| Thu 22 May 2003, 16:52 | | METOREX LIMITED - RESULTS OF OPERATIONS FOR THE QU |
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Metorex Limited
Registration number 1934/005478/06
Incorporated in the Republic of South Africa
Listed on the JSE Securities Exchange South Africa and London Stock Exchange
JSE alpha MTX ISIN ZAE000022745
Issuer code MEMTX
www.metorexgroup.com
* Shareholders approve ETC acquisition
* O"Okiep smelter refurbishment completed
* Loss of 8,14 cents per share
* Rand is major contributor to poor results
Results of operations for the quarter ended 31 March 2003
Consolidated income statement
Quarter ended Quarter ended
31 March 2003 31 December 2002
(Unaudited) (Unaudited)
R000 R000
Revenue - Mineral sales
Copper 59 327 70 672
Zinc 16 508 23 466
Coal 39 311 42 745
Fluorspar 14 479 36 536
Gold 24 606 23 739
Antimony 17 544 27 377
Other 721 3 448
Gross revenue 172 496 227 983
Realisation costs 27 160 33 063
On-mine revenue 145 336 194 920
Cost of production 152 297 177 435
Cash costs 155 375 151 618
Stock movement (13 295) 15 493
Depreciation 10 217 10 324
Mining (loss)/profit (6 961) 17 485
Other expenses 1 866 1 004
(Loss)/income before finance costs (8 827) 16 481
Net finance costs 3 174 3 559
(Loss)/income before taxation (12 001) 12 922
Taxation (578) 7 497
(Loss)/income after taxation (11 423) 5 425
(Loss)/income attributable to outside shareholders (100) 973
(Loss)/income attributable to ordinary shareholders (11 323) 4 452
Weighted average shares in issue (000"s) 139 019 138 985
Earnings per share (cents) (8,14) 3,20
Headline earnings per share (cents) (7,49) 3,86
Headline earnings is calculated as follows:
(Loss)/income attributable to ordinary shareholders (11 323) 4 452
Goodwill amortisation 915 915
Headline earnings (10 408) 5 367
Share information
Quarter ended Quarter ended
31 March 2003 31 December 2002
Shares in issue (000"s) 139 019 139 019
Shares traded (000"s) 3 840 31 543
Share price (cents) - High 332 375
Share price (cents) - Low 240 300
Closing price (cents) 240 310
Commodity sales statistics
Quarter ended Quarter ended
31 March 2003 31 December 2002
Copper (t) 4 434 4 977
Zinc (t) 2 578 3 227
Coal (t) 322 897 343 694
Fluorspar (dmt) 18 224 40 795
Gold (kg) 265 241
Antimony (mtu) 116 412 131 575
Commodity prices achieved (averaged)
Quarter ended Quarter ended
31 March 2003 31 December 2002
Copper (net of refining) ($/t) 1 597 1 468
Zinc ($/t) 764 752
Coal (R/t) 122 124
Fluorspar (all grades) ($/t) 95 93
Gold ($/oz) 345 317
Antimony ($/mtu) 18 22
Exchange rate (Average) (R/$) 8,38 9,67
COMMENTARY
FINANCIAL RESULTS
The Group incurred a loss attributable to ordinary shareholders of R11,3 million
for the quarter ended 31 March 2003. This performance was driven by a 24%
decrease in gross revenue to R172 million from the previous quarter. The ETC
acquisition will significantly increase the Group"s turnover in the future.
The Group"s Rand denominated commodity prices declined from the previous
quarter, mainly as a result of the strengthening of the Rand/US Dollar exchange
rate by 13% to an average of R8,38/US$ for the quarter from R9,67/US$ the
previous quarter.
Antimony sales volumes decreased by 12% as a result of the annual shut down
of the Antimony Products plant during the quarter and lower headgrade from the
Beta Shaft.
Fluorspar sales volumes were lower due to the timing of export shipments from
the first to the second quarter of this calendar year. Efforts to improve
qualities at the Vergenoeg mine have achieved results with the securing of
favourably priced contracts with new customers. The Company is pursuing a
favourable sales mix in order to optimise profitability.
The O"Okiep smelter refurbishment took five weeks to complete during the
current quarter, which affected copper production and sales volumes. The smelter
was brought back into use at the beginning of April 2003.
Zinc sales volumes were affected by the unavailability of railway trucks, which
resulted in zinc in transit at quarter-end.
ETC ACQUISITION
Metorex shareholders approved the ETC acquisition on 21 May 2003. The
effective date of ownership and management control is 15 June 2003.
The ETC acquisition, to be operated together with our empowerment partner
Millennium Consolidated Investments (Pty) Ltd ("MCI"), chaired by Mr Cyril
Ramaphosa, will be renamed Barberton Mines Limited ("Barberton"), and is a
strategic acquisition for the Metorex Group, which provides the Group with a
long life project, increased exposure to gold and an expected significant
increment to the Group"s earnings and asset value.
Investec Bank and ABSA Bank, the joint financiers of the acquisition, require
that a certain proportion of the future gold production is sold forward. At the
current gold price, which is nearing a ten year high, this process partially
protects the income stream from ETC at prices above the feasibility study
financial model.
CURRENT DEVELOPMENTS
* Chibuluma South
The shareholders" agreement and other documentation with the IDC and ZCCM-IH
is nearing completion. Discussions are underway with mining contractors for
the development of the ramp decline and underground infrastructure.
* Middelburg Townlands
The Environmental Management Program Report is awaiting approval by the
Department of Minerals and Energy. In the meantime work is progressing on
sourcing a coal washing plant for the property.
* Black Economic Empowerment
The Group continues its discussions with other potential empowerment
partners, which will add to the existing partnerships with Millennium
Consolidated Investments in Barberton and Umnotho weSizwe in Wakefield Coal.
FUTURE PROSPECTS
Sustained strength of the Rand/US Dollar exchange rate in the short to medium
term will continue to affect Group earnings significantly. The Metorex Group has
responded to this situation and has a major drive on reducing costs and is
investigating methods of increasing production levels.
The current strength of the Rand is the single major reason for the quarterly
loss incurred by the Group. The Rand strength together with the high interest
rates are contrary to the Government"s declared objective of an export led
growth economy. A sustained period of high interest rates and strength in the
Rand will have a profoundly negative effect on the South African mining
industry, which exacerbated by the proposed Royalty Bill could result in job
losses and reduced revenue to the fiscus. Metorex, however, takes a positive
longer-term view on improvements in commodity prices and an exchange rate more
appropriate to an export economy.
CAPITAL EXPENDITURE
The Group incurred capital expenditure of R11,2 million during the quarter,
mainly on the smelter refurbishment at O"Okiep.
SAFETY
The Group"s operations generally produced commendable safety statistics and
thanks are extended to all staff for their contributions to this record.
Management is firmly committed to the elimination of all risks that threaten the
health and safety of its employees. It is with regret that the Group reports a
fatal accident, which occurred at Maranda Mines during the quarter.
By order of the Board
22 May 2003
A S MALONE C D S NEEDHAM
Chairman Financial Director
Secretaries Transfer secretaries
Moore Stephens MWM Computershare Investor Services Limited
7 West Street 70 Marshall Street
Houghton Johannesburg
2198 2001
Contact details for Metorex Limited:
Postal PO Box 2814
Saxonwold, 2132
Republic of South Africa
Telephone +27 (011) 880-3155
Facsimile +27 (011) 880-3322
e-mail info@metorexgroup.com
website www.metorexgroup.com
Date: 22/05/2003 04:30:07 PM Supplied by www.sharenet.co.za
Produced by the JSE SENS Department
