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LON
LOLMI
LON - Lonmin Plc - Interim Results Announcement 2009 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")
Interim Announcement 2009 Part 2
Operating Statistics
6 months 6 months
to to
31 March 31 March
2009 2008
Tonnes mined Marikana Underground - 000 4,487 4,349
conventional
Underground - M&A 000 771 552
1
Underground - 000 5,258 4,901
total
Opencast 000 229 624
Total 000 5,488 5,525
Limpopo Underground 000 87 264
Opencast 000 0 0
Total 000 87 264
Pandora Underground 000 71 68
attributabl
e 2
Opencast 000 110 101
Total 000 181 169
Lonmin Underground 000 5,417 5,233
Platinum
Opencast 000 339 725
Total 000 5,756 5,958
Tonnes milled Marikana Underground 000 5,124 4,844
3
Opencast 000 194 719
Total 000 5,319 5,563
Limpopo Underground 000 92 207
Opencast 000 0 0
Total 000 92 207
Pandora 4 Underground 000 168 159
Opencast 000 251 192
Total 000 419 351
Ore Underground 000 0 0
Purchases 5 Opencast 000 0 30
Total 000 0 30
Lonmin Underground 000 5,384 5,210
Platinum
Head grade 6 g/t 4.57 4.72
Recovery rate 7 % 80.8 81.5
Opencast 000 445 941
Head grade 6 g/t 4.68 3.18
Recovery rate 7 % 70.6 56.8
Total 000 5,829 6,151
Head grade 6 g/t 4.58 4.48
Recovery rate 7 % 80.0 78.8
6 months 6 months
to to
31 March 31 March
2009 2008
Metals in Marikana Platinum oz 308,617 319,543
concentrate 8
Palladium oz 143,110 146,474
Gold oz 7,057 8,522
Rhodium oz 43,000 43,328
Ruthenium oz 66,454 66,680
Iridium oz 14,520 13,945
Total PGMs oz 582,759 598,492
Nickel 9 MT 1,321 1,493
Copper 9 MT 825 906
Limpopo Platinum oz 3,770 8,589
Palladium oz 3,331 6,493
Gold oz 243 620
Rhodium oz 487 894
Ruthenium oz 688 1,302
Iridium oz 159 274
Total PGMs oz 8,679 18,172
Nickel 9 MT 76 175
Copper 9 MT 54 120
Pandora 4 Platinum oz 25,754 17,825
Palladium oz 11,601 8,148
Gold oz 202 133
Rhodium oz 3,566 2,478
Ruthenium oz 5,216 3,676
Iridium oz 971 615
Total PGMs oz 47,310 32,875
Nickel 9 MT 25 25
Copper 9 MT 15 11
Ore Platinum oz 0 937
Purchases 5 Palladium oz 0 793
Gold oz 0 74
Rhodium oz 0 83
Ruthenium oz 0 107
Iridium oz 0 25
Total PGMs oz 0 2,019
Nickel 9 MT 0 16
Copper 9 MT 0 11
Lonmin Platinum oz 338,142 346,894
Platinum
Palladium oz 158,042 161,908
Gold oz 7,503 9,349
Rhodium oz 47,053 46,783
Ruthenium oz 72,358 71,765
Iridium oz 15,649 14,859
Total PGMs oz 638,748 651,558
Nickel 9 MT 1,422 1,709
Copper 9 MT 894 1,048
6 months 6 months
to to
31 March 31 March
2009 2008
Metallurgy Lonmin Platinum oz 317,904 282,650
refined
metal
production
Palladium oz 147,393 128,140
Gold oz 8,647 9,563
Rhodium oz 44,688 42,437
Ruthenium oz 72,952 62,763
Iridium oz 12,479 10,577
Total PGMs oz 604,063 536,128
Toll Platinum oz 315 0
refined
metal
production
Palladium oz 0 0
Gold oz 0 0
Rhodium oz 573 0
Ruthenium oz 1,009 0
Iridium oz 184 0
Total PGMs oz 2,081 0
Total Platinum oz 318,219 282,650
refined
PGMs
Palladium oz 147,393 128,140
Gold oz 8,647 9,563
Rhodium oz 45,261 42,437
Ruthenium oz 73,961 62,763
Iridium oz 12,663 10,577
Total PGMs oz 606,145 536,128
Base metals Nickel 10 MT 1,632 1,323
Copper 10 MT 1,079 795
Sales Refined Platinum oz 313,671 284,731
metal sales
Palladium oz 147,184 133,991
Gold oz 9,318 9,208
Rhodium oz 38,739 43,537
Ruthenium oz 67,501 65,941
Iridium oz 12,500 11,720
Total PGMs oz 588,913 549,127
Concentrate Platinum oz (1,818) 4,233
and other
11
Palladium oz (3,222) 1,833
Gold oz 0 97
Rhodium oz 0 758
Ruthenium oz 0 990
Iridium oz 0 240
Total PGMs oz (5,039) 8,150
Lonmin Platinum oz 311,853 288,963
Platinum
Palladium oz 143,962 135,823
Gold oz 9,318 9,305
Rhodium oz 38,739 44,295
Ruthenium oz 67,501 66,931
Iridium oz 12,500 11,960
Total PGMs oz 583,873 557,277
Nickel 10 MT 1,368 1,216
Copper 10 MT 907 805
