| Tue 12 Feb 2008, 17:05 | | NHM - Northam Platinum - Reviewed Interim Results And Dividend Declaration |
|
NHM
NHM
NHM - Northam Platinum - Reviewed Interim Results And Dividend Declaration
for the six months ended 31 December 2007
NORTHAM PLATINUM LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1977/003282/06)
JSE code: NHM
ISIN code: ZAE000030912
("Northam Platinum" or "the company")
REVIEWED INTERIM RESULTS AND DIVIDEND DECLARATION
for the six months ended 31 December 2007
KEY FEATURES
- Buoyant PGM market conditions continue
- Booysendal transaction on track
- Interim dividend of 145 cents per share declared
Consolidated Income Statement
Reviewed Unaudited Audited
Six months Six months Year
ended ended ended
31 December 31 December 30 June
Change 2007 2006* 2007
% R000 R000 R000
Sales revenue (17.1) 1 497 084 1 806 674 3 739 805
Cost of sales (13.7) 708 090 820 745 1 727 945
Operating costs 14.8 797 819 695 054 1 360 818
Concentrates - 66 364 106 447
purchased
Refining and 35 085 41 650 91 816
other costs
Depreciation 71 999 63 684 129 040
Change in metal (196 813) (46 007) 39 824
inventories
Operating profit (20.0) 788 994 985 929 2 011 860
Investment income 40 868 35 545 83 643
Net sundry income (6 839) 3 142 5 303
Profit before tax (19.7) 823 023 1 024 616 2 100 806
Tax 350 432 362 612 774 562
Profit (28.6) 472 591 662 004 1 326 244
attributable to
shareholders
Reconciliation of
headline earnings
Profit 472 591 662 004 1 326 244
attributable to
shareholders
Loss/(profit) on 97 292 (388)
sale of property,
plant and
equipment
Tax effect (28) (85) 113
472 660 662 211 1 325 969
Earnings per (29.0) 199.0 280.1 560.2
share - cents
Fully diluted (28.5) 197.8 276.7 553.1
earnings per
share - cents
Headline earnings (29.0) 199.0 280.2 560.1
per share - cents
Fully diluted (28.5) 197.8 276.8 553.0
headline earnings
per share - cents
Dividends per 145.0 245.0 525.0
share - cents
Weighted average 237 529 261 236 363 204 236 746 919
number of shares
in issue
Fully diluted 238 961 044 239 234 842 239 771 782
number of shares
in issue
Number of shares 238 146 000 237 001 000 237 226 000
in issue
Consolidated Cash Flow Statement
Cash flow from operations 231 553 731 769 1 555 025
Profit before tax 823 023 1 024 616 2 100 806
Depreciation 71 999 63 684 129 040
Change in working capital (104 029) (88 984) (98 506)
Tax paid (570 444) (273 431) (584 301)
Other 11 004 5 884 7 986
Cash utilised in investing (100 615) (85 250) (211 636)
activities
Property, plant and equipment
Additions to maintain (100 153) (82 965) (187 562)
operations
Disposals 1 243 1 742 4 522
Township development (1 705) (4 027) (28 596)
Cash utilised in financing (655 980) (383 655) (964 763)
activities
Proceeds from issue of shares 12 283 10 031 12 128
Dividends paid (664 233) (389 486) (970 332)
Increase in investments
held by
Northam Platinum (991) (685) (2 527)
Restoration Trust Fund
Increase in investments
held by
Environmental Contingency (3 039) (3 515) (4 032)
Fund
Net increase in cash and cash (525 042) 262 864 378 626
equivalents
Cash and cash equivalents at 1 209 912 831 286 831 286
beginning of period
Cash and cash equivalents at 684 870 1 094 150 1 209 912
end of period
* Financial figures restated
Consolidated Statement of Changes in Equity
Equity at beginning of period 2 381 446 2 001 632 2 001 632
Net profit attributable to 472 591 662 004 1 326 244
shareholders
Credit in respect of share 9 082 4 458 11 774
based payments
Issue of new shares 12 283 10 031 12 128
Dividends distributed (664 233) (389 486) (970 332)
Equity at end of period 2 211 169 2 288 639 2 381 446
Capital Commitments
Authorised but not contracted 90 199 111 846 179 380
Contracted 85 127 19 403 25 712
175 326 131 249 205 092
Other Commitments
Information Technology Outsource Service
Provider
Due in one year 4 549 8 251 8 851
Due in two to five years - 6 745 1 868
Operating lease rentals - office equipment
Due in one year 172 183 114
Due in two to five years 192 82 31
Operating lease rentals - premises
Due in one year 512 161 99
Due in two to five years 1 417 - -
Housing development 407 423 1 913
Consolidated Balance Sheet
Reviewed Unaudited Audited
Six months Six months Year
ended ended ended
31 December 31 December 30 June
2007 2006* 2007
R000 R000 R000
Non-current assets
Property, plant and 1 563 103 1 499 148 1 536 289
equipment
Available for sale 6 6 6
investments
Township development 36 903 10 629 35 198
Investments held by
Northam Platinum
Restoration Trust Fund 19 911 17 078 18 920
Environmental 13 350 9 794 10 311
