNDS	83	11
	INDIVIDUALS	714	3
	OTHER	215	2
	TOTAL	1 155	100

SHARE INFORMATION
Share code: TRE ISIN: ZAE000007506
FTSE/JSE sector classification: Cyclical services, transport – shipping & ports

	PRICE (CENTS)	2004	2003	2002
	HIGH	1 500	1 150	1 200
	LOW	974	700	540

ANNUAL GENERAL MEETING
The annual general meeting of the company will be held on Wednesday, 25 May 2005 at 15:00 at 1313 Main Tower, Standard Bank Centre, Heerengracht, Cape Town.

DIRECTORS
EXECUTIVE: N I JOWELL ^{1 3} (CHAIRMAN) H R VAN DER MERWE ¹ (MANAGING) 
J E McQUEEN ¹ 
NON-EXECUTIVE: C JOWELL ^{1 4} 
INDEPENDENT NON-EXECUTIVE: H A GORVY ^{2 4} J E HOELTER ² (USA) 
D M NUREK ^{2 3 4} E OBLOWITZ ²

1 EXECUTIVE COMMITTEE 2 AUDIT COMMITTEE 3 REMUNERATION COMMITTEE  4 NOMINATION COMMITTEE

ON BEHALF OF THE BOARD
N I JOWELL           CHAIRMAN
J E McQUEEN         FINANCIAL DIRECTOR 

24 MARCH 2005