8th Feb 2005 08:48
Appendix 4D HALF YEAR REPORT 6 MONTHS ENDED 31 DECEMBER 2004 Details of the reporting period and the previous corresponding periodName of entity Aquarius Platinum Limited ABN Reporting period Previous corresponding period 087 577 893 Six months ended 31/12/04 Six months ended 31/12/03 Results for announcement to the market $US'000 Revenues from ordinary activities up 1 % to 98,762 Profit from ordinary activities down 58 % to 6,002 * after tax attributable to members Dividends Amount per Franked amount per security security Interim dividend 3 ‚¢ - ‚¢ Record date for determining entitlements to 2 March 2005 the dividend Refer to the Half Yearly Results announcement released in conjunction with this appendix 4D to the market on 8th February 2005. * Consists of Net profit before non cash charges down 27 % to 17,194 Amortisation and depreciation of (8,593) mining assets Amortisation of fair value uplift of (2,599) mineral properties Net profit after non cash charges down 58 % to 6,002 Director's ReportYour directors submit their report for the half-year ended 31 December 2004.DirectorsThe names of the company's directors in office during the half-year and untilthe date of this report are as below. Directors were in office for this entireperiod unless otherwise stated.Nicholas T Sibley Sir William Purves Stuart A Murray David Dix Catherine E Markus G Edward Haslam Patrick D Quirk Zwelakhe Sisulu Review and Results of OperationsThe consolidated entity recorded an operating profit after tax for the sixmonth period of US$6.0M, a decrease of 58% over the previous correspondingperiod ("pcp") result of US$14.480M. The operating results for the periodincludes a US$3.123 million net gain arising from the sale of a 2% stake inAquarius Platinum South Africa (AQPSA) to Impala Platinum following the firststage of the Black Economic Empowerment (BEE) transaction. The considerationpaid by Impala for the 2% stake in AQPSA amounted to R71.5 million, which wassettled by the cession of R71.5 million of interest bearing loan account toAquarius.Comparisons with the pcp are not appropriate due to the impact of the Pooling &Sharing Agreement (P&SA) entered into with AngloPlatinum on the 1 November2003. The P&SA which provides for the sharing (50 / 50) of production andprofits of the Kroondal operation is set to commission a new concentrator fromMarch 2005. At steady state production, the new concentrator is targeted toproduce 250,000 PGM ounces per annum, effectively doubling the Kroondal Mine'sannual output to 505,000 PGM ounces per annum.The Group's operating mines (with the exception of Marikana which operated at aloss) performed well during the period under difficult economic conditionswhich saw the Rand strengthen further against the US Dollar. Marikana returneda disappointing result for the six months having being hampered by operatingand mining difficulties including poor contractor performance and inconsistentore quality. Both Kroondal and Mimosa platinum mines contributed to theoperating profit as shown in the table below:Operating Contribution 31/12/04 31/12/03 PGM Ounces Total Production 215,219 197,854 Less production attributable to (69,505) (17,564)P&SA Production attributable to 145,714 180,290Aquarius Profit US$'000 Kroondal 10,293 17,256 Marikana (17,765) (7,697) Mimosa 7,059 9,883 Other/Corporate 4,616 120 Net Profit before tax 4,203 19,562 Tax (expense)/credit 1,113 (3,811) Net profit after tax 5,316 15,751 Outside equity interest 686 (1,271) Net profit attributable to 6,002 14,480members The profit was achieved on a 1% increase in revenue from US$97.5 million toUS$98.8M, despite an attributable production decrease from 180,290 PGM ouncesto 145,714 PGM ounces, this being offset by a general strengthening in PGM US$metal prices of 20%.The South African operations costs were impacted by a stronger Rand whichappreciated against the US$ by 12% over the pcp.The Mimosa result was assisted by the depreciation of the Zimbabwe dollaragainst the $US and a reduction in the company tax rate from 20% to 15%.Although operating conditions in Zimbabwe remain challenging, the companycontinues