| Wed 27 Nov 2002, 18:23 | | Lonmin Plc - Results For The Year Ended 30 Septemb |
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Lonminplc - Results For The Year Ended 30 September 2002
Lonmin Plc
ISIN Code: GB0031192486
ISSUED BY LONMIN PLC
4 GROSVENOR PLACE, LONDON SW1X 7YL
TEL +44 (0)20 7201 6000 FAX +44 (0)20 7201 6100
RESULTS FOR THE YEAR ENDED 30 SEPTEMBER 2002
Financial Highlights Year to Year t
30 30 Septem
September 2001
2002
PROFITS
(i) EBITDA $372m $541m
Operating profit $331m $490m
Profit before tax $332m $523m
Earnings per share 121.5c 153.7c
(ii) Dividends per share 72.0c 64.0c
CASH FLOW
Trading cash flow per share 118.9c 242.9c
Free cash flow per share (4.6)c 129.0c
BALANCE SHEET
Equity interests $675m $1,077
Net (borrowings)/cash and deposits $(155)m $523m
(iii) Gearing 23% nil
Commenting on the results, Edward Haslam said:
"The Group has enjoyed another good year both operationally and financially.
Current trading is in line with the Board`s expectations and the platinum market
outlook for the coming year remains strong."
NOTES ON HIGHLIGHTS
(i) EBITDA is Group operating profit before interest, tax, depreciation and
amortisation.
(ii) The Board recommends a final dividend of 42 cents per share payable on 17
February 2003 to shareholders on the registers on 24 January 2003.
(iii) Gearing is calculated on the equity interests of the Group.
Press enquiries: Anthony Cardew/Jackie Range, Cardew Chancery - +44 (0)20 7930
0777
This press release is available on http://www.lonmin.com
Chairman`s statement
I am pleased to present the report and accounts for the year to 30th September
2002, which has been a year of steady progress across the Company.
Our results are, as always, dominated by our platinum group metal mining
activities in South Africa. I commented last year that platinum group metal
prices had reached levels that were probably unsustainable and this proved to be
the case. The more restrained earnings reported for the year just ended reflect
lower platinum group metal prices.
The Chief Executive`s statement deals in considerable detail with operational
matters and I shall, therefore, confine my comments to matters of strategic
import.
The most important development in the year just ended was the introduction by
the Ministry of Minerals and Energy in South Africa of a new framework for the
conduct of mining activities in South Africa - conventionally known as the Black
Economic Empowerment Charter, or "BEE". This is designed to redress the
economic inequalities and lack of opportunity for the many, that have
characterised South Africa for so many years. We are wholly in sympathy with
this initiative and believe that it will in the fullness of time ensure that
South Africa remains a stable and welcoming home for international investment,
which will be good for us as a major investor in South Africa. This is crucial
to the future of Lonmin as South Africa currently accounts for substantially all
of our earnings and where we are embarked upon a major capital expenditure
programme designed to take our annual production of platinum group metals to two
million ounces.
This BEE programme is receiving a great deal of attention from the Board and
management at every level. The Board has established a Standing Committee, with
executive and non-executive membership under the Chairmanship of Roger
Phillimore, to oversee the process. We are well advanced in developing plans to
ensure full and timely compliance with the new regime through to the issuance of
so-called "New Order" mining licences covering all our existing and prospective
activities.
We are in regular contact with the authorities from the highest level down in
formulating and refining our response to the new requirements. As a condition
of the grant of New Order mining licences we will be required to make available
equity in our operations to Historically Disadvantaged South Africans. We are
in active discussion with a small number of potential investor groups, while
also examining the potential for a broader participation by the South African
qualifying investor public. We are also, of course, maintaining a constructive
dialogue with Impala, our co-shareholder in Lonplats.
We will also have to demonstrate to the authorities that we have taken or are
committed to measures designed to increase the representation of Historically
Disadvantaged South Africans at all levels within the company, to extend our
training and education programmes and to protect the environment in and around
the mines and the communities in which they operate. We will have to address
our procurement arrangements and explore the possibilities that may exist for
the beneficiation of our end product in South Africa.
