| Fri 25 Jan 2002, 0:00 | | Palabora Mining Company Limited - Preliminary Resu |
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Palabora Mining Company Limited
and its Subsidiaries
(Incorporated in the Republic of South Africa)
(Reg. No. 1956/002134/06)
Share code: PAM ISIN: ZAE000005245
Preliminary report
for the year ended 31 December 2001
Commentary
Group profit for the year was R220 million, down 7% on the R237 million
achieved in 2000. The decrease can largely be attributed to an increase in
operating costs, mainly as a result of industrial action and high
maintenance costs, and an increase in taxation. Taxation in 2000 was reduced
because of a reversal of provisions. These increases offset higher revenue.
Group operating expenditure increased by R171 million. The increase was
attributable to the increase in sales volumes and increased operating costs
due to industrial action, which occurred from 22 May to 14 June 2001. Sales
and production volumes of all products were impacted by the industrial
action.
Contained copper in concentrate production was 78 381 tons, down 33% on the
116 959 tons achieved in 2000. This decrease was mainly the result of low
concentrate grades associated with the processing of reverberatory slag,
industrial action and the disruptions of mining operations due to rain in
the first and fourth quarters of the year. Stockpiled concentrate was
processed during 2001 due to the lower copper in concentrate production.
Alternative sources of material have been planned to maintain smelter feed
during 2002. Cathode production was marginally down by 1% on the previous
year. This was due to lower anode supply from the smelter. Contained copper
sales of 100 163 tons was
10 478 tons greater than the 89 685 tons achieved in 2000.
The weighted average unit cost of copper cathode delivered to customers was
R8 928 per ton. This was 16 % higher than the R7 682 per ton achieved in the
previous year as a result of both lower production volumes and higher
operating costs, as discussed above.
In industrial minerals, vermiculite production was hampered in 2001 by wet
in-pit conditions, low availability of plant and heavy equipment and
industrial action. Baddeleyite and uranium production ceased during the year
following closure of the heavy minerals plant in August.
Palabora's safety performance improved significantly in 2001, but was
disappointing due to two fatalities - one in the underground mine, and one
in the anode section of the smelter. The lost time injury frequency rate
(LTIFR) for the year was 0,27. This is a 36% improvement on the 0,42
achieved in 2000. The LTIFR of 0,27, which includes all contractors working
in the underground mine, is the lowest on record.
On the environmental front there was a decrease in the annual average raw
water consumption with an average of 36,6 Ml/day for 2001, compared with 43
Ml/day for 2000. The reduction in consumption is mainly due to initiatives
around improving monitoring, recycling and waste minimization. Sulphur
recovery for the year was 71%, 3% higher than in 2000. The effect of the new
primary hoods has been significant and October 2001 had the highest monthly
sulphur capture since 1991 at 81%.
The Palabora Foundation continued to provide substantial assistance to local
communities in training, education and socio-economic development, with
financial support from the company amounting to R7,6 million in 2001.
The project to develop an underground mine had been in progress for 68
months at the end of 2001. A total of 56 700 square metres have been
undercut to date. The drawpoint development rate has shown steady
improvement during the year and is currently running at a sustainable rate
to achieve 120 drawbells by the end of 2002. Infrastructural development
has also progressed well with the complete excavation of the number 2
crusher chamber as well as 57% and 33% of crushers numbers 3 and 4
respectively. With the exception of limited punch listing and modifications
after construction, all surface construction is complete. Indications are
that caving has commenced with roughly 100 000 tons of material having been
drawn from the drawpoints to date. The recent devaluation of the Rand versus
the US Dollar has resulted in significant volatility in the project
estimated final cost (EFC) in terms of both currencies. By year-end, the
unspent portion of the project EFC stood at approximately R500 million of
which 30% was foreign exchange denominated.
For 2001, Palabora declared a dividend of R0,30 per share. As mentioned in
the interim report for the half year ended 30 June 2001, the company has
undertaken that it would not, in respect of either of the calendar years
2001 and 2002, distribute any of its distributable profits for each such
calendar year except for the dividend already declared on 24 April 2001.
This is one of the conditions pertaining to the granting of the new four-and-
a-half year unsecured syndicated loan of US$125 million by a consortium of
nine local and international banks.
