| Thu 4 Aug 2005, 8:34 | | Northam Platinum Limited - Reviewed preliminary an |
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Northam Platinum Limited - Reviewed preliminary announcement of results and
dividend declaration for the year ended 30 June 2005
NORTHAM PLATINUM LIMITED
(Registration number 1977/003282/06)
(Incorporated in the Republic of South Africa)
JSE code: NHM ISIN: ZAE000030912
Reviewed preliminary announcement of results and dividend declaration for the
year ended 30 June 2005
KEY FEATURES
* Improved H2 operating performance
* Annual production of PGMs lower by 4.5%
* Net income largely unchanged at R249 million
* Final dividend of 45 cents declared
Income statement Restated
Year Year
ended ended
30 June 30 June
Change 2005 2004
% R000 R000
Sales revenue (9.6) 1 554 501 1 720 399
Cost of sales (3.9) 1 283 055 1 335 217
Operating costs 5.7 1 121 556 1 061 171
Concentrates purchased 37.2 20 075 14 632
Refining and other costs (5.5) 57 222 60 569
Metal leasing costs - (14 149)
Depreciation 6.3 103 646 97 527
Change in metal stocks (19 444) 115 467
Operating profit (29.5) 271 446 385 182
Investment income 29 269 38 174
Net sundry revenue/(expenditure) 75 367 (36 392)
Profit before tax (2.8) 376 082 386 964
Tax (6.8) 127 569 136 869
Net income attributable
to shareholders (0.6) 248 513 250 095
Reconciliation of headline
earnings
Net income attributable to
shareholders 248 513 250 095
Profit on sale of fixed assets (72) (193)
Loss on disposal of unlisted
investments 66 -
Tax effects 21 58
(0.6) 248 528 249 960
Earnings per share - cents (0.6) 107.3 108.0
Fully diluted earnings per share
- cents 1.2 106.9 108.0
Headline earnings per share -
cents (0.6) 107.3 108.0
Dividends per share - cents 70.0 90.0
Capital repayments per share -
cents 55.0
Weighted average number of
shares in issue 231 577 747 231 540 413
Fully diluted number
of shares in issue 232 366 778 231 556 027
Number of shares in
issue at year end 231 968 500 231 543 500
Cash flow statement
Cash flow from operations 378 696 512 808
Profit before tax 376 082 386 964
Depreciation 103 646 97 527
Change in working capital (3 114) 139 362
Tax paid (104 084) (117 766)
Other 6 166 6 721
Cash flows utilised in
investing activities (133 708) (118 496)
Property, plant and equipment
Additions to maintain operations (138 873) (122 925)
Disposals 5 157 4 427
Investments - net 8 2
Cash flows utilised in
financing activities (240 728) (187 665)
Proceeds from issue of shares 4 284 24
Reduction of share premium (46 310) (81 394)
Dividends paid (196 822) (104 194)
Increase in Restoration Trust Fund (1 880) (2 101)
Net cash flow 4 260 206 647
Cash and cash equivalents at
beginning of period 501 622 294 975
Cash and cash equivalents
at end of period 505 882 501 622
Statement of changes in equity
Equity at beginning of period 1 583 642 1 515 508
Net income attributable to shareholders 248 513 250 095
Equity compensation credit 3 446 3 603
Issue of new shares 4 284 24
Reduction of share premium (46 310) (81 394)
Dividends distributed (196 822) (104 194)
Equity at end of period 1 596 753 1 583 642
Balance sheet
Property, plant and equipment 1 390 586 1 355 765
Unlisted investments 107 181
Northam Platinum
Restoration Trust Fund 14 443 12 563
Current assets 835 187 804 015
Inventories 246 302 223 187
Accounts receivable 83 003 79 206
Cash and cash equivalents 505 882 501 622
2 240 323 2 172 524
Share capital 1 954 733 1 996 759
Equity compensation reserve 16 674 13 228
Accumulated loss (374 654) (426 345)
Shareholders` equity 1 596 753 1 583 642
Deferred tax 325 298 332 395
Long-term provisions 22 556 15 151
Current liabilities 295 716 241 336
Accounts payable 185 653 161 855
Tax 110 063 79 481
2 240 323 2 172 524
Operating statistics Restated
Year Year
ended ended
Change 30 June 30 June
% 2005 2004
Merensky:
Development metres (23.3) 8 218 10 713
Square metres mined (13.0) 280 635 322 451
Tons milled (6.9) 1 434 198 1 541 234
Head grade
(g/ton - 3 PGEs + Au) 6.2 6.0
Available ore reserves
- months 18 15
UG2:
Development metres 72.4 2 913 1 690
Square metres mined (3.1) 110 258 113 754
Tons milled 3.6 715 946 691 353
Head grade
(g/ton - 3 PGEs + Au) 4.4 4.3
Available ore reserves
- months 18 24
Combined:
Development metres (10.3) 11 131 12 403
Square metres mined (10.4) 390 893 436 205
Tons milled (3.7) 2 150 144 2 232 587
Head grade
(g/ton - 3 PGEs + Au) 5.6 5.5
Financial statistics
