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LON
LOLMI
LON - Lonmin Plc - Final Results Part 2
Lonmin Plc
(Incorporated in England and Wales)
(Registered in the Republic of South Africa under registration number
1969/000015/10)
JSE code: LON
Issuer Code: LOLMI & ISIN: GB0031192486 ("Lonmin")
Lonmin Plc - Final Results Part 2
Operating Statistics - 5 Year Review
Units 2008 2007 20061 2005 2004
Tonnes
mined
Marikana Underground 000 10,226 11,211 11,484 10,921 11,053
Opencast 000 1,300 1,597 1,583 2,653 2,730
Limpopo Underground 000 523 757 857 212 n/a
Opencast 000 - - 14 - n/a
Pandora Underground 000 124 128 100 54 7
attribut
able2
Opencast 000 275 286 176 - -
Lonmin Underground 000 10,875 12,096 12,441 11,187 11,060
Platinum
Opencast 000 1,575 1,883 1,772 2,653 2,730
Total 000 12,449 13,979 14,213 13,840 13,790
% tonnes % 73.1 72.0 71.2 74.3 82.4
mined
from UG2
reef
Tonnes
milled3
Marikana Underground 000 10,206 11,216 11,502 10,975 11,103
Opencast 000 1,163 1,469 1,854 2,444 3,283
Limpopo Underground 000 534 781 887 214 n/a
Opencast 000 - - 14 - n/a
Pandora4 Underground 000 293 301 236 127 18
Opencast 000 595 649 394 - -
Ore Underground 000 - 75 14 - -
Purchase
s5
Opencast 000 30 20 18 - -
Lonmin Underground 000 11,033 12,373 12,639 11,316 11,121
Platinum
Opencast 000 1,788 2,138 2,280 2,444 3,283
Total 000 12,821 14,511 14,919 13,760 14,404
Milled
head
grade
Marikana Underground g/t 4.71 4.98 5.00 4.98 5.00
Opencast g/t 3.06 4.11 4.25 4.88 4.86
Limpopo Underground g/t 3.47 3.50 4.09 3.84 n/a
Opencast g/t - - 3.29 n/a n/a
Pandora Underground g/t 5.11 4.88 5.05 4.54 4.89
Opencast g/t 5.04 5.33 4.92 n/a n/a
Ore Underground g/t - 3.92 3.92 n/a n/a
Purchase
s
Opencast g/t 2.90 5.16 4.14 n/a n/a
Lonmin Underground g/t 4.66 4.88 4.94 4.95 5.00
Platinum
Opencast g/t 3.70 4.39 4.36 4.88 4.86
Total g/t 4.52 4.80 4.85 4.94 4.97
Metals
in
concentr
ate
Lonmin Platinum oz 732,12 869,83 964,95 908,97 n/c
Platinum 5 2 8 2
Palladium oz 342,08 404,53 447,89 397,54 n/c
1 5 4 6
Gold oz 18,932 25,030 31,973 22,269 n/c
Rhodium oz 99,173 114,60 125,37 115,43 n/c
1 9 6
Ruthenium oz 152,77 182,32 198,49 187,96 n/c
2 6 1 7
Iridium oz 31,562 41,157 41,284 38,465 n/c
Total PGMs oz 1,376, 1,637, 1,809, 1,670, n/c
645 481 979 655
Nickel6 mt 3,549 4,636 5,120 4,042 n/c
Copper6 mt 2,216 2,814 3,104 2,498 n/c
Units 2008 2007 20061 2005 2004
Metallurg
ical
productio
n
Lonmin
refined
metal
productio
n
Platinum oz 699,942 695,842 799,070 796,082 771,913
Palladium oz 330,209 318,758 369,859 348,681 334,371
Gold oz 20,257 20,485 20,955 17,059 13,828
Rhodium oz 91,063 88,469 115,453 87,632 79,877
Ruthenium oz 158,424 135,873 174,639 172,610 144,004
Iridium oz 31,599 30,430 40,836 25,110 27,204
Total oz 1,331,493 1,289,857 1,520,8 1,447,17 1,371,1
PGMs 12 4 97
Toll
refined
metal
productio
n
Platinum oz - 93,609 - 46,354 61,909
Palladium oz - 43,274 - 21,115 24,334
Gold oz - - - 731 411
Rhodium oz - 12,966 - 7,133 10,135
Ruthenium oz - 20,439 - 11,524 20,436
Iridium oz - 4,090 - 2,263 3,338
Total oz - 174,378 - 89,120 120,563
PGMs
Total
refined
PGMs
Platinum oz 699,942 789,451 799,070 842,436 833,822
Palladium oz 330,209 362,032 369,859 369,796 358,705
Gold oz 20,257 20,485 20,955 17,790 14,239
Rhodium oz 91,063 101,435 115,453 94,765 90,012
Ruthenium oz 158,424 156,312 174,639 184,134 164,440
