10th Feb 2006 07:36
Appendix 4D HALF YEAR REPORT 6 MONTHS ENDED 31 DECEMBER 2005 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 31/12/05 Six months ended 31/12/04 Results for announcement to the market $US'000 Revenues from ordinary activities up 62 % to 159,706 Profit from ordinary activities up 332 % to 25,915 * after tax attributable to members Dividends Amount per Franked amount per security security Interim dividend 6 ‚¢ - ‚¢ Record date for determining entitlements to 2 March 2006 the dividend Refer to the Half Yearly Results announcement released in conjunction with this appendix 4D to the market on 10th February 2006. * Consists of Net profit before non cash charges up 125 % to 38,733 Amortisation and depreciation of (9 ,093 ) mining assets Amortisation of fair value uplift of (3,725 ) mineral properties Net profit after non cash charges Up 332 % to 25,915 Director's ReportYour directors submit their report for the half-year ended 31 December 2005.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 David Dix Stuart A Murray G Edward Haslam Patrick D Quirk Zwelakhe Sisulu Sir William Purves Catherine E Markus (resigned 17 January 2006) Review and Results of OperationsAquarius Platinum Limited (Aquarius) recorded an operating profit after tax forthe six month period of US$25.9M, an increase of 332% over the previouscorresponding period ("pcp") result of US$6.0M, which period included a profitof $3.1 million on the sale of 2% of AQPSA to Implats. The operating resultsreflect the growth of Aquarius which has seen operating PGM productionattributable to Aquarius increase by 31%. The Group's production is expected toshow further growth in the second half of this financial year as the Everestmine commences contributing to operating production.The Directors have declared an interim dividend of 6 cents per share (2005: 3cents per share) payable on 23 March 2006 to shareholders registered on 2 March2006.During the year the Group built on the foundation from which it will deliverthe growth that has been referred to in previous reports. The Everest mine hasnow commenced production and has been transferred to operations effective 1January 2006. Everest produced 7,111 PGM ounces in ramp up mode in December2005 and is expected to contribute significantly to PGM production in thesecond half of this financial year. Revenue from Everest's December productionhas been credited to capital expenditure.Operating Contribution 31/12/05 31/12/04 %+/- PGM Ounces Attributable production 198,426 145,714 36% (includes attributable production from 191,315 145,714 31% ordinary operations) Profit US$'000 Kroondal 40,982 10,293 298% Marikana 1,388 (17,765) - Mimosa 12,299 7,059 74% CTRP 336 - - Other/Corporate (2,971) 4,616* - Net Profit before tax 52,034 4,203 1,138% Tax (expense)/credit (12,581) 1,113 - Net profit after tax 39,453 5,316 642% Outside equity interest (13,538) 686 - Net profit attributable to members 25,915 6,002* 332% *(Includes $3.1 million profit on sale of 2% of AQPSA to Implats)The profit was achieved on a 62% increase in revenue from US$98.8 million toUS$159.7M. All mining operations returned a profit for the six month period.Amortisation and depreciation were marginally higher at $9 million from $8.6million despite a 31% increase in production from normal operations. The impactof the Pooling & Sharing Agreement 2 (P&SA2) at Marikana which extended thelife of mine at Marikana has reduced the pro-rata amount of amortisationattributable to the P&SA2. Net finance charges for the period were $0.5million, comprising $1.8 million in interest income and $2.3 million interestexpense. Interest of $1.0 million was capitalised as part of the Everestconstruction costs.The prices for platinum group metals showed healthy gains over the period, withthe PGM basket price (platinum, palladium, rhodium and gold) in South Africanaveraging $872 per PGM ounce across the operations and averaging $637 per PGMounce in Zimbabwe. The South African basket price increased 23% over the periodto $966 per PGM ounce at the end of December. The Zimbabwean basket priceincreased 20% to $746 per PGM ounce at the end of December.Aquarius' cash balances of $85 million at 31 December 2005 are expected toincrease in the second half of the year as Group production increases. Thistogether with the new RMB facility will provide Aquarius with the requisitefunding