to operate successfully.The BEE transaction announced to shareholders of Aquarius on 26th July 2004 andapproved by them in Special General Meeting on 11th October 2004 was formallyexecuted with the receipt of R860 million in cash by the Aquarius Group on the29th October 2004. The transaction has two key components, the first of whichis now completed. This saw the BEE consortium, led by Savannah Resources (Pty)Limited, subscribe for a 29.5% shareholding in the enlarged share capital ofAQPSA. Concurrently Impala Platinum Holdings Limited (Impala) acquired anadditional holding in AQPSA from Aquarius to increase their shareholding to 20%in AQPSA following the dilution resulting from the issue of the new shares inAQPSA to the BEE consortium. At this time, the shareholdings in AQPSA are asfollows: * 50.5% interest by AQP; * 29.5% by the Savannah consortium; and * 20% held by Impala. Further details of the transaction are on page 11 of appendix 4D and theCompany's website www.aquariusplatinum.comRefer to the Half Yearly Results announcement released in conjunction with thisAppendix 4D to the market on 8th February 2005 for further information.RoundingThe amounts contained in this report and in the half-year financial report havebeen rounded to the nearest $1,000 (where rounding is applicable).Signed in accordance with a resolution of the Directors.Nicholas T SibleyChairmanDate: 8th February 2005Condensed consolidated income statement(Half year ended 31 December 2004) 31/12/04 31/12/03 $US'000 $US'000 Revenue 98,762 97,518 Foreign exchange loss (1,694) (7,430) 97,068 90,088 Cost of sales (83,088) (62,816) Gross profit 13,980 27,272 Amortisation of fair value uplift of (2,599) (2,703) mineral properties Gross profit after amortisation of fair 11,381 24,569 value uplift of mineral properties Administrative and other costs (3,389) (3,410) Foreign exchange gain 2,395 3,250 Finance costs (6,185) (4,847) Profit before income tax 4,202 19,562 Income tax on ordinary activities 1,113 (3,811) Net profit from ordinary activities 5,315 15,751 Net (profit)/loss attributable to outside 687 (1,271) equity interests Net profit for the period attributable to 6,002 14,480 members of Aquarius Platinum Limited Earnings per security (EPS) Basic EPS 7.25 cents 17.89 cents Diluted EPS 7.25 cents 17.84 cents Condensed consolidated statement of recognised gains and losses(Half year ended 31 December 2004)Foreign currency translation adjustments 31/12/04 31/12/03 recognised directly in equity $US'000 $US'000 5,413 7,377 Net profit for the period 6,002 14,480 Total recognised gains and losses 11,415 21,857 Condensed consolidated balance sheet(Half year ended 31 December 2004) As at As at As at 31/12/04 30/06/04 31/12/03 $US'000 $US'000 $US'000 Non-current assets Receivables 3,728 4,627 4,691 Investments 512 18 21 Property, plant and 117 132 123 equipment Mining assets 409,502 356,509 327,144 Total non-current assets 413,859 361,286 331,979 Current assets Cash and cash equivalents 136,746 77,942 55,058 Trade and other 34,162 23,262 29,765 receivables Investments 4 4 22 Inventories 19,855 10,688 9,916 Other 333 44 433 Total current assets 191,100 111,940 95,194 Total assets 604,959 473,226 427,173 Non-current liabilities Payables 176,697 59,600 56,224 Interest bearing 18,519 62,716 63,859 liabilities Deferred tax liabilities 57,491 56,917 52,298 Provisions 25,093 18,030 3,325 Total non-current 277,800 197,263 175,706 liabilities Current liabilities Trade and other payables 28,836 19,081 21,497 Interest bearing 20,408 15,555 8,265 liabilities Current tax liabilities 9,255 6,843 7,767 Provisions 322 287 121 Total current liabilities 58,821 41,766 37,650 Total liabilities 336,621 239,029 213,356 NET ASSETS 268,338 234,197 213,817 Shareholders equity Issued capital 12,413 12,413 12,413 Share premium reserve 136,668 136,668 136,668 Foreign currency translation reserve 18,491 13,078 8,338 Retained earnings 66,335 62,816 51,075 Equity attributable to members of 233,907 224,975 208,494 Aquarius Platinum Limited Minority interests 34,431 9,222 5,323 TOTAL EQUITY & MINORITY INTEREST 268,338 234,197 213,817 Condensed consolidated