| Thu 7 Aug 2003, 9:26 | | Preliminary Announcement Of Reviewed Results For T |
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Northam Platinum Limited -
NORTHAM PLATINUM LIMITED
A broadly-based black empowerment company
(Registration number 1977/003282/06)
(Incorporated in the Republic of South Africa)
Share code: NHM ISIN: ZAE 000030912
PRELIMINARY ANNOUNCEMENT OF REVIWED RESULTS FOR THE YEAR ENDED 30 JUNE 2003
HIGHLIGHTS
* Metals in concentrates produced up 22%
* Merensky ore reserves improve to 20 months
* Smelter rebuild successfully completed
* Unit operating costs remain constant
Income statement
Year Year
ended ended
30 June 30 June
Change 2003 2002
% R000 R000
Sales revenue (5.7) 1 471 999 1 560 685
Cost of sales 11.4 1 086 571 975 549
Operating costs 1 004 327 803 514
Refining and realisation costs 68 549 41 394
Metal leasing costs 14 149 -
Depreciation and impairments 89 059 99 451
Change in metal stocks (89 513) 31 190
Operating profit (34.1) 385 428 585 136
Investment income 64 140 52 023
Net sundry revenue 23 946 20 793
Profit before tax (28.0) 473 514 657 952
Tax (23.4) 198 601 259 121
Net income (31.1) 274 913 398 831
Reconciliation of headline earnings
Net income 274 913 398 831
Impairments - plant and equipment - 11 247
Impairments - investments - 59
Profit on sale of fixed assets (505) (480)
Tax effect 152 (3 230)
Headline earnings 274 560 406 427
Earnings per share - cents (31.3) 118.8 172.8
Headline earnings per share - cents (32.6) 118.7 176.1
Fully diluted earnings per share - cents (31.8) 116.9 171.4
Dividends per share - cents 90.0 170.0
Capital repayment per share - cents 55.0 75.0
Weighted average number of shares in issue 231 313 068 230 744 049
Fully diluted number of shares in issue 235 108 275 232 696 600
Number of shares in issue at year end 231 538 500 230 914 500
Statement of changes in equity
Equity at beginning of period 1 892 908 1 965 439
Net income for the period 274 913 398 831
Issue of new shares 6 742 1 580
Reduction of share premium (219 606) -
Dividends distributed (439 449) (472 942)
Equity at end of period 1 515 508 1 892 908
Operating statistics
Merensky
Development metres 13 596 14 622
Square metres mined 317 677 264 463
Tons milled 1 582 421 1 288 141
Head grade (g/ton - 3 PGEs + Au) 5.9 6.1
Available ore reserves in months 20 17
UG2
Development metres 1 147 2 148
Square metres mined 114 373 116 931
Tons milled 636 717 643 286
Head grade (g/ton - 3 PGEs + Au) 4.0 3.8
Available ore reserves in months 38 36
Combined
Development metres 14 743 16 770
Square metres mined 432 050 381 394
Tons milled 2 219 138 1 931 427
Head grade (g/ton - 3 PGEs + Au) 5.3 5.3
Precious metals in concentrates produced
- 3 PGEs + Au kg 10 354 8 458
oz 332 888 271 937
Precious metals sold - 3 PGEs + Au kg 9 174 8 944
oz 294 947 287 546
Average price realised - 3 PGEs + Au R/kg 145 273 160 367
US$/oz 498 497
Operating costs - 3 PGEs + Au R/kg 105 600 105 426
US$/oz 363 325
Cash costs - 3 PGEs + Au R/kg 96 880 94 861
US$/oz 333 292
Cash flow statement
Year Year
ended ended
30 June 30 June
2003 2002
R000 R000
Cash flows from operations 390 040 747 481
Profit before tax 473 514 657 952
Depreciation 89 059 99 451
Change in working capital (97 701) 58 522
Tax paid (75 554) (69 176)
Other 722 732
Cash flows utilised in investing activities (172 171) (87 575)
Property, plant and equipment
Additions to maintain operations (175 758) (90 170)
Disposals 3 597 2 645
Investments - net (10) (50)
Cash flows from/(utilised in) financing activities (654 207) (472 802)
Proceeds from issue of shares 6 742 1 580
Reduction of share premium (219 606) -
Dividends paid (439 449) (472 942)
Increase in Restoration Trust Fund (1 894) (1 440)
Net cash flow (436 338) 187 104
Cash and cash equivalents at beginning of period 731 313 544 209
Cash and cash equivalents at end of period 294 975 731 313
Balance sheet
Fixed assets 1 334 203 1 249 774
Unlisted investments 183 173
Northam Platinum Restoration Trust Fund 10 462 8 568
Current assets 747 907 1 038 062
Inventories 339 156 249 252
Accounts receivable 113 776 57 497
Cash and cash equivalents 294 975 731 313
2 092 755 2 296 577
Share capital 2 078 129 2 290 993
Accumulated loss (562 621) (398 085)
Shareholders" equity 1 515 508 1 892 908
Deferred tax 330 323 249 103
Long-term provisions 11 442 9 393
Current liabilities 235 482 145 173
Accounts payable 173 032 124 550
Tax 62 450 20 623
2 092 755 2 296 577
Capital commitments
Authorised but not contracted 106 387 89 760
Contracted 23 644 7 259
130 031 97 019
Other commitments
Information Technology Outsource Service Provider
Due in one year 7 314 6 661
Due in two to five years 26 993 25 524
Thereafter 1 388 7 666
Operating lease rentals - office equipment
Due in one year 167 184
Due in two to five year 438 465
Thereafter - 19
Operating lease rentals - premises
Due in one year 390 292
Due in two to five year 204 489
These commitments will be financed from operating cash flows.
