7th Feb 2008 07:00
Appendix 4D
HALF YEAR REPORT
6 MONTHS ENDED 31 DECEMBER 2007
Aquarius Platinum Limited
ABN Reporting period Previous corresponding period
087 577 893 Six months ended 31/12/07 Six months ended 31/12/06
Results for announcement to the market
$US'000 Revenues from ordinary activities up 28 % to 423,657
Profit from ordinary activities after tax up 25 % to 106,646
attributable to members Dividends Amount per Franked amount security per security Interim dividend 10 ‚¢ - ‚¢ Record date for determining entitlements to the dividend 29 February 2008
Refer to the Half Yearly Results Announcement released in conjunction with
this Appendix 4D to the market on 7th February 2008.
The amounts contained in this report have been rounded to the nearest $1,000
(where rounding is applicable).
Director's Report
Your directors submit their report for the half-year ended 31 December 2007.
Directors
The names of the company's directors in office during the half-year and until the date of this report are as below. Directors were in office for this entire period unless otherwise stated.
Nicholas T Sibley G Edward Haslam Stuart A Murray Timothy Freshwater Sir William Purves David Dix
Kofi Morna Zwelakhe Mankazana (Alternate to Kofi Morna)
Review and Results of Operations
Aquarius Platinum Limited (Aquarius) recorded an operating profit after tax for the six month period of US$106.6M, an increase of 25% over the previous corresponding period ("pcp").
The profit was achieved on a 28% increase in revenue from US$330.4 million to US$423.7 million. All mining operations returned increased profits for the six month period compared to the pcp. Mimosa was the only mine that reported a lower profit compared to the pcp. This was due to lower PGM sales caused by (i) adverse foreign exchange effects due to local currency depreciation and (ii) disruptions to production during the period and shipment delays which caused 25% of December's sales to be held over to January 2008.
Amortisation and depreciation were higher at $24.2 million from $18.8 million in line with the Group's capital development plans and also on account of amortising the increased rehabilitation liability at Marikana as reassessed in June 2007. Net finance income for the period of $3.3 million, comprised $12.2 million in interest income and $8.9 million in interest expense. Included in interest expense is a non-cash element of $3.0 million relating to the net present value adjustments to the Marikana and Kroondal rehabilitation provisions.
Operating Contribution 31/12/07 31/12/06 %+/- PGM Ounces Attributable production 277,813 277,156 - Profit US$'000 Kroondal 89,598 77,140 16% Marikana 15,788 14,179 11% Everest 87,236 49,321 77% Mimosa 31,073 41,381 (25%) CTRP 3,205 1,739 84% Other/Corporate 892 (4,776) - Net profit before tax 227,792 178,984 27% Tax expense (59,178) (46,175) 28% Net profit after tax 168,614 132,809 27% Outside equity interest (61,968) (47,438) 31% Net profit attributable to members 106,646 85,371 25%
The Directors have declared an interim dividend of 10 cents per share (2007: 4 cents per share) payable on 21 March 2008 to shareholders registered on 29 February 2008.
Regretfully, Aquarius recorded 5 fatalities during the half-year at its South African mines. Aquarius extends its deepest condolences to the family and friends of Mr Juan Paulo, Mr Tete Tlali, Mr Ernst Mower, Mr Tseliso Nthunya, and Mr Thabiso Chaka.
The US$ prices for platinum group metals showed healthy gains over the period, with the PGM basket price (platinum, palladium, rhodium and gold) in South Africa averaging $1,455 per PGM ounce across the operations, an increase of 26% compared to the previous corresponding period. The Zimbabwean basket price increased 13% to $1,074 for the half year to December 2007, although the significant fall of the nickel price, reduced Mimosa's revenue.
Aquarius' cash balances increased by $81 million during the half-year to $368.7 million at 31 December 2007. Group cash was impacted during the half year by repayment of minority shareholder loans ($55 million) and a capital reduction by Aquarius Platinum (SA) (Pty) Ltd of which the minorities share was $14 million.
The Zimbabwean Government's draft Bill proposing 51% indigenous ownership has not been enacted as the Parliament was adjourned without passing the proposed legislation. Parliament will resume sitting after the presidential, parliamentary and local government elections on 29 March 2008.
