7th Feb 2007 07:34
Appendix 4D
HALF YEAR REPORT
6 MONTHS ENDED 31 DECEMBER 2006
Details of the reporting period and the previous corresponding period
Name of entity Aquarius Platinum Limited
ABN Reporting period Previous corresponding period
087 577 893 Six months ended 31/12/06 Six months ended 31/12/05
Results for announcement to the market
$US'000
Revenues from ordinary activities up 107 % to 330,774
Profit from ordinary activities up 229 % to
85,371 *
after tax attributable to members
Dividends Amount per security Franked amount per security Interim dividend 12 ‚¢ - ‚¢
Record date for determining entitlements to the 2 March 2007
dividend Refer to the Half Yearly Results announcement released in conjunction with this appendix 4D to the market on 7th February 2007.
* Consists of Net profit before non cash charges up 190 % to
151,757
Amortisation and depreciation of mining assets
(15,192)
Amortisation of fair value uplift of mineral (3,756) properties Net profit from ordinary activities 132,809 Outside equity interests (47,438) Profit attributable to members of Aquarius Up 229 % to 85,371 Platinum Limited Director's Report
Your directors submit their report for the half-year ended 31 December 2006.
Directors
The 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 Timothy Freshwater (Appointed 09/08/06) Sir William Purves Zwelakhe Sisulu (Resigned 07/ 02/07)
Kofi Morna (Appointed 07/02/07) Zwelakhe Mankazana (Alternate to Kofi Morna
appointed 07/02/07)
Review and Results of Operations
Aquarius Platinum Limited (Aquarius) recorded an operating profit after tax forthe six month period of US$85.4 million, an increase of 229% over the previouscorresponding period ("pcp"). The operating results reflect the growth ofAquarius which has seen operating PGM production attributable to Aquariusincrease by 45%. The Group's production is expected to show further growth inthe second half of this financial year as the Everest mine reaches steady stateproduction and the expansion of Mimosa consolidates.The Directors have declared an interim dividend of 12 cents per share (2005: 6cents per share) payable on 23 March 2007 to shareholders registered on 2 March2007.
During the half-year the Group built on the foundation from which it will deliver the growth that has been referred to in previous reports. The achievement for the half-year is both a profit and production record for the Group.
The profit was achieved on a 107% increase in revenue from US$159.7 million toUS$330.8 million. All mining operations returned a profit for the six monthperiod. Amortisation and depreciation were higher at $18.9 million from $12.8million in line with the 45% increase in production. Net finance income for theperiod was $0.7 million, comprising $8.0 million in interest income and $7.3million interest expense. Operating Contribution 31/12/06 31/12/05 %+/- PGM Ounces Attributable production 277,156 191,315 45% Profit US$'000 Kroondal 77,140 40,982 88% Marikana 14,179 1,388 922% Everest 49,321 - - Mimosa 41,381 12,299 236% CTRP 1,739 336 418% Other/Corporate (4,776) (2,971) 61% Net Profit before tax 178,984 52,034 244% Tax (expense)/credit (46,175) (12,581) 267% Net profit after tax 132,809 39,453 237% Outside equity interest (47,438) (13,538) 250% Net profit attributable to members 85,371 25,915 229%
The prices for platinum group metals showed healthy gains over the period, withthe PGM basket price (platinum, palladium, rhodium and gold) in South Africaaveraging $1,299 per PGM ounce across the operations, an increase of 48%compared to the previous corresponding period. The Zimbabwean basket priceincreased 49% to $949 for the half year to December 2006.
Aquarius' cash balances increased $102 million during the half-year to $263.4 million at 31 December 2006.
During the half-year Aquarius finalised all the processes for conversion of itsSouth African mining rights to new order licenses. The South African Departmentof Minerals and Energy (DME) approved AQPSA's applications for the new ordermining rights conversions in respect of all three of its mines: Kroondal,Marikana and Everest on 24th October 2006. Aquarius is now in full compliancewith the South African Mineral and Petroleum Resources Development Act 2002,having exceeded the requirement for 26% Black Economic Empowerment ownership by2014.Board of DirectorsSubsequent to the end of the half year, Mr Zwelakhe Sisulu has resigned fromthe Board of Aquarius effective 6th February 2007 due to an increasing workload in South Africa. The Board wish to record their appreciation of MrSisulu's contribution as director to the Company. Mr Kofi Morna who currentlyacts as Mr Sisulu's alternate director will join the board effectiveimmediately. Mr Zwelakhe Mankazana will act as Mr Morna's alternate director.
