| Thu 26 Aug 2004, 14:39 | | Results for the financial year ended 30 June 2004 |
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Metorex Limited - Reviewed Consolidated Provisional Results For The Financial
Year Ended 30 June 2004
METOREX LIMITED
(Registration number 1934/005478/06)
(Incorporated in the Republic of South Africa)
Share code MTX ISIN ZAE000022745
Issuer code MEMTX
Listed on the JSE Securities Exchange and London Stock Exchange
Reviewed consolidated provisional results for the financial year ended 30 June
2004
- Mineral sales exceed R1 billion
- Barberton contributes significantly to Group earnings
- Coal and Fluorspar operations performed well
- Chibuluma South orebody intersected
- Middelburg Townlands Coal mine commissioned
- Maranda and O`Okiep commence closure procedures
CONSOLIDATED INCOME STATEMENT
Year ended Year ended
30 June 2004 30 June 2003
(Reviewed) (Audited)
R000 R000
Revenue
Mineral sales
Copper 188 333 290 092
Zinc 60 127 83 492
Coal 208 618 179 236
Fluorspar 111 538 93 730
Gold 388 467 105 703
Antimony 89 581 121 484
Cobalt 3 393 5 986
Other 5 360 6 594
Gross revenue 1 055 417 886 317
Realisation costs 142 603 150 709
On-mine revenue 912 814 735 608
Cost of production 828 346 632 685
Stock movement 10 698 20 435
Depreciation 67 964 40 934
Mining profit 5 806 41 554
Profit on closure of hedges 48 241 -
Retrenchment costs (11 494) -
Impairment of assets (27 905) -
Foreign exchange gains/(losses) 590 (5 948)
Other income, net 13 630 3 890
Operating income before finance costs 28 868 39 496
Finance income 1 757 4 692
Finance costs (26 827) (18 926)
Income before taxation 3 798 25 262
Taxation - normal and STC (6 497) (6 820)
Taxation - deferred 20 566 (5 630)
Income after taxation 17 867 12 812
Income attributable to outside
shareholders 32 225 2 459
(Loss)/income attributable to ordinary
shareholders (14 358) 10 353
(Loss)/earnings per share (cents) (8,0) 7,4
Headline earnings per share (cents) 2,8 9,1
Diluted (loss)/earnings per share (cents) (8,0) 7,4
Diluted headline earnings per
share (cents) 2,8 9,1
Dividend per share (cents) 3,0 14,0
Earnings per share and headline earnings
per share are calculated using
the following:
(Loss)/income attributable to
ordinary shareholders (14 358) 10 353
Impairment of assets net of tax 22 711 -
Impairment of assets 27 905 -
Tax effect on impairment of assets (5 194) -
Goodwill amortisation 3 662 3 662
Profit on sale of assets (9 054) (1 704)
Tax effect on sale of assets 2 037 511
Headline earnings 4 998 12 822
Weighted average number of shares in
issue (000`s) 178 839 140 498
Number of shares in issue at year
end (000`s) 187 233 175 019
STATEMENT OF CHANGES IN EQUITY
Year ended Year ended
30 June 2004 30 June 2003
(Reviewed) (Audited)
R000 R000
Share capital 18 724 17 502
- Balance at start of year 17 502 13 897
- Issue of new shares 1 222 3 605
Share premium 483 087 455 702
- Balance at start of year 455 702 369 186
- Issue of new shares 27 385 86 516
Reverse acquisition reserve (128 066) (128 066)
Foreign exchange translation reserve (50 750) (33 231)
- Balance at start of year (33 231) 11 304
- Foreign exchange reserve 26 612 15 832
- Translation loss on foreign monetary
item (58 842) (84 631)
- Tax effect of translation loss on
foreign monetary item 14 711 24 264
Hedging reserve - 840
- Balance at start of year 840 (380)
- Fair value losses for the year - 5 603
- Foreign exchange movement - (92)
- Transferred to income statement (840) (4 291)
Retained income 96 460 116 069
- Balance at start of year 116 069 125 175
- Net (loss)/income for the year (14 358) 10 353
- Dividends distributed (5 251) (19 459)
Total equity 419 455 428 816
SEGMENTAL INFORMATION - YEAR ENDED 30 JUNE 2004
2004 2003
Exchange rate (average) 6,9 9,1
Exchange rate (year-end) 6,2 7,6
CONSOLIDATED BALANCE SHEET
30 June 2004 30 June 2003
(Reviewed) (Audited)
R000 R000
ASSETS
Non-current assets
Property, plant and equipment 500 543 499 952
Mineral rights 218 527 218 288
Goodwill 18 310 21 971
Investments 891 891
Rehabilitation trust funds 44 374 41 063
Deferred tax asset 40 441 -
823 086 782 165
Current assets
Inventories 37 246 53 074
Trade and other receivables 165 947 109 072
Derivative instruments 329 840
Taxation prepaid 4 829 9 550
Bank balances and cash 29 530 23 498
237 881 196 034
Total assets 1 060 967 978 199
EQUITY AND LIABILITIES
Capital and reserves
Share capital and premium 501 811 473 204
Hedging and translation reserve (50 750) (32 391)
Retained income 96 460 116 069
Equity reserve (128 066) (128 066)