for any future growth opportunities and for balance sheet optimisation.Refer to the Half Yearly Results announcement released in conjunction with thisAppendix 4D to the market on 10th February 2006 for further information.The 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: 10th February 2006Condensed consolidated income statement(Half year ended 31 December 2005) 31/12/05 31/12/04 $US'000 $US'000 Revenue 159,706 98,762 Foreign exchange loss (2,297) (1,694) 157,409 97,068 Cost of sales (98,550) (83,088) Gross profit 58,859 13,980 Amortisation of fair value uplift of (3,725) (2,599) mineral properties Gross profit after amortisation of fair 55,134 11,381 value uplift of mineral properties Administrative and other costs (1,983) (3,389) Foreign exchange gain 1,207 2,395 Finance costs (2,324) (6,185) Profit before income tax 52,034 4,202 Income tax on ordinary activities (12,581) 1,113 Net profit from ordinary activities 39,453 5,315 Net (profit)/loss attributable to outside (13,538) 687 equity interests Net profit for the period attributable to 25,915 6,002 members of Aquarius Platinum Limited Earnings per security (EPS) Basic EPS 31.50 cents 7.32 cents Diluted EPS 30.90 cents 7.32 cents Condensed consolidated statement of recognised gains and losses(Half year ended 31 December 2005)Foreign currency translation adjustments 31/12/05 31/12/04 recognised directly in equity $US'000 $US'000 4,658 5,413 Net profit for the period 25,912 6,002 Total recognised gains and losses 30,570 11,415 Condensed consolidated balance sheet(Half year ended 31 December 2005) As at As at As at 31/12/05 30/06/05 31/12/04 $US'000 $US'000 $US'000 Non-current assets Investments 460 437 512 Property, plant and 145,335 137,819 155,289 equipment Mining assets 333,675 271,050 254,330 Total non-current assets 479,470 409,306 410,131 Current assets Cash and cash equivalents 84,954 75,251 136,746 Trade and other 46,098 44,695 34,162 receivables Investments 3 3 4 Inventories 22,416 16,308 19,855 Other 379 1 333 Total current assets 153,850 136,258 191,100 Total assets 633,320 545,564 601,231 Non-current liabilities Payables 158,190 150,735 176,697 Interest bearing 44,042 16,037 18,519 liabilities Deferred tax liabilities 59,994 53,789 57,491 Provisions 25,817 24,526 25,093 Total non-current 288,043 245,087 277,800 liabilities Current liabilities Trade and other payables 25,674 25,538 28,836 Interest bearing - - 20,408 liabilities Current tax liabilities 11,154 9,612 9,255 Provisions 261 330 322 Total current liabilities 37,089 35,480 58,821 Total liabilities 325,132 280,567 336,621 NET ASSETS 308,188 264,997 264,610 Shareholders equity Issued capital 12,433 12,413 12,413 Shares held for employee share plan (2,351) (2,928) (3,728) Share premium reserve 137,234 136,669 136,668 Foreign currency translation reserve 12,127 7,469 18,491 Retained earnings 100,571 78,801 66,335 Equity attributable to members of 260,014 232,424 230,179 Aquarius Platinum Limited Minority interests 48,174 32,573 34,431 TOTAL EQUITY & MINORITY INTEREST 308,188 264,997 264,610 Condensed consolidated statement of cash flows(Half year ended 31 December 2005) 31/12/05 31/12/04 $US'000 $US'000 Cash flows related to operating activities Receipts from customers 153,832 77,390 Payments to suppliers and employees (88,674) (65,308) Interest and other items of similar nature 1,870 3,400 received Interest and other costs of finance paid (2,324) (5,604) Income taxes paid (6,003) - Net operating cash flows 58,701 9,878 Cash flows related to investing activities Payments for mining assets and development - (40,798) costs Payment for purchases of property, plant and (75,406) - equipment Proceeds from sale of property, plant and - - equipment Payment for purchases of equity investments - (494) Proceeds from disposal of investments - 4,445 Net investing cash flows (75,406) (36,847) Cash flows related to financing activities Proceeds from issues of shares 585 38,193 Payments for share issue and listing expenses - (4,671) Proceeds from borrowings 53,591 97,439 Repayment of share-plan loans 411 1,145 Repayment of borrowings (26,966) (53,199) Payment of principal potion of hire purchase (8) 1 liability Dividends paid (4,117) (2,463) Net financing cash flows 23,496 76,445 Net increase (decrease) in cash held 6,791 49,476 Cash at beginning of period 75,251 77,942 Exchange rate adjustments to opening cash 2,912 9,132 Cash at end of period 84,954 136,550 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 2005. 