results for the year ended 30 june 2003 · 2017. 8. 18. · barplats/crocodile river •...
TRANSCRIPT
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Results for the year ended 30 June 2003
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Today’s presentation
• Overview of results
• Market review
• Financial review
• Operational review
• Prospects
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3
Key features
• Gross platinum production up by 21%
• Sales revenue down by 1%
• Gross margin healthy at 43%
• Net profit down by 25% due to rand appreciation
• Zimbabwean acquisitions extend resource base
• Return on equity of 37%
• Return on assets of 30%
4
4
Key features - continued
• Safety improved by more than 30%
• On-mine cash costs per tonne mined up by 8%
• Total cost per refined platinum ounce up 11%
• Effects of strike largely mitigated
5
5
Share price performance
60
70
80
90
100
110
120
130
Jul-02 Oct-02 Jan-03 Apr-03 Jul-03HSBC global mining index ImplatsAnglo Platinum Lonmin
Source: UBS
Indexed to 100
6
6
Headline earnings per share
SA cps
7035
3394
6 877
5 140
0
10002000
30004000
5000
60007000
8000
FY00 FY01 FY02 FY03
FY H1 H2
7
7
Dividends per share
1 760
3 800
6 800
3 700
0
1000
2000
3000
4000
5000
6000
7000
8000
FY00 FY01 FY02 FY03
SA cps
2 650
Special dividend
8
8
Implats gross refined production
202 6393 162PGM
1313.014.7Nickel (t)
21177215Rhodium
22732893Palladium
211 3871 673Platinum
Variance (%)FY02FY03000oz
9
Refined platinum production
211 3871 673Total
66152252Returned to customers
49174260Non-mine-to-market
91 0611 161Mine-to-market
Variance %FY02FY03000 oz
10
10
Impala Platinum
Marula Platinum
Barplats
100%
83%
80%*
*20% allocated to BEE partnership# Up to 12% to be allocated to BEE participants
+ Excluding 9% in Aquarius Platinum
Lonplats
Aquarius Platinum SA
Two RiversZimplats
Mimosa
27%
25%+
45%#
51%
50%
Implats100%
Impala Refining Services (IRS)
Concentrate offtakeagreements
Mining operations Strategic holdings
Corporate structure
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11
Implats
R3 415m
Mining operationsR2 585m (76%)
IRSR151m (4%)
Strategic holdings R679m (20%)
Contribution to net profit
12
12
Market review
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A year of varying fortunes
• Platinum
• Demand underpinned by strong fundamentals
• Fourth consecutive year of deficits
• Palladium
• Weaker demand counteracted to large extent by reduced Russian selling
• Rhodium
• Excess supplies depress prices
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14
Average $-price achieved
(11)9 4898 471Revenue/Pt oz (R)
-934935Revenue/Pt oz ($)
375 5947 664Nickel ($/t)
(41)1 098646Rhodium ($/oz)
(32)389264Palladium ($/oz)
23485597Platinum ($/oz)
Variance %FY02FY03
15
15
Sales volumes up
1612.013.9Nickel (000t)
17165193Rhodium
4663688Palladium
101 2511 373Platinum
Variance %FY02FY03000oz
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16
Platinum supply and demand
6 2506 5656 635Total supply
(180)(505)(115)Net deficit
6 4307 0706 750Total demand
1 6351 6201 620Industrial/investment
2 5902 8502 670Jewellery
2 2052 6002 460Automobile
Demand
200120022003*Calendar year (000oz)
* Estimate
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17
Palladium supply and demand
8 1306 8156 610Total demand
8 9207 0606 670Total supply
79024560Net surplus
550620650Other
720760815Dental
1 425950805Electronics
5 4354 4854 340Automobile
Demand
200120022003*Calendar year (000oz)
* Estimate
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Market outlook - platinum
• Stricter emission legislation worldwide, coupled with growth in diesel vehicle sales, to underpin demand
• Chinese jewellery demand negatively impacted by high prices
• Abolition of VAT and reduction in consumption tax should stimulate fabrication growth
• Japanese demand stabilises
• Significant advances in fuel cell applications
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Market outlook - palladium
• Lower price and more stable supply will stimulate demand
• Noticeable reverse substitution in automotive sector
• Increased South African output and above-ground stocks will pressure pricing