6 months 6 months
to to
31 March 31 March
2009 2008
Average Lonmin Platinum $/o 947 1,578
Prices Platinum z
Palladium $/o 192 396
z
Gold $/o 871 853
z
Rhodium $/o 1,650 7,121
z
Ruthenium $/o 124 446
z
Iridium $/o 393 424
z
Basket price of $/o 699 1,558
PGMs 12 z
Nickel 10 $/M 15,721 27,235
T
Copper 10 $/M 6,062 6,936
T
Capital Rm 1,050 1,000
Expenditure
$m 106 139
Cost per PGM ounce 13
Mining - Marikana R/o 4,712 3,247
z
Mining - Limpopo R/o 7,404 6,125
z
Mining - (weighted average) R/o 4,751 3,366
z
Concentrating - Marikana R/o 817 638
z
Concentrating - Limpopo R/o 1,820 2,193
z
Concentrating - (weighted average) R/o 831 684
z
Process division R/o 827 604
z
Shared business services R/o 547 838
z
C1 cost per PGM ounce produced R/o 6,956 5,492
z
Stock movement R/o 103 (489)
z
C1 cost per PGM ounce sold before base metal R/o 7,059 5,003
credits z
Base metal credits R/o (508) (493)
z
C1 costs per PGM ounce sold after base metal R/o 6,551 4,510
credits z
Amortisation R/o 430 496
z
C2 costs per PGM ounce sold R/o 6,981 5,006
z
Pandora mining costs:
C1 Pandora mining costs (in joint venture) R/o 3,004 3,945
z
Pandora JV cost/ounce to Lonmin (adjusting R/o 4,537 6,703
Lonmin share of profit) z
Exchange Average rate for period R/$ 9.91 7.14
Rates
Closing rate R/$ 9.49 8.08
Footnotes:
1 M&A comprises ore produced by our fully mechanised shafts and from Saffy
shaft, which is being transitioned to hybrid mining.
2 Pandora attributable tonnes mined includes Lonmin`s share (42.5%) of the
total tonnes mined on the joint venture.
3 Tonnes milled excludes slag milling.
4 Lonmin purchases 100% of the ore produced by the Pandora joint venture
for onward processing which is included in downstream operating
statistics.
5 Relates to the tonnes milled and derived metal in concentrate from third-
party ore purchases.
6 Head Grade is the grammes per tonne (5PGE + Au) value contained in the
tonnes milled and fed into the concentrator from the mines (excludes
slag milled).
7 Recovery rate in the concentrators is the total content produced divided
by the total content milled (excluding slag).
8 Metals in concentrate includes slag and have been calculated at industry
standard downstream processing losses.
9 Corresponds to contained base metals in concentrate.
10 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.
11 Concentrate and other sales have been adjusted to a saleable ounces
basis using standard industry recovery rates.
12 Basket price of PGMs is based on the revenue generated from the actual
PGMs sold in the period.
13 With the restructuring of the business the cost allocation between
business units has been changed and therefore whilst the C1 cost per PGM
ounce produced total is on a like-for-like basis individual line items
are not totally comparable.
Consolidated income statement
for the 6 months to 31 March 2009
6 months to Special 6 months to
31 March items 31 March
2009 2009
Underlying i (note 3) Total
Continuing operations Note $m $m $m
Revenue 2 436 - 436
(LBITDA) / EBITDA ii (51) (44) (95)
Depreciation, amortisation (47) - (47)
and impairment
Operating (loss) / profit iii 2 (98) (44) (142)
Impairment of available for - (39) (39)
sale financial assets
Finance income 4 3 - 3
Finance expenses 4 (27) - (27)
Share of profit of associate 9 - 9
and joint venture
(Loss) / profit before (113) (83) (196)
taxation
Income tax income/(expense) 5 16 53 69
iv
(Loss) / Profit for the (97) (30) (127)
period
Attributable to:
- Equity shareholders of (79) (33) (112)
Lonmin Plc
- Minority interest (18) 3 (15)
(Loss) / earnings per share 6 (50.2)c (71.2)c
Diluted (loss) / earnings per 6 (50.2)c (71.2)c
share v
Dividend per share paid in 7 0.0c
period
Table continues:...