Z.W. Ntuli D.S. Sadler
Chairman Managing Director
24 January 2002
Audited Group Results
Abridged income statement
2001 2000
R000 R000
Revenue 1 985 038 1 747 685
Operating costs 1 461 140 1 290 147
Depreciation 163 535 124 302
Operating profit 360 363 333 236
Interest received 4 001 12 723
Interest payable (31 436) (11 545)
Foreign exchange gains 38 361 28 081
Increase in provisions (31 910) (35 095)
Profit before taxation 339 379 327 400
Taxation 119 546 90 658
Current 36 432 7 738
Deferred tax 83 114 82 920
Profit after taxation 219 833 236 742
Abridged balance sheet
2001 2000
R000 R000
Employment of capital
Current assets 753 935 945 748
Mining assets 3 959 841 2 935 660
Deferred expenditure 6 534 26 126
Investment - (unlisted) 47 915 41 967
Total assets 4 768 225 3 949 501
Liabilities and shareholders' equity
Current liabilities 487 797 1 250 497
Provision for restoration
and closure costs 162 877 142 092
Borrowings 1 391 395 189 250
Provision for post retirement
medical benefits 148 803 141 490
Deferred taxation 784 620 701 506
Total liabilities 2 975 492 2 424 835
Total shareholders' equity 1 792 733 1 524 666
Total equity and liabilities 4 768 225 3 949 501
Summarised cash flow
2001 2000
R000 R000
Cash flow from operating activities 771 378 317 239
Cash flow from investing activities (800 407) (599 423)
Replacement of mining assets (108 242) (132 447)
Development expenditure (687 679) (476 673)
Other investing activities (4 486) 9 697
Cash flow from financing activities 416 461 (225 192)
Long-term loans raised 1 032 575 -
Long and short-term loans repaid (599 125) (191 213)
Dividends paid (16 989) (33 979)
Net increase/(decrease) in cash and
cash equivalents 387 432 (507 376)
Cash and cash equivalents
at beginning of period (587 168) (79 792)
Cash and cash equivalents
at end of period (199 736) (587 168)
Notes:
1. Accounting policies
The preliminary consolidated financial statements are prepared on the
historical cost basis. Accounting principles and policies used in preparing
this report comply with South African Statements of Generally Accepted
Accounting Practice and are consistent with the accounting policies applied
in the previous year except for the following:
During the year the Group adopted AC 116 (revised): "Employees Benefits".
The adoption of this statement had no effect on the Group's net profit or
distributable reserves.
2. Long-term loan Year Year
2001 2000
Long-term loan 1 393 218 567 750
Current portion (1 823) (378 500)
1 391 395 189 250
The company has arranged a long-term loan with a group of national and
international banks for an unsecured facility agreement of US$125 million.
The facility consists of a US$90 million tranche and a rand tranche of R283
million. This facility, which is being used for the underground mine
development and the repayment of other short-term loans, is repayable in six
equal half yearly instalments starting on 11 June 2003 and the interest rate
is based on Libor/Jibor +1,5%. The balance owing on the Chase Manhattan
loan, being US$50 million was repaid on 29 June 2001.
3. Holding company
The immediate holding company is Palabora Holdings Limited and the ultimate
holding company is Rio Tinto plc, which is incorporated in the United
Kingdom.