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 December2005 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.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.Adoption of new and revised International Financial Reporting StandardsIn the current year, the Group has adopted all of the new and revised Standardsand Interpretations issued by the International Accounting Standards Board (theIASB) and the International Financial Reporting Interpretations Committee(IFRIC) of the IASB that are relevant to its operations and effective foraccounting periods beginning on 1 July 2005. The adoption of these new andrevised Standards and Interpretations has resulted in changes to the Group'saccounting policies in the following areas that have affected the amountsreported for the current or prior years:Share-based payments (IFRS 2)IFRS 2 Share-based Payment requires the recognition of equity-settledshare-based payments at fair value at the date of grant and the recognition ofliabilities for cash-settled share-based payments at the current fair value ateach balance sheet date. Prior to the adoption of IFRS 2, the Group did notrecognise the financial effect of share-based payments until such payments weresettled.In accordance with the transitional provisions of IFRS 2, the Standard has beenapplied retrospectively to all grants of equity instruments after 7 November2002 that were unvested as of 1 July 2005, and to liabilities for share-basedtransactions existing at 1 July 2005.The Group currently has a Share Plan and an Option Plan for directors andemployees. Loans made under the Share plan are treated as share basedcompensation under IFRS 2. Under this approach the principal amount of theinterest free limited recourse loans provided to acquire shares arereclassified from receivables to a separate class of shareholders' equity("Shares held for Employee Share Plan"). Dividends paid on shares issued underthe share plan, to the extent they are withheld to repay the loans, are offsetagainst that separate class of shareholders' equity. For the half year ending31 December 2005, the change in accounting policy has resulted in a netdecrease in profit for the year of US$52,962. There was no impact on profits inprior years and no material impact on earnings per share.Early Adoption of Accounting StandardsThe group has elected to apply IFRS 6 Exploration and Evaluation of MineralResources effective 1 July 2005 even though the standard is not required to beapplied until subsequent reporting periodsFuture Accounting StandardsAt the date of authorization of these financial statements, the followingStandards and Interpretations were in issue but not yet effective:IFRS 7 "Financial Instruments: Disclosures"IFRIC 4 "Determining whether an Arrangement contains a Lease"IFRIC 5 "Right to Interests Arising from Decommissioning, Restoration andEnvironmental Rehabilitation Funds"The directors anticipate that the adoption of these Standards andInterpretations in future periods will have no material impact on the financialstatements of the Group.Notes to the condensed consolidated income statement 31/12/05 31/12/04 $US'000 $US'000 Revenue from ordinary activitiesSales revenue 157,713 91,166 Interest revenue 1,870 3,400 Other revenue 123 4,196 Total revenue 159,706 98,762 Cost of salesAmortisation and depreciation 9,093 8,593 Cost of production 88,595 73,769 Royalties 862 726 Total cost of sales 98,550 83,088 Details of individual and total dividends and dividend payments Date the interim dividend is payable 23 March 2006 Record date to determine entitlements to the 2 March 2006 dividend Has the dividend been declared? Yes Interim dividends on all securities Total amount Amount per Franked amount paid or payable share per share US$'000 US$ Interim dividend: Current 4,972 6 ‚¢ - ‚¢ period Previous period 2,483 3 ‚¢ - ‚¢ Other disclosures in relation to dividends The proposed interim dividend for the current period of 6 cents per share has not been provided for in the Condensed Balance Sheet in accordance with International Financial Reporting 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. 