We are well into the process and I am pleased to say are independently advised
that the Company is already well advanced towards compliance with the new
expected requirements in most areas. We believe that it will be possible for us
to demonstrate full compliance and that this will not have a material adverse on
going impact upon our finances.
It is our objective to have reached agreement with the authorities probably in
the second quarter of 2003. Shareholders will, of course, be kept fully
informed of developments.
As a result of some early rumours that the measures would be much further
reaching and more Draconian than they appear to be, shares of all groups with
significant exposure to South African mining have been extremely volatile and
substantial value has been eroded. It is essential, if confidence in South
Africa is to be restored in the international investment community, that it is
made clear that this is a one-time exercise rather than one that will be
repeated from time to time in future. That could only lead to a permanent
erosion of confidence and a drying up of foreign investment flows with all the
implications that would have for South Africa. The mining industry needs a legal
and regulatory environment, which is predictable and stable, if it is to make a
full contribution to the future of South Africa.
We have been busy as well on other fronts. Shortly after the year-end we
announced the sale of our residual gold mining assets in Zimbabwe, recovering
substantially all of their book value of $16 million.
Earlier in 2002 we participated in a recapitalisation of Ashanti, the Ghanaian
gold mining company in which we owned a 32% interest and in which our partner is
the Government of Ghana. This was to effect a reconstruction of the balance
sheet and finances of Ashanti that had been severely impacted by the financial
difficulties arising from its hedge book difficulties some two years earlier.
Our commitment of $75 million of new money to Ashanti should not be taken to
indicate any change of strategy on our part. Lonmin remains committed to its
development as a focused producer of platinum group metals. We believe that the
terms of a refinancing plan earlier proposed by the Board of Ashanti were
unnecessarily dilutive of the interests of its shareholders and transferred too
much value to Ashanti`s convertible debt holders and bullion counterparties away
from Ashanti`s long standing shareholders. As a result Ashanti is a better
company with a more secure balance sheet and improved prospects that are already
coming through in its financial results. We are under no financial pressure
whatsoever to divest our shareholding in Ashanti, but it is not a strategic
asset and it is our intention to exit this investment.
We are committed to minimising our cost of capital and running an efficient
balance sheet consistent with our capital expenditure programme and the
volatility of the metals that we produce. The Board keeps the efficiency of the
balance sheet and cost of capital under constant review and plans to introduce a
conservative measure of long-term leverage into the balance sheet. In this
context we bought in shares at a cost of $128 million and returned a further
$360 million to our shareholders in February 2002 through a Court approved
scheme.
Peter Harper, who had served the Company for three successive three-year terms
latterly as Deputy Chairman and Chairman of the Audit Committee, has retired.
We thank him for his input and contribution through some turbulent years as the
Company was transformed from a sprawling conglomerate to a focused mining
company. Roger Phillimore, who has been a Board member for 5 years succeeded him
as Deputy Chairman while Sir Alastair Morton took over the Chairmanship of the
Audit Committee and was nominated Senior Independent Director. The executive
representation on the Board has been further strengthened by the appointment
shortly after the year-end, of Peter Ledger, whose considerable mining
experience will be a valuable asset.
I should like to extend the thanks of the full Board to our entire management
and workforce.
Sir John Craven
Chairman
Chief Executive`s statement
In its second year as a pure Platinum Group metal miner, Lonmin has consolidated
its reputation for low cost mining and further demonstrated its ability to
deliver against a stated strategy.
During the year under review, ore milled, for the second year in a row, hit an
all time record high quantity of 11.3 m.t. This resulted in a refined metal
production of 757,451 tr. oz of platinum, an increase of approximately six
percent over the previous year and ahead of our published expansion target.
Total pgm and gold production was 1,467,525 tr. oz. and the cash cost per ounce
excluding royalties fell year on year by around fifteen percent to $168.
There was an overall reduction in the basket of metals` average price of twenty-
seven percent year on year, but we were still able to achieve operating margins
of around fifty-five percent and earnings per share of 121.5 cents.
All expansion and replacement projects proceeded satisfactorily during the year.