Refer to the Half Yearly Results announcement released in conjunction with this Appendix 4D to the market on 7th February 2007 for further information.
The amounts contained in this report and in the half-year financial report have been rounded to the nearest $1,000 (where rounding is applicable).
Signed in accordance with a resolution of the Directors.
Nicholas T SibleyChairmanDate: 7th February 2007
Condensed consolidated income statement
(Half year ended 31 December 2006)
31/12/06 31/12/05 $US'000 $US'000 Revenue 330,774 159,706
Foreign exchange loss on sales (2,914) (2,297)
327,860 157,409 Cost of sales (138,822) (98,550) Gross profit 189,038 58,859
Amortisation of fair value uplift of mining assets (3,756) (3,725) Gross profit after amortisation of fair value uplift of mining assets 185,282 55,134 Administrative and other costs (3,574) (1,983)
Foreign exchange gain 4,598 1,207 Finance costs (7,322) (2,324) Profit before income tax 178,984 52,034
Income tax on ordinary activities (46,175) (12,581) Net profit from ordinary activities 132,809 39,453 Net (profit)/loss attributable to outside equity interests (47,438) (13,538) Net profit for the period attributable to members of
Aquarius Platinum Limited 85,371 25,915 Earnings per share (EPS) Basic EPS 100.39 cents 31.50 cents Diluted EPS 98.65 cents 30.90 cents
Condensed consolidated statement of recognised income and expenses
(Half year ended 31 December 2006)
31/12/ 31/12/ 06 05 $US'000 $US'000Foreign currency translation adjustments recognised directly in equity 5,404 4,658 Net profit for the period 85,371 25,915 Total recognised income and expenses 90,775 30,573
Condensed consolidated balance sheet
(As at 31 December 2006) As at As at As at 31/12/ 30/06/ 31/12/ 06 06 05 $US'000 $US'000 $US'000 Non-current assets Receivables 8,156 6,590 - Available for sale investments 415 404 460 Property, plant and equipment 212,140 206,626 208,811 Mining assets 279,145 247,601 270,199 Total non-current assets 499,856 461,221 479,470 Current assets Cash and cash equivalents 263,563 162,425 84,954 Trade and other receivables 71,245 66,721 46,098 Available for sale Investments 4 4 3 Inventories 26,946 19,823 22,416 Other 660 1 379 Total current assets 362,418 248,974 153,850 Total assets 862,274 710,195 633,320 Non-current liabilities Payables 124,410 130,104 147,626 Interest bearing liabilities 34,843 45,372 44,042 Deferred tax liabilities 91,654 73,311 59,994 Provisions 41,159 32,108 25,817 Total non-current liabilities 292,066 280,895 277,479 Current liabilities Trade and other payables 37,978 32,852 25,655 Interest bearing liabilities 25 29 19 Current tax liabilities 9,840 2,209 11,154 Provisions 394 373 261 Total current liabilities 48,237 35,463 37,089 Total liabilities 340,303 316,358 314,568 NET ASSETS 521,971 393,837 318,752 Shareholders equity Issued capital 12,686 12,652 12,433 Share premium reserve 144,966 143,621 137,234 Equity benefits reserve 252 (56) (2,351) Equity reserve 10,564 10,564 10,564
Foreign currency translation reserve (1,072) (6,476) 12,127
Retained earnings 225,418 155,254 100,571
Equity attributable to members of Aquarius Platinum
Limited 392,814 315,559 270,578 Minority interests 129,157 78,278 48,174 TOTAL EQUITY 521,971 393,837 318,752
Condensed consolidated statement of cash flows
(Half year ended 31 December 2006)
31/12/06 31/12/05 $US'000 $US'000
Cash flows related to operating activities
Receipts from customers 311,215 153,832 Payments to suppliers and employees (131,008)
(88,674)
Interest and other items of similar nature received 8,437 1,870
Interest and other costs of finance paid (7,322) (2,324) Income taxes paid (22,296) (6,003) Net operating cash flows 159,026 58,701
Cash flows related to investing activities Payment for mine development and property, plant and
equipment (22,919) (75,406) Payment for mine closure/rehabilitation costs (2,570) - Net investing cash flows (25,489) (75,406)
Cash flows related to financing activities Proceeds from issues of shares 1,288 585 Proceeds from borrowings - 53,591 Repayment of share-plan loans 313 411 Repayment of borrowings (23,288) (26,974) Dividends paid (15,208) (4,117) Net financing cash flows (36,895) 23,496
Net increase (decrease) in cash held 96,642 6,791
Cash at beginning of period 162,425 75,251
Exchange rate adjustments to opening cash 4,496 2,912
Cash at end of period 263,563 84,954
BASIS OF PREPARATION OF THE HALF-YEAR FINANCIAL REPORT
The 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 of Aquarius Platinum Limited as at 30 June 2006. It is alsorecommended that the half-year financial report be considered together with anypublic announcements made by the company and its controlled entities during thehalf-year ended 31 December 2006 in accordance with the group's continuousdisclosure obligations.