statement of cash flows(Half year ended 31 December 2004) 31/12/04 31/12/03 $US'000 $US'000 Cash flows related to operating activities Receipts from customers 77,390 93,583 Payments to suppliers and employees (65,308) (52,605) Interest and other items of similar nature 3,400 615 received Interest and other costs of finance paid (5,604) (3,998) Income taxes paid - (5,768) Net operating cash flows 9,878 31,827 Cash flows related to investing activities Payments for mining assets and development (40,798) (11,805) costs Payment for purchases of property, plant and - (28) equipment Proceeds from sale of property, plant and - 572 equipment Payment for purchases of equity investments (494) - Proceeds from disposal of investments 4,445 500 Net investing cash flows (36,847) (10,761) Cash flows related to financing activities Proceeds from issues of shares 38,193 16,470 Payments for share issue and listing expenses (4,671) (494) Proceeds from borrowings 97,439 308 Repayment of share-plan loans 1,145 2,882 Repayment of borrowings (53,199) - Payment of principal potion of hire purchase 1 2 liability Dividends paid (2,463) (2,354) Net financing cash flows 76,445 16,814 Net increase (decrease) in cash held 49,476 37,880 Cash at beginning of period 77,942 16,996 Exchange rate adjustments to opening cash 9,132 182 Cash at end of period 136,550 55,058 BASIS OF PREPARATION OF THE HALF-YEAR FINANCIAL REPORTThe half-year financial report does not include all notes of the type normallyincluded within the annual financial report and therefore cannot be expected toprovide as full an understanding of the financial performance, financialposition and financing and investing activities of the consolidated entity asthe full financial report.The half-year financial report should be read in conjunction with the AnnualFinancial Report as at 30 June 2004. It is also recommended that the half-yearfinancial report be considered together with any public announcements made bythe company and its controlled entities during the half-year ended 31 December2004 in accordance with the group's continuous disclosure obligations. a. Basis of Accounting The half-year financial report is a general-purpose financial report, which hasbeen prepared in accordance with International Accounting Standard 34 ("IAS34").For the purpose of preparing the half-year financial report, the half-year hasbeen treated as a discrete reporting period.The consolidated financial statements have been prepared under the historicalcost accounting convention except where otherwise stated.The consolidated financial information has been rounded to the nearest thousandof US dollars unless otherwise stated. b. Changes in Accounting Policies Unless disclosed below, the accounting policies, estimation methods andmeasurement bases used in this report are the same as those used in the lastannual report.Notes to the condensed consolidated income statement 31/12/04 31/12/03 $US'000 $US'000 Revenue from ordinary activitiesSales revenue 91,166 96,320 Interest revenue 3,400 583 Other revenue 4,196 615 Total revenue 98,762 97,518 Cost of salesAmortisation and depreciation 8,593 6,468 Cost of production 73,769 56,137 Royalties 726 211 Total cost of sales 83,088 62,816 Details of individual and total dividends and dividend payments Date the interim dividend is payable 23 March 2005 Record date to determine entitlements to the 2 March 2005 dividend Has the dividend been declared? Yes Interim dividends on all securities Total amount Amount per Franked amount paid or payable share per share US$'000 US$ Interim dividend: Current 2,483 3 ‚¢ - ‚¢period Previous period 2,483 3 ‚¢ - ‚¢Other disclosures in relation to dividends The interim dividend for the current period of US$0.03 per share has not been provided for in the Condensed Balance Sheet in accordance with International Accounting Standards. The company does not have a dividend reinvestment plan. Earnings per security (EPS)Details of basic and diluted EPS reported separately in accordance with IAS33: Earnings Per Share are as follows. 