The new smelter, following some earlier commissioning problems, produced its
first matte during March. It has since exceeded operating expectations, drawing
down considerable quantities of the back-log of metal contained in concentrates,
reverts, slags and tailings. The three pyromet furnaces replaced by the new
smelter came off-line in August. We anticipate further smelting cost savings as
a result and a continuing draw down of backlog materials during the coming year.
We will take advantage of our additional smelting capacity, where possible, to
introduce new business activities.
The vertical shafts at Karee and Eastern Platinum are both progressing to plan
and commissioning is expected in 2007 and 2008 respectively. The two new 120,000
tpm concentrators completed commissioning and commenced operations shortly after
the year-end. They will be used to concentrate opencast ore until they assume
their designated roles at the Karee No 4 shaft and the Pandora J.V.
respectively. At year-end we had an opencast stockpile of just over 1 million
tonnes, which, together with new opencast production, will keep both
concentrators operating at full capacity during the coming year. This, together
with ongoing underground production gives us confidence in our ability to
maintain our published expansion profile and reach the 870,000 tr. oz Pt
production figure forecast for the coming year.
The Pandora joint venture has now received approval from the South African
Competitions Board. Empowerment criteria are well in hand and we expect to
finalise the processing of the mining authorisation soon. Operations will
commence shortly thereafter.
Our safety record this year was a great disappointment to us, the more so after
the encouraging improvements of the previous year. On a positive note, however,
we are able to report that there were no underground fatalities associated with
either falls of ground or scraping and rigging. These categories of accident
have historically presented the greatest underground threat. Training programmes
to promote heightened awareness, risk management and procedure compliance in
these areas have proved effective. We will redouble our efforts to extend these
skills to other areas with particular reference to the year`s unusual number of
non-mining incidents, which we should be able to eliminate totally.
Our record production of pgm`s was delivered into strong markets. Platinum
demand rose by some eight percent and exceeded the six million-ounce level for
the first time ever. Only negative sentiment surrounding the world`s economies
had a depressing effect on prices.
There are two main drivers of future Platinum demand. The first is the
automobile industry as diesel engines become subject to the ever-tightening
emission control standards and new countries join the list of those already
applying emission controls, and the second is the expected increase in jewellery
demand particularly in China but also in Japan following the recent liquidations
of stock.
As a result of these influences, the market outlook for Platinum supply and
demand, remains strong and the consensus opinion supports a continuing balance,
if not a small deficit, in supply for some time, underlining confidence in our
expansion plans.
We have reconfirmed our commitment to a previously announced major capital
investment in our South African operations over the ten-year period, ending 2010
but at the same time have taken full advantage of the strength of our balance
sheet and the Company`s international position, to move towards an active
participation in the mining of pgm`s outside South Africa.
Together with a Canadian mining junior we are exploring some twenty-one
properties around the Sudbury Basin area. Our arrangements here provide for a
minimum exploration spend of $4.5m over a two-year period. Results to date on
certain of the properties are encouraging.
Work also continues on the feasibility study at the Panton Sill project in
Western Australia and we have been sufficiently encouraged to underwrite a
rights issue to raise approximately $1.5m to complete this study. Metallurgical
test-work is underway which if successful will result in a new process for the
PGM industry. A 10.6 million-ton resource at an average grade of 5.8 g/t pgm`s
plus gold or a total of 4.5 million ounces has already been delineated and we
expect to complete a detailed feasibility study in early 2003.
More recently an exploration project in the Mibango area of Tanzania has been
added to our international portfolio.
In order to maximise the use of our smelting capacity, we have initiated the
procurement of a supply of spent autocatalysts with the intention of re-cycling
the contained pgm`s. On successful completion of a technical appraisal we expect
a growing participation in this type of business. Recycling could make not only
a valuable contribution to revenues but would also enable us to participate
further in the global sustainability initiatives which will require an
increasing re-cycling element of primary products.
In keeping with our declared pgm focus, we were able to complete just after year
end the outright sale of our Zimbabwean gold assets to a Black Empowerment South
African Group and during the year we participated in the re-financing of Ashanti
Goldfields, details of which are covered in the Chairman`s statement.