31/12/05 31/12/04 $US'000 $US'000 Net Profit: 39,453 5,315 Adjustments: Net profit attributable to outside (13,538) 687 equity interest Earnings used in calculating basic and 25,915 6,002 diluted earnings per share Current period Previous corresponding Number of Shares period Number of Shares Weighted average number of ordinary 82,206,742 81,998,892 shares used in calculating basic earnings per share Effect of dilutive securities: Share options 1,607,210 - Adjusted weighted average number of 83,813,952 81,998,892 ordinary shares used in calculating diluted earnings per share Details 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 31/12/05 31/12/04 31/12/05 31/12/04 $US'000 $US'000 Mimosa Investments 50% 50% 11,390 6,727 Limited Total 11,390 6,727 Group's share of associates' and joint 31/12/05 31/12/04 venture entities': $US'000 $US'000 Profit from ordinary activities before 12,333 7,024 tax Income tax on ordinary activities (943) (297) Profit from ordinary activities after 11,390 6,727 tax Adjustments - - Share of net profit of associates and 11,390 6,727 joint venture entities Subsequent eventsThere have been no subsequent events for noting.Contingency : Moolman Mining DisputeOn 19 December 2005, Aquarius Platinum (South Africa) (Pty) Ltd, AQPSA,rescinded the Marikana Mining contract with Moolman Mining ("Moolmans").Moolmans was replaced by MCC Mining, an already established contractor at boththe Kroondal and Everest Mines. Production at Marikana has thus continuedwithout any untoward interruption.Rescission of the Moolmans' contract was based on the recent discovery,following an audit by KPMG, that Moolmans misrepresented material facts whichinduced AQPSA into concluding that contract. The decision to resile from thecontract was taken after careful consideration of external forensic accountingand legal advice. AQPSA should not continue in business with an essentialsupplier who has proved unreliable.AQPSA has instructed its attorneys vigorously and expeditiously to pursue legalproceedings against Moolmans for recovery of all damages caused by Moolmans.These are estimated to amount to approximately ZAR1 billion. Preparatory workhas already commenced and it is anticipated that formal High Court proceedingswill be launched not later than May 2006.Moolmans has alleged the following counterclaims against AQPSA:a) a claim for escalation ("rise and fall") of R218.5 million, excludinginterest. ;b) a claim for a so-called `early termination penalty' of R70m.These claims alleged by Moolmans will be defended. There is, in AQPSA's view,no reasonable prospect of success for any of Moolmans' claims; no liability hasbeen recognised.Segment reportingThe economic entity operates in the mining industry through the ownership and operation of platinum group metals mining projects. The group operates in four geographical segments - South Africa, Zimbabwe, Bermuda and Australia. Geographical segments 31 December 2005 Bermuda South Australia Zimbabwe Eliminations Consolidated Africa US$'000 External sales - 126,373 31,340 157,713 External other 21 1,052 544 376 1,993 revenues Intersegment 838 - 223 - (1,061) - revenues Segment revenue 859 127,425 767 31,716 (1,061) 159,706 Segment result (766) 40,005 (888) 12,333 1,350 52,034 Income tax expense (12,581) Profit after tax 39,453 Minority interest (13,538) Net profit 25,915 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 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 82,884,892 82,864,892 Changes during current period: Increases through issues - - - - Increases through option 131,000 - - - conversions Decreases through returns - - - - of capital, buybacks, redemptions Options (description and Exercise Expiry conversion factor) Price date Unlisted employee options each convertible for one (if any) ordinary share 1,484,000 - ‚£2.50 23/10/11 380,000 - ‚£3.32 21/11/13 1,093,967 - ‚£2.54 11/06/11 209,865 - ‚£2.54 11/06/11 479,605 - ‚£2.92 02/11/11 78,965 ‚£3.32 02/08/12 Changes during current period: Issued during current 78,965 ‚£3.32 02/08/12 period * Employee options Exercised during current 131,000 - - - period Expired during current 16,189 - - - 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 2005 and the performance of the consolidated entity for the half-year ended on that date; 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 SibleyChairmanDate: 10th February 2006Appendix 4BHalf yearly/preliminary final report+ See chapter 19 for defined terms.Appendix 4B Page 20 1/1/2002ENDAQUARIUS PLATINUM LIMITEDRelated Shares:
AQP.L