| Wed 7 Sep 2005, 13:21 | | Metorex Limited - Provisional Results |
|
Metorex Limited - Provisional Results
Metorex Limited
Registration number: 1934/005478/06
Share code: MTX
ISIN 000022745
Issuer code: MEMTX
Incorporated in the Republic of South Africa
Listed on the JSE Limited and London Stock Exchange
Exchange rate (average): (2005): 6,2 (2004): 6,9
Exchange rate (year-end): (2005): 6,7 (2004): 6,2
- Ruashi/Etoile project secured and financed
- Group operations re-focused
- Chibuluma South decline shaft commissioned in June 2005
- Mining profit doubles
- Coal division main earning contributor
- Debt/Equity ratio reduces to 15,8% from 45,5%
- Cash generated by operations increases by 14%
Consolidated Income Statement
Year ended Year ended
30 June 2005 30 June 2004
R000`s (Reviewed) (Reviewed)
Revenue
Mineral sales
Copper 61 276 75 291
Coal 385 765 208 618
Fluorspar 122 743 111 538
Gold 363 823 386 523
Antimony 95 606 89 581
Cobalt - 3 393
Other 796 3 555
Gross revenue 1 030 009 878 499
Realisation costs 84 167 89 938
On-mine revenue 945 842 788 561
Cost of production 823 659 692 786
Stock movement (13 326) 9 275
Depreciation 50 597 47 406
Mining profit 84 912 39 094
- Continuing operations 94 335 48 852
- Closed operations (9 423) (9 758)
Hedging profit 21 295 50 704
Discontinued operations (12 439) (43 158)
Impairment of assets - (4 381)
Other expenses (4 323) (80)
Operating income before finance costs 89 445 42 179
Finance income 3 817 1 553
Finance costs (13 786) (23 467)
Income before taxation 79 476 20 265
Taxation - normal and STC (5 256) (6 497)
Taxation - deferred (25 594) 4 099
Income after taxation 48 626 17 867
Income attributable to outside
shareholders 18 725 32 225
Income/(loss) attributable to ordinary
shareholders 29 901 (14 358)
Earnings/(loss) per share (cents) 14,7 (8,0)
Headline earnings per share (cents) 13,6 2,8
Diluted earnings/(loss) per
share (cents) 13,8 (8,0)
Diluted headline earnings
per share (cents) 12,8 2,8
Dividend per share (cents) - 3,0
Reconcilliation between earnings
and headline earnings:
Income/(loss) attributable to
ordinary shareholders 29 901 (14 358)
Impairment of assets - 27 905
Goodwill amortisation - 3 662
Profit on sale of assets/subsidiaries (4 607) (9 054)
Discontinued operations 2 357 -
Tax effects - (3 157)
Headline earnings (R000`s) 27 651 4 998
Weighted average number of shares
in issue (000`s) 203 717 178 839
Number of shares in issue at
year-end (000`s) 279 933 187 243
Statement of Changes in Equity
Year ended Year ended
30 June 2005 30 June 2004
R000`s (Reviewed) (Audited)
Share capital 27 993 18 723
- Balance at start of year 18 723 17 502
- Issue of new shares 9 270 1 221
Share premium 737 204 483 088
- Balance at start of year 483 088 455 702
- Issue of new shares 267 946 27 386
- Share issue costs (13 830) -
Reverse acquisition reserve (128 066) (128 066)
Foreign exchange translation reserve (52 353) (50 750)
- Balance at start of year (50 750) (33 231)
- Foreign exchange reserve (20 222) 26 612
- Translation profit/(loss) on foreign
monetary item 24 825 (58 842)
- Tax effect of translation
(profit)/loss on foreign monetary item (6 206) 14 711
Hedging reserve (8 278) -
- Balance at start of year - 840
- Fair value losses for the year (13 974) -
- Minority interest 5 696 -
- Transferred to income statement - (840)
Retained income 126 361 96 460
- Balance at start of year 96 460 116 069
- Net income/(loss) for the year 29 901 (14 358)
- Dividends distributed - (5 251)
Total equity 702 861 419 455
Consolidated Balance Sheet
30 June 2005 30 June 2004
R000`s (Reviewed) (Audited)
ASSETS
Non-current assets
Property, plant and equipment 568 727 495 742
Mineral rights 250 748 218 527
Goodwill 18 309 18 309
Investments 929 891
Rehabilitation trust funds 43 033 44 374
Deferred tax assets 16 170 40 441
897 916 818 284
Current assets
Inventories 47 691 37 246
Trade and other receivables 161 777 165 388
Derivative instruments - 888
Taxation prepaid 4 985 4 829
Bank balances and cash 207 779 29 530
422 232 237 881
Total assets 1 320 148 1 056 165
EQUITY AND LIABILITIES
Capital and reserves
Share capital and premium 765 197 501 811
Hedging and translation reserve (60 631) (50 750)
Retained income 126 361 96 460