In summary, the Group has enjoyed another good year both operationally and
financially and the platinum market outlook for the coming year remains strong.
Finally I would like to echo the Chairman`s acknowledgements and extend my own
personal thanks and appreciation to all the employees whose efforts and loyalty
have once again contributed to this solid performance.
Edward Haslam
Chief Executive
Financial Review
Introduction
During the year, the Company bought back 10.4 million shares at a cost of $128
million, returned capital of $361 million to shareholders (of which $1 million
remained unclaimed at 30 September 2002) and redenominated its share capital
from Sterling into US dollars. An investment of a further $75 million in
Ashanti was also made.
Profit and loss account
Turnover decreased by 20% from $866 million in 2001 to $697 million in 2002 due
to lower average PGM prices realised in the year despite a growth in output of
8%. Production costs were lower than last year due to a devaluation in the
South African rand of 20% even though PGM ounces produced increased by 8% to
1,467,525 troy ounces from 1,357,301 troy ounces. EBITDA amounted to $372
million in 2002 compared with $541 million in 2001 and the reduction in
depreciation of $12 million in 2002 to $39 million arose largely because 2001
included an impairment provision of $12 million on fixed assets held in
Zimbabwe. Net interest receivable of $1 million in 2002 was lower than last
year due to lower interest rates and borrowings arising in the Group following
the capital return to shareholders in February 2002. The resulting profit
before tax amounted to $332 million in 2002, a decrease of 37% on last year`s
profit before tax of $523 million.
The tax charge for 2002 was $75 million compared with $150 million in 2001.
Offsetting the tax charge were US dollar exchange profits of $53 million in 2002
and $46 million in 2001. These arose due to the devaluation in the South
African rand during the year resulting in payments in US dollar amounts being
lower than the originally accrued amounts and the provision for deferred tax
reducing accordingly. The weakening of the rand also gave rise to taxable
realised exchange profits in the local South African rand books of account of $5
million (2001 - $6 million). These exchange profits arose primarily on sales
where rand receipts were higher than those originally booked at the point of
sale. Excluding the effects of the US dollar exchange profits and the locally
taxable exchange gains, the effective tax rate was 37% in 2002 compared with 36%
in 2001.
Minority interest for the 2002 year was $72 million compared with $99 million in
2001, the reduction due to lower profits in the platinum operations in South
Africa and profit for the 2002 year fell by 32% to $185 million from $274
million in 2001. Earnings per share were 121.5 cents in 2002 based on a
weighted average number of shares outstanding of 152 million compared with 153.7
cents for the prior year on a weighted average number of shares outstanding of
178 million.
In line with the policy outlined in the circular to shareholders on the return
of capital dated 20 December 2001, dividend declarations are now based on the
reported earnings for the year, but taking into account the projected cash
requirements of the business. The traditional one-third/two-thirds split of the
total dividend between interim and final declarations is no longer being
followed.
The Board recommends a final dividend of 42.0 cents (2001 - 40.0 cents) making
total dividends for the year of 72.0 cents (2001 - 64.0 cents). This represents
a cover of 1.7 times on earnings (2001 - 2.4 times).
Balance sheet
Equity interests reduced from $1,077 million at 30 September 2001 to $675
million at 30 September 2002. The reduction in equity interests included the
return of capital to shareholders which was approved by the Court in February
2002 of $361 million and share buybacks by the Company of 10 million shares at a
cost of $123 million during October 2001 and 0.4 million shares at a cost of $5
million during August 2002. The retained profit for the year amounted to $84
million after interim and final dividends declared of $42 million and $59
million respectively. At 30 September 2002 there were 141 million $1 ordinary
shares in issue.
Fixed assets include the subscription by the Company, during June 2002, for $75
million of mandatorily exchangeable notes in Ashanti. This additional investment
in Ashanti was made to assist it in its financial restructuring plans and to
protect against the dilution in the value of Lonmin`s stake. Ashanti continues
to be accounted for as a fixed asset investment.