6 months Special 6 months Year ended Special Year
to items to 30 Sep items ended
31 March 31 March 2008 30 Sep
2008 2008 2008
Underlying (note 3) Total Underlying (note 3) Total
i i
$m $m $m $m $m $m
907 - 907 2,231 - 2,231
417 (3) 414 1,059 (25) 1,034
(46) - (46) (96) (174) (270)
371 (3) 368 963 (199) 764
- - - - (19) (19)
8 - 8 13 - 13
(1) - (1) (6) - (6)
21 - 21 27 - 27
399 (3) 396 997 (218) 779
(137) 96 (41) (322) 109 (213)
262 93 355 675 (109) 566
207 76 283 550 (95) 455
55 17 72 125 (14) 111
132.5c 181.1c 351.9c 291.1c
132.0c 180.5c 350.7c 290.2c
60.0c 119.0c
Consolidated statement of recognised income and expense
for the 6 months to 31 March 2009
Note 6 months 6 months Year
to to ended
31 March 31 March 30
2009 2008 September
2008
$m $m $m
(Loss) / profit for the period (127) 355 566
Change in fair value of available for (23) (33) (127)
sale financial assets
Net change in fair value of cash flow 10 (8) 16
hedges
Gains on settled cash flow hedges (14) - (4)
released to the income statement
Foreign exchange gain on retranslation 5 - 5
of associate
Deferred tax on items taken directly to 7 7 16
the statement of recognised income and
expense
Total recognised (expense) / income (142) 321 472
for the period
Attributable to:
- Equity shareholders of Lonmin Plc 8 (126) 250 352
- Minority interest 8 (16) 71 120
8 (142) 321 472
Footnotes:
i Underlying (loss) / earnings for the period are calculated on profit
excluding one-off restructuring and reorganisation costs, impairment of
available for sale financial assets and foreign exchange on tax
balances. For prior periods, special items also includes profits on
disposal of subsidiaries, revaluations and impairment of assets,
takeover bid defence costs, pension scheme payments relating to scheme
settlements and effects of changes in corporate tax rates as disclosed
in note 3 to the interim accounts.
ii (LBITDA) / EBITDA is operating (loss) / profit before depreciation,
amortisation and impairment.
iii Operating (loss) / profit is defined as revenue less operating expenses
before impairment of available for sale financial assets, finance
income and expenses and before share of profit of associate and joint
venture.
iv The income tax income / (expense) relates substantially to overseas
taxation and includes exchange gains of $50 million (March 2008 - gains
of $83 million) as disclosed in note 5 to the interim accounts.
v Diluted (loss) / earnings per share are based on the weighted average
number of ordinary shares in issue adjusted by dilutive outstanding
share options. In the 6 months to 31 March 2009 outstanding share
options were anti-dilutive and so have been excluded from diluted
earnings per share in accordance with IAS 33 - Earnings Per Share.
Consolidated balance sheet
as at 31 March 2009
As at As at As at
31 March 31 March 30
2009 2008 September
2008
Note $m $m $m
Non-current assets
Goodwill 113 186 113
Intangible assets 956 937 949
Property, plant and equipment 1,950 1,780 1,893
Investment in associate and joint 174 152 163
venture
Available for sale financial 34 207 96
assets
Other receivables 18 21 19
3,245 3,283 3,233
Current assets
Inventories 285 299 319
Trade and other receivables 112 246 326
Assets held for sale 6 6 6
Tax recoverable - 12 5
Derivative financial instruments 16 - 20
Cash and cash equivalents 9 82 13 226
501 576 902
Current liabilities
Overdraft 9 (6) (38) -
Trade and other payables (239) (207) (346)
Interest bearing loans and 9 - (138) -
borrowings
Tax payable (9) - (55)
(254) (383) (401)
Net current assets 247 193 501
Non-current liabilities
Employee benefits (11) (27) (21)
Interest bearing loans and 9 (525) (343) (529)
borrowings
Deferred tax liabilities (457) (521) (540)
Provisions (48) (40) (50)
(1,041) (931) (1,140)
Net assets 2,451 2,545 2,594
Capital and reserves
Share capital 8 157 156 156
Share premium 8 320 303 305
Other reserves 8 97 88 100
Retained earnings 8 1,463 1,586 1,586
Attributable to equity 8 2,037 2,133 2,147
shareholders of Lonmin Plc
Attributable to minority interest 8 414 412 447
Total equity 8 2,451 2,545 2,594
Consolidated cash flow statement
for the 6 months to 31 March 2009
6 months 6 months Year ended
to to 30
31 March 31 March September
2009 2008 2008
Note $m $m $m
(Loss) / profit for the period (127) 355 566
Taxation 5 (69) 41 213
Finance income 4 (3) (8) (13)
Finance expenses 4 27 1 6
Share of profit after tax of (9) (21) (27)
associate and joint venture
Impairment of available for sale 3 39 - 19
financial assets
Depreciation and amortisation 47 46 96
Other impairment 3 - - 174
Change in inventories 34 (113) (133)
Change in trade and other 214 92 12
receivables
Change in trade and other (102) (79) 37
payables
Change in provisions (3) (6) -
Profit on disposal of subsidiary 3 - (2) (2)
Dividend received from associate 3 - -
Share-based payments (10) 7 6
Other non cash charges - 2 (7)