Guarantee Investment
Current assets 1 324 248 1 645 900 1 733 264
Inventories 457 486 339 795 254 490
Accounts receivable 181 892 211 955 268 862
Cash and cash equivalents 684 870 1 094 150 1 209 912
Total assets 2 957 521 3 182 555 3 333 988
Share capital 2 043 197 2 028 817 2 030 914
Equity compensation reserve 38 859 27 246 29 777
Retained earnings 129 113 232 576 320 755
Shareholders` equity 2 211 169 2 288 639 2 381 446
Non-current liabilities
Deferred tax 385 091 362 154 376 163
Long-term provisions 23 574 26 283 21 749
Current liabilities 337 687 505 479 554 630
Accounts payable 223 436 249 359 211 439
Tax 114 251 256 120 343 191
Total equity and liabilities 2 957 521 3 182 555 3 333 988
Operating Statistics
Reviewed Unaudited Audited
Six Six months
months Year
ended ended ended
31 December 31 December 30
June
Change 2007 2006* 2007
% R000 R000 R000
Merensky
Development metres (26.1) 5 112 6 919 11 555
Square metres mined (24.3) 103 920 137 368 249 812
Tonnes milled (27.5) 544 981 752 215 1 341 057
Head grade (0.9) 5.6 5.6 5.6
(g/ton - 3 PGEs + Au)
Available ore reserves 5.6 19 18 15
- months
UG2
Development metres 2.3 1 314 1 285 3 267
Square metres mined (4.5) 74 644 78 152 146 698
Tonnes milled (4.0) 479 261 499 397 928 149
Head grade 1.4 4.4 4.3 4.4
(g/ton - 3 PGEs + Au)
Available ore reserves 24 23 24
- months
Combined
Development metres (21.7) 6 426 8 204 14 822
Square metres mined (17.1) 178 564 215 520 396 510
Tonnes milled (18.2) 1 024 242 1 251 612 2 269 206
Head grade (2.2) 5.0 5.1 5.1
(g/ton - 3 PGEs + Au)
Financial Statistics
Precious metals in kg (16.5) 4 689 5 618 10 087
concentrates produced*
Precious metals in kg - 263 404
concentrates purchased*
Precious metals sold * kg (23.5) 4 173 5 455 10 703
Average price realised * R/kg 11.8 311 369 278 505 297 292
Operating costs * R/kg 37.4 185 510 135 053 147 705
Cash costs * R/kg 36.8 167 828 122 722 134 081
Precious metals in oz (16.5) 150 755 180 623 324 296
concentrates produced *
Precious metals in oz - 8 456 12 989
concentrates purchased *
Precious metals sold * oz (23.5) 134 165 175 382 344 101
Average price realised * US$/oz 16.3 1 396 1 200 1 288
Operating costs * US$/oz 43.4 832 580 638
Cash costs * US$/oz 42.7 752 527 579
Average exchange rate US$1.00 (3.9) 6.94 7.22 7.18
realised = R
* - 3PGE + Au
Operating costs per tonne R/tonne 40.1 849 606 656
milled
Cash costs per tonne R/tonne 39.4 768 551 596
milled
COMMENT ON RESULTS
Safety
The mine achieved one million fatality-free shifts on 25 July 2007. This
achievement was, however, subsequently marred by the death of three employees in
three separate mining related accidents. The board extends its sincere
condolences to the families of the deceased. This was followed by the closure of
the mine while the management, in co-operation with the DME, embarked on a
remedial safety training programme with all employees. As a result 23 days of
production were lost.
A sustained focus on mine safety and safety related issues in order to provide a
safe working environment for all employees remains a key management objective.
Operating performance
The combination of safety related mine closures together with the difficult
mining conditions, as anticipated, on the Merensky pothole facies resulted in
Merensky tonnage mined declining by 24.3%. However, with greater emphasis placed
on increasing the UG2 production, the decline in the combined tonnage mined was
limited to 17.1%. Consequently total tonnage milled was 18.2% lower and the
average head grade declined by some 2.2% to 5.0 g/t (3PGE+Au).
As a result of the lower tonnage and grade, production of metal in concentrates
(3PGE + Au) at 4 689 kg (150 755 oz) was 16.5% lower than the production of 5
618 kg (180 623 oz) during the period ended 31 December 2006.
Ore reserve position
Despite a decrease of 21.7% in total development metres, Merensky ore reserves
increased from 18 months to 19 months. The UG2 ore reserve remained satisfactory
at 24 months. In the second half of the financial year, greater emphasis will be
placed on the deepening project with the objective of improving the Merensky ore
reserve position.
Financial results
The increase of 16.3% in the average US Dollar basket price received to US$1 396
per ounce, was offset by a strengthening Rand, which resulted in the average
Rand basket price received increasing by 11.8% to R311 369 per kg. The decrease
in production of metals in concentrates, together with an increase in metal
inventories, resulted in unit sales declining by 23.5% to 4 173 kg (134 165 oz).