Precious metals in
concentrates produced * kg (4.5) 10 115 10 592
Precious metals sold * kg (15.4) 9 922 11 733
Average price realised * R/kg 5.1 137 517 130 874
Operating costs * R/kg 10.7 121 124 109 392
Cash costs * R/kg 10.8 110 267 99 532
Precious metals in
concentrates produced * oz (4.5) 325 214 340 547
Precious metals sold * oz (15.4) 318 992 377 239
Average price realised * US$/oz 14.9 686 597
Operating costs * US$/oz 23.3 608 493
Cash costs * US$/oz 23.4 554 449
Average exchange rate
realised US$1.00=R (9.9) 6.22 6.90
* - 3PGE + Au
Operating cost per ton milled R/ton 9.6 569 519
Cash cost per ton milled R/ton 10.0 519 472
Outstanding hedging instruments at period-end
Palladium
Period covered by
hedging instruments July 2005 n/a
Quantity hedged - oz 1 000 -
Contract price - US$/oz 200.00 -
Fair value price at
period-end - US$/oz 181.31 -
Unrealised gain/(loss)
recognised - US$000 19 -
- R000 127 -
Currency
Period covered by
hedging instruments July 2005 to July 2004 to
August 2005 September 2004
Average volumes hedged
per month - US$000 3 000 2 000
Average contract rate - US$1.00 = R 6.32 7.05
Fair value rate at
period-end - US$1.00 = R 6.69 6.20
Unrealised gain/(loss)
recognised - R000 (1 797) 4 078
In addition the
company has hedged its
commitments in respect
of the importation
of certain consumable
items.
At year end the
outstanding
contracts were as
follows:
(a) Month August 2005 n/a
Volume hedged - EUR 000 80 -
Average contract rate - EUR1.00 = R 8.49 -
Fair value rate
at period-end - EUR1.00 = R 8.07 -
Unrealised gain
/(loss) recognised - R000 (33) -
(b) Month November 2005 n/a
Volume hedged - EUR 000 140 -
Average contract rate - EUR1.00 = R 8.23 -
Fair value rate
at period-end - EUR1.00 = R 8.07 -
Unrealised gain
/(loss) recognised - R000 (6) -
Capital commitments R000 R000
Authorised but not
contracted 120 875 127 737
Contracted 35 826 8 399
156 701 136 136
Other commitments
Information Technology Outsource Service Provider
Due in one year 9 351 8 346
Due in two to five years 18 920 29 607
Operating lease rentals - office equipment
Due in one year 186 167
Due in two to five years 178 332
Operating lease rentals - premises
Due in one year 142 204
Due in two to five years 236 -
These commitments will be financed out of operating cash flows.
Operating results
Safety
The Board deeply regrets the loss of 14 lives in mining related accidents during
the period under review. The devastating fire on 20 September 2004 claimed the
lives of nine workers whilst five other separate incidents resulted in the
deaths of a further five employees.
Operating performance
The suspension of mining operations for an effective six weeks following the
fire on 20 September 2004 resulted in the loss of some 12% of planned production
during the period under review. However, a strong operating performance during
the second half of the year, particularly from the
UG2 horizon, made up for some of the losses.
Consequently, the production of metals in concentrate (3PGE + Au) was only 4.5%
lower at 10 115 kg (325 214oz) compared to the previous year. Merensky tonnage
milled was some 6.9% lower whilst UG2 tonnage milled was 3.6% higher.
Poor ground conditions associated with major faults and water intersections
continued to affect development on the Merensky horizon. Nevertheless, some
progress was made, resulting in the immediately available Merensky ore
reserve increasing to 18 months. UG2 ore reserve availability is at 18 months as
planned.
Management strives to eliminate unsafe working practices and the number of
injuries reported during the year continued to show a downward trend.
Financial results
The sustained strength of the Rand resulted in the average basket price received
increasing by only 5.1% to R137 517 per kg despite an increase of 14.9% in the
US Dollar price to US$686 per ounce. Unit sales were 15.4% lower at 9 922 kg
(318 992 oz) resulting in sales revenue declining by 9.6% to
R1 555 million.
An increase of 5.7% in total operating costs together with lower production of
metal in concentrates resulted in the unit cash operating costs increasing by
10.7% to R121 124 per kg. The lower sales volumes resulted in the cost of sales
for the period decreasing by 3.9%.
A total amount of R75.9 million received from the company`s insurers in respect
of business interruption following the fire is the major component of net sundry
revenue.