Iridium oz 31,599 34,520 40,836 27,373 30,542
Total oz 1,331,493 1,464,235 1,520,8 1,536,29 1,491,7
PGMs 12 4 60
Base
metals
Nickel7 mt 3,483 4,522 4,342 4,187 3,098
Copper7 mt 2,009 2,466 2,452 2,547 1,965
Capital Rm 2,816 1,923 1,207 1,180 1,230
expenditu
re8
$m 378 276 182 190 187
Unit 2008 2007 20061 2005 2004
s
Sales
Refined
metal
sales
Platinum oz 706,492 786,552 803,47 838,859 858,211
1
Palladium oz 329,460 362,077 373,30 364,080 366,988
3
Gold oz 20,151 24,449 22,133 18,122 18,498
Rhodium oz 93,337 102,916 116,28 93,453 103,641
1
Ruthenium oz 158,477 162,853 179,55 183,372 192,635
7
Iridium oz 32,140 37,858 38,092 26,676 36,390
Total PGMs oz 1,340,05 1,476,705 1,532, 1,524,56 1,576,363
7 837 2
Concentrat
e and
other9
Platinum oz 20,425 7,032 136,18 71,396 80,032
3
Palladium oz 11,888 3,232 61,110 37,003 36,999
Gold oz 117 201 4,641 2,362 2,887
Rhodium oz 889 1,008 15,965 21,552 20,312
Ruthenium oz 26,205 1,942 26,137 20,517 25,814
Iridium oz 1,789 64 5,291 2,548 4,163
Total PGMs oz 61,313 13,479 249,32 155,377 170,207
7
Lonmin
Platinum
Platinum oz 726,918 793,584 939,65 910,255 938,243
4
Palladium oz 341,348 365,309 434,41 401,083 403,987
3
Gold oz 20,268 24,650 26,774 20,484 21,385
Rhodium oz 94,227 103,924 132,24 115,005 123,953
6
Ruthenium oz 184,682 164,795 205,69 203,889 218,449
4
Iridium oz 33,929 37,922 43,384 29,224 40,553
Total PGMs oz 1,401,37 1,490,184 1,782, 1,679,93 1,746,570
1 164 9
Nickel mt 3,338 5,308 4,604 3,892 4,017
Copper mt 1,978 2,474 2,974 2,481 2,070
Average Prices
Platinum $/oz 1,655 1,213 1,091 852 818
Palladium $/oz 372 339 300 185 228
Gold $/oz 867 647 571 425 402
Rhodium $/oz 7,614 5,757 3,971 1,684 762
Ruthenium $/oz 340 404 134 66 46
Iridium $/oz 414 402 233 153 132
Basket $/oz 1,529 1,196 972 668 590
price of
PGMs
Nickel $/MT 22,556 26,461 17,975 12,527 11,444
Copper $/MT 7,212 6,971 7,882 3,168 2,261
Units 2008 2007 20061 2005 2004
Cost per PGM ounce
sold
Group:
Mining - Marikana R/oz 3,380 2,306 1,700 1,606 1,422
Mining - Limpopo R/oz 6,363 4,463 3,740 3,587 -
Mining (weighted R/oz 3,979 2,430 1,827 1,636 1,422
average)
Concentrating - R/oz 724 470 330 283 274
Marikana
Concentrating - R/oz 1,743 1,506 847 814 -
Limpopo
Concentrating R/oz 761 526 361 291 274
(weighted average)
Process division R/oz 686 600 406 269 242
Shared business R/oz 845 612 463 345 316
services
Stock movement R/oz (863) 28 (9) 14 165
C1 cost per PGM
ounce sold R/oz 5,408 4,196 3,048 2,555 2,419
before base metal
credits
Base metal credits R/oz (482) (762) (400) (242) (233)
C1 cost per PGM
ounce sold R/oz 4,926 3,434 2,648 2,313 2,186
after base metal
credits
Amortisation R/oz 420 360 272 252 232
Other EBIT items R/oz - - - (28) -
C2 costs per PGM R/oz 5,346 3,794 2,920 2,537 2,418
ounce sold
Pandora Mining
cost:
C1 Pandora mining cost 3,223 2,453 1,795 n/c n/c
(in joint venture)
R/oz
Pandora JV cost/ounce to
Lonmin 6,200 4,225 3,110 n/c n/c
(adjusting Lonmin share
of profit)
R/oz
Exchange Rates
Average rate for
period10
R/$ 7.45 7.14 6.63 6.28 6.60
GBP/$ 0.51 0.51 0.55 0.54 0.56
Closing rate
R/$ 8.27 6.83 7.77 6.36 6.48
GBP/$ 0.56 0.50 0.53 0.57 0.55
Footnotes:
2006 comprised an additional 7 days mining performance for WPL and EPL
arising on the change of basis to report on a calendar month. The data has
been restated to remove these extra days and restate on a like for like
basis.