Signed in accordance with a resolution of the Directors.
Nicholas T SibleyChairmanDate: 7th February 2008
Condensed consolidated income statement
(Half year ended 31 December 2007)
31/12/07 31/12/06 $US'000 $US'000 Revenue 423,657 330,388 Cost of sales (175,662) (142,578) Gross profit 247,995 187,810 Other income 595 386 Administrative and other costs (3,822) (3,574) Foreign exchange gain/(loss) (8,068) 1,684 Finance costs (8,908) (7,322) Profit before income tax 227,792 178,984 Income tax expense (59,178) (46,175) Net profit 168,614 132,809 Attributable to:
Equity holders of Aquarius Platinum Limited 106,646 85,371
Minority interests 61,968 47,438 168,614 132,809 Earnings per share (EPS) Basic EPS 41.58 cents 33.46 cents * Diluted EPS 41.17 cents 33.28 cents *
* Adjusted for three for one share split approved by shareholders on 23 November 2007.
Condensed consolidated statement of recognised income and expenses
(Half year ended 31 December 2007)
31/12/ 31/12/ 07 06 $US'000 $US'000Foreign currency translation adjustments recognised directly in equity 9,460 5,404 Net profit for the period 168,614 132,809 Total recognised income and expenses 178,074 138,213 Attributable to: Equity holders of Aquarius Platinum Limited 111,754 88,100 Minority interests 66,320 50,113 Total recognised income and expenses 178,074 138,213
Condensed consolidated balance sheet
(As at 31 December 2007) As at As at As at 31/12/07 30/06/07 31/12/ 06 $US'000 $US'000 $US'000 Non-current assets Receivables 12,803 11,612 8,156 Available for sale investments 431 418 419 Property, plant and equipment 214,043 219,113 212,140 Mining assets 316,408 299,672 279,145 Total non-current assets 543,685 530,815 499,860 Current assets Cash 368,682 287,663 263,563 Trade and other receivables 107,282 100,573 71,245 Inventories 37,677 26,123 26,946 Other 910 - 660 Total current assets 514,551 414,359 362,414 Total assets 1,058,236 945,174 862,274 Non-current liabilities Payables 2,391 54,228 124,410 Interest bearing liabilities 33,731 31,272 34,843 Deferred tax liabilities 109,010 103,378 91,654 Provisions 72,205 69,026 41,159 Total non-current liabilities 217,337 257,904 292,066 Current liabilities Trade and other payables 45,651 44,715 37,978 Interest bearing liabilities 140 4,583 25 Current tax liabilities 21,715 4,851 9,840 Provisions 622 576 394 Total current liabilities 68,128 54,725 48,237 Total liabilities 285,465 312,629 340,303 NET ASSETS 772,771 632,545 521,971 Shareholders equity Issued capital 12,827 12,823 12,686 Share premium reserve 149,592 149,423 144,966 Equity benefits reserve 351 351 252 Equity reserve (22,584) (22,584) 10,564 Foreign currency translation reserve 3,907 (988) (1,072) Retained earnings 398,106 317,113 225,418 Equity attributable to members of Aquarius Platinum Limited 542,199 456,138 392,814 Minority interests 230,572 176,407 129,157 TOTAL EQUITY 772,771 632,545 521,971
Condensed consolidated statement of cash flows
(Half year ended 31 December 2007)
31/12/07 31/12/06 $US'000 $US'000 Cash flows related to operating activities Receipts from customers 403,521 311,215 Payments to suppliers and employees (165,148) (131,008) Interest received 12,202 8,437 Interest paid (5,880) (7,322) Income taxes paid (39,543) (22,296) Net operating cash flows 205,152 159,026 Cash flows related to investing activities Payment for mine development and property, plant and equipment (22,996) (22,919) Payment for mine closure/rehabilitation costs - (2,570) Redeemable deposit (10,000) - Net investing cash flows (32,996) (25,489) Cash flows related to financing activities Proceeds from issues of shares 173 1,288 Repayment of share-plan loans - 313 Return of capital (14,587) - Repayment of borrowings (55,230) (23,288) Dividends paid (25,653) (15,208) Net financing cash flows (95,297) (36,895) Net increase in cash held 76,859 96,642 Cash at beginning of period 287,663 162,425 Net foreign exchange differences 4,160 4,496 Cash at end of period 368,682 263,563
BASIS OF PREPARATION OF THE HALF-YEAR FINANCIAL REPORT
The half-year financial report does not include all notes of the type normally included within the annual financial report and therefore cannot be expected to provide as full an understanding of the financial performance, financial position and financing and investing activities of the consolidated entity as the full financial report.
