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NHM
NHM
Northam Platinum Limited - Reviewed preliminary announcement
Northam Platinum Limited
(Incorporated in the Republic of South Africa)
(Registration number 1977/003282/06)
("Northam Platinum" or "the company")
KEY FEATURES
- Record production at 362 000 oz precious metals in concentrate (3PGE+Au)
- 54% increase in sales revenue
- Headline earnings per share 180% higher year on year
- Dividend of 165 cents per share declared
Reviewed preliminary announcement of results and dividend declaration
for the year ended 30 June 2006
CONSOLIDATED INCOME STATEMENT
Year ended Year ended
30 June 30 June
Change 2006 2005
% R000 R000
Sales revenue 53.5 2 386 326 1 554 501
Cost of sales 7.2 1 375 377 1 283 055
Operating costs 10.8 1 242 970 1 121 556
Concentrates purchased - 20 075
Refining and realisation costs 4.0 59 520 57 222
Depreciation 10.7 114 713 103 646
Change in metal stocks 115.1 (41 826) (19 444)
Operating profit 272.4 1 010 949 271 446
Investment income 33.5 39 075 29 269
Net sundry revenue (73.7) 19 820 75 367
Profit before tax 184.5 1 069 844 376 082
Tax 187.4 366 606 127 569
Net income attributable to
shareholders 183.0 703 238 248 513
Reconciliation of headline earnings
Net income attributable to
shareholders 703 238 248 513
Loss / (profit) on sale of property,
plant and equipment (146) (72)
Loss / (profit) on disposal
of unlisted investments (129) 66
Tax effect 61 21
182.9 703 024 248 528
Earnings per share - cents 180.4 300.9 107.3
Fully diluted earnings
per share - cents 174.6 293.6 106.9
Headline earnings
per share - cents 180.4 300.9 107.3
Dividends per share - cents 280.0 70.0
Weighted average number of
shares in issue 233 704 034 231 577 747
Fully diluted number of shares in
issue 239 542 861 232 366 778
Number of shares in issue at year
end 236 003 000 231 968 500
CONSOLIDATED CASH FLOW STATEMENT
Cash flows from operations 849 226 378 696
Profit before tax 1 069 844 376 082
Depreciation 114 713 103 646
Change in working capital (69 755) (3 114)
Tax paid (274 694) (104 084)
Other 9 118 6 166
Cash flows utilised in
investing activities (212 045) (133 708)
Property, plant and equipment
Additions to maintain operations (210 512) (138 873)
Disposals 4 839 5 157
Township development (6 602) -
Investments - net 230 8
Cash flows utilised in
financing activities (311 777) (240 728)
Proceeds from issue of shares 64 053 4 284
Reduction of share premium - (46 310)
Dividends paid (373 880) (196 822)
Increase in Restoration Trust Fund (1 950) (1 880)
Net cash flow 325 404 4 260
Cash and cash equivalents at
beginning of period 505 882 501 622
Cash and cash equivalents
at end of period 831 286 505 882
CONSOLIDATED STATEMENT
OF CHANGES IN EQUITY
Equity at beginning of period 1 596 753 1 583 642
Net income attributable
to shareholders 703 238 248 513
Equity compensation charge 7 009 3 446
Issue of new shares 64 053 4 284
Reduction of share premium - (46 310)
Dividends distributed (373 880) (196 822)
Equity at end of period 1 997 173 1 596 753
CONSOLIDATED BALANCE SHEET
Year ended Year ended
30 June 30 June
2006 2005
R000 R000
Property, plant and equipment 1 481 901 1 390 586
Township development 6 602 -
Available for sale investments 6 107
Investments held by Northam Platinum
Restoration Trust Fund 16 393 14 443
Current assets 1 231 073 835 187
Inventories 280 372 246 302
Accounts receivable 119 415 83 003
Cash and cash equivalents 831 286 505 882
2 735 975 2 240 323
Share capital 2 018 786 1 954 733
Equity compensation reserve 22 788 16 674
Accumulated loss (44 401) (374 654)
Shareholders" equity 1 997 173 1 596 753
Deferred tax 357 632 325 298
Long-term provisions 25 149 22 556
Current liabilities 356 021 295 716
Accounts payable 186 380 185 653
Tax 169 641 110 063
2 735 975 2 240 323
CAPITAL COMMITMENTS
Authorised but not contracted 170 105 148 824
Contracted 17 584 35 826
187 689 184 650
OTHER COMMITMENTS
Information Technology Outsource
Service Provider
Due in one year 8 123 9 351
Due in two to five years 10 224 18 920
Operating lease rentals - office equipment
Due in one year 622 186
Due in two to five years 101 178
Operating lease rentals - premises
Due in one year 155 142
Due in two to five years 81 236
Housing development
Contracted 2 843 -
These commitments will be financed out of operating cash flows.