Pandora attributable tonnes mined includes Lonmin`s share (42.5%) of the
total tonnes mined on the Pandora joint venture. Prior years have been
restated.
Tonnes milled excludes slag milling.
Lonmin purchases 100% of the ore produced by the Pandora joint venture for
onward processing which is included in downstream operating statistics.
Relates to the tonnes milled and derived metal in concentrate from third-
party ore purchases.
Corresponds to contained base metals in concentrate.
Nickel is produced and sold as nickel sulphate crystals or solution and the
volumes shown correspond to contained metal. Copper is produced as refined
product but typically at LME grade C.
Capital expenditure is the aggregate of the purchase of property, plant and
equipment and intangible assets as shown in the consolidated cash flow
statement.
Concentrate and other sales have been adjusted to a saleable ounces basis
using standard industry recovery rates. Prior years have been restated.
During the fourth quarter of 2008 financial year, 25,000 oz of refined
Ruthenium and 1,500 oz of refined iridium were bought and sold to meet
contractual commitments. The metallurgy section of the above table excludes
these transactions as they relate to third party mined and processed metals
but they are included in the sales section.
Exchange rates are based on the weighted average rates applicable over the
course of the year on revenue between Rand and US$.
N/A Not applicable
N/C Not calculated
Consolidated income statement
for the year ended 30 September
Special Special
2008 items 2008 2007 items 2007
Underlying i (note 3) Total Underly (note 3) Total
Continuing Note $m $m $m ing i $m $m
operations $m
Revenue 2 2,231 - 2,231 1,941 - 1,941
EBITDA ii 1,059 (25) 1,034 883 (2) 881
Depre-
ciation, (96) (174) (270) (87) - (87)
amorti-
sation and
impairment
Operating 963 (199) 764 796 (2) 794
profit /
(loss) iii
Impairment
of - (19) (19) - - -
available
for sale
financial
assets
Finance 4 13 - 13 25 - 25
income
Finance 4 (6) - (6) (28) (104) (132)
expenses
Share of
profit of 27 - 27 18 - 18
associate
and
joint
venture
Profit / 997 (218) 779 811 (106) 705
(loss) 5 (322) 109 (213) (255) (42) (297)
before
taxation
Income tax
expense iv
Profit / 675 (109) 566 556 (148) 408
(loss) for
the year
Attributabl
e to: 550 (95) 455 453 (139) 314
Equity 125 (14) 111 103 (9) 94
shareholder
s of Lonmin
Plc
Minority
interest
Earnings 6 351.9c 291.1c 295.9c 205.1c
per share
Diluted 6 350.7c 290.2c 293.4c 203.3c
earnings
per share v
Dividends 7 119.0c 110.0c
paid per
share
Consolidated statement of recognised income and expense
for the year ended 30 September
2008 2007
Total Total
Note $m $m
Profit for the year 566 408
Change in fair value of available for (127) 111
sale financial assets
Net changes in fair value of cash flow 16 (8)
hedges
Losses / (gains) on settled cash flow (4) 20
hedges released to the income statement
Foreign exchange on retranslation of 5 -
associate
Deferred tax on items taken directly to
the statement of recognised income and 16 (32)
expense
Actuarial losses on post retirement - (11)
benefit plan
Total recognised income for the year 472 488
Attributable to:
Equity shareholders of Lonmin Plc 9 352 392
Minority interest 9 120 96
9 472 488
Footnotes:
i Underlying earnings are calculated on profit for the period excluding
pension scheme payments relating to scheme settlements, profit on disposal of
subsidiaries, revaluations and impairment of assets, takeover bid defence
costs, foreign exchange on tax balances and effects of changes in corporate
tax rates. For the prior period, special items also included profit on the
sale of Marikana houses, pension scheme net refunds relating to scheme
settlements and movements in the fair value of the embedded derivative
associated with the convertible bonds as disclosed in note 3 to the accounts.
