| Thu 22 Aug 2002, 0:00 | | Barplats Consolidated Annual Results For The Year |
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Barplats Consolidated Annual Results For The Year Ended 30 June 2002 (Audited)
BARPLATS INVESTMENTS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1987/004830/06)
Share code: BPL
ISIN: ZAE000028692
Consolidated Annual Results for the year ended 30 June 2002 (AUDITED)
Highlights
- Platinum in concentrate production up 162% in first full year of production
after re-opening
- Dollar metal basket price down 33%
- Attributable income of R54,9 million
Income statement
for the year ended 30 June (R `000) 2002 2001
Sales revenue 265 832 116 938
Cost of sales 193 162 57 918
Contract mining costs 92 843 19 640
Contract concentrating costs 50 219 14 627
Amortisation of mining assets 41 794 20 256
Other costs 8 306 3 395
Operating income 72 670 59 020
Other expenses (8 416) (22 048)
Net financing expense (9 162) (4 805)
Income/(loss) before taxation 55 092 32 167
Taxation 133 32
Attributable income/(deficit) 54 959 32 135
Headline and basic earnings
per share (cents) 25 14
Balance sheet
as at 30 June (R `000) 2002 2001
ASSETS
Non-current assets 219 378 200 214
Property, plant and equipment 219 378 200 214
Investments in subsidiaries
Current assets 69 776 102 617
Inventories 1 455 994
Receivables 68 224 101 534
Cash and cash equivalents 97 89
Total assets 289 154 302 831
EQUITY AND LIABILITIES
Capital and reserves 169 182 114 223
Ordinary shares 2 225 2 225
Share premium 1 049 928 1 049 928
Accumulated deficit (882 971) (937 930)
Non-current liabilities 32 908 29 603
Provision for environmental 32 908 29 603
obligations
Current liabilities 87 064 159 005
Trade and other payables 36 828 40 256
Current taxation liabilities 87 16
Borrowings 50 149 118 733
Total equity and liabilities 289 154 302 831
Statement of changes in equity
Share Share Accumulated
capital premium deficit Total
Balance at 30 June 2 225 1 049 928 (970 065) 82 088
2002
Net profit
attributable to
ordinary 32 135 32 135
shareholders
Balance at 30 June 2 225 1 049 928 (937 930) 114 223
2001
Net profit
attributable to
ordinary 54 959 54 959
shareholders
Balance at 30 June 2 225 1 049 928 (882 971) 169 182
2002
Cash flow statement
for the year ended 30 June (R `000) 2002 2001
Operating activities
Cash generated from/(used in) operations 137 602 (1 665)
Financial income 444 108
Interest paid (8 434) (4 913)
Taxation paid (62) (283)
Net cash generated from/(used in)
operating activities 129 550 (6 753)
Investing activities
Purchase of property,
plant and equipment (68 621) (113 156)
Proceeds from sale of fixed assets 7 663 1 048
Net cash used in investing activities (60 958) (112 108)
Financing activities
(Repayment of)/proceeds from borrowings (68 584) 118 733
Net cash (used in)/generated
from financing activities (68 584) 118 733
Increase/(decrease) in cash
and cash equivalents 8 (128)
Movement in cash and cash equivalents
At the start of the year 89 217
Increase/(decrease) 8 (128)
At the end of the year 97 89
Notes
The annual financial statements have been prepared using accounting policies
consistent with those of the annual financial statements for the year ended 30
June 2001. In addition, the group adopted the provisions of IAS 39 (Financial
Instruments: Recognition and Measurement). The adoption of these policies had no
impact on the prior or current earnings. The financial statements have been
audited by PricewaterhouseCoopers Inc. whose opinion is available for inspection
at the registered office of Barplats.
Other expenses includes an amount of R14.9 million for exchange adjustments as
well as exploration costs of R18.9 million.
Capital expenditure for the period under review amounted to R68.6 million.
Capital expenditure approved and committed at 30 June 2002 amounted to R13.3
million. This expenditure will be funded from internal resources and borrowings.
Current liabilities includes a loan facility from Impala Platinum Limited of
R200 million of which R50.1 million has been utilised. This facility bears
interest at the Johannesburg Interbank Acceptance Rate plus 2% and any
outstanding balance will be repaid from cash generated from operations. Non-
current liabilities comprises the provision for environmental obligations.
Year at a glance
%
2002 2001 change
Financial (R`000)
Sales revenue 265 832 116 938 127,4
Operating income 72 670 59 020 23,1
Income before taxation 55 092 32 167 71,3
Headline earnings per share (cps) 25 14 78,6
Production
Tonnes ex mine (`000t) 757 344 120
Platinum in concentrate (`000oz) 39,1 14,9 162
PGM in concentrate (`000oz) 75,9 28,6 165
Key statistics
2002 2001 % change
Sales volumes in
concentrate
Platinum (`000 oz) 39.1 14.9 162.4
Palladium (`000 oz) 17.3 6.6 162.1
Rhodium (`000 oz) 6.1 2.3 165.2
Nickel (t) 50.1 18.5 170.8
Prices achieved in
concentrate
Platinum ($/oz) 410 497 (17.5)
Palladium ($/oz) 298 534 (44.2)
Rhodium ($/oz) 595 1 446 (58.9)
Nickel ($/t) 4 370 4 664 (6.3)
Exchange rate achieved (R/US$) 10.28 7.95 29.3
Production
Tonnes milled ex-mine (`000 t) 757 344 120.1
Platinum in concentrate (`000 oz) 39.1 14.9 162.4
Palladium in concentrate (`000 oz) 17.3 6.6 162.1
Rhodium in concentrate (`000 oz) 6.1 2.3 165.2
Nickel in concentrate (t) 50.1 18.5 170.8
Pgm in concentrate (`000 oz) 75.9 28.6 165.4
Total cost
per tonne milled (R/t) 200 109 (83.5)
($/t) 20 14 (42.8)
per pgm ounce in (R/oz) 1 994 1 315 (51.6)
concentrate
($/oz) 197 173 (13.9)
per platinum ounce in
concentrate (R/oz) 3 871 2 527 (53.2)
($/oz) 382 332 (15.1)
Capital expenditure (Rm) 69 133 48.3
(US$m) 7 17 58.8
Extracts from the Chairman`s letter to shareholders and review of operations
Review
As predicted in last year`s annual report, Barplats has achieved an increase in
earnings to
R55 million, from R32 million the previous year. Sales revenues rose by 127% to
R265.8 million with the increase in production of platinum in concentrate to
39 100 ounces (75 900 PGM ounces) for the year. A dramatic decrease of 33% in
metals prices was offset to some extent by the weaker rand, squeezing the gross
margin to 27%.
The exchange rate received by the company for the year was R10.28/US$. Headline
earnings per share rose by 78% to 25 cents per share. The high level of future
capital, exploration and appraisal expenditure precluded the Board from
declaring a dividend.
The market
Overall, platinum demand has increased, although strong price rallies in recent
years have taken a toll on demand. Platinum jewellery demand declined at prices
above US$600/oz, while the switch to platinum-rich catalytic converters
continued. The downturn in the electronics industry resulted in the destocking
of palladium, and Russian activity further fuelled volatility. This was all
within the context of a suppressed global economy after the events of September
11.
Of perhaps greater relevance was the 59% decline in rhodium prices which
significantly influenced the company`s revenue due to its greater relative
importance in the price basket.
Crocodile River
During the year, Crocodile River`s safety performance was satisfactory, with six
lost time injuries reported, resulting in a LTIFR of 2,87. Crocodile River
developed and implemented a set of "Platinum Rules" aimed at addressing the most
safety-critical issues. Safety expert, Du Pont, was engaged to implement the
Safety Management Audit Training (SMAT) system. Employees of both Crocodile
River and the contractor companies have been trained on the SMAT principles and
procedures. The aim is to instill a culture of safety among all those who work
at the mine.
Following the recommencement of mining during the previous financial year,
production reached 75 000 tons per month by year-end. The move to underground
mining is progressing well and output should rise to full production of 42 000
platinum ounces
(80 000 PGM ounces) by the end of FY2003, by then production should be almost
entirely from underground sources. The eventual target remains 50 000 platinum
ounces, but start-up has been more protracted than expected.
Barplats shareholders will also be pleased to learn that investigations are in
progress to extend the life of mine. Trial mining and exploration to be
undertaken on the property during the next financial year have the potential to
significantly increase production output.
Kennedy`s Vale
A feasibility study will be completed during FY2003, following extensive 3D
seismic surveying and infill drilling during the year. A decision on whether or
not to proceed with the construction of a mine will only be taken on completion
of the resource, engineering and market evaluations - which are expected to be
finalised in early 2004.
Prospects
The Crocodile River operations were restarted at a time of buoyant platinum and
palladium prices on the Maroelabult property, a resource expected to support
mining for four to five years. It was recognised at the time that cash flows
generated by the Maroelabult operation would be used to further evaluate the
remaining resources available to Barplats on the balance of the Crocodile River
property and at Kennedy`s Vale.
Management is continuing with this course of action and is investigating the
viability of extending the life of the Crocodile River operations, and
potentially increasing mining rates and throughput so as to improve economies of
scale. The Crocodile River operations will always be at the high end of the cost
curve, given current production levels and the higher costs associated with the
underground mining operation, particularly now that open-cast operations are
winding down.
The medium-term future for Barplats will therefore be dependant on the outcome
of these investigations at the Crocodile River property, which is known to be
geologically complex and relatively low grade. The long-term future of Barplats
will be determined by the outcome of the feasibility study on the Kennedy`s Vale
prospect.
Looking forward, the fundamental outlook for the platinum market remains sound.
Global automotive sales should recover in 2003, while Chinese jewellery demand
in particular is expected to be supported by growth in GDP in the run-up to the
Beijing Olympics.
Platinum use in the automotive industry, in particular, is forecast to grow
strongly as a result of the ongoing substitution for palladium and the growth of
diesel vehicle sales in Europe. Although palladium growth is threatened by
substitution, a partial return at lower price levels is possible.
Prospects for Barplats therefore remain satisfactory although the higher cost of
the underground operation will impact on operating margins. 2003 should be a
satisfactory year albeit with slightly lower returns than this year.
On behalf of the board
K C Rumble D H Brown Johannesburg
Chairman Director 22 August 2002
Registered office
3rd Floor, Old Trafford 4, Isle of Houghton, Boundary Road, Houghton 2198
(PO Box 61386, Marshalltown 2107)
Transfer secretaries
Computershare Investor Services Limited
8th Floor, 11 Diagonal Street, Johannesburg 2001
(PO Box 1053, Johannesburg 2000)
Date: 22/08/2002 09:01:00 AM Produced by the JSE SENS Department