The half-year financial report should be read in conjunction with the Annual Financial Report of Aquarius Platinum Limited as at 30 June 2007. It is also recommended that the half-year financial report be considered together with any public announcements made by the company and its controlled entities during the half-year ended 31 December 2007 in accordance with the group's continuous disclosure obligations.
Basis of Accounting
The half-year financial report is a general-purpose condensed 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 historical cost accounting convention except for available for sale investments that have been 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 2007.
Changes in Accounting Policies
Since 1 July 2007 the Group has adopted the following standards and interpretations, mandatory for annual period beginning on or after 1 July 2007. Adoption of these Standards and Interpretations did not have any effect on the financial position or performance of the Group.
IFRS 7 Financial Instruments: Disclosure
IAS 1 Amendments- Presentation of Financial Statements
IFRIC 8 Scope of IFRS 2
IFRIC 9 Reassessment of embedded derivatives
IFRIC 10 Interim Financial Reporting and Impairment
IFRIC 11 (IFRS2) Group and Treasury Share Transactions
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.
Notes to the condensed consolidated income statement
31/12/07 31/12/06 $US'000 $US'000
Revenue from ordinary activities
Sales revenue 411,455 322,337 Interest revenue 12,202 8,051 Total revenue 423,657 330,388 Cost of salesAmortisation and depreciation 20,727 15,192
Amortisation of fair value uplift 3,512 3,756
Cost of production 149,886 121,605 Royalties 1,537 2,025 Total cost of sales 175,662 142,578
Details of individual and total dividends and dividend payments
Date the interim dividend is payable 21 March 2008
Record date to determine entitlements to the dividend 29 February 2008
Has the dividend been declared? Yes
Interim dividends on all securities
Total amount paid Amount per Franked amount or payable share per share US$'000 US$ Final dividend: Current period - - ‚¢ - ‚¢ Previous period 25,653 30* ‚¢ - ‚¢ Interim dividend: Current period 25,653 10 ‚¢ - ‚¢ Previous period 10,152 12* ‚¢ - ‚¢
* Prior to three for one share split approved by shareholders 23 November 2007
The proposed interim dividend for the current period of 10 cents per share has not been provided for in the 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.
31/12/07 31/12/06 $US'000 $US'000 Net Profit: 168,614 132,809 Adjustments:
Net profit attributable to outside equity interest (61,968) (47,438)
Earnings used in calculating basic and diluted earnings per share 106,646 85,371 Current Previous period corresponding period Number of Shares Number of Shares * Weighted average number of ordinary shares used in calculating basic earnings per share 256,513,648 255,129,218 Effect of dilutive securities: Share options 2,518,327 1,357,141 Adjusted weighted average number of ordinary shares
used in calculating diluted earnings per share 259,031,975 256,486,359
* Adjusted for three for one share split approved by shareholders on 23 November 2007.
Details of associates and joint venture entities
The Group has an interest (that is material to it) in the following entity:
Name of Percentage of ownership interest held Contribution to net profit entity at end of period 31/12/07 31/12/06 31/12/07 31/12/06 $US'000 $US'000 Mimosa Investments Limited 50% 50% 25,908 33,975 Total 25,908 33,975 Group's share of joint venture: 31/12/07 31/12/06 $US'000 $US'000
Profit from ordinary activities before tax 31,044 41,476
Income tax on ordinary activities (5,136) (7,501)
Profit from ordinary activities after tax 25,908 33,975
Adjustments - -
Share of net profit of joint venture entities 25,908 33,975
Subsequent EventsDividend
On 5 February 2008 a dividend of 10 cents per ordinary share was declared. The record date to determine entitlement to the dividend is 29 February 2008 and the dividend will be paid on 21 March 2008.