31/12/04 31/12/03 $US'000 $US'000 Net Profit: 5,315 15,751 Adjustments: Net profit attributable to outside 687 (1,271) equity interest Earnings used in calculating basic and 6,002 14,480 diluted earnings per share Current period Previous corresponding Number of Shares period Number of Shares Weighted average number of ordinary 82,753,892 80,917,826 shares used in calculating basic earnings per share Effect of dilutive securities: Share options * - 249,082 Adjusted weighted average number of 82,753,892 81,166,908 ordinary shares used in calculating diluted earnings per share * Share options in the current period are not dilutiveDetails of entities over which control has been gained or lost during theperiodName of entity (or Contribution to net profit Profit (loss) for the group of entities) (loss) previous corresponding periodand date of the gain or loss of control Current Previous Current period Previous period corresponding corresponding period - $US'000 period - $US'000 $US'000 $US'000 - - - - Total - - - - Details of associates and joint venture entitiesThe economic entity has an interest (that is material to it) in the followingentities: Name of entity Percentage of ownership Contribution to net profit interest held at end of (loss) period or date of disposal 31/12/04 31/12/03 31/12/04 31/12/03 $US'000 $US'000 Mimosa Investments 50% 50% 6,727 9,325 Limited Total 6,727 9,325 Group's share of associates' and joint 31/12/04 31/12/03 venture entities': $US'000 $US'000 Profit (loss) from ordinary activities 7,024 9,883 before tax Income tax on ordinary activities (297) (558) Profit (loss) from ordinary activities 6,727 9,325 after tax Adjustments - - Share of net profit (loss) of associates 6,727 9,325 and joint venture entities Subsequent eventsThere have been no subsequent events.Contingent LiabilityA dispute arose between AQPSA and the mining contractor at Marikana Mine,regarding interpretation of the mining cost escalation formula, especially asit relates to the foreign component of the formula. A commercial solutionproposed by AQPSA to resolve the dispute with the contractor over the so-called"Rise and Fall" clause has been rejected by the contractor who has nowindicated that they intend to refer the matter to arbitration.Counsel has advised that the earliest date for arbitration could be April 2005.In the meantime, the contractual formula continues to be applied on the basiswhich AQPSA believes was agreed by the contractor. Due to the nature of thedispute, namely the application of the formula and the foreign component, it isnot possible to quantify the dispute in Rand terms. The directors of AQPSA inconsultation with Counsel, are of the opinion that the ruling will favourAQPSA.Black Economic Empowerment (BEE) TransactionThe BEE transaction announced to shareholders on 26th July 2004 and approved byshareholders in Special General Meeting on 11th October 2004 was formallyexecuted with the receipt of R860 million in cash by the Aquarius Group on the29th October 2004.The transaction has two key components, the first of which is now completed.The first step saw the BEE consortium, led by Savannah Resources (Pty) Limited(Savcon), subscribe for a 29.5% shareholding in the enlarged share capital ofAQPSA as follows: * Savcon were issued with 400 shares in AQPSA for cash of $38,192,616 (R234,544,678) and shareholder loans of $97,439,401 (R598,385,104). The terms and conditions of the loans are as follows: * a loan of R498,385,104 that is unsecured, subordinated to AQPSA's third party debt, is interest free, has no fixed terms of repayment and ranks pari passu with the other shareholder loans; and * a loan of R100,000,000 that that is unsecured, subordinated to AQPSA's third party debt, bears interest at a rate of 12.745% per annum, has no fixed terms of repayment and ranks pari passu with the other shareholder loans. * Aquarius also agreed to sell 13 AQPSA shares to Savcon for $4,445,028 (R27,070,218) resulting in a deferred gain of $1,250,936. A gain on disposal totalling $11,467,786 has been deferred pending completionof the second component of the transaction.Concurrently Impala Platinum Holdings Limited (Impala) acquired an additionalholding in AQPSA from Aquarius