419 455 428 816
Minority interest 118 960 16 699
Non-current liabilities
Long-term liabilities - interest bearing 98 318 179 974
Long-term provisions 74 109 72 424
Deferred tax liabilities 72 696 56 370
245 123 308 768
Current liabilities
Trade and other payables 150 302 124 582
Short-term borrowings - interest bearing 61 814 45 080
Short-term provisions 33 579 28 168
Bank overdraft 30 571 25 554
Taxation 1 163 532
277 429 223 916
Total equity and liabilities 1 060 967 978 199
Net asset value per share (cents) 224 245
Net tangible asset value per share (cents) 214 233
CONSOLIDATED CASH FLOW STATEMENT
Year ended Year ended
30 June 2004 30 June 2003
(Reviewed) (Audited)
R000 R000
Cash generated before working
capital changes 119 347 82 388
Working capital changes (10 777) 11 828
Cash generated by operations 108 570 94 216
Dividends paid (8 131) (21 709)
Taxation paid (1 092) (20 159)
Finance costs (25 070) (14 234)
Cash inflows from operating activities 74 277 38 114
Cash outflows from investing activities (109 436) (59 413)
Cash inflows/(outflows) from financing
activities 36 230 (53 109)
Net increase/(decrease) in cash and
cash equivalents 1 071 (74 408)
Cash at start of year (2 056) 73 633
Effect of foreign exchange rate changes (56) (1 281)
Cash at end of year (1 041) (2 056)
MINING PROFIT BEFORE DEPRECIATION
2004 2003
Exchange rate (average) 6,9 9,1
Exchange rate (year-end) 6,2 7,6
COMMENTARY
The Group has experienced a particularly active year, the most significant
features being:
1. The first full year of operations at Barberton Mines and the implementation
of the Metorex philosophies.
2. A boom in commodity prices during the second half of the year.
3. Continued strength of the Rand against the Dollar, which has had the effect
of capping certain revenue streams.
4. The commissioning of the Middelburg Townlands colliery.
5. Securing the right to treat and mine the Ruashi/Etoile stockpiles and the
Ruashi orebodies.
6. Subsequent to year-end, the underground development at Chibuluma South
intersected the orebody.
7. Maranda and O`Okiep commence closure procedures on a controlled and phased
basis.
OPERATING PERFORMANCE
The Group`s revenue from mineral sales exceeded R1 billion for the first time.
Barberton Mines completed its first full year of operations under Metorex
management and made a meaningful contribution to revenue and to the mining
profit before depreciation.
Wakefield coal produced and sold, at improved prices, 46% more coal than the
previous year and secured a supply contract with Eskom. The fluorspar operations
continued to improve product quality and recovery and also benefited from higher
prices and a broader customer base.
Chibuluma West continued to produce copper and limited amounts of cobalt, whilst
underground development continued at Chibuluma South. Chibuluma produced a break
even for the year before hedging losses brought about by the sharp rise in the
copper price at the end of calendar year 2003.
Consolidated Murchison experienced lower grades of antimony and gold, and copper
grades in the O`Okiep slag dump were poor. Both operations are highly sensitive
to the effects of a strong Rand/Dollar exchange rate. It has been decided to
cease operations at O`Okiep post year-end.
Maranda Mine, which has produced regular and steady earnings during the past 14
years, has exhausted its ore reserves and will be discontinued with immediate
effect. The Board extends its thanks to all of the staff who have made this mine
such a success.
FINANCIAL POSITION AND CASH FLOW
The Group`s net asset value decreased to R419 million from R429 million the
previous year as a result of a R19 million foreign exchange translation movement
on the Chibuluma assets and after having impaired the O`Okiep and Perkoa assets
by R28 million. Also an amount of R11 million of retrenchment costs have been
charged during the year. The closure of long-term gold forward sales realised a
profit of R54 million, which is to be applied to the Barberton debt resulting in
a significant reduction in annual interest charges. It also reduces the
repayment period from five years to two years. Operating costs increased from
R633 million to R828 million, which was mainly due to the inclusion of the
Barberton Mines operations during the year. The increase in the depreciation
charge and finance costs is also mainly a result of the Barberton Mines
operations and debt profile. In view of Wakefield`s performance, a deferred tax
asset of R24 million has been recognised in the current year.
