| Wed 21 Feb 2001, 0:00 | | Sallies Limited Unaudited Results |
|
SALLIES LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1903/001879/06)
UNAUDITED RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2000
HIGHLIGHTS
24% increase in operating profit from mining
5% increase in production of acid grade fluorspar
29% increase in average Rand selling price of acid grade fluorspar
14% increase in average selling price of metallurgical grade fluorspar
2001 production capacity sold at higher average USD prices than those realised
for the year ended 30 June 2000
CONSOLIDATED INCOME STATEMENTS
Restated
Six months Six months 12 months
ended ended ended
31 Dec 31 Dec 30 June
2000 1999 Per- 2000
Unaudited Unaudited centage Audited
R'000 R'000 change R'000
Revenue - mining 40 198 47 072 (15) 88 876
Cost of sales (29 559) (38 250) 29 (72 744)
Profit from mining activities 10 639 8 822 21 16 132
Less:
Depreciation (1 031) (1 004) (3) (2 091)
Amortisation of mineral rights (1 004) (860) (14) (2 055)
Operating profit from mining 8 604 6 958 24 11 986
Less:
Administrative expenses (1 485) (1 023) (31) (2 051)
Amortisation of goodwill (321) (258) (20) (616)
Net finance costs (1 706) (1 287) (25) (2 818)
Net foreign exchange loss (2 837) (893) (69) (2 906)
Net profit before taxation 2 255 3 497 (36) 3 595
Taxation
- normal (558) (868) 56 (2 753)
- deferred (217) (1 107) 410 (170)
Net profit for period 1 480 1 522 (3) 672
Issued shares (number) 64 574 054 61 770 929 64 574 054
Weighted average
shares issued (number) 64 574 054 57 962 621 60 677 758
Weighted average shares issued
for diluted earnings
per share (number) 100 984 054 78 572 621 81 287 758
Reconciliation of earnings:
Net profit attributable to
ordinary shareholders for
basic earnings per share 1 480 1 522 672
Amortisation of goodwill - - 616
Opening stock of mined ore stock (315) - -
Net profit attributable to ordinary
shareholders for headline
earnings per share 1 165 1 522 1 288
Depreciation 1 031 1 004 2 091
Amortisation of mineral rights 1 004 860 2 055
Adjusted cash attributable to
ordinary shareholders for
cash earnings per share 3 200 3 386 5 434
Income adjustment for diluted
earnings per share 492 297 684
Earnings per share:
Basic
- undiluted (cents) 2,3 2,6 (12,7) 1,1
- diluted (cents) 2,0 2,3 (15,6) 1,7
Headline:
- undiluted (cents) 1,8 2,6 (31,3) 2,1
- diluted (cents) 1,6 2,3 (29,1) 2,4
Cash earnings per share:
- undiluted (cents) 5,0 5,8 (15,2) 9,0
diluted (cents) 3,7 4,7 (22,0) 7,5
CONSOLIDATED BALANCE SHEETS
Restated
31 Dec 31 Dec 30 June
2000 1999 2000
Unaudited Unaudited Audited
R'000 R'000 R'000
EQUITY AND LIABILITIES
Capital and reserves 42 981 40 104 41 501
Share capital and premium 42 084 39 835 42 084
Accumulated income/(loss) 897 269 (583)
Non-current liabilities 47 687 48 269 44 973
Long-term loan 29 494 27 994 27 027
Provision for environmental
rehabilitation 437 375 407
Deferred taxation 17 756 19 900 17 539
Current liabilities 22 300 19 661 18 067
Accounts payable and provisions 10 975 10 795 8 159
Taxation payable 1 512 868 899
Current portion of long-term
liabilities 9 831 7 998 9 009
Total equity and liabilities 112 968 108 034 104 541
ASSETS
Non-current assets 71 534 70 726 71 307
Property, plant and equipment 60 870 59 382 60 322
Goodwill 10 664 11 344 10 985
Current assets 41 434 37 308 33 234
Inventories 14 582 7 221 8 313
Accounts receivable 19 308 16 724 22 805
Cash and cash equivalents 7 544 13 363 2 116
Topal assets 112 968 108 034 104 541
Net asset value per share (cents) 66,6 64,9 64,3
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Accu-