Net borrowings at 30 September 2002 amounted to $155 million. Gearing was 23%
on the equity interests of the Group and 18% on the equity and minority
interests of the Group. A $355 million loan facility was negotiated during the
year of which $130 million was drawn at 30 September 2002. The capital
structure of the balance sheet remains under constant review with a view to
optimising its efficiency.
Cash flow
2002 2001
$m $m
Net cash inflow from operating activities 359 525
Inter 3 17
est
Ta (181) (109)
x
Trading cash 181 433
flow
Capital expenditure (152) (115)
Minority (36) (88)
dividends
Free cash flow (7) 230
Acquisitions and - (6)
disposals
Other financial (78) (11)
investment
Share - issued 3 4
s
- bought back (128) (19)
Capital return (360) -
Equity dividends paid (109) (110)
Cash (679) 88
(outflow)/inflo
w
Trading cash flow per 118.9c 242.9c
share
Free cash flow per share (4.6)c 129.0c
Note: The difference between the opening net cash and deposits
of $523 million and the closing net borrowings of $155
million was made up of the cash outflow shown above of $679
million and exchange on non-US dollar amounts of $1 million.
The table above summarises the main components of the cash flow during the year.
Trading cash flow was $181 million during 2002, a 58% decrease on the trading
cash flow of $433 million achieved during 2001. The decrease was largely due to
the lower net cash inflow from operating activities of $359 million in 2002 as a
consequence of lower commodity prices reducing profitability (2001 - $525
million). Corporation tax payments made in South Africa of $181 million were
66% higher than 2001 and included the payment of outstanding liabilities from
2001 together with payments on account of 2002 profits. The resulting trading
cash flow per share was 118.9 cents compared with 242.9 cents for the prior
period.
Capital expenditure of $152 million showed an increase of 32% on the prior
period. This increase was somewhat offset by the depreciation of the South
African rand during the year and expenditure stated in rand increased by 66%
from R936 million to R1,558 million. Minority dividends paid totalled $36
million and the resulting free cash flow was a negative $7 million or (4.6)
cents per share.
After accounting for amounts spent on other financial investment, shares issued
and bought back, the capital return and dividends, the cash outflow for the year
was $679 million resulting in net borrowings of $155 million at 30 September
2002.
John Robinson
Finance Director
Lonmin Plc
Consolidated profit and loss account
For the year ended 30 September
2002 2001
Note $m $m
Turnover 1 697 866
EBITDA (ii) 1 372 541
Depreciation (39) (51)
Group operating profit 333 490
Share of associate`s operating loss (2) -
Operating profit 1 331 490
Net interest receivable and similar 2 1 33
items
Profit before taxation 1 332 523
Taxation 3 (75) (150)
Profit after taxation 257 373
Minority interest (72) (99)
Profit for the year 185 274
Dividends 4 (101) (110)
Retained profit for the year 84 164
Earnings per share 5 121.5c 153.7c
Diluted earnings per share 5 121.0c 152.4c
Dividends per share 4 72.0c 64.0c
Financial ratios
Tax rate (iii) 37% 36%
Net debt to EBITDA 0.4 times (1.0) times
Notes:
(i) The results for both years relate to continuing operations.
(ii) EBITDA is Group operating profit before interest, tax, depreciation and
amortisation.
(iii) The tax rate has been calculated excluding exchange items as disclosed in
note 3 on page 13.