Cash flow from operations 41 315 947
Interest received 2 4 11
Interest and bank fees paid (9) (16) (23)
Tax paid (48) (144) (229)
Cash flow from operating (14) 159 706
activities
Cash flow from investing
activities
Proceeds from disposal of - 3 3
subsidiary
Purchase of intangible assets (8) (9) (24)
Purchase of property, plant and (98) (130) (354)
equipment
Purchase of available for sale - (17) (17)
financial assets
Proceeds from disposal of assets - 1 1
held for sale
Cash used in investing activities (106) (152) (391)
Cash flow from financing
activities
Equity dividends paid to Lonmin 8 - (94) (186)
shareholders
Dividends paid to minority 8 (17) (51) (65)
Repayment of current borrowings 9 - (99) (237)
Proceeds from non-current 9 - - 170
borrowings
Repayment of non-current 9 (4) (16) -
borrowings
Issue of ordinary share capital 8 15 4 6
Cash used in financing activities (6) (256) (312)
(Decrease) / increase in cash and 9 (126) (249) 3
cash equivalents
Opening cash and cash equivalents 9 226 221 221
Effect of exchange rate changes 9 (24) 3 2
Closing cash and cash equivalents 9 76 (25) 226
Notes to the Accounts
1 Statement on accounting policies
Basis of preparation
Lonmin Plc (the "Company") is a company domiciled in the United Kingdom. The
condensed consolidated interim financial statements of the Company as at and for
the six months to 31 March 2009 comprise the Company and its subsidiaries
(together referred to as the "Group") and the Group`s interests in associates
and joint ventures.
These condensed consolidated interim financial statements have been prepared in
accordance with IAS 34 - Interim Financial Reporting, as adopted by the EU.
They do not include all of the information required for full annual financial
statements and should be read in conjunction with the consolidated financial
statements of the Group for the year ended 30 September 2008.
The comparative figures for the financial year ended 30 September 2008 are not
the Group`s full statutory accounts for that financial year. Those accounts
have been reported on by the Group`s auditors and delivered to the registrar of
companies. The report of the auditors 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.
The consolidated financial statements of the Group as at and for the year ended
30 September 2008 are available upon request from the Company`s registered
office at 4 Grosvenor Place, London, SW1X 7YL.
These condensed consolidated interim financial statements were approved by the
Board of Directors on 10 May 2009.
These consolidated interim financial statements apply the accounting policies
and presentation that were applied in the preparation of the Group`s published
consolidated financial statements for the year ended 30 September 2008.
The Directors believe, after making inquiries that they consider to be
appropriate and taking account of the net proceeds of the fully underwritten
rights issue announced today, that the Company has adequate resources to
continue in operational existence for the foreseeable future. The Directors
continue to adopt the going concern basis in preparing the financial statements.
New standards that are relevant to the Group but have not yet been adopted
The following standards, issued by the IASB, have not yet been adopted by the
Group:
IFRS 8 - Operating Segments introduces the "management approach" to segment
reporting. IFRS 8, which becomes mandatory for the Group`s 2010 financial
statements, will require the disclosure of segment information based on the
internal reports regularly reviewed by the Group`s Chief Operating Decision
Maker in order to assess each segment`s performance and to allocate
resources to them. Currently the Group presents segment information by
business group and geographical location.
Amendment to IAS 1 - Presentation of Financial Statements. The Group will
be required to present both a statement of comprehensive income and a
statement of changes in equity as primary statements. The statement of
comprehensive income effectively combines the current content of the income
statement and statement of recognised income and expense. This represents
a change from the current requirement to present either the statement of
recognised income and expense or a statement of all changes in equity as a
financial statement.
The Group is currently assessing the impact that these standards would have
on the presentation of its consolidated results.
The Group does not expect the adoption of other new, or revisions to
existing, standards or interpretations, issued by the IASB but not listed
above, to have a material impact on the consolidated results or financial
position of the Group.
Notes to the Accounts (continued)
2 Segmental analysis
The Group`s primary operating segment is in the mining of Platinum Group Metals.
The majority of the Group`s operations are based in South Africa.
