Audited Results
September 08 2010 - 1:15AM
UK Regulatory
TIDMPTMN
RNS Number : 3174S
Petmin Limited
08 September 2010
Petmin Limited
(Incorporated in the Republic of South Africa)
(Registration number 1972/001062/06)
JSE code: PET AIM code: PTMN
ISIN: ZAE000076014
("Petmin" or "the Company" or "the Group")
Condensed Preliminary Consolidated Financial Statements for the year ended 30
June 2010
Achievements:
Maiden Dividend Declared
· Like-for like headline earnings per share 19.09 cents, up 5% from 18.26
cents in 2009 (18.26 cents excludes 2009 earnings from Springlake)
· Gross profit margin increased to 37% (2009: 27%), despite difficult
trading conditions
· Cash on hand R283 million (2009: R91 million) and undrawn bank facilities
of R110 million
· Net cash flow from operating activities increased by 43% to R321 million
from R225 million
· Interest-bearing debt-to-equity ratio of 7.55% (2009: 9.97%)
Condensed Preliminary Consolidated Income Statement
for the year ended 30 June 2010
+-------------------------------------------+--------+-----------+-----------+
| | | | |
+-------------------------------------------+--------+-----------+-----------+
| | | Reviewed | Audited |
+-------------------------------------------+--------+-----------+-----------+
| | | Year | Year |
| | | ended | ended |
+-------------------------------------------+--------+-----------+-----------+
| | | 30 June | 30 June |
| | | 2010 | 2009 |
+-------------------------------------------+--------+-----------+-----------+
| | Note | R'000 | R'000 |
+-------------------------------------------+--------+-----------+-----------+
| Revenue | | 489 354 | 788 624 |
+-------------------------------------------+--------+-----------+-----------+
| Cost of sales | | (310 449) | (578 419) |
+-------------------------------------------+--------+-----------+-----------+
| Gross profit | | 178 905 | 210 205 |
+-------------------------------------------+--------+-----------+-----------+
| Operating expenses | | (14 248) | (18 501) |
+-------------------------------------------+--------+-----------+-----------+
| Administration expenses | | (15 208) | (17 810) |
+-------------------------------------------+--------+-----------+-----------+
| Results from operating activities | | 149 449 | 173 894 |
+-------------------------------------------+--------+-----------+-----------+
| Net finance income/(expense) | | 4 168 | (969) |
+-------------------------------------------+--------+-----------+-----------+
| - Finance income | | 9 116 | 11 270 |
+-------------------------------------------+--------+-----------+-----------+
| - Finance expenses | | (4 948) | (12 239) |
+-------------------------------------------+--------+-----------+-----------+
| Profit before tax and separately | | | |
+-------------------------------------------+--------+-----------+-----------+
| disclosed items | | 153 617 | 172 925 |
+-------------------------------------------+--------+-----------+-----------+
| Separately disclosed items: | | | |
+-------------------------------------------+--------+-----------+-----------+
| Loss on sale of subsidiary | | - | (79 170) |
+-------------------------------------------+--------+-----------+-----------+
| Impairment loss on goodwill acquired | | - | (1 327) |
+-------------------------------------------+--------+-----------+-----------+
| Share of profit of equity accounted | | - | 78 185 |
| investee | | | |
+-------------------------------------------+--------+-----------+-----------+
| Profit before income tax | | 153 617 | 170 613 |
+-------------------------------------------+--------+-----------+-----------+
| Income tax expense | | (45 900) | (52 627) |
+-------------------------------------------+--------+-----------+-----------+
| Profit for the year | | 107 717 | 117 986 |
+-------------------------------------------+--------+-----------+-----------+
| Attributable to: | | | |
+-------------------------------------------+--------+-----------+-----------+
| - Equity holders of Petmin | | 107 717 | 118 364 |
+-------------------------------------------+--------+-----------+-----------+
| - Non-controlling interest | | - | (378) |
+-------------------------------------------+--------+-----------+-----------+
| Profit for the year | | 107 717 | 117 986 |
+-------------------------------------------+--------+-----------+-----------+
| Basic earnings per ordinary share (cents) | 6 | 19.09 | 21.86 |
+-------------------------------------------+--------+-----------+-----------+
| Diluted earnings per ordinary share | 6 | 18.97 | 20.68 |
| (cents) | | | |
+-------------------------------------------+--------+-----------+-----------+
Condensed Preliminary Consolidated Statement of Comprehensive Income
for the year ended 30 June 2010
+--------------------------------------------+----------+---------+
| | Reviewed | Audited |
+--------------------------------------------+----------+---------+
| | Year | Year |
| | ended | ended |
+--------------------------------------------+----------+---------+
| | 30 June | 30 June |
| | 2010 | 2009 |
+--------------------------------------------+----------+---------+
| | R'000 | R'000 |
+--------------------------------------------+----------+---------+
| Profit for the year | 107 717 | 117 986 |
+--------------------------------------------+----------+---------+
| Other comprehensive income | | |
+--------------------------------------------+----------+---------+
| Effective portion of changes in fair value | 636 | 241 |
| of cash flow hedges | | |
+--------------------------------------------+----------+---------+
| Other comprehensive income for the year, | | |
+--------------------------------------------+----------+---------+
| net of income tax | 636 | 241 |
+--------------------------------------------+----------+---------+
| Total comprehensive income for the year | 108 353 | 118 227 |
+--------------------------------------------+----------+---------+
| Attributable to: | | |
+--------------------------------------------+----------+---------+