Basis of Accounting
The half-year financial report is a general-purpose financial report, which has been prepared in accordance with International Accounting Standard 34 ("IAS 34").
For the purpose of preparing the half-year financial report, the half-year has been treated as a discrete reporting period.
The consolidated financial statements have been prepared under the historicalcost accounting convention except for available for sale investments that havebeen measured at fair value.
The consolidated financial information has been rounded to the nearest thousand of US dollars unless otherwise stated.
Where appropriate figures for the comparative period have been restated to make them comparable with the disclosures adopted for the half-year ended 31 December 2005.
Changes in Accounting Policies
Unless disclosed below, the accounting policies, estimation methods and measurement bases used in this report are the same as those used in the last annual report.
Adoption of new and revised International Financial Reporting Standards
Adoption of New Accounting Standards
The group adopted the following relevant standards and interpretations duringthe period - IFRIC 5 "Right to Interests Arising from Decommissioning,Restoration and Environmental Rehabilitation Funds"; IFRIC 8 "Scope of IFRS 2";and IFRIC 9 "Reassessment of Embedded Derivatives".
The adoption of these standards and interpretations has had no significant impact on the group during the half year.
Future Accounting Standards
At the date of authorisation of these financial statements, the following relevant Standards and Interpretations were in issue but not yet effective - IFRS 7 "Financial Instruments: Disclosures" and IFRIC 10 "Interim Financial Reporting and Impairment".
The directors anticipate that the adoption of these Standards and Interpretations in future periods will have no material impact on the financial statements of the Group.
Notes to the condensed consolidated income statement
31/12/06 31/12/05 $US'000 $US'000
Revenue from ordinary activities
Sales revenue 322,336 157,713 Interest revenue 8,051 1,870 Other revenue 387 123 Total revenue 330,774 159,706 Cost of salesAmortisation and depreciation 15,192 9,093 Cost of production 121,605 88,595 Royalties 2,025 862 Total cost of sales 138,822 98,550
Details of individual and total dividends and dividend payments
Date the interim dividend is payable 23 March 2007 Record date to determine entitlements to the dividend 2 March 2007 Has the dividend been declared? Yes
Interim dividends on all securities
Total amount paid Amount per Franked amount or payable share per share US$'000 US$ Final dividend: Current period - - ‚¢ - ‚¢ Previous period 15,208 18 ‚¢ - ‚¢ Interim dividend: Current period 10,149 12 ‚¢ - ‚¢ Previous period 5,032 6 ‚¢ - ‚¢
Other disclosures in relation to dividends
The proposed interim dividend for the current period of 12 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 IAS 33: Earnings Per Share are as follows.