As a consequence of the above, sales revenue decreased by 17.1% to R1 497
million.
Investment income increased by 15% owing to higher interest rates. Costs
associated with the Booysendal transaction and project amounted to R5.7 million,
which, together with currency translation losses of R8.1 million contributed to
the net sundry expenditure of R6.8 million compared to net sundry income of R3.1
million reported for the six months ended 31 December 2006.
The profit attributable to shareholders decreased by 28.6% to R473 million
compared with that for the six months ended 31 December 2006.
Costs
Total operating costs increased by 14.8% from R695 million to R798 million,
reflecting general inflationary cost increases, which together with the decrease
in production of metals in concentrates, resulted in unit cash costs increasing
by 36.8% to R167 828 per kg compared to that for the six months ended 31
December 2006.
Cost of sales decreased by 13.7%, primarily as a result of the increase in
operating costs being offset by the increase in metal inventories (R197 million)
and the absence of any costs associated with concentrate purchases in the period
under review.
Hedging
No hedging activities occurred during the period.
Capital expenditure
Development expenditure (R11 million), infrastructure to access 1 level (R12
million) and the conveyor decline deepening project (R23 million) were the major
contributors to the capital expenditure of R100 million, with routine capital
expenditure comprising the balance.
Prospects
Provided that Eskom can supply the company with not less than 90% of its normal
average power consumption, production and sales of metal in the second half of
the year should correspond to those in the first half.
On this basis earnings will be determined largely by the average Rand basket
price received in the second half, currently at significantly higher levels than
the R311 369 per kilogram received in the first half of the 2008 financial year.
Expansion prospects
Booysendal
Shareholders are referred to the announcement dated 31 January 2008, and are
advised that the circular should be posted towards the end of March 2008. At the
time a further announcement confirming the posting of the circular will be made.
Pandora
Upon the successful conclusion of the Booysendal transaction, ownership of the
7.5% interest in the Pandora Joint Venture, currently warehoused by Mvelaphanda
Resources Limited, will be re-assigned at cost to Northam.
Audit review opinion
Ernst & Young Inc., the group`s auditors, have reviewed the financial results. A
copy of their unqualified report is available for inspection at the company`s
registered office.
Accounting policies - basis of preparation
The financial statements have been prepared on the historical cost basis, except
for financial instruments that are fairly valued, in accordance with IAS 34 -
Interim Reporting, issued by the International Accounting Standards Board and
incorporate the accounting policies which are consistent with those adopted in
the financial year ended 30 June 2007, with the exception of the adoption of the
following policies in response to changes in International Financial Reporting
Standards (IFRS):
- IFRS 4 - Insurance contracts
- IFRS 7 - Financial instruments - disclosure
- IAS 1 - Presentation of financial statements
- IFRIC 11 - scope of IFRS 2 - Share based payments.
While the adoption of these amendments, standards and interpretations has had no
impact on the interim financial results, they result in additional disclosures
in the financial statements.
Related parties
The group, in the ordinary course of business, enters into various sale,
purchase and lease transactions with a large number of entities, some of whom
are related parties. All transactions were concluded on an arm`s length basis.
Segmental reporting
The group`s primary segment reporting format is by business segment. During the
reporting period the group derived its sales revenue from customers in Europe,
Japan, North America and South Africa, with accounts receivable at the end of
the reporting period comprising amounts receivable from entities in the
abovementioned countries.
Dividend
Dividend number 18 of 145 cents per share has been declared in South African
currency, in respect of the six months ended 31 December 2007.
The dividend will be paid on Monday, 10 March 2008 to shareholders recorded in
the books of the company at the close of business on Friday, 7 March 2008 (the
record date). The last day to trade cum dividend is Friday, 29 February 2008.
The shares will commence trading ex dividend on Monday, 3 March 2008 and the
record date is Friday, 7 March 2008.
No share certificates may be de-materialised or re-materialised between Monday,
3 March 2008 and Friday, 7 March 2008, both days inclusive.
On behalf of the Board
P L Zim G T Lewis
Chairman Chief Executive Officer
Johannesburg
12 February 2008
Registered Office
1st Floor, Block 1A PO Box 412694
Albury Park Craighall
Magalieszicht Avenue 2024
Dunkeld West Republic of South Africa
Johannesburg
Directors:
P L Zim (Chairman), G T Lewis (Chief Executive Officer) (British), M E Beckett
(British), Ms N J Dlamini (Dr), R Havenstein, Ms E T Kgosi, N B Mbazima
(Zambian), P C Pienaar, B R van Rooyen
Company Secretary:
S J van der Spuy
These results are available on our website at www.northam.co.za
Date: 12/02/2008 17:05:01 Produced by the JSE SENS Department.
The SENS service is an information dissemination service administered by the
JSE Limited (`JSE`). The JSE does not, whether expressly, tacitly or
implicitly, represent, warrant or in any way guarantee the truth, accuracy or
completeness of the information published on SENS. The JSE, their officers,
employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature,
howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