6 months to 31 March 2009
Platinum Corporat Explorati Total
Analysis by business group ii e iii oniv $m
$m $m $m
Revenue - external sales 436 - - 436
Operating loss (116) (19) (7) (142)
Segment total assets 2,981 7 758 3,746
Segment total liabilities (865) (249) (181) (1,295)
Capital expenditure i 94 - 17 111
Depreciation and amortisation 47 - - 47
Impairment losses (note 3) 39 - - 39
Share of profit of associate 9 - - 9
and joint venture
Share of net assets of 174 - - 174
associate and joint venture
6 months to 31 March 2008
Platinum Corporat Explorati Total
Analysis by business group ii eiii oniv $m
$m $m $m
Revenue - external sales 907 - - 907
Operating profit / (loss) 426 (42) (16) 368
Segment total assets 3,118 16 725 3,859
Segment total liabilities (937) (196) (181) (1,314)
Capital expenditure i 138 - 16 154
Depreciation and amortisation 46 - - 46
Share of profit of associate 21 - - 21
and joint venture
Share of net assets of 152 - - 152
associate and joint venture
Year ended 30 September 2008
Platinum Corporat Explorati Total
Analysis by business group ii e iii oniv $m
$m $m $m
Revenue - external sales 2,231 - - 2,231
Operating profit / (loss) 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 amortisation 96 - - 96
Impairment losses (note 3) 193 - - 193
Share of profit of associate 27 - - 27
and joint venture
Share of net assets of 163 - - 163
associate and joint venture
Notes to the Accounts (continued)
2 Segmental analysis (continued)
6 months to 31 March 2009
South UK Other Total
Analysis by geographical Africa $m $m $m
location $m
Revenue - external sales 436 - - 436
Segment total assets 3,729 4 13 3,746
Capital expenditure i 111 - - 111
6 months to 31 March 2008
South UK Other Total
Analysis by geographical Africa $m $m $m
location $m
Revenue - external sales 907 - - 907
Segment total assets 3,817 6 36 3,859
Capital expenditure i 154 - - 154
Year ended 30 September 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
Revenue by destination is analysed by geographical area below:
6 months to 6 months Year ended
31 March to 31 30
2009 March September
$m 2008 2008
$m $m
The Americas 77 216 580
Asia 141 356 798
Europe 162 104 349
South Africa 56 226 496
Zimbabwe - 5 8
436 907 2,231
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 platinum segment includes all operational activities together with
direct overheads, plus investments in mining related assets.
iii The corporate segment consists of the London head office and the
Johannesburg head office.
iv The exploration segment comprises the investment in the Akanani
deposit and various exploration sites around the world.
Notes to the Accounts (continued)
3 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 periods.
6 months 6 months Year ended
to 31 to 31 30
March March September
2009 2008 2008
$m $m $m
Operating loss (44) (3) (199)
- Restructuring and reorganisation costs (44) - -
i
- Impairment loss ii - - (174)
- Profit on disposal of subsidiary iii - 2 2
- Defence costs iv - - (18)
- Pensions v - (5) (9)
Impairment of available for sale assets (39) - (19)
vi
Loss on special items before taxation (83) (3) (218)
Taxation related to special items (note 53 96 109
5)
Special (loss) / profit before minority (30) 93 (109)
interest
Minority interest (3) (17) 14
Special (loss) / profit for the period (33) 76 (95)
attributable to equity shareholders of
Lonmin Plc
Footnotes:
i In the current period the Group has incurred $44 million in
restructuring and reorganisation costs primarily comprising employee
exit costs together with abnormal non productive operating costs at
Limpopo following the announcement of its closure.
ii The 2008 full year impairment charges primarily comprised the write
down of property, plant and equipment of $89 million for 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. The
impairment arose as a result of reduced reserves and weaker short-term
pricing anticipated. The 2008 income statement was presented to
incorporate these charges within depreciation, amortisation and
impairment.
iii During the first half of 2008 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.
iv In the second half of 2008 the Group incurred $18 million of defence
costs relating to a takeover bid that occurred.
v During 2008, the Group settled the Lonmin Superannuation Scheme (LSS)
and incurred a $9 million charge of which $5 million was incurred in
the first half. No further expense relating to the LSS is expected in
future periods.
vi Certain available for sale financial assets were marked to market and
fell below original acquisition costs resulting in $39 million of
impairment charges taken to the income statement. $19 million
impairment was recognised in the second half of 2008.
Notes to the Accounts (continued)
4 Finance income and expense
6 months 6 months Year ended
to to 31 30
31 March March September
2009 2008 2008
$m $m $m
Finance income: 3 8 13
Interest receivable 2 4 5
Movement in fair value of other 1 1 1
receivables
Other interest receivable - - 7
Exchange gains on net debt ii - 3 -
Finance expenses: (27) (1) (6)
On bank loans and overdrafts (8) (16) (22)
Bank fees (2) - (1)
Capitalised interest i 10 15 23
Unwind of discounting on provisions (1) - (4)
Exchange differences on other (2) - (4)
receivables
Exchange (losses) / gains on net debt (24) - 2
ii
Total finance expenses (27) (1) (6)
Net finance (expense) / income (24) 7 7
Footnotes:
i 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 in the period
was 3.2% (6 months to 31 March 2008 - 5.4%, year ended 30 September 2008
- 4.7%).
ii Net debt as defined by the Group comprises cash and cash equivalents,
bank overdrafts repayable on demand, interest bearing loans and
borrowings.