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Financial review
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Financial review
(18)6 136.65 031.1Profit from operations
(18)5 764.96 775.9Total operating expenses
(1)11 901.511 807.0Sales
Variance %FY02FY03R million
(351)130.8(328.8)Net forex transaction (losses)/gains
(25)4 581.53 415.1Net profit
(20)6 733.45 374.7Profit before tax
26(804.4)(598.0)Royalty expense
(6)1 102.91 039.3Share of results of associates before tax
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Sales variance analysis
11 807Year-ended June 2003
(1 302)Exchange rate
1Price
1 206 Volumes
11 902Year-ended June 2002
R million
23
23
Net profit by entity
4 582
(29)
(13)
22
717
87
416
3 382
FY2002 Variance %FY2003
(25)
214
454
(50)
(10)
(140)
(64)
(24)
3 415
33
46
11
646
(35)
151
2 563
Total Implats
Aquarius Platinum
Zimplats
Mimosa Platinum JV
Lonplats
Barplats
IRS
Impala Platinum
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24
Exchange rate comparisons
7.68 9.0610.16
02468
1012
FY01 FY02 FY03
7.52
10.32
02468
1012
2002 2003
Average annual rate received Rate at year-end
June 02 June 03
25
25
Total operating expenses
(18)5 764.96 775.9Total operating expenses
-(136.0)133.1Decrease/(increase) in inventory
(24)203.9252.6Other costs
221 883.41 474.1Metals purchased
(82)248.8452.4Amortisation of mining assets
(16)354.7411.5Refining operations
(25)642.6801.1Concentrating and smelting
(27)2 567.53 251.1On-mine operations
Variance %FY02FY03Rm
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Strong cash generation continues
• Cash-on-hand in excess of R2 billion
• Strong balance sheet for future funding requirements
• Gearing to improve through project financing
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Group capex
(43)1 2501 787Total
--87Mimosa Platinum JV
--25Zimplats
266951Barplats
(217)172545Marula Platinum
(7)1 0091 079Impala lease area
Variance %20022003(Rm)
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28
Operational review
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Impala safety improves
• Significant improvements in health and safety
• World-class performance from Refineries
• FIFR at lowest level in three years and LTIFR at all time low
!
LTIFR
02468
101214
FY00 FY01 FY02 FY03
-31%
FIFR
0
0.05
0.1
0.15
0.2
FY00 FY01 FY02 FY03
-37%
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30
Safety programmes bear fruit
• Highly successful fall-of-ground prevention campaign
0
50
100
150
200
250
Aug Sep
t Oct
June
July
Aug Sep
t Oct Nov Dec Ja
n
Mar May July
Before GCDs
After GCDs
GCD: Ground control districts
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31
Impala safety programmesbear fruit
• Highly successful fall-of-ground prevention campaign
• Roll-out of Du Pont’s SMAT system continues
• Launch of Tsiboga
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Impala – key features
• Tonnes mined up 6% to 15 029mt
• Tonnes milled rose by 1.3% to 15 042mt
• Platinum production increased by 1.5% to 1.04Moz
(11)
(25)
3 459
341
3 832
425
Per platinum ounce (R/oz)
($/oz)
(11)
(21)
239
24
265
29
Per tonne milled (R/t)
($/t)
(8)
(24)
174
17
188
21
Per tonne mined (R/t)
(on mine only) ($/t)
VarianceFY2002FY2003Costs
!
Solid operational performance
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Productivity
1.850.351.2Tonnes mined/employee
2.924.525.2mPanel length
0.615.916.0m/monthFace advance
1.240.240.7m2/manCentares/panel man
Variance
%
FY02FY03
!
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New technology
• Ultra-low profile machinery
• Narrow reef continuous mining machine
!
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New technology
Nylon rock straps – on trial at shafts 10 and 4
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Mineral Processes
• All time high Merensky recovery rate of 89%
• UG2 recovery stable at 75%, plant capacity increased by 20%
• Capital efficient project delivery:
• Sulfacid plant R65m
• No 6 Dryer R99m
• Other technical initiatives
• Tails scavenging
• Smelting capability for high chrome content improved
• Scoping of UG2 Phase II
!