ii EBITDA is operating profit before depreciation, amortisation and
impairment.
iii Operating profit is defined as revenue less operating expenses before
impairment of available for sale financial assets, net finance costs and
share of profit of associate and joint venture.
iv The income tax expense substantially relates to overseas taxation and
includes exchange gains of $88 million (2007 - exchange losses of $51
million) as disclosed in note 5.
v In the prior period the calculation of diluted EPS included
consideration of the movement in fair value of the embedded derivative within
the convertible bonds subject to the limitation under IAS 33 - Earnings Per
Share, that this cannot thereby create a figure exceeding basic EPS.
Consolidated balance sheet
as at 30 September
2008 2007
Note $m $m
Non-current assets
Goodwill 113 186
Intangible assets 949 936
Property, plant and equipment 1,893 1,673
Investment in associate and joint 163 131
venture
Available for sale financial assets 96 226
Other receivables 19 22
3,233 3,174
Current assets
Inventories 319 186
Trade and other receivables 326 338
Assets held for sale 6 7
Tax recoverable 5 3
Derivative financial instruments 20 8
Cash and cash equivalents 8 226 222
902 764
Current liabilities
Overdraft 8 - (1)
Trade and other payables (346) (286)
Interest bearing loans and borrowings 8 - (237)
Tax payable (55) (40)
(401) (564)
Net current assets 501 200
Non-current liabilities
Employee benefits (21) (24)
Interest bearing loans and borrowings 8 (529) (359)
Deferred tax liabilities (540) (585)
Provisions (50) (46)
(1,140) (1,014)
Net assets 2,594 2,360
Capital and reserves
Share capital 9 156 156
Share premium 9 305 299
Other reserves 9 100 96
Retained earnings 9 1,586 1,417
Attributable to equity shareholders 9 2,147 1,968
of Lonmin Plc
Attributable to minority interest 9 447 392
Total equity 9 2,594 2,360
Consolidated cash flow statement
for the year ended 30 September
2008 2007
Note $m $m
Profit for the year 566 408
Taxation 5 213 297
Share of profit after tax of (27) (18)
associate and joint venture
Finance income 4 (13) (25)
Finance expenses 4 6 132
Impairment of available for sale 3 19 -
financial assets
Depreciation and amortisation 96 87
Other impairment 3 174 -
Change in inventories (133) (51)
Change in trade and other 12 58
receivables
Change in trade and other payables 37 70
Change in provisions - 4
Profit on sale of assets held for - (1)
sale
Profit on sale of subsidiary (2) -
Share-based payments 6 24
Other non cash charges (7) (2)
Cash flow from operations 947 983
Interest received 11 16
Interest paid (23) (41)
Tax paid (229) (266)
Cash flow from operating activities 706 692
Cash flow from investing activities
Acquisition of subsidiaries (net of - (393)
cash acquired)
Proceeds from disposal of 3 -
subsidiaries
Purchase of intangible assets (24) (6)
Purchase of property, plant and (354) (270)
equipment
Proceeds from disposal of available - 51
for sale financial assets
Purchase of available for sale (17) (72)
financial assets
Proceeds from disposal of assets 1 5
held for sale
Cash used in investing activities (391) (685)
Cash flow from financing activities
Equity dividends paid to Lonmin 9 (186) (171)
shareholders
Dividends paid to minority 9 (65) (41)
Proceeds from current borrowings 8 - 237
Repayment of current borrowings 8 (237) -
Proceeds from non-current borrowings 8 170 71
Issue of ordinary share capital 9 6 68
Cash used in financing activities (312) 164
Increase in cash and cash 3 171
equivalents
Opening cash and cash equivalents 8 221 43
Effect of exchange rate changes 8 2 7
Closing cash and cash equivalents 8 226 221
Basis of preparation
The financial information presented has been prepared on the basis of
International Financial Reporting Standards (IFRSs) as adopted by the EU.