to increase their shareholding to 20% in AQPSAfollowing the dilution resulting from the issue of the new shares in AQPSA tothe BEE consortium. Aquarius agreed to sell 30 AQPSA shares to Impala for$11,471,938 (R71,500,000) resulting in a net gain of $3,123,601. This wassettled by the cession of R71,500,000 of interest bearing loan account toAquarius.At this time, the shareholdings in AQPSA are as follows:¢â‚¬¢ 50.5% interest by Aquarius;¢â‚¬¢ 29.5% by the Savcon; and¢â‚¬¢ 20% held by Impala.The second step of the transaction will in time and subject to the conditionsdetailed in the notice of meeting to shareholders dated 17th September 2004,see Savcon sell its 29.5% holding in AQPSA along with cession of all of theirclaims in respect of the above loans in exchange for 24,599,542 new Aquariusshares.Following this exchange, Aquarius will hold 80% of AQPSA and Savcon constituentmembers will hold approximately 23% of the enlarged share capital of Aquarius.If the final component of the transaction were not to proceed the ownershipstructure of AQPSA as detailed above would remain unchanged.In terms of the BEE transaction agreements, Aquarius has invited Savcon tonominate a non-executive director to the Board of Director's of Aquarius and tonominate three non-executive directors to the Board of Director's of AQPSA.Segment reportingThe economic entity operates predominantly in the mining industry through the ownership and operation of platinum group metals mining projects. The group operates in four predominant geographical segments - South Africa, Zimbabwe, Bermuda and Australia. Geographical segments 31 December 2004 Bermuda South Australia Zimbabwe Eliminations Consolidated Africa US$'000 External sales - 68,461 - 22,705 - 91,166 External other 4,204 2,870 504 16 2 7,596 revenues Intersegment 3,263 - 214 - (3,477) - revenues Segment revenue 7,467 71,331 718 22,721 (3,475) 98,762 Segment result 2,802 (8,530) 1,873 7,024 1,033 4,202 Income tax expense 1,113 Profit after tax 5,315 Minority interest 687 Net profit 6,002 31 December 2003 Bermuda South Australia Zimbabwe Eliminations Consolidated Africa US$'000 External sales - 68,450 - 20,440 - 88,890 External other 1,653 3,924 147 (1,276) - 4,448 revenues Intersegment 1,751 - 194 - (1,945) - revenues Segment revenue 3,404 72,374 341 19,164 (1,945) 93,338 Segment result 1,735 9,559 (93) 9,883 (1,522) 19,562 Income tax expense (3,811) Profit after tax 15,751 Minority interest (1,271) Net profit 14,480 Issued and quoted securities at end of current periodCategory of securities Total number Number Issue Amount quoted price per paid up security per security (cents) (cents) Ordinary securities 82,753,892 82,753,892 Changes during current period: Increases through issues - - - - Increases through option - - - - conversions Decreases through returns - - - - of capital, buybacks, redemptions Options (description and Exercise Expiry conversion factor) Price date (if any) Unlisted options each 1,715,000 - ‚£2.50 23/10/11 convertible for one ordinary share 133,333 - ‚£3.43 02/10/12 - Employee options 380,000 - ‚£3.32 21/11/13 " " 1,093,967 - ‚£2.54 11/06/11 " " 209,865 - ‚£2.54 11/06/11 " " 495,794 ‚£2.92 02/11/11 Changes during current period: Issued during current 495,794 ‚£2.92 02/11/11 period * Employee options Exercised during current - - - - period Expired during current - - - - period DIRECTORS' DECLARATIONIn accordance with a resolution of the Directors of Aquarius Platinum Limited Istate that:In the opinion of the Directors: a. the financial statements and notes of the consolidated entity: i. give a true and fair view of the financial position as at 31 December 2004 and the performance for the half-year ended on that date of the consolidated entity; and ii. comply with International Accounting Standard IAS 34; and b. there are reasonable grounds to believe that the company will be able to pay its debts as and when they become due and payable. On behalf of the BoardNicholas T SibleyChairmanDate: 8th February 2005Appendix 4BHalf yearly/preliminary final report+ See chapter 19 for defined terms.Appendix 4B Page 20 1/1/2002ENDRelated Shares:
AQP.L