31/12/06 31/12/05 $US'000 $US'000 Net Profit: 132,809 39,453 Adjustments:
Net profit attributable to outside equity interest (47,438) (13,538) Earnings used in calculating basic and diluted
earnings per share 85,371 25,915 Current Previous period corresponding period Number of Shares Number of Shares
Weighted average number of ordinary shares used in calculating basic earnings per share 85,043,073
82,206,742
Effect of dilutive securities:
Share options 1,497,673 1,607,210
Adjusted weighted average number of ordinary shares
used in calculating diluted earnings per share 86,540,746 83,813,952
Details of entities over which control has been gained or lost during theperiodName of entity (or group of Contribution to net Profit (loss) for the entities) and date of the profit (loss) previous corresponding gain or loss of control period Current Previous Current Previous period corresponding period corresponding period - period - $US'000 $US'000 $US'000 $US'000 - - - - Total - - - -
Details of associates and joint venture entities
The economic entity has an interest (that is material to it) in the followingentities: Name of Percentage of ownership interest held Contribution to net profit entity at end of period or date of disposal (loss) 31/12/06 31/12/05 31/12/06 31/12/05 $US'000 $US'000 Mimosa Investments Limited 50% 50% 33,975 11,390 Total 33,975 11,390 Group's share of associates' and joint venture entities': 31/12/06 31/12/05 $US'000 $US'000 Profit from ordinary activities before tax 41,476
12,333
Income tax on ordinary activities (7,501) (943) Profit from ordinary activities after tax 33,975 11,390 Adjustments - - Share of net profit of associates and joint venture entities 33,975 11,390 Subsequent events
There have been no subsequent events for noting.
Contingency : Moolman Mining Dispute
Moolman Mining was the primary opencast mining contractor employed at theMarikana Mine from start up in May 2002 until December 2005. In December 2005,AQPSA resiled from the contract with Moolman Mining on discoveringmisrepresentations by Moolman which induced the contract. Moolman has beenreplaced by MCC as opencast contractor and MCC has since improved productionfrom the opencast mine significantly at no additional cost over the disputedMoolmans contract rates.In April 2006, AQPSA instituted action against Moolman arising from themisrepresentation. The action includes a damages component. In May 2006,AQPSA served an application to stay the arbitration in respect of the Rise andFall claim pending the determination of the action. In September 2006, AQPSAreceived Moolmans' response in the application to stay the arbitration as wellas a plea to the action. Moolmans delivered a conditional counterclaim,comprising four components in an aggregate amount of ZAR472 million. The AQPSAlegal team is in the process of preparing a reply in the applicationproceedings and a plea to the conditional counterclaims. During the course ofthis process, AQPSA has requested further documentation from Moolmans relatingto the Marikana contract. The process of finalising the replying affidavit andinspection of documents continues and is expected to be finalised in the 3rdQuarter of the 2007 financial year.
Segment reporting
The 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 2006 South US$'000 Bermuda Africa Australia Zimbabwe Eliminations Consolidated External sales - 266,522 - 55,814 - 322,336 External other 228 5,636 745 1,829 - 8,438 revenues Intersegment 746 - 250 - (996) - revenues Segment revenue 974 272,158 995 57,643 (996) 330,774 Segment result (889) 137,293 48 41,476 1,055 178,983 Income tax expense (46,174) Profit after tax 132,809 Minority interest (47,438) Net profit 85,371 31 December 2005 South US$'000 Bermuda Africa Australia Zimbabwe Eliminations Consolidated 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
Issued and quoted securities at end of current period
Category of securities Total Number Issue Amount paid number quoted price per up per security security (cents) (cents) Ordinary securities 84,575,558 84,575,558 Changes during current period: Increases through issues - - - - Increases through option 227,333 - ‚£3.14 - 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 50,000 - ‚£2.50 23/10/11 110,000 - ‚£3.32 21/11/13 1,066,760 - ‚£2.54 11/06/11 209,865 - ‚£2.54 11/06/11 424,694 - ‚£2.92 02/11/11 78,965 - ‚£3.32 02/08/12 80,036 ‚£7.01 26/05/13 Changes during current period: Issued during current period Employee options Exercised during current period 227,333 - ‚£3.14 - Expired during current 82,118 - ‚£2.81 - period DIRECTORS' DECLARATION
In accordance with a resolution of the Directors of Aquarius Platinum Limited I state that:
In the opinion of the Directors:
the financial statements and notes of the consolidated entity:
give a true and fair view of the financial position as at 31 December 2006 and the performance of the consolidated entity for the half-year ended on that date; and
comply with International Accounting Standard IAS 34; and
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: 7th February 2007
AQUARIUS PLATINUM LIMITEDRelated Shares:
AQP.L