Lonmin Plc
Consolidated balance sheet
As at 30 September
2002 2001
$m $m
Fixed assets
Tangible assets 887 774
Investments: 294 223
Associate
Other investments
4 6
290 217
1,181 997
Current assets
Stocks 41 30
Debtors 105 99
Investments 2 1
Cash and short-term deposits 34 528
182 658
Creditors: amounts falling due within one (188) (254)
year
Net current (liabilities)/assets (6) 404
Total assets less current liabilities 1,175 1,401
Creditors: amounts falling due after more (135) (6)
than one year (160) (150)
Provisions for liabilities and charges
880 1,245
Capital and reserves
Called up share capital 141 258
Reserves 534 819
Equity interests 675 1,077
Minority equity interest 205 168
880 1,245
Net (borrowings)/cash and deposits (155) 523
Lonmin Plc
Consolidated cash flow statement
For the year ended 30 September
2002 2001
Note $m $m
Net cash inflow from operating 6 359 525
activities
(33) (71)
Returns on investment and servicing of
finance
Interest - received 7 26
- paid (4) (9)
Dividends paid to minorities (36) (88)
Taxation (181) (109)
Capital expenditure and financial (230) (126)
investment
- (6)
Acquisitions and disposals
(109) (110)
Equity dividends paid
Net cash (outflow)/inflow before use of liquid (194) 103
resources and financing
433 (98)
Management of liquid resources
(356) (17)
Financing
New long-term loans 130 -
Repayment of short-term loans (1) (2)
Issue of ordinary share capital 3 4
Share buybacks (128) (19)
Capital return (360) -
Decrease in cash in the year (117) (12)
Lonmin Plc
Statement of total consolidated recognised gains and losses
For the year ended 30 September
2002 2001
$m $m
Profit/(loss) for the year - Group 187 274
- Associate (2) -
Total consolidated recognised gains relating to 185 274
the year
Consolidated historical cost profits
For the year ended 30 September
2002 2001
$m $m
Reported profit before taxation 332 523
Difference between an historical cost depreciation
charge and the 2 2
actual depreciation charge calculated on the
revalued amount
Historical cost profit before taxation 334 525
Historical cost retained profit for the year 86 166
Reconciliation of movement in equity interests
For the year ended 30 September
2002 2001
$m $m
Total consolidated recognised gains relating to the 185 274
year (101) (110)
Dividends
Retained profit for the year 84 164
Capital return (361) -
Share buybacks (128) (19)
Shares issued on exercise of share options 3 4
Other items - 2
Net (decrease)/increase in equity interests in the (402) 151
year 1,077 926
Equity interests at 1 October
Equity interests at 30 September 675 1,077
Lonmin Plc
Segmental analysis
By business origin:
2002
Operating Profit Net
Turnover EBITDA profit before operating
$m $m $m tax assets
$m $m
Platinum 638 387 348 346 799
Gold 59 6 6 6 292
Exploration - (10) (12) (12) -
Other - (1) (1) (1) -
Corporate - (10) (10) (7) 3
697 372 331 332 1,094
South Africa 638 377 338 336 792
Zimbabwe 59 6 6 6 15
Ghana - - - - 277
Europe - 9 9 9 (1)
Australia - (6) (8) (8) 5
Canada - (3) (3) (3) -
Asia and other - (1) (1) (1) 3
Corporate - (10) (10) (7) 3
697 372 331 332 1,094
2001
Operating Profit Net
Turnover EBITDA profit before operating
$m $m $m tax assets
$m $m
Platinum 815 553 516 518 571
Gold 51 5 (9) 1 213
Exploration - (2) (2) (2) -
Other - (4) (4) (4) -
Corporate - (11) (11) 10 5
866 541 490 523 789
South Africa 815 539 502 504 559
Zimbabwe 51 5 (9) 1 13
Ghana - - - - 200
Europe - 10 10 10 (1)
Australia - (2) (2) (2) 10
Asia and other - - - - 3
Corporate - (11) (11) 10 5
866 541 490 523 789
Net operating assets exclude net (borrowings)/cash and deposits and dividends.
Turnover by destination is analysed by geographical area below:
2002 2001
$m $m
The Americas 219 279
Asia 199 253
Europe 124 158
South Africa 93 120
Zimbabwe 62 56
697 866
Lonmin Plc
Net interest receivable and similar items
2002 2001
$m $m
Interest payable:
On bank loans and overdrafts wholly repayable (3) (3)
within five years (1) (1)
Other loans (1) (1)
Finance leases
(5) (5)
Interest receivable on cash and deposits 5 25
Exchange differences on net debt 1 13
Net interest receivable and similar items 1 33
Tax on profit on ordinary activities
2002 2001
$m $m
United Kingdom:
Corporation tax at 30% (2001- 30%) 37 119
Double Tax relief (37) (119)
- -
Overseas:
Current taxation 63 157
Excluding tax on local currency exchange profits 71 131
On local currency exchange profits 5 6
Tax on dividends remitted 16 38
Prior year adjustments - 1
Exchange on current taxation (29) (19)
Deferred taxation 12 (7)
Origination and reversal of timing differences 36 20
Exchange on deferred taxation (24) (27)
Tax charge 75 150
Tax charge excluding exchange 123 190
Effective tax rate excluding exchange 37% 36%
A reconciliation of the standard tax charge to the current tax charge is as
follows:
2002 2001
$m $m
Tax charge at standard tax rate 100 157
Overseas taxes on dividends remitted by subsidiary 16 38
companies (4) (13)
Prior year losses utilised (25) (12)
Other timing differences (24) (13)
Effect of exchange adjustments
Current tax charge 63 157
The Group`s primary operations are based in South Africa. Therefore, the
relevant standard tax rate for the Group is the South African statutory tax rate
of 30% (2001 - 30%). The secondary tax rate on dividends remitted by South
African companies is 12.5% (2001 - 12.5%).
Lonmin Plc
Dividends
2002 2001
$m $m
Interim 30.0c (2001 - 24.0c) per share 42 43
Final 42.0c (2001 - 40.0c) per share 59 67
101 110
Until 31 March 1999, advanced corporation tax (ACT) was paid on dividends at the
rate of 25% of the net dividend. Subject to certain restrictions, this was
recoverable by offsetting it against corporation tax liabilities. When this
offset was not available surplus ACT was generated.
At the year end, the Group had surplus ACT of $105 million (2001 - $105 million)
carried forward and available, subject to certain restrictions, for set-off
against future United Kingdom corporation tax liabilities. The notional "Shadow
ACT", being the ACT which would have been payable if the system had not been
abolished and which must be set-off prior to utilisation of surplus ACT, amounts
to $100 million (2001 - $70 million).
Earnings per share
Earnings per share have been calculated on the profit attributable to
shareholders amounting to $185 million (2001 - $274 million) using a weighted
average number of 152,251,293 ordinary shares (2001 - 178,264,503 ordinary
shares).
As the table below illustrates, diluted earnings per share are based on the
weighted average number of ordinary shares in issue adjusted by dilutive
outstanding share options during the year as follows:
2002 2001
Profit Per Profit for Per
for Number share the year Number share
the of amount $m of amount
year Shares cents Shares cents
$m
Basic EPS 185 152,251, 121.5 274 178,264, 153.7
Share option - 293 (0.5) - 503 (1.3)
schemes 650,512 1,557,15
8
Diluted EPS 185 152,901, 121.0 274 179,821, 152.4
805 661
Net cash flow from operating activities
2002 2001
$m $m
Group operating profit 333 490
Depreciation charge 39 51
Increase in stock (11) (10)
Increase in debtors (6) (19)
Increase/(decrease) in creditors 4 (8)
(Decrease)/increase in provisions (2) 1
Exchange - 20
Other 2 -
Net cash inflow from operating activities 359 525
Lonmin Plc
Exchange Rates
The principal US dollar exchange rates used are as follows:
2002 2001
Average exchange rates:
Sterling 0.68 0.69
SA rand 10.65 8.01
Zimbabwe dollar 415.97 117.84
Closing exchange rates:
Sterling 0.64 0.69
SA rand 10.54 8.77
Zimbabwe dollar 640.00 306.68
Statutory Disclosure
The financial information set out above is taken from but does not constitute
the Company`s statutory accounts for the years ended 30 September 2002 and 2001.
Statutory accounts for 2001 have been delivered, and for 2002 will be delivered,
to the Registrar of Companies. The Auditors have made unqualified reports on
those accounts and such reports did not contain a statement under Section 237(2)
or (3) of the Companies Act 1985.
Copies of the 2002 Lonmin Accounts will be posted to shareholders and will be
available at the Company`s registered office in mid December 2002.
9 Annual General Meeting
The 2003 Annual General Meeting will be held at 11am on Thursday 30 January 2003
at The Ball Room, Park Lane Hotel, Piccadilly, London W1.