Acquisition of 50% Interest in Platinum Mile Resources (Pty) Ltd
Aquarius Platinum Limited has announced today that it has entered into a binding agreement for the acquisition of a 50% interest in Platinum Mile Resources (Pty) Ltd (Platinum Mile). The shareholding will be acquired from a consortium of private investors and Mvelaphanda Holdings (Pty) Ltd.
Platinum Mile operates a tailings re-treatment facility which is located in Rustenburg, North West Province. It is situated within Rustenberg Platinum Mine's lease area, adjacent to Aquarius' Kroondal operation.
The Platinum Mile plant currently produces approximately 20,000 ounces of PGMs (4E) per annum and production ramp-up plans and technological innovations should see the production from the operation increase to above 35,000 ounces of PGMs (4E) per annum.
The consideration payable to the shareholders of Platinum Mile for 50% of the issued share capital amounts to R420 million. The payment comprises of R210 million in cash and R210 million in Aquarius Platinum shares, issued on the South African register, at a fixed price of R78.33 (~ January 2008 VWAP).
More information will be provided to shareholders following conclusion of this transaction.
Contingency : Moolman Mining Dispute
AQPSA has received a response from Moolman Mining to AQPSA's answering affidavit in Moolman Mining's counter-application in the motion proceedings instituted by AQPSA. AQPSA's application is to stay the Arbitration proceedings instituted by Moolman Mining in the "rise and fall" formula dispute, pending the outcome of the action proceedings instituted by AQPSA against Moolman Mining to set aside the mining contract by reason of Moolman Mining's misrepresentation when the mining contract in question was originally concluded. The response has not changed AQPSA's view of the merits of the matter in any respect.
AQPSA has served a plea to Moolman Mining's counterclaim in the abovementioned action proceedings. AQPSA denies that any amounts whatsoever are owing to Moolman Mining because such claims arise either directly out of the mining contract or as a result of a finding that AQPSA was not entitled to rescind the mining contract. A finding that there was a misrepresentation at the instance of Moolman Mining will have the effect that none of the amounts in the counter-claim will be payable.
All pleadings in the matter are now closed and the legal teams will be meeting in the near future to discuss a timetable and procedural issues for the hearing of the matter.
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 2007 South US$'000 Bermuda Africa Australia Zimbabwe Eliminations Consolidated Revenue 2,259 368,057 135 53,206 - 423,657 Intersegment 9,710 - 311 - (10,021) - revenues Segment revenue 11,969 368,057 446 53,206 (10,021) 423,657 Segment result 2,927 192,822 - 31,045 998 227,792 Income tax expense (59,178) Profit after tax 168,614 Minority interest (61,968) Net profit 106,646 Segment assets 204,974 685,490 4,326 163,446 - 1,058,236 Segment liabilities 19,703 255,369 666 9,727 - 285,465 31 December 2006 South US$'000 Bermuda Africa Australia Zimbabwe Eliminations Consolidated Revenue 228 271,844 745 57,571 - 330,388 Intersegment 746 - 250 - (996) - revenues Segment revenue 974 271,844 995 57,571 (996) 330,388 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 Segment assets 72,333 645,361 24,513 120,067 - 862,274 Segment liabilities 21,846 304,797 538 13,122 - 340,303
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 256,534,266 256,534,266 Changes during current period: Increases through issues - - - - Increases through option 78,963 - ‚£1.11 - 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 Employee options 280,002 - ‚£1.11 21/11/13 1,465,440 - ‚£0.85 11/06/11 419,730 - ‚£0.85 11/06/11 653,781 - ‚£0.97 02/11/11 240,108 - ‚£2.34 02/08/12 Changes during current period: Issued during current period Employee options Exercised during current period 78,963 - ‚£1.11 - Expired during current 157,932 - ‚£1.11 - period Share Split
On 23 November 2007 shareholders approved a 3 for 1 split of the Company's ordinary shares.
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 2007 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 2008
AQUARIUS PLATINUM LIMITEDRelated Shares:
AQP.L