| - Equity holders of Petmin Limited | 108 353 | 118 605 |
+--------------------------------------------+----------+---------+
| - Non-controlling interest | - | (378 |
+--------------------------------------------+----------+---------+
| Total comprehensive income for the year | 108 353 | 118 227 |
+--------------------------------------------+----------+---------+
Condensed Preliminary Consolidated Statement of Financial Position
at 30 June 2010
+---------------------------------------------+------+-----------+-----------+
| | | | |
+---------------------------------------------+------+-----------+-----------+
| | | Reviewed | Audited |
+---------------------------------------------+------+-----------+-----------+
| | | Year | Year |
| | | ended | ended |
+---------------------------------------------+------+-----------+-----------+
| | | 30 June | 30 June |
| | | 2010 | 2009 |
+---------------------------------------------+------+-----------+-----------+
| | Note | R'000 | R'000 |
+---------------------------------------------+------+-----------+-----------+
| ASSETS | | | |
+---------------------------------------------+------+-----------+-----------+
| Non-current assets | | 1 131 293 | 1 131 688 |
+---------------------------------------------+------+-----------+-----------+
| Property, plant and equipment | | 631 225 | 629 102 |
+---------------------------------------------+------+-----------+-----------+
| Intangible assets | | 4 407 | 6 925 |
+---------------------------------------------+------+-----------+-----------+
| Investment in equity accounted investee | | 470 661 | 470 661 |
+---------------------------------------------+------+-----------+-----------+
| Investments | | 25 000 | 25 000 |
+---------------------------------------------+------+-----------+-----------+
| Current assets | | 465 044 | 341 642 |
+---------------------------------------------+------+-----------+-----------+
| Inventories | | 48 935 | 30 373 |
+---------------------------------------------+------+-----------+-----------+
| Trade and other receivables | | 127 118 | 214 239 |
+---------------------------------------------+------+-----------+-----------+
| Current tax assets | | 5 977 | 5 934 |
+---------------------------------------------+------+-----------+-----------+
| Cash and cash equivalents | | 283 014 | 91 096 |
+---------------------------------------------+------+-----------+-----------+
| Total assets | | 1 596 337 | 1 473 330 |
+---------------------------------------------+------+-----------+-----------+
| EQUITY AND LIABILITIES | | | |
+---------------------------------------------+------+-----------+-----------+
| Ordinary share capital and reserves | | 1 241 421 | 1 119 101 |
+---------------------------------------------+------+-----------+-----------+
| Share capital | | 142 681 | 134 686 |
+---------------------------------------------+------+-----------+-----------+
| Share premium | | 331 337 | 304 745 |
+---------------------------------------------+------+-----------+-----------+
| Share option reserve | | 3 121 | 23 741 |
+---------------------------------------------+------+-----------+-----------+
| Hedging reserve | | - | (636) |
+---------------------------------------------+------+-----------+-----------+
| Retained earnings | | 764 282 | 656 565 |
+---------------------------------------------+------+-----------+-----------+
| Non-current liabilities | | 202 092 | 181 192 |
+---------------------------------------------+------+-----------+-----------+
| Interest-bearing loans and borrowings | | 42 128 | 57 664 |
+---------------------------------------------+------+-----------+-----------+
| Deferred taxation liabilities | | 136 744 | 100 901 |
+---------------------------------------------+------+-----------+-----------+
| Environmental rehabilitation provision | | 23 220 | 22 627 |
+---------------------------------------------+------+-----------+-----------+
| Current liabilities | | 152 824 | 173 037 |
+---------------------------------------------+------+-----------+-----------+
| Trade and other payables | | 101 245 | 119 101 |
+---------------------------------------------+------+-----------+-----------+
| Current portion of non-current liabilities | | 51 579 | 53 936 |
+---------------------------------------------+------+-----------+-----------+
| Total equity and liabilities | | 1 596 337 | 1 473 330 |
+---------------------------------------------+------+-----------+-----------+
Condensed Preliminary Consolidated Statement of Cash Flows
for the year ended 30 June 2010
+--------------------------------------------------+-----------+-----------+
| | Reviewed | Audited |
+--------------------------------------------------+-----------+-----------+
| | Year | Year |
| | ended | ended |
+--------------------------------------------------+-----------+-----------+
| | 30 June | 30 June |
| | 2010 | 2009 |
+--------------------------------------------------+-----------+-----------+
| | R'000 | R'000 |
+--------------------------------------------------+-----------+-----------+
| Cash generated by operations | 149 449 | 173 894 |
+--------------------------------------------------+-----------+-----------+
| Adjustments for: | | |
+--------------------------------------------------+-----------+-----------+
| - depreciation and amortisation of intangible | 118 226 | 134 209 |
| assets | | |
+--------------------------------------------------+-----------+-----------+
| - fair value of derivatives included in | 636 | (636) |
| payables/(receivables) | | |
+--------------------------------------------------+-----------+-----------+
| - impairment charges | 4 983 | 3 211 |
+--------------------------------------------------+-----------+-----------+
| - notional interest | 2 733 | 1 539 |
+--------------------------------------------------+-----------+-----------+
| - profit on disposal of property, plant and | - | (12) |
| equipment | | |
+--------------------------------------------------+-----------+-----------+
| - decommissioning asset - new mining areas | - | