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NHM
NHM
Northam Platinum - Unaudited interim report and dividend declaration for the six
months ended 31 December 2005
Northam Platinum Limited
(Incorporated in the Republic of South Africa)
(Registration number 1977/003282/06)
JSE code: NHM ISIN: ZAE000030912
("Northam Platinum" or "the company")
Unaudited interim report and dividend declaration for the six months ended 31
December 2005
KEY FEATURES
* Metal production up 25% to 186 704 oz
* Net income increased by 397% to R303 million
* Sales revenue up 50% to R1 084 million
* Dividend of 115 cents per share declared
Income statement
Six months Six months Year
ended ended ended
31 December 31 December 30 June
Change 2005 2004 2005
% R000 R000 R000
Unaudited Unaudited Audited
Sales revenue 50.5 1 083 818 720 283 1 554 501
Cost of sales 3.2 660 580 639 977 1 283 055
Operating costs 9.2 610 849 559 493 1 121 556
Concentrates
purchased - 21 552 20 075
Refining and other
costs 26 538 28 393 57 222
Depreciation 56 900 58 500 103 646
Change in metal
inventories (33 707) (27 961) (19 444)
Operating profit 427.0 423 238 80 306 271 446
Investment income 17 360 16 126 29 269
Net sundry revenue 4 410 15 982 75 367
Profit before tax 295.9 445 008 112 414 376 082
Tax 141 921 51 433 127 569
Net profit
attributable to
ordinary shareholders 397.0 303 087 60 981 248 513
Reconciliation of
headline earnings
Net profit
attributable
to ordinary
shareholders 303 087 60 981 248 513
Profit on sale of
fixed assets (663) (191) (72)
Loss/(Profit) on
disposal
of unlisted
investments (129) - 66
Tax effect 211 57 21
302 506 60 847 248 528
Earnings per share -
cents 395.8 130.4 26.3 107.3
Fully diluted
earnings
per share - cents 387.5 128.2 26.3 106.9
Headline earnings
per share - cents 394.7 130.1 26.3 107.3
Dividends per
share - cents 115.0 25.0 70.0
Weighted average
number
of shares in issue 232 510 410 231 558 337 231 577 747
Fully diluted number
of shares in issue 236 454 209 231 615 661 232 366 778
Number of shares in
issue 233 220 000 231 573 500 231 968 500
Cash flow statement
Cash flow from operations 300 988 122 196 378 696
Profit before tax 445 008 112 414 376 082
Depreciation 56 900 58 500 103 646
Change in working capital (81 597) (31 327) (3 114)
Tax paid (123 119) (19 965) (104 084)
Other 3 796 2 574 6 166
Cash utilised in
investing activities (100 381) (46 282) (133 708)
Property, plant and equipment
Additions to
maintain operations (99 171) (49 484) (138 873)
Disposals 2 075 3 202 5 157
Employee housing development (3 515) - -
Investments - net 230 - 8
Cash utilised in
financing activities (91 384) (185 685) (240 728)
Proceeds from issue of shares 13 654 137 4 284
Reduction of share premium - (46 310) (46 310)
Dividends paid (104 451) (138 929) (196 822)
Increase in Northam
Platinum Restoration Trust Fund (587) (583) (1 880)
Net increase/(decrease) in
cash and cash equivalents 109 223 (109 771) 4 260
Cash and cash equivalents
at beginning of period 505 882 501 622 501 622
Cash and cash equivalents
at end of period 615 105 391 851 505 882
Statement of changes in equity
Equity at beginning of period 1 596 753 1 583 642 1 583 642
Net profit attributable to
ordinary shareholders 303 087 60 981 248 513
Equity compensation credit 2 879 1 727 3 446
Issue of new shares 13 654 137 4 284
Reduction of share premium - (46 310) (46 310)
Dividends distributed (104 451) (138 929) (196 822)
Equity at end of period 1 811 922 1 461 248 1 596 753
Balance sheet
Assets
Property, plant and equipment 1 430 810 1 343 738 1 390 586
Unlisted investments 6 181 107
Employee housing development 3 515 - -
Northam Platinum Restoration Trust
Fund 15 030 13 146 14 443
Current assets 1 017 012 752 908 835 187
Inventories 280 981 261 778 246 302
Accounts receivable 120 926 99 279 83 003
Cash and cash equivalents 615 105 391 851 505 882
Total assets 2 466 373 2 109 973 2 240 323
Equity and liabilities
Share capital 1 968 387 1 950 586 1 954 733
Equity compensation reserve 19 553 14 955 16 674
Accumulated loss (176 018) (504 293) (374 654)
Shareholders" equity 1 811 922 1 461 248 1 596 753
Non-current liabilities 359 961 344 189 347 854
Deferred tax 336 331 328 000 325 298
Long-term provisions 23 630 16 189 22 556
Current liabilities 294 490 304 536 295 716
Accounts payable 176 658 189 192 185 653
Tax 117 832 115 344 110 063
Total equity and liabilities 2 466 373 2 109 973 2 240 323
Outstanding hedging instruments at period-end
Six months Six months
ended ended
31 December 31 December
2005 2004
R000 R000
Unaudited Unaudited
Palladium:
Period n/a January 2005 to
February 2005
Quantity hedged oz 2 000
Average contract price US$/oz - 215.00
Fair value price
at period-end US$/oz - 183.00
Unrealised gain
recognised US$000 - 55
R000 - 307
Currency:
US Dollars
Period n/a January 2005 to
February 2005
Volumes hedged US$000 - 2 000
Average contract
rate US$1.00 = R - 6.35
Fair value rate
at period end US$1.00 = R - 5.60
Unrealised
gain/(loss) recognised R000 - 1 463
Euros:
Period n/a n/a
Volumes hedged 000 - -
Average contract
rate 1.00 = R - -
Fair value rate
at period-end 1.00 = R - -
Unrealised loss
recognised R000 - -
Year
ended
30 June
2005
R000
Audited
Palladium:
Period July 2005
Quantity hedged oz 1 000
Average contract price US$/oz 200.00
Fair value price
at period-end US$/oz 181.31
Unrealised gain
recognised US$000 19
R000 127
Currency:
US Dollars
Period July 2005 to
August 2005
Volumes hedged US$000 6 000
Average contract
rate US$1.00 = R 6.32
Fair value rate
at period end US$1.00 = R 6.69
Unrealised
gain/(loss) recognised R000 (1 797)
Euros:
Period August 2005 to
November 2005
Volumes hedged 000 220
Average contract
rate 1.00 = R 8.32
Fair value rate
at period-end 1.00 = R 8.07
Unrealised loss
recognised R000 (39)
Restated following the adoption of IFRS 2 - Share based payments.
Capital commitments
Authorised but not contracted 38 569 88 727 148 824
Contracted 47 608 6 732 35 826
86 177 95 459 184 650
Other commitments
Information Technology Outsource Service
Provider:
Due in one year 9 351 8 715 9 015
Due in two to five years 18 920 28 271 22 950
Operating lease rentals - office equipment:
Due in one year 187 171 186
Due in two to five years 144 215 178
Operating lease rentals - premises:
Due in one year 148 136 142
Due in two to five years 161 309 236
These commitments will be financed out of operating cash flows.
Operating statistics Change
Merensky: %
Development metres 52.9 5 451
Square metres mined 7.6 148 862
Tonnes milled 10.5 759 479
Head grade (g/tonne - 3 PGEs + Au) 6.1
Available ore reserves - months 19
UG2:
Development metres 34.1 1 759
Square metres mined 55.6 70 297
Tonnes milled 43.2 433 566
Head grade (g/tonne - 3 PGEs + Au) 4.6 4.4
Available ore reserves - months 28 16
Combined:
Development metres 47.9 7 210
Square metres mined 19.4 219 159
Tonnes milled 20.5 1 193 045
Head grade (g/tonne - 3 PGEs + Au) 5.5
Financial statistics
Precious metals in concentrates
produced * kg 24.9 5 807
Precious metals sold * kg 24.2 5 867
Average basket price realised * R/kg 26.0 167 079
Operating costs * R/kg (13.2) 114 987
Cash costs * R/kg (12.7) 104 508
Precious metals in
concentrates produced * oz 24.9 186 704
Precious metals sold * oz 24.2 188 628
Average basket price realised * US$/oz 20.0 798
Operating costs * US$/oz (17.4) 549
Cash costs * US$/oz (16.8) 499
Average exchange rate realised US$1.00 = R 5.0 6.51
Operating costs per tonne milled R/tonne (10.1) 560
Cash costs per tonne milled R/tonne (9.4) 509
*3PGE + Au.