The profit attributable to shareholders was largely unchanged at R249 million
compared to R250 million for the year ended 30 June 2004.
Hedging
During the year US$24.0 million was hedged at an average rate of US$1.00 =
R6.21.The currency hedging programme was suspended in March 2005 when a reversal
in the strengthening trend of the Rand became evident. A total of 17 000 ounces
of palladium was hedged during the year at an average price of US$200 per ounce.
Details of the aggregate outstanding contracts are set out in the accompanying
financial report.
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 loss of R1.7 million being included in net income.
Capital expenditure
Development expenditure (R30 million), access infrastructure to 1 level and 14
level (R24 million), additional pumping capacity (R6 million), extensions to the
backfill infrastructure (R12 million), safety equipment (R17 million), and
employee housing (R9 million) were the major contributors to the capital
expenditure of R139 million, with routine capital expenditure comprising the
balance.
Expansion
Pandora Joint Venture
Northam`s 7.5% interest in Pandora temporarily vests in Mvelaphanda Resources
Limited pending the resolution of Northam`s HDSA status.As soon as this has been
resolved, the Pandora interest will be redeployed to Northam at cost.
Booysendal Project
In terms of the Mineral and Petroleum Resources Development Act, application had
to be made for a prospecting licence in respect of two state owned mineral
properties.This has now been granted and the acquisition of Booysendal is in the
process of being finalised. The consideration due in respect of the transaction
comprises R90 million in cash, 20 million fully paid ordinary shares and 18
million fully paid deferred shares, which will not rank for dividends for four
years after the issue. A circular will be issued to shareholders in due course.
Prospects
Production of metals in concentrate and sales of PGMs in F2006 are expected to
be modestly higher than that reported in the current year. Consequently, should
the Rand basket price received remain at current levels, a commensurate increase
in earnings may be expected.
Directorate
Mr. Robin Mills was appointed a non-executive director on 1 September 2004 in
the place of Mr Dorian Emmett who resigned on 30 August 2004. Dr Judy Dlamini
and Ms. Emily Kgosi were appointed independent non-executive directors on
1 November 2004.
Mr Pine Pienaar was appointed alternate director to Mr Bernard van Rooyen with
effect from 1 February 2005. Mr Glyn Lewis was appointed to the board as Chief
Executive Officer with effect from 1 March 2005.
Audit review
Ernst & Young, the company`s auditors, have reviewed the financial results.A
copy of their review opinion is available for inspection at the company`s
registered office.
Accounting policies - basis of preparation
The financial statements have been prepared on the historical cost basis except
for the measurement at fair value of financial instruments, 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, with the exception
of the early adoption of IFRS 2 - `Share Based Payments`.
In line with the new accounting policy the cumulative value of the share options
granted to employees at 30 June 2003 (R9.6 million) was charged to accumulated
loss. A charge of R3.6 million has been included in operating costs for the 2004
financial year. The charge in respect of the current year is R3.4 million. In
line with the requirements of IFRS 2, an compensation reserve` has been created.
Dividend
The company`s policy is to distribute net earnings less retentions necessary to
cover operational requirements and new business opportunities. Earnings for the
year totalled 108 cents per share and provision has been made for the contingent
cash liability of 39 cents per share in respect of the Booysendal transaction.
After deducting the interim dividend of 25 cents per share, the board has
declared a final dividend of 45 cents per share.
Dividend number 13 of 45 cents per share has been declared in South African
currency, in respect of the year ended 30 June 2005. The dividend will be paid
on Monday, 29 August 2005 to shareholders recorded in the books of the company
at the close of business on Friday, 26 August 2005 (the record date).The last
day to trade cum dividend is Friday, 19 August 2005.The shares will commence
trading ex dividend on Monday, 22 August 2005 and the record date is Friday, 26
August 2005.
No share certificates may be de-materialised or re-materialised between Monday,
22 August 2005 and Friday, 26 August 2005, both days inclusive.
On behalf of the Board
T M G Sexwale G T Lewis
Chairman Chief Executive Officer
Johannesburg
3 August 2005
Registered Office
1st Floor, Block 1A PO Box 412694
Albury Park Craighall
Magalieszicht Avenue 2024
Dunkeld West Republic of South Africa
Johannesburg
Directors: T M G Sexwale (Chairman), G T Lewis (Chief Executive Officer)
(British), M E Beckett (British), Ms N J Dlamini (Dr), R Havenstein,
Ms E T Kgosi, R G Mills, E Molobi, R H H van Kerckhoven (Belgian),
B R van Rooyen (Alternate: P C Pienaar), M J Willcox
Company Secretary: S J van der Spuy
Z
Date: 04/08/2005 08:03:43 AM
Produced by the JSE SENS Department