Equity reserve (128 066) (128 066)
702 861 419 455
Minority interest 151 391 118 960
Non-current liabilities
Long-term liabilities - interest bearing 48 953 95 826
Long-term provisions 72 645 74 109
Deferred tax liabilities 74 456 67 895
196 054 237 830
Current liabilities
Trade and other payables 162 577 150 301
Short-term borrowings - interest bearing 43 610 64 306
Short-term provisions 29 673 33 579
Derivative instruments 14 947 -
Bank overdraft 18 713 30 571
Taxation 322 1 163
269 842 279 920
Total equity and liabilities 1 320 148 1 056 165
Net asset value per share (cents) 251 224
Net tangible asset value
per share (cents) 245 214
Consolidated Cash Flow Statement
Year ended Year ended
30 June 2005 30 June 2004
R000`s (Reviewed) (Audited)
Cash generated before working
capital changes 129 260 119 347
Working capital changes (5 732) (10 777)
Cash generated by operations 123 528 108 570
Dividends paid (3 009) (8 131)
Taxation paid (6 702) (1 094)
Finance costs (9 969) (25 070)
Cash inflows from operating activities 103 848 74 275
Cash outflows from investing activities (131 045) (110 431)
Cash inflows from financing activities 217 220 37 227
Net increase in cash and cash
equivalents 190 023 1 071
Cash at beginning of year (1 041) (2 056)
Effect of foreign exchange rate changes 84 (56)
Cash at end of year 189 066 (1 041)
COMMENTARY
The Group has experienced a particularly successful year in which the most
significant features are set out below:
1. The Ruashi and Etoile copper/cobalt projects in the DRC were evaluated, the
funds required for the capital development programme were raised and development
commenced.
2. The Group operations were reorganised with the closure of Maranda, O`Okiep
and Chibuluma West and sales of Metmin and the Perkoa zinc deposit in Burkina
Faso. The remaining operations are clearly divisionalised into Coal, Gold, Base
Metal and Industrial Minerals.
3. After delays brought about by poor ground conditions, the decline shaft at
Chibuluma South was commissioned, enabling ease of access for machines, men and
materials and increased production levels.
4. The profits from continuing mining operations doubled. The major contribution
was the coal division with Middelburg Townlands completing its first full year
of operation.
5. The combined effect of the issue of new shares for Ruashi/Etoile and debt
repayment programme resulted in the debt/equity ratio improving from 45,5% to
15,8%.
Operating performance
The largest contributor to the Group`s mineral sales was from the Wakefield coal
division with a 65% increase in sales volumes and 85% increase in sales revenue.
This was the first full year of coal production from the Middelburg Townlands
Colliery. The coal division was also the largest contributor to the Group`s
mining profit.
The fluorspar operation continued with its quality improvement programme but was
affected by the continued strength of the Rand exchange rate relative to the US
Dollar. This company, however, made a meaningful contribution to Group earnings
as did the performance from the Barberton gold operations.
Expenditure on the closure of O`Okiep, Maranda and Chibuluma West amounted to
R25,9 million, which meant a temporary lack of earning/contribution from the
copper division. The commissioning of Chibuluma South should reintroduce
contributions from copper in the forthcoming year with additional contributions
from Ruashi during the following year.
Consolidated Murchison experienced low antimony and gold grades but has the
advantage of a major increase in the antimony price, which is expected to remain
at present levels in the short-term.
Financial position and cash flow
The net asset value of the Group increased to R703 million from R419 million the
previous year through a combination of the issue of new shares for the
Ruashi/Etoile project and the operating performance. The net current assets of
R152 million increased from the net current liability position of R42 million
the previous year. The proceeds from the closure of the Barberton gold hedge
contracts were applied to the debt raised on acquisition and the major portion
of the funds on hand at the year-end have been designated for the Ruashi/Etoile
capital programme.