Operating statistics
Merensky:
Development metres 3 564 8 218
Square metres mined 138 393 280 635
Tonnes milled 687 194 1 434 198
Head grade (g/tonne - 3 PGEs + Au) 6.1 6.2
Available ore reserves - months 20 18
UG2:
Development metres 1 312 2 913
Square metres mined 45 173 110 258
Tonnes milled 302 689 715 946
Head grade (g/tonne - 3 PGEs + Au) 4.4
Available ore reserves - months 18
Combined:
Development metres 4 876 11 131
Square metres mined 183 566 390 893
Tonnes milled 989 883 2 150 144
Head grade (g/tonne - 3 PGEs + Au) 5.6 5.6
Financial statistics
Precious metals in concentrates produced 4 649 10 115
Precious metals sold * 4 723 9 922
Average basket price realised * 132 645 137 517
Operating costs * 132 547 121 124
Cash costs * 119 742 110 267
Precious metals in
concentrates produced * 149 481 325 214
Precious metals sold * 151 835 318 992
Average basket price realised * 665 686
Operating costs * 665 608
Cash costs * 600 554
Average exchange rate realised 6.20 6.22
Operating costs per tonne milled 623 569
Cash costs per tonne milled 562 519
*3PGE + Au.
Comments on results
Safety
It is with deep regret that the Board reports that two employees tragically
lost their lives in two separate incidents+ during the period under review.
Operating performance
Production of metal in concentrates (3PGE + Au) at 5 807 kg (186 704 oz) was
24.9% higher than the comparable period ended 31 December 2004. Merensky
tonnage milled was some 10.5% higher whilst UG2 tonnage milled was 43.2%
higher.
Merensky ore reserve increased to 19 months whilst UG2 ore reserve
availability rose to 28 months.
Financial results
The combination of a 20% increase in the average US Dollar basket price
received to US$798 per ounce and a modest weakening of the Rand resulted in the
average Rand basket price received increasing by 26.0% to R167 079 per kg.
This, together with a 24.2% increase in unit sales to 5 867 kg (188 628 oz),
resulted in sales revenue increasing by 50.5% to R1 084 million.
Although total operating costs increased by 9.2%, the higher production
resulted in the unit cash costs decreasing by 12.7% to R104 508 per kg. The
higher sales volumes combined with lower unit costs resulted in the cost of
sales for the period increasing by only 3.2%.
Net sundry revenue reduced to normalised levels following the once-off interim
recovery from the company"s insurers that was received during the six months
ended 31 December 2004.
The profit attributable to shareholders increased by 397% to R303 million
compared with that for the six months ended 31 December 2004.
Hedging
No currency was hedged during the period and there were no outstanding
contracts at the end of the period. Minor volumes of palladium were hedged at
an average of US$195 per ounce. There were no outstanding contracts at the end
of the period.
Capital expenditure
Development expenditure (R23 million), access infrastructure to 1 level and 14
level (R29 million), and construction of a furnace slag processing plant (R14
million) were the major contributors to the capital expenditure of R99 million,
with routine capital expenditure comprising the balance.
Prospects
The erratic nature of the Merensky reef combined with the fewer number of
working shifts available in the second half of the financial year will give
rise to lower metal production and sales. Consequently, should the average Rand
basket price received for the second half be in line with currently prevailing
prices, a moderate decline in earnings will result.
Accounting policies - basis of preparation
The financial statements have been prepared on the historical cost basis,
except for financial instruments that are fairly valued, in accordance with
International Financial Reporting Standards ("IFRS") issued by the
International Accounting Standards Board and incorporate the accounting
policies which are consistent with those adopted in the financial year ended 30
June 2005.
Dividend
Dividend number 14 of 115 cents per share has been declared in South African
currency, in respect of the six months ended 31 December 2005.
The dividend will be paid on Monday, 27 February 2006 to shareholders recorded
in the books of the company at the close of business on Friday, 24 February
2006 ("the record date"). The last day to trade cum dividend is Friday, 17
February 2006. The shares will commence trading ex-dividend on Monday, 20
February 2006 and the record date is Friday, 24 February 2006.
No share certificates may be dematerialised or rematerialised between Monday,
20 February 2006 and Friday, 24 February 2006, both days inclusive.
On behalf of the Board
T M G Sexwale G T Lewis
Chairman Chief Executive Officer
Johannesburg
1 February 2006
Registered Office
1st Floor, Block 1A PO Box 412694
Albury Park Craighall, 2024
Magalieszicht Avenue Republic of South Africa
Dunkeld West, 2196
Johannesburg
JSE code: NHM ISIN: ZAE000030912
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
NORTHAM
(Incorporated in the Republic of South Africa)
(Registration number 1977/003282/06)
("Northam Platinum" or "the company")
These results are available on our website at www.northam.co.za
Date: 02/02/2006 08:00:11 AM Produced by the JSE SENS Department
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