OPERATING STATISTICS
% Change
Merensky
Development metres 35.1 11 102 8 218
Square metres mined (1.0) 277 896 280 635
Tonnes milled (0.7) 1 424 160 1 434 198
Head grade (g/tonne - 3PGEs + Au) 6.1 6.2
Available ore reserves in months 21 18
UG2
Development metres (3.3) 2 818 2 913
Square metres mined 25.3 138 170 110 258
Tonnes milled 22.8 878 924 715 946
Head grade (g/tonne - 3PGEs + Au) 4.5 4.4
Available ore reserves in months 26 18
Combined
Development metres 25.1 13 920 11 131
Square metres mined 6.4 416 066 390 893
Tonnes milled 7.1 2 303 084 2 150 144
Head grade (g/tonne - 3PGEs + Au) 5.5 5.6
FINANCIAL STATISTICS
Precious metals in
concentrates produced * kg 11.2 11 247 10 115
Precious metals sold * kg 13.7 11 285 9 922
Average price realised * R/kg 37.6 189 286 137 517
Operating costs * R/kg (0.3) 120 711 121 124
Cash operating costs * R/kg (0.5) 109 677 110 267
Precious metals in
concentrates produced * oz 11.2 361 599 325 214
Precious metals sold * oz 13.7 362 821 318 992
Average price realised * US$/oz 33.8 918 686
Operating costs * US$/oz (3.5) 587 608
Cash operating costs * US$/oz (3.6) 534 554
Average exchange rate
realised US$1.00 = R 3.1 6.41 6.22
Operating cost per
tonne milled R/tonne 3.5 589 569
Cash cost per tonne milled R/tonne 3.3 536 519
*Platinum, Palladium, Rhodium and Gold (3PGE + Au).
COMMENTS ON RESULTS
Safety
It is with deep regret that the board reports the death of five employees over
the reporting period.
Operating performance
Production of precious metal in concentrates (3PGE + Au) at 11 247 kg (361.599
oz) was 11.2% higher than the previous year. Merensky tonnage milled was
marginally lower than that of the previous year, whilst UG2 tonnage milled was
22.8% higher.
The available Merensky ore reserve increased to 21 months whilst UG2 ore
reserve availability rose to 26 months.
Financial results
The combination of a 33.8% increase in the average US Dollar basket price
received to US$918 per ounce, and a modest weakening of the Rand resulted in
the average Rand basket price received increasing by 37.6% to R189 286 per kg.
This, together with a 13.7% increase in unit sales to 11 285 kg (362 821 oz)
resulted in sales revenue increasing by 53.5% to R2 386 million.
Total operating costs increased by 10.8% in line with the 11.2% increase in
precious metals produced, resulting in unit cash operating costs decreasing
marginally to R109 677 per kg. The higher sales volumes combined with lower
unit costs resulted in the cost of sales for the period increasing by 7.2%.
The increased cash flows resulting from the higher metal prices resulted in
interest income rising by 33.5%. Net sundry revenue reduced to normalised
levels following the recovery from the company"s insurers during the previous
year.
The net income attributable to shareholders increased by 183.0% to R703
million compared to the previous year.
Hedging
No currency was hedged during the period, and there were no outstanding
contracts at the end of the period. Minor volumes of palladium were hedged at
an average of US$ 195 per ounce. There were no outstanding contracts at the
end of the period.
Capital expenditure
The major contributing items to the capital expenditure of R211 million were:
development expenditure (R38 million); access infrastructure to 1 level and 14
level (R67 million); upgrading of the backfill reticulation system (R9
million);
new compressed air columns (R12 million); improvements to the skip capacity
(R9 million); and construction of a furnace slag processing plant (R17
million). The balance comprised routine capital expenditure.
Prospects
Production of metals in concentrate and sales of PGMs in the coming year are
expected to be slightly lower owing to the difficult ground conditions
characterised by severe potholing. Should the Rand basket price remain at
current levels, a modest decrease in earnings could be expected.
Audit review
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 - 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 15 of 165 cents per share has been declared in South African
currency, in respect of the year ended 30 June 2006.
The dividend will be paid on Monday, 28 August 2006 to shareholders recorded
in the books of the company at the close of business on Friday, 25 August 2006
(the record date). The last day to trade cum dividend is Friday, 18 August
2006. The shares will commence trading ex dividend on Monday, 21 August 2006
and the record date is Friday, 25 August 2006.
No share certificates may be de-materialised or re-materialised between
Monday, 21 August 2006 and Friday, 25 August 2006, both days inclusive.
Directorate
The board noted, with sadness, the passing away of Eric Molobi on 4 June 2006.
Mr Molobi joined the board in September 2000, and had in the past five years
made an invaluable contribution to the affairs of the company.
On behalf of the Board
T M G Sexwale G T Lewis
Chairman Chief Executive Officer
Johannesburg
2 August 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, R H H van Kerckhoven (Belgian),
B R van Rooyen (Alternate: P C Pienaar), M J Willcox
Company Secretary: S J van der Spuy
These results are available on our website at www.northam.co.za
Date: 03/08/2006 08:00:19 AM Produced by the JSE SENS Department
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