Notes to the Accounts (continued)
5 Taxation
6 months 6 months Year
to to ended
31 March 31 March 30
2009 2008 September
$m $m 2008
$m
United Kingdom:
Current tax expense at 28% (2008 - 28%) 31 98 126
Less amount of the benefit arising from (31) (98) (126)
double tax relief available
Total UK tax expense - - -
Overseas:
Current tax expense at 28% (2008 - 28%) 10 120 261
excluding special items
Corporate tax (income) / expense - 93 224
Tax on dividends remitted 10 27 37
Deferred tax (income) / expense: (26) 17 61
Origination and reversal of temporary (26) 17 49
differences
Tax on dividends unremitted - - 12
Special items: UK and overseas (note 3): (53) (96) (109)
Deferred tax on reorganisation and (9) - -
restructuring costs
Exchange on current taxation i (3) (11) (19)
Exchange on deferred taxation i (47) (58) (69)
Reversal of utilisation / (utilisation) of 6 - (2)
losses from prior periods to offset
deferred tax liability ii
Retranslation of monetary assets and other - (14) -
translation differences
Change in South African corporate tax rate - (13) (19)
from 29% to 28% iii
Actual tax (credit) / charge (69) 41 213
Tax (credit) / charge excluding special (16) 137 322
items (note 3)
Effective tax rate 35% 10% 27%
Effective tax rate excluding special items 14% 35% 32%
(note 3)
Notes to the Accounts (continued)
5 Taxation (continued)
A reconciliation of the standard tax charge to the actual tax charge was as
follows:
6 months 6 months 6 months 6 months Year Year ended
to to 31 to 31 to 31 ended 30
31 March March March March 30 September
2009 2009 2008 2008 September 2008
2008
$m $m $m
Tax (credit) 28% (55) 28% 111 28% 218
/ charge at
standard tax
rate
Overseas 1% (2) 7% 27 5% 37
taxes on
dividends
remitted by
subsidiary
companies
Overseas - - - - 2% 12
taxes on
dividends
unremitted by
subsidiary
companies
Special items 21% (41) (25)% (96) (14)% (109)
as defined
above
Tax effect of - - - - 6% 49
impairment
relating to
Baobab shaft
at Limpopo
Tax effect of (6)% 11 - - - 5
impairment of
available for
sale
financial
assets
Tax effect of (8)% 15 - - - -
unutilised
losses
Tax effect of (1)% 3 - (1) - 1
other timing
differences
Actual tax 35% (69) 10% 41 27% 213
(credit) /
charge
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% (2008 - 28%). The secondary tax rate on dividends remitted by South
African companies was 10% (2008 - 10%).
Footnotes:
i 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 31 March 2009 is $297 million (31
March 2008 - $333 million, 30 September 2008 - $373 million).
ii The Group holds a number of available for sale financial assets which
are marked to market. The investments have 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. In the prior year one of the
investments increased in value resulting in a deferred tax balance
arising on setting off unutilised tax losses against the gain.
iii The corporation tax rate changed to 28% with effect from the 2008
financial year. This resulted in net release of deferred tax
liabilities of $19 million. This tax saving was reported as special.
Notes to the Accounts (continued)
6 (Loss) / earnings per share
(Loss) / earnings per share have been calculated on the (loss) / earnings for
the period attributable to equity shareholders amounting to $112 million (March
2008 - profit $283 million) using a weighted average number of 157.4 million
ordinary shares in issue for the 6 months to 31 March 2009 (6 months to 31 March
2008 - 156.3 million ordinary shares).
Diluted (loss) / earnings per share are based on the weighted average number of
ordinary shares in issue adjusted by dilutive outstanding share options. In the
6 months to 31 March 2009 outstanding share options were anti-dilutive and so
have been excluded from diluted earnings per share in accordance with IAS 33 -
Earnings Per Share.
6 months to 31 March 2009
(Loss)/profit Number Per share
for the of shares amount
period
$m Millions cents
Basic (LPS) / EPS (112) 157.4 (71.2)
Share option schemes - - -
Diluted (LPS) / EPS (112) 157.4 (71.2)
Table continues:...