Share Share mulated
capital premium income Total
R'000 R'000 R'000 R'000
Balance on formation
of the group on 1 July 1999 9 - (1 254) (1 245)
Net income for period - - 672 672
Issue of shares 55 44 152 - 44 207
Share issue and listing expenses
charged against share premium - (2 133) - (2 133)
Balance at 30 June 2000 64 42 019 (582) 41 501
Net income for period - - 1 480 1 480
Balance at 31 December 2000 64 42 019 898 42 981
CONSOLIDATED CASH FLOW STATEMENTS
Restated Restated
Six months Six months 12 months
ended ended ended
31 Dec 31 Dec 30 June
2000 1999 2000
Unaudited Unaudited Audited
R'000 R'000 R'000
Net cash inflow/(outflow)
from operating activities 8 011 5 497 (727)
Cash generated by operations 9 662 6 196 5 555
Net interest (paid)/received (1 706) (1 287) (3 762)
Normal taxation (paid)/received 55 587 (2 520)
Net cash outflow from
investment activities (2 583) (68 895) (72 150)
Acquisition of subsidiary - (65 683) (66 358)
Net additions to mine plant,
equipment and buildings (2 583) (2 969) (5 549)
Additions to office furniture
and equipment - (243) (243)
Net cash outflow from financing
activities - 76 630 74 862
Proceeds from issue of
ordinary shares - 42 075 44 207
Long-term loan
- raised - 38 999 38 999
- repaid - (4 444) (8 344)
Net increase/(decrease) in cash
and cash equivalents 5 428 13 231 1 984
Cash and cash equivalents at
beginning of period 2 116 132 132
Cash and cash equivalents at
end of period 7 544 13 363 2 116
COMMENTARY
Overview
The results for the six months ended 31 December 2000 are much improved over
the results for the year ended 30 June 2000. Considering that no sale of acid
grade fluorspar was made in December 2000, whilst the December 1999 results
were enhanced by a high stockholding on date of take-over of Witkop Fluorspar
Mine, the results are considered satisfactory.
Production
Production of acid grade fluorspar was 5% higher than that of December 1999,
but was 5 391 tonne lower than budget. This was mainly as a result of a lower
head grade of 13,68% as opposed to the budgeted 14,5% and recoveries of 83,2%
being lower than the budgeted 85,8%. The average mill feed was recently
increased to 125 tonne per hour from the budgeted 117 tonne per hour. The plant
is now running at full capacity barring any breakages.
Acid grade fluorspar cost of production increased by 6% for product being
exported and 11% for product sold locally. Taking into account the increases in
the cost of fuel, the weakening Rand and the increasing stripping ratio, the
increases are considered reasonable.
Metallurgical grade fluorspar production was 9% lower than the previous year
due to lower demand.
Metallurgical grade fluorspar cost of production increased 13% mainly due to
increases in the purchase price of metallurgical grade fluorspar, transport
and fuel costs.
The crushing of aggregate commenced during August 2000. The project is
currently being reviewed to assess the long-term viability thereof.
Sales
Acid grade fluorspar sales volumes are 34% down on December 1999 sales, mainly
due to no shipment being made during December 2000, thereby increasing the
stockholding and the disposal of 17 279 tonne of finished product taken over on
acquisition of the mine. The lower volumes were however, set-off by improved
USD selling prices and the weakening in the Rand/USD exchange rate. Sales for
the six months ended 31 December 2000 had a favourable customer mix, resulting
in a 10% increase in the average USD selling price, this should, however,
decrease as lower priced sales increase in volume during the second half.