Statement of changes
in equity for the
year ended
31 December 2001
Share Distri-
Capital & Other butable
Premium Reserves Reserves Total
R000 R000 R000 R000
Balance
1 January 2001 28 891 109 419 1 386 356 1 524 666
Net gains and losses
not recognised in
income statement:
Currency translation
difference - 65 223 - 65 223
Net profit for
the period - - 219 833 219 833
Dividends - - (16 989) (16 989)
Balance
31 December 2001 28 891 174 642 1 589 200 1 792 733
Comparative statement
of changes in equity
for the year ended
31 December 2000
Balance
1 January 2000 28 891 79 648 1 183 593 1 292 132
Net gains and losses
not recognised in
income statement:
Currency translation
difference - 29 771 - 29 771
Net profit for
the period - - 236 742 236 742
Dividends - - (33 979) (33 979)
Balance
31 December 2000 28 891 109 419 1 386 356 1 524 666
Selected statistics
2001 2000
Production and sales
Ore mined (millions of tons) 13,9 26,0
Copper in concentrate
(thousands of tons) 78,4 117,0
Cathode produced (thousands of tons) 86,9 87,7
Cathode sold (thousands of tons) 95,9 84,2
Contained copper sold
(thousands of tons) 100,2 89,7
Vermiculite sold (thousands of tons) 186 194
ZBS sold (thousands of tons) 1,0 0,6
Average rand/dollar exchange rate 8,54 6,93
Average copper price realised
per ton (ZAR) 14 006 12 949
Cash cost per ton - delivered (ZAR) 8 928 7 682
Average copper price realised
(USc/lb) 74,4 84,8
Average vermiculite price realised
per ton (ZAR) 1 571 1 326
Average ZBS price realised per ton (ZAR) 17 338 15 634
All tons are metric tons
Capital expenditure (R millions) 702 505
Capital commitments (R millions)
Approved expenditure at end of
each period 844 999
Contracts placed at end of each period 402 621
Share capital
Ordinary shares of R1 each (thousands)
- Authorised 28 500 28 500
Ordinary shares of R1 each (thousands)
- Issued 28 316 28 316
The directors are authorised to
issue unissued shares until the
next annual general meeting
Investments - (R thousands)
Fair value of investments 81 857 70 078
Interest capitalised (R thousands) 53 927 63 689
Dividends paid (R thousands)
2000 total dividend 120 cents
per share 33 979
2001 total dividend 60 cents
per share 16 989
Earnings per share, based on the
net profit after tax R7,76 R8,36
Headline earnings per share, based
on the net profit after tax adjusted
for non-operational gains/losses R7,76 R7,91
Net asset value per share R63,31 R53,85
Segmental reporting
Copper Industrial Minerals Other
R000 R000 R000
1.12.01 31.12.00 31.12.01 31.12.00 31.12.01 31.12.00
Profit and Loss
Revenues
1 378 247 1 139 965 503 663 502 073 103 128 105 647
Cost and
expenses 1 229 734 999 704 343 546 368 133 51 395 46 612
Operating
profit 148 513 140 261 160 117 133 940 51 733 59 035
Finance cost
Profit before tax
Taxation
Net income for the year
Total
R000
31.12.01 31.12.00
Profit and Loss
Revenues
1 985 038 1 747 685
Cost and
expenses 1 624 675 1 414 449
Operating
profit 360 363 333 236
Finance cost (20 984) (5 836)
Profit before tax 339 379 327 400
Taxation 119 546 90 658
Net income for the year 219 833 236 742
The segmental split on a geographical basis is based on the country in which
the orderis received.
South Africa America United Kingdom
R000 R000 R000
31.12.01 31.12.00 31.12.01 31.12.00 31.12.01 31.12.00
Profit
and Loss
Revenues 1 486 238 1 263 589 208 222 180 457 223 044 248 654
Cost and
expenses 1 250 938 1 040 077 187 418 169 806 165 168 178 160
Operating
profit
before
tax 235 300 223 512 20 804 10 651 57 876 70 494
Taxation 88 313 58 004 7 387 4 033 18 325 22 327
Net income
for the year 146 987 165 508 13 417 6 618 39 551 48 167
Singapore Total
R000 R000
31.12.01 31.12.00 31.12.01 31.12.00
Profit
and Loss
Revenues
67 534 54 985 1 985 038 1 747 685
Cost and
expenses 42 135 32 242 1 645 659 1 420 285
Operating
profit
before
tax 25 399 22 743 339 379 327 400
Taxation 5 521 6 294 119 546 90 658
Net income
for the year 19 878 16 449 219 833 236 742
Directors:
Z W Ntuli (Chairman), D S Sadler** (Managing Director), D A Farnaby, O L
Groeneveld**, M D Humphries, R M Maruma, G M Negota, J H K Sachikonye***, J
E Rickus*, J C M van Gaalen# (Alt: B K Wood),
R M Whyte* (Alt: S D L Reynish)
Company Secretary:
E B R Hone
* British **Australian ***Zimbabwean #Dutch
Transfer Secretaries: Registered Office:
Computershare Services Limited 1 Copper Road
41 Fox Street Phalaborwa
Johannesburg 2001 1389
Postal Address: Postal Address:
P O Box 61051 P O Box 65
Marshalltown 2107 Phalaborwa 1390
These results are also available on our website at: www.palabora.co.za