Segmental analysis
The Group`s primary operating segment is the mining of platinum group metals.
The majority of the Group`s operations are based in South Africa.
2008
Platinum Corporat Explorat Total
Analysis by business group $m e ii ion $m
$m $m
Revenue - external sales 2,231 - - 2,231
Operating profit 892 (101) (27) 764
Segment total assets 3,369 25 741 4,135
Segment total liabilities (1,100) (267) (174) (1,541)
Capital expenditure i 389 - 36 425
Depreciation and 96 - - 96
amortisation
Share of profit of 27 - - 27
associate and joint venture
Share of net assets of 163 - - 163
associate and joint venture
2007
Platinum Corporat Explorat Total
Analysis by business group $m e ii ion $m
$m $m
Revenue - external sales 1,941 - - 1,941
Operating profit 880 (63) (23) 794
Segment total assets 3,211 41 686 3,938
Segment total liabilities (1,066) (339) (173) (1,578)
Capital expenditure i 353 - 19 372
Depreciation and 87 - - 87
amortisation
Share of profit of 18 - - 18
associate and joint venture
Share of net assets of 131 - - 131
associate and joint venture
2008
South UK Other Total
Analysis by geographical Africa $m $m $m
location $m
Revenue - external sales 2,231 - - 2,231
Segment total assets 4,091 10 34 4,135
Capital expenditure i 425 - - 425
2007
South UK Other Total
Analysis by geographical Africa $m $m $m
location $m
Revenue - external sales 1,941 - - 1,941
Segment total assets 3,867 41 30 3,938
Capital expenditure i 372 - - 372
Footnotes:
i Capital expenditure includes additions to plant, property and equipment
(including capitalised interest), intangible assets and goodwill in
accordance with IAS 14 - Segment reporting.
ii The corporate segment consists of the London head office, the
Johannesburg office (including marketing and the capital programme group).
Revenue by destination is analysed by geographical area below:
2008 2007
$m $m
The Americas 580 419
Asia 798 705
Europe 349 314
South Africa 496 482
Zimbabwe 8 21
2,231 1,941
Special Items
`Special items` are those items of financial performance that the Group
believes should be separately disclosed on the face of the income statement
to assist in the understanding of the financial performance achieved by the
Group and for consistency with prior years.
2008 2007
$m $m
Operating profit: (199) (2)
- Sale of houses i - 1
- Sale of subsidiary ii 2 -
- Pensions iii (9) 2
- Defence costs iv (18) -
- Impairment v (174) (5)
Impairment of available for sale financial (19) -
assets vi
Finance costs:
- Movement in fair value of embedded - (104)
derivative vii
Loss on special items before taxation (218) (106)
Taxation related to special items (note 5) 109 (42)
Special loss before minority interest (109) (148)
Minority interest 14 9
Special loss for the year attributable to (95) (139)
equity shareholders of Lonmin Plc
Footnotes:
i The Company is selling houses to employees to encourage home-ownership.
Any profits or losses from such sales are not deemed to represent underlying
earnings.
ii During the period, the Group disposed of a subsidiary, Southern Era
Mining Exploration South Africa (Pty) Limited, for consideration of $3
million resulting in a profit before tax of $2 million.
iii During 2008 the Group settled the Lonmin Superannuation Scheme (LSS) and
incurred a $9 million charge. No further expense relating to the LSS is
expected in future periods. In 2007 the Group finalised the winding up of
the SUITS pension scheme which was settled in 2004. During the prior year a
$1 million provision was made for the purchase of additional benefits for
members of the scheme which was offset by a $3 million refund on final
settlement.
iv In 2008 the Group incurred $18 million of defence costs relating to a
takeover bid that occurred.