6 months to 31 March 2008 Year ended 30 September 2008
Profit Number Per share Profit Number Per share
for the of shares amount for the of shares amount
period year
$m Millions cents $m millions cents
283 156.3 181.1 455 156.3 291.1
- 0.6 (0.6) - 0.5 (0.9)
283 156.9 180.5 455 156.8 290.2
6 months to 31 March 2009
(Loss)/profit Number Per share
for the of shares amount
period
$m Millions cents
Underlying (LPS) / EPS (79) 157.4 (50.2)
Share option schemes - - -
Diluted Underlying (LPS) / (79) 157.4 (50.2)
EPS
Tables Continues:...
6 months to 31 March 2008 Year ended 30 September 2008
Profit Number Per share Profit Number Per share
for the of shares amount for the of shares amount
period year
$m Millions cents $m millions cents
207 156.3 132.5 550 156.3 351.9
- 0.6 (0.5) - 0.5 (1.2)
207 156.9 132.0 550 156.8 350.7
Underlying (loss) / earnings per share have been presented as the Directors
consider it to give a fairer reflection of the underlying results of the
business. Underlying (loss) / earnings per share are based on the (loss) /
profit attributable to equity shareholders adjusted to exclude special items (as
defined in note 3) as follows:
6 months to 31 March 2009
(Loss)/profit Number Per share
for the of shares amount
period
$m Millions cents
Basic (LPS) / EPS (112) 157.4 (71.2)
Special Items (note 3) 33 - 21.0
Underlying (LPS) / EPS (79) 157.4 (50.2)
Table Continues:...
6 months to 31 March 2008 Year ended 30 September 2008
Profit/(loss) Number Per share Profit Number Per share
for the of shares amount for the of shares amount
period year
$m Millions cents $m millions cents
283 156.3 181.1 455 156.3 291.1
(76) - (48.6) 95 - 60.8
207 156.3 132.5 550 156.3 351.9
Notes to the Accounts (continued)
6 Earnings per share (continued)
Headline (loss) / earnings and the resultant headline (loss) / earnings per
share are specific disclosures defined and required by the Johannesburg Stock
Exchange.
These are calculated as follows:
6 months 6 months Year ended
to to 30
31 March 31 March September
2009 2008 2008
$m $m $m
(Loss) / earnings attributable to (112) 283 455
ordinary shareholders (IAS 33 earnings)
Less profit on sale of subsidiary (note - (2) (2)
3)
Add back impairment of assets (note 3) 39 - 193
Tax related to the above items - 1 1
Headline (loss) / earnings (73) 282 647
6 months to 31 March 2009
(Loss)/profit Number Per share
for the of shares amount
period
$m Millions cents
Headline (LPS) / EPS (73) 157.4 (46.4)
Share option schemes - - -
Diluted Headline (LPS) / EPS (73) 157.4 (46.4)
Table Continues:...
6 months to 31 March 2008 Year ended 30 September 2008
Profit Number Per share Profit Number Per share
for the of shares amount for the of shares amount
period year
$m millions cents $m millions cents
282 156.3 180.5 647 156.3 413.9
- 0.6 (0.7) - 0.5 (1.3)
282 156.9 179.8 647 156.8 412.6
7 Dividends
6 months to 31 6 months to 31 Year ended 30
March 2009 March 2008 September 2008
$m Cents $m Cents $m Cents
per per per
share share share
Prior year final - 0.0 94 60.0 94 60.0
dividend paid in the
period
Interim dividend paid in - 0.0 - 0.0 92 59.0
the period
Total dividend paid in - 0.0 94 60.0 186 119.0
the period
0.0
Proposed dividend in - 0.0 92 59.0 - 0.0
respect of the period
Notes to the Accounts (continued)
8 Total equity
Equity shareholders` funds
Called Share
up premium Other Retained Minority Total
share
capital account reserves earnings Total interests equity
ii iii
$m $m $m $m $m $m $m
At 1 October 156 299 96 1,417 1,968 392 2,360
2007
Total recognised - - (8) 258 250 71 321
income and
expense
Dividends - - - (94) (94) (51) (145)
Other - - - 5 5 - 5
Shares issued on - 4 - - 4 - 4
exercise of
share options
At 31 March 2008 156 303 88 1,586 2,133 412 2,545
At 1 April 2008 156 303 88 1,586 2,133 412 2,545
Total recognised - - 12 90 102 49 151
income and
expense
Dividends - - - (92) (92) (14) (106)
Other - - - 2 2 - 2
Shares issued on - 2 - - 2 - 2
exercise of
share options
At 30 September 156 305 100 1,586 2,147 447 2,594
2008
At 1 October 156 305 100 1,586 2,147 447 2,594
2008
Total recognised - - (3) (123) (126) (16) (142)
income and
expense
Dividends - - - - - (17) (17)
Shares issued 1 15 - - 16 - 16
under the IFC
option agreement
i
At 31 March 2009 157 320 97 1,463 2,037 414 2,451
Footnotes:
i During the year 1,172,583 shares were issued under the International
Finance Corporation option agreement. As the shares were issued at a
discount only $15 million of cash was received.
ii Other reserves at 31 March 2009 represent the capital redemption
reserve of $88 million (30 September 2008 - $88 million) and a $9
million hedging reserve net of deferred tax (30 September 2008 - $12
million). The movement in the current period represents the movement
on the hedging reserve.
iii Minority interests represent an 18% shareholding in Eastern Platinum
Limited, Western Platinum Limited and Messina Limited and a 26%
shareholding in Akanani Mining (Pty) Limited.