Cash generated by operations increased to R109 million from the previous year`s
R94 million. After dividends, taxation and finance costs, the Group`s cash
inflow from operating activities amounted to R74 million (2003: R38 million).
Group capital expenditure net of asset sales amounted to R109million and net
debt raised amounted to R36 million.
FUTURE PROSPECTS
The Group considers that the Rand/Dollar exchange rate is likely to remain
`stronger for longer` and continues to seek productivity improvements from its
operating mines.
The forthcoming year, however, brings with it new ventures and profit
contributors. The Chibuluma South Mine is planned to commence its production
build-up from September 2004 and the Middelburg Townlands colliery will increase
coal sales which, together with the Eskom supply contract, will exceed 3million
sales tons for the year.
Pending final metallurgical investigations and financing arrangements,
construction of the Ruashi/Etoile concentrator and SX/EW plant should commence
prior to the 2004 calendar year.
Given the current trend in the international zinc price, the Perkoa zinc project
has been optioned out with a view to a sale.
Exploration agreements have been entered into to evaluate the regional geology
on the Barberton and Consolidated Murchison mineral title holdings, with a view
to expanding the gold resources.
FINAL DIVIDEND
The impact of the exchange rate on the Group`s earnings, together with the cash
requirements of current development programmes, has necessitated the decision
not to declare a final dividend this year.
CAPITAL EXPENDITURE AND COMMITMENTS
Group capital expenditure totalled R119,2 million (2003: R30 million), which
mainly related to the Chibuluma South shaft sinking and the Middelburg Townlands
project. Both of these projects are funded by the IDC. In the case of Chibuluma
South, this funding is structured as a 35% equity participation.
Contracted capital commitments at 30 June 2004 amount to R2,2 million (2003: R1
million), whilst uncontracted commitments amount to R54,6 million (2003: R7
million).
Operating lease commitments, which fall due within the next year, amount to R2,3
million (2003: R3 million), whilst commitments of R17,2 million (2003: R5
million) fall due during the next four years.
SHARES ISSUED
Metorex Limited issued an additional 11 799 145 shares on 5 March 2004 at 234
cents per share, raising R27,6 million and a further
415 625 shares were issued on 28 May 2004 at 240 cents per share in exchange for
an increased shareholding in Ruashi Holdings (Pty) Ltd (Ruashi). Subsequent to
year end, a further 400712 shares were issued at 234 cents per share for a
further shareholding in Ruashi.
AUDIT REVIEW
Deloitte & Touche, the company`s auditors, have reviewed the consolidated
provisional results. A copy of their unqualified review report is available for
inspection at the company`s registered office.
ACCOUNTING POLICIES
The reviewed consolidated provisional results have been prepared on the
historical cost basis, except for certain financial instruments and the assets
and liabilities acquired with a business, which are stated at fair value and in
accordance with the International Financial Reporting Standard and the South
African Statement of Generally Accepted Accounting Practice applicable to
Interim Financial Reporting. The accounting policies are consistent with those
adopted in the previous year.
SAFETY
The Group`s safety record for the year was marred by six fatal accidents, four
of which occurred at Consolidated Murchison and one each at Maranda and
Wakefield.
The Group strives to conduct its activities with due regard to the safety and
health of its employees.
By order of the Board
A.S. MALONE C.D.S. NEEDHAM
Chairman Financial Director
26 August 2004
Contact details for Metorex Limited: Postal: P O Box 2814 Saxonwold 2132
South Africa Telephone: (+27 11) 880-3155 Facsimile: (+27 11) 880-3322
Registrars: South African and United Kingdom: Ultra Registrars (Pty) Limited
P O Box 4844 Johannesburg 2000 South Africa Telephone: (+27 11) 834-2266
Capita Group plc: The Registry 34 Beckenham Road Beckenham Kent BR
34TU England Telephone: +44 (208) 639-2157
Company Secretaries: Moore Stephens MWM PO Box 1574 Houghton 2041 South
Africa Telephone (+27 11) 728-7240
Sponsor: Barnard Jacobs Mellet Corporate Finance (Pty) Ltd POBox 62200
Marshalltown 2107 Telephone (+27 11) 283-0300
Auditors: Deloitte & Touche Private Bag X6 Gallo Manor, 2052 South
Africa Telephone: (+27 11) 806-5000
ADR Programme - North America and Canada: The Bank of New York 101 Barclay
Street New York NY 10286 USA Telephone +1 212 815 3326
website: www.metorexgroup.com e-mail: info@metorexgroup.com
Date: 26/08/2004 02:30:09 PM Produced by the JSE SENS Department