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Sulfacid plant commissioned
0102030405060708090
Mar
-02
Apr
-02
May
-02
Jun-
02
Jul-0
2
Aug
-02
Sep-
02
Oct
-02
Nov
-02
Dec
-02
Jan-
03
Feb-
03
Mar
-03
Apr
-03
May
-03
Jun-
03
Jul-0
3
Average daily rate of SO2 stack emissions
Tonnes
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Impala Refineries
• 21% increase in metal production
• 10% real decrease in refining costs per platinum ounce
• First phase of expansion successfully concluded
• Capex of R60m
• Capacity increased to 1.65Moz Pt
• Phase 2 underway to increase capacity to 2Moz Pt
• Planned capex of R252m in FY2004
!!
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Marula Platinum
• 20% BEE participation
• 10% Mmakau Mining
• 5% stake to Community Trust
• 5% to local business
• On-reef decline development slightly behind schedule
• 163 000-tonne stockpile on hand
• Concentrator commissioning planned for Feb 2004
• Production of 100 000 Pt oz pa at full production (Phase 1) in FY2005
!
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Barplats/Crocodile River
• Disappointing operational results, as mining changed from opencast to underground operation
• Tonnes mined decreased by 38%
• Unit costs up 62% per tonne milled
• Concentrator recoveries above 70%
• Platinum production in concentrate decreased by 37% to 24 500oz
Disappointing performance
"
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Barplats/Crocodile River
• Revised mining targets not being met
• Continues to operate at a loss, relying on funding from Implats loan
• Options investigated:
• Mining at Krokodildrift and Zandfontein not viable
• Kennedy’s Vale project not viable
• Going forward:
• Sale or partial sale of shareholding and/or asset/s
• Closure/mothballing operation
• To be concluded within two months
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Zimplats
• Current holding of 68%
• Offer to minorities expires on 29 August
• Opencast produced 82 000 Pt oz in concentrate
• Significant expansion potential of mine-to-market oz
• Underground trial mine established
• Bankable feasibility study expected by Dec 2003
Provides flexibility and blue sky potential
!
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43
Hartley Complex
161.24.122 494.1TotalMineral Resources
18.03.33343.7TotalOre Reserves
Pt oz (m)
Grade 3PGE &
Au
Tonnage (m)
44
44
Moving up the resource chain
0100200300400500600700800
Aquarius Northam Lonmin Implats Angloplat
Attributable resources
Inferred
Moz PGM
45
45
Mimosa Platinum JV
• 36 000 oz Pt in concentrate in FY2003
• Ramping up to full production of 65 000 Pt oz by Sept 2003
• FY2004 – feasibility study on further increasing production
Quality, low-cost asset
!
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Good growth for IRS
• Platinum production up 75% to 633 100oz
• Nickel production increased by 27% to 6 700 tonnes
Exceptional volume growth
!
0
200400
600800
1000
12001400
1600
FY00 FY01 FY02 FY03 FY04
Pt PGMs
CAGR of 38%
000oz
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47
• Lonplats
• Aquarius
• Two Rivers
Strategic holdings
48
48
Lonplats
• On track to increase production to 1Moz Pt by FY2008
• Net contribution of R646m
• Dividends of R176 million
• Discussions on potential BEE participation in progress
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49
Aquarius Platinum
• Total production up to 134 000 Pt oz in FY2003
• Contribution of R33 million
• Marikana commissioning commenced
• Everest South feasibility study in progress
50
50
Two Rivers
• Feasibility study in final stages of completion
• Resource of 8Moz Pt
• Mining licence and EMPR approved during the year
• BEE provision through Tiso Capital
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51
Strategic issues and prospects
52
Strategic issues
• Gencor unbundling
• Black Economic Empowerment
• HIV/AIDS
• Growth
0
500
1000
1500
2000
2500
FY99 FY00 FY01 FY02 FY03 FY04 FY05 FY06
Pt 000oz
Potential upside from Zimbabwe
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Prospects
• Prospects remain good in short and medium term
• Platinum demand remains sound, although palladium and rhodium markets remain under pressure in the short-term
• Further strengthening of the rand not predicted
• Whilst earnings for current year are likely to be lower than results reported, Implats will continue to generate strong cash flows, substantial earnings and good dividends
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Results for the year ended 30 June 2003