v Impairment charges primarily comprised the write down of property, plant
and equipment of $89 million for the Baobab shaft at Limpopo together with
$73 million of smelting synergies recognised as goodwill at acquisition and
$7 million relating to the remaining carrying value of the Messina
concentrate off-take contract. This impairment has arisen as a result of
reduced reserves and weaker short-term pricing now anticipated. In 2008 the
presentation of the income statement has been presented to incorporate these
charges within depreciation, amortisation and impairment. In the prior year
the Group carried out a review of non-mining investments resulting in a $5
million impairment charge to the income statement. This charge was not
separated out in line with the 2008 presentation of the income statement on
the grounds of materiality.
vi Certain available for sale financial assets have been marked to market
and have fallen below original acquisition costs resulting in $19 million of
impairment charges being taken to the income statement.
vii In the prior period convertible bonds existed that contained an embedded
derivative which, because of the cash settlement option, was held at fair
value with movements in fair value taken to the income statement.
Fluctuations of fair value were mainly due to share price and as they were
not considered underlying they were reported as special. The convertible
bonds were fully redeemed during the 2007 fiscal year with the movement in
fair value from the previous year end to the date of redemption being
reported as special.
Net finance costs
2008 2007
$m $m
Finance income: 13 25
Interest receivable 5 16
Expected return on defined benefit pension - 8
scheme assets
Movement in fair value of other receivables 1 1
Other interest receivable 7 -
Finance expenses: (6) (28)
On bank loans and overdrafts (22) (40)
Bank fees (1) (5)
Capitalised interest 23 23
Discounting on provisions (4) (3)
Unwind of discounting on convertible bonds - (3)
Exchange differences on other receivables (4) -
Exchange differences on net debt 2 7
Pension scheme interest payable - (7)
Special items: - (104)
Movement in fair values of derivative - (104)
financial instruments (note 3)
Total finance expenses (6) (132)
Net finance costs 7 (107)
Interest expenses incurred have been capitalised on a group basis to the
extent that there is an appropriate qualifying asset.
The weighted average interest rate used by the Group for capitalisation is
4.7% (2007 - 6.0%).
5. Taxation
2008 2007
$m $m
United Kingdom:
Current tax expense at 28% (2007 - 30%) 126 42
Less amount of the benefit arising from (126) (42)
double tax relief available
Total UK tax expense - -
Overseas:
Current tax expense at 28% (2007 - 29%) 261 200
Corporate tax expense 224 186
Tax on dividends remitted 37 14
Deferred tax expense: 61 55
Origination and reversal of temporary 49 55
differences
Tax on dividends remitted 12 -
Special items - UK and overseas: (109) 42
Utilisation of losses from prior years to (2) (9)
offset deferred tax liability i
Exchange on current taxation ii (19) 10
Exchange on deferred taxationii (69) 41
Change in tax rate iii (19) -
Actual tax charge 213 297
Tax charge excluding special items 322 255
Effective tax rate 27% 42%
Effective tax rate excluding special items 32% 31%
A reconciliation of the standard tax charge
to the tax charge was as follows:
2008 2008 2007 2007
$m $m
Tax charge at standard tax rate 28% 218 29% 204
Overseas taxes on dividends remitted by 5% 37 2% 14
subsidiary companies
Overseas taxes on dividends unremitted 2% 12 - -
by subsidiary companies
Special items as defined above (14%) (109) 6% 42
Tax effect of impairment relating to 6% 49 - -
Baobab shaft
Tax effect of impairment of available - 5 - -
for sale financial assets
Tax effect of movements in the fair - - 4% 31
values of financial instruments
Tax effect of other timing differences - 1 1% 6
Actual tax charge 27% 213 42% 297
The Group`s primary operations are based in South Africa. Therefore, the
relevant standard tax rate for the Group was the South African statutory tax
rate of 28% (2007 - 29%). The secondary tax rate on dividends remitted by
South African companies was 10.0% (2007 - 12.5%).