Mining revenue from continuing operations increased by 17% and operating costs
increased by 19%, being a volume increase at Middelburg Townlands Colliery.
Significant production increases at Wakefield coal were the reason for the
increased depreciation charge during the year.
Cash generated from mining operations increased to R124 million from R109
million the previous year. The cash generated from operations was enhanced by
the issue of new shares for the Ruashi project and applied to the capital
development programmes at Ruashi and Chibuluma South, closure costs and debt
servicing. The earnings per share calculated on an increase of 14% on the
weighted average number of shares in issue increased to 14,7 cents per share
from a loss of 8 cents per share the previous year.
Future prospects
The Group considers that the Rand/Dollar exchange rate is likely to track in its
present range in the short to medium term but the Dollar weakness is likely to
maintain the present strength in the Dollar-denominated commodity prices.
Productivity improvements are continuously being sought.
Subsequent to the year-end, the Wakefield Coal group has increased its BEE
Shareholding from 9,5% to 26% through the issue of new shares for a cash
consideration of R44 million. Approximately half of these funds will be applied
to the reduction of debt in that company, with the remainder being applied to
increasing plant capacity at the Middelburg Townlands Colliery by approximately
40%.
Chibuluma South Mine is building up its production levels and has reached a
level of 20 000 milled tons per month in August 2005 and is expected to achieve
production design capacity of 40 000 tons per month by April 2006.
Improved grades and robust antimony prices should result in Consolidated
Murchison contributing to the Group`s earnings and Barberton is budgeted to
perform in line with the previous year.
The Ruashi concentrator and Sable treatment plant are planned for completion in
the forthcoming financial year and should be operational during the final
quarter.
Vergenoeg fluorspar will continue with its production expansion and quality
improvement programmes.
The costs of closure of the various operations commenced during the current year
and are expected to reduce significantly during the forthcoming year.
Final dividend
With the present development and growth programmes and associated cash
requirements, the Board considers it inappropriate to declare a dividend for
this year.
Capital expenditure and commitments
Group capital expenditure totalled R160,3 million (2004: R119,2 million), which
mainly related to the Chibuluma South shaft sinking and the Ruashi/Sable
projects.
Contracted capital commitments at 30 June 2005 amount to R21,8 million (2004:
R2,2 million), whilst uncontracted commitments amount to R264,5 million (2004:
R54,6 million).
Operating lease commitments, which fall due within the next year, amount to R5,3
million (2004: R2,3 million), whilst commitments of R12,6 million (2004: R17,2
million) fall due during the next four years.
Shares issued
(1) 26 April 2005: 83,3 million shares at R3,00 per share - Ruashi share
placing;
(2) July 04 - May 05: 8,6 million shares at an average of R2,92 per share -
Ruashi mineral right acquisition;
(3) April 05 - June 05: 0,8 million shares at an average of R2,65 per share -
Share option implementations.
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 in accordance
with International Financial Reporting Standards applicable to Interim Financial
Reporting. The accounting policies are consistent with those adopted in the
financial year ended 30 June 2004, except for the application of IFRS 3:
Business Combinations. IFRS 3 was implemented in the current reporting period.
In accordance with IFRS 3, goodwill is no longer amortised and comparatives have
not been restated.
Comparative figures on the consolidated income statement have been reclassified
to reflect the comparable losses from discontinued operations.
Safety
The Group`s safety record was marred by four fatal accidents, one each at
Barberton and Chibuluma South and two at Consolidated Murchison.
The Group strives to conduct its activities with due regard to the safety and
health of its employees and regrets the loss of life on its operations.
By order of the Board
A.S. Malone C.D.S. Needham
Chairman Managing Director
7 September 2005
Contact details for Metorex Limited and Corporate Advisers
Postal: PO 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
The Capita Group PLC:
The Registry, 34 Beckenham Road, Beckenham, Kent, BR34TU, England Telephone:
+44 (208) 639-2157
Company Secretaries:
Moore Stephens MWM, PO Box 1574, Houghton, 2041, South Africa Telephone: (+27
11) 728-7240
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: 07/09/2005 12:00:24 PM
Produced by the JSE SENS Department