Review Opinion
Ernst & Young, the company"s auditors, have reviewed the financial results. A
copy of their report is available for inspection at the company"s registered
office.
Accounting policies
The financial statements have been prepared on the historical cost basis in
accordance with International Financial Reporting Standards and South African
Statements of Generally Accepted Accounting Practice and incorporate the
accounting policies which are consistent with those adopted in the previous
year.
Comment on results
Safety
The board deeply regrets that eight employees died in mining related accidents.
These tragic events overshadow the previously reported two million fatality free
shift achievement. Management is firmly committed to eradicating risks that
threaten the health and safety of employees and has embarked on a behavioural
based safety programme to complement the existing safety initiatives.
Operating performance
Production of metal in concentrates (3PGEs + Au) was 22% higher, at 10 354 kg
(332 888 oz) than that achieved for the year ended 30 June 2002. Merensky
tonnage milled increased by 23% while UG2 remained constant.
The smelter rebuild started in January 2003 and was successfully completed on
schedule. Concentrate arising during the period was toll treated.
Ore reserve availability on the Merensky Reef increased to 20 months by the end
of June 2003, from 17 months at the end of the previous financial year. A total
of 2.4 km of face was lost owing to poor ground conditions associated with
faults and transitions and water intersections. UG2 ore reserve availability is
as planned.
Financial results
The substantial strengthening of the Rand, particularly in the second half of
the year, resulted in the average price received declining by 9% to R145 273 per
kg (US$498 per oz, 3PGE + Au). This decline was partially offset by the increase
of 3% in units sold. Nevertheless, the effect on sales revenue was limited to a
decline of 6%, from R1 561 million in 2002 to R1 472 million for the current
reporting period.
The focus on cost control was maintained, with unit operating costs remaining
constant and only a marginal increase of 2% in unit cash costs. Total operating
costs increased by 25% in line with the higher production. The increase in
refining and realisation costs is primarily as a result of the additional costs
incurred in toll refining the concentrates during the smelter shut down. Metal
inventories increased as a result of the extended pipeline during the smelter
rebuild. This metal will be released during the coming year. Included in cost of
sales is a charge of R14 million in respect of metal that was leased in order to
meet contractual commitments during the smelter rebuild.
Net sundry revenue comprises mainly gains from the hedging programme
discussed below.
The profit attributable to shareholders fell by 31% compared to the previous
year.
Hedging
During the year the company embarked on a hedging programme to protect its
revenues from a potential decline in the platinum and palladium prices. At 30
June 2003 an average of 4 500 ounces of palladium per month until February 2004
had been hedged at an average price of US$244 per ounce. For July to September
2003, 5 000 ounces of platinum per month have been hedged at an average price of
US$661 per ounce.
In terms of AC 133 - Financial Instruments : Recognition and Measurement, the
hedging instruments have been recognised at fair value at the end of the period,
with a gain of R17 million being included in net income.
Capital expenditure
Apart from routine capital expenditure, the development programme
(R42 million), the smelter rebuild (R35 million) and additional refrigeration
plants (R31 million) were the major contributors to the capital expenditure of
R176 million.
Planned capital expenditure for 2004 amounts to a total of R130 million and
includes the following items: the development programme (R49 million);
additional refrigeration plants (R20 million); safety improvements to the
hoisting arrangements (R12 million), and access infrastructure to 1 level (R10
million).
Expansion
Agreement has been finalised with regard to Northam"s participation in the
Pandora Joint Venture. The parties are awaiting the granting of a mining
licence.
Northam is actively pursuing other growth opportunities arising from the
prevailing minerals legislation.
Shareholders are referred to the cautionary announcement issued on Wednesday,
6 August 2003.
Prospects
Production of precious metals in concentrate (3PGEs + Au) is geared to be
similar to the output reported in the current year. Should the Rand basket price
for metals remain at its current level, earnings for 2004 are likely to be lower
than those for 2003.
Directorate
Mr Ralph Havenstein was appointed a director on 1 July 2003 in the place of Mr
Barry Davison who has resigned from the board.
Proposed reduction of share premium
The company is proposing a further reduction in its share premium account,
amounting to 35 cents per share. A notice convening a meeting of shareholders to
consider this proposal will be issued shortly. As a consequence, no dividend has
been declared.
On behalf of the board
T M G Sexwale B R van Rooyen
Chairman Director
Johannesburg
6 August 2003
Registered Office:
Kenilworth House
PO Box 37160
Rutherford Estate Birnam
1 Scott Street 2015
Waverley 2090 Republic of South Africa
Johannesburg
Directors: T M G Sexwale (Chairman), M E Beckett (British),
D T G Emmett, R Havenstein, A S Malone, E Molobi,
R H H van Kerckhoven (Belgian), B R van Rooyen, M J Willcox
Company Secretary: S J van der Spuy
These results are available on our website at www.northam.co.za
Date: 07/08/2003 08:59:55 AM Supplied by www.sharenet.co.za
Produced by the JSE SENS Department