Metallurgical grade fluorspar sales volumes were down due to lower demand,
whilst prices increased by 14% over that of the previous year
Operating statistics
Six months Six months 12 months
ended ended Percen- ended
31 Dec 31 Dec tage 30 June
2000 1999 change 2000
Acid grade fluorspar concentrate
Ore mined tonne 596 755 479 623 24 1 146 377
Stripping ratio /tonne ore 0,49 0,01 0,22
Ore milled tonne 493 403 446 053 11 932 138
Head grade % 13,68 13,67 - 13,76
Production tonne 57 686 54 750 5 114 034
Sales volume tonne 47 450 72 029 (34) 127 338
Average price Rand/tonne 790,04 616,08 28 657,07
Average export price USD/tonne 110,73 101,74 9 104,75
Average exchange rate Rand/USD 7,33 6,09 20 6,33
Average export price Rand/tonne 811,65 619,89 31 662,93
Average cost of exports Rand/tonne 615,34 577,94 6 555,31
Average local price Rand/tonne 610,98 558,86 9 580,96
Average cost of local sales Rand/tonne 484,95 437,87 11 406,82
Metalurgical grade fluorspar concentrate
Production tonne 6 615 7 245 (9) 13 808
Sales volume tonne 6 659 7 203 (8) 13 249
Average selling price Rand/tonne 425,47 374,38 14 391,30
Average cost or production Rand/tonne 373,69 329,88 13 321,54
Mineral resource
Proven and probable mineral reserves are adequate for a further 18 years at
current production levels.
Treasury and finance
The third payment on the RMB Australia loan was made on 5 January 2001. The
current balance outstanding on the RMB Australia loan is US$4,55 million.
The group has not hedged is foreign sales or its foreign liability during the
period under review, due to the uncertainty on the restructuring of the RMB
Australia loan and due to initial indications that the Rand would strengthen
against the US$ from its 30 June 2000 position of R6,93/US$. It is, however,
the intention of the group to commence with hedging once the USD loan has been
restructured to a Rand denominated loan.
Capital expenditure
Capital expenditure during the period under review amounted to R2,6 million and
relates mainly to pre-stripping to ensure enough available reserves for
effective mining and R302 000 to increase production capacity by a further 10%.
Capital expenditure budgeted, but not incurred, amounts to R9,4 million and
relates to the replacement of assets to maintain current production capacity
and improve controls in the production process. This will be financed from
internal sources.
Accounting policies
The interim results have been prepared using accounting policies which are in
accordance with the standards issued by the International Accounting Standards
Committee and the South African Institute of Chartered Accountants. These
policies are consistent with those applied in the audited financial statements
for the year ended 30 June 2000.
Restatement of comparative results
The comparative figures for the December 1999 interim have been restated to
conform to accounting policies used in the 30 June 2000 audited annual
financial statements. The consolidated cash flow statement, weighted average
shares issued for diluted earnings per share and diluted earnings per share for
the year ended 30 June 2000 have been restated to realign with current
disclosure.
Diluted earnings per share
Diluted earnings per share have been calculated after taking into account
options allocated to employees and assuming that RMB Australia has exercised
their conversion right at the beginning of the reporting period. The net profit
is therefore adjusted by the after-tax effect of interest on the USD1,5 million
of the loan, and the number of shares being based on the share price and
exchange rate at the beginning of the period.
On behalf of the Board
E F G NEALON
Chairman
Johannesburg
20 February 2001
Registered office
KPMG Forum, 427 Hilda Street, Pretoria (PO Box 11265, Hatfield, 0028)
Transfer secretaries
Computershare Services Limited, 1st Floor, Edura, 41 Fox Street, Johannesburg
(PO Box 61051, Marshalltown, 2107)
Directors
E F G Nealon* (Chairman), P H De Villiers (Managing Director), O R Dix, M J
Tuite*
*Australian