Footnotes:
i The Group holds a number of available for sale financial assets which
are marked to market. In the prior year the value of these investments
increased significantly resulting in the recognition of unrealised gains
through the statement of recognised income and expense. This resulted in the
recognition of an associated deferred tax liability except to the extent that
there were available losses which, in the opinion of the Directors, could be
utilised to offset against such gains. In the current year most of the
investment decreased in value resulting in the unwind of the associated
deferred tax balances. Losses below initial carrying value have not created
deferred tax assets because future profits arising in relevant statutory
entities are not considered sufficiently certain.
ii Overseas tax charges are predominantly calculated based on Rand
financial statements. As the Group`s functional currency is US Dollar this
leads to a variety of foreign exchange impacts being the retranslation of
current and deferred tax balances and monetary assets, as well as other
translation differences. The Rand denominated deferred tax balance in US
Dollars at 30 September 2008 is $373 million (30 September 2007 - $391
million).
iii The corporation tax rate changed to 28% for the current financial year
(2007 - 29%). This resulted in a net release of deferred tax liabilities of
$19 million. This tax saving has been reported as special.
6. Earnings per share
Earnings per share have been calculated on the profit attributable to equity
shareholders amounting to $455 million (2007 - $314 million) using a weighted
average number of 156,311,052 ordinary shares in issue (2007 - 153,097,437
ordinary shares).
Diluted earnings per share is based on the weighted average number of
ordinary shares in issue adjusted by dilutive outstanding share options and
shares issuable. In the prior year shares issuable on conversion of the
convertible bonds were anti-dilutive and so were excluded from diluted
earnings per share in accordance with IAS 33 - Earnings Per Share.
2008 2007
Profit Per Profit Per
for Number share for Number share
the of amount the of amount
year shares cents year shares cents
$m $m
Basic EPS 455 156,311, 291.1 314 153,097, 205.1
052 437
Share option - 496,389 (0.9) - 1,324,64 (1.8)
schemes 2
Diluted EPS 455 156,807, 290.2 314 154,422, 203.3
441 079
2008 2007
Profit Per Profit Per
for Number share for Number share
the of amount the of amount
year shares cents year shares cents
$m $m
Underlying EPS 550 156,311, 351.9 453 153,097, 295.9
052 437
Share option - 496,389 (1.2) - 1,324,64 (2.5)
schemes 2
Diluted 550 156,807, 350.7 453 154,422, 293.4
underlying EPS 441 079
Underlying earnings per share has been presented as the Directors consider it
important to present the underlying results of the business. Underlying
earnings per share is based on the profit attributable to equity shareholders
adjusted to exclude special items (as defined in note 3) as follows:
2008 2007
Profit Per Profit Per
for Number share for Number share
the of amount the of amount
year shares cents year shares cents
$m $m
Basic EPS 455 156,311, 291.1 314 153,097, 205.1
052 437
Special items 95 - 60.8 139 - 90.8
(note 3)
Underlying EPS 550 156,311, 351.9 453 153,097, 295.9
052 437
Headline earnings and the resultant headline earnings per share are specific
disclosures defined and required by the Johannesburg Stock Exchange. These
are calculated as follows:
Year ended Year
30 September ended
2008 30
$m September
2007
$m
Earnings attributed to ordinary shareholders 455 314
(IAS 33 earnings)
Less profit on sale of subsidiary (note 3) (2) -
Less profit on sale of available for sale - (2)
financial assets
Add back impairment of assets (note 3) 193 5
Tax related to the above items 1 (1)
Headline earnings 647 316
2008 2007
Profit Per Profit Per
for Number share for Number share
the of amount the of amount
year shares cents year shares cents
$m $m
Headline EPS 647 156,311, 413.9 316 153,097, 206.4
052 437
Diluted EPS - 496,389 (1.3) - 1,324,64 (1.8)
2
Diluted 647 156,807, 412.6 316 154,422, 204.6
Headline EPS 441 079
Dividends
2008 2007
Cents Cents per
$m per $m share
share
Prior year final dividend, 94 60.0 85 55.0
paid in the year
Interim dividend, paid in the 92 59.0 86 55.0
year
Total dividend paid in the 186 119.0 171 110.0
year
Interim dividend, paid in the 59.0 55.0
year
Proposed final dividend for 0.0 60.0
the year
Total dividend in respect of 59.0 115.0
the year
Net debt as defined by the Group
Foreign
As at exchange As at
1 Subsidia and non- 30
October ry Cash cash September
2007 acquired flow movements 2008
$m $m $m $m $m
Cash and cash 222 - 2 2 226
equivalents
Overdrafts (1) - 1 - -
221 - 3 2 226
Current borrowings (237) - 237 - -
Non-current (359) - (170) - (529)
borrowings
Net debt as defined (375) - 70 2 (303)
by the Group
Foreign
As at exchange As at
1 Subsidia and non- 30
October ry Cash cash September
2006 acquired flow movements 2007
$m $m $m $m $m
Cash and cash 61 20 134 7 222
equivalents
Overdrafts (18) - 17 - (1)
43 20 151 7 221
Current borrowings - - (237) - (237)
Non-current (288) - (71) - (359)
borrowings
Convertible bonds (213) - - 213 -
Net debt as defined (458) 20 (157) 220 (375)
by the Group
Net debt as defined by the Group comprises cash and cash equivalents, bank
overdrafts repayable on demand, interest bearing loans and borrowings and
convertible bonds grossed up for capitalised fees.
On 15 November 2006 Lonmin Plc gave notice to force redemption of all
outstanding convertible bonds at their principal amount. This led to the
issuance of 10,576,900 shares and a reduction in net debt as defined by the
Group of $213 million.
9. Total Equity
Equity shareholders` funds
Called Share
up share premium Other Retained Minority Total
capital account reserves earnings Total interests equity
$m $m $m $m $m $m $m
At 1 156 299 96 1,417 1,968 392 2,360
October
2007
Total - - 4 348 352 120 472
recognise
d income
and
expense
Dividends - - - (186) (186) (65) (251)
Share- - - - 7 7 - 7
based
payments
Shares - 6 - - 6 - 6
issued on
exercise
of share
options i
At 30 156 305 100 1,586 2,147 447 2,594
September
2008
At 1 143 26 84 836 1,089 223 1,312
October
2006
Total - - 12 380 392 96 488
recognise
d income
and
expense
Dividends - - - (171) (171) (41) (212)
Conversio 11 205 - - 216 - 216
n of the
convertib
le bonds
ii
Embedded - - - 371 371 - 371
derivativ
e
movement
iii
Deferred - - - (3) (3) (1) (4)
tax on
share-
based
payments
Other - - - 4 4 2 6
Shares 1 32 - - 33 - 33
issued on
exercise
of share
options i
Shares 1 36 - - 37 - 37
issued
under the
IFC
option
agreement
iv
Minority - - - - - 113 113
interest
arising
on
business
acquisiti
on
At 30 156 299 96 1,417 1,968 392 2,360
September
2007
Footnotes:
i During the year 231,338 share options were exercised (2007 - 1,876,433)
on which $6 million of cash was received (2007 - $33 million).
ii In November 2006 the Company issued notice regarding the redemption of
all outstanding convertible bonds. Conversion of the convertible bonds
resulted in the issuance of 10,576,900 shares with an associated nominal
share capital of $11 million and the recognition of $205 million share
premium.
iii As explained in note 3, the convertible bonds contained an embedded
derivative, movements in the fair value of which were recognised through the
income statement. On conversion of the convertible bonds the embedded
derivative was extinguished with all cumulative prior movements in fair value
which had been taken through the income statement reversing in equity.
iv During the prior year 586,730 share options were exercised under the
International Finance Corporation option agreement. As the shares were
issued at a discount only $35 million of cash was received.
Other reserves represent the capital redemption reserve of $88 million (2007
- $88 million) and a $12 million hedging reserve asset net of deferred tax
(2007 - $8 million asset).
Minority interests represent an 18% shareholding in Eastern Platinum Limited,
Western Platinum Limited and Messina Limited throughout 2008 and 2007 and,
from 1 February 2007, a 26% shareholding in Akanani Mining (Pty) Limited.
10. Statutory Disclosure
The financial information set out above does not constitute the Company`s
statutory accounts for the years ended 30 September 2008 and 2007 but is
derived from those accounts. Statutory accounts for 2007 have been delivered
to the registrar of companies, and those for 2008 will be delivered in due
course. The auditors have reported on those accounts; their report was (i)
unqualified, (ii) did not include a reference to any matters to which the
auditors drew attention by way of emphasis without qualifying their report
and (iii) did not contain a statement under Section 237 (2) or (3) of the
Companies Act 1985.
Date: 18/11/2008 09:01:01 Produced by the JSE SENS Department.
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