Notes to the Accounts (continued)
9 Analysis of net debt i
As at Cash flow Foreign As at
1 October exchange 31 March
2008 and non cash 2009
movements
$m $m $m $m
Cash and cash 226 (120) (24) 82
equivalents
Overdrafts - (6) - (6)
226 (126) (24) 76
Current borrowings - - - -
Non-current borrowings (529) 4 - (525)
Net debt i (303) (122) (24) (449)
As at Cash flow Foreign As at
1 April exchange 30
2008 and non cash September
movements 2008
$m $m $m $m
Cash and cash 13 214 (1) 226
equivalents
Overdrafts (38) 38 - -
(25) 252 (1) 226
Current borrowings (138) 138 - -
Non-current borrowings (343) (186) - (529)
Net debt i (506) 204 (1) (303)
As at Cash flow Foreign As at
1 October exchange 31 March
2007 and non cash 2008
movements
$m $m $m $m
Cash and cash 222 (212) 3 13
equivalents
Overdrafts (1) (37) - (38)
221 (249) 3 (25)
Current borrowings (237) 99 - (138)
Non-current borrowings (359) 16 - (343)
Net debt i (375) (134) 3 (506)
Footnotes:
i Net debt as defined by the Group comprises cash and cash equivalents,
bank overdrafts repayable on demand, interest bearing loans and
borrowings.
Notes to the Accounts (continued)
10 Contingent liabilities
As at As at As at
31 March 31 March 30
2009 2008 September
2008
$m $m $m
Third party guarantees i 7 7 7
Indemnities ii 66 77 74
Preference share capital put options 17 17 18
iii
Vantage Capital Investments iv 16 16 18
Outstanding legal claims 2 2 2
Contingent liabilities 108 119 119
Footnotes:
i Third party guarantees relate to guarantees provided by the Group in
connection with the sale of certain subsidiaries in 1996, 1997 and 1998
for which amounts have been reasonably estimated but the liabilities
are not probable and therefore the Group has not provided for such
amounts in the accounts.
ii Indemnities represent the vendor financing indemnity given by Lonmin
following the purchase of the additional 9.11% in Eastern Platinum
Limited (EPL) and Western Platinum Limited (WPL) and the investment in
Incwala Resources (Pty) Limited (Incwala). Lonmin agreed to indemnify
Impala Platinum Holdings Limited (Impala) against any non-payment on
the relevant due date of any principal amount owing to Impala by any
HDSA (historically disadvantaged South African) investor in relation to
loans made by Impala to HDSA investors for their purchase of shares in
EPL and WPL. The indemnity is for the US Dollar equivalent of R618
million ($66 million of which $47 million would become enforceable on
30 September 2009 and $19 million would become enforceable on 30
September 2011). A counter-indemnity has been given by each HDSA
investor which is secured on that HDSA investor`s shares in Incwala.
iii Various preference share capital put option agreements were entered
into by Lonmin with a number of banks who subscribed for preference
shares in HDSAs investing in Incwala. These options, which are for the
US Dollar equivalent of R160 million ($17 million), can be put upon
Lonmin by the banks in the event that the HDSAs default on payment. A
counter-indemnity has been given by each HDSA investor which is secured
on that HDSA investor`s shares in Incwala.
iv Vantage Capital Investments:
1) In 2006, pursuant to a reorganisation of the HDSA shareholdings in
Incwala, Lonmin Plc granted Standard Chartered Bank Johannesburg Branch
a put option in respect of 96 preference shares in Vantage Capital
Investments (Pty) Ltd. During the year ended 30 September 2007 the bank
sold 48 of these put options to Thelo Incwala Investments (Pty) Limited
(Thelo). The put option granted by Lonmin Plc outstanding at 31 March
2009 was for the US Dollar equivalent of R111 million ($12 million).
2) The Lonmin Employee Masakane Trust (LEMT) has a 25% shareholding in
Thelo. Lonmin Plc has provided a guarantee to Sanlam Capital Markets
Limited, on behalf of LEMT, over their 25% share of the Thelo funding
to acquire 48 preference shares in Vantage Capital. The guarantee at 31
March 2009 covers the US Dollar equivalent of R41 million ($4 million).
Date: 11/05/2009 08:01:01 Produced by the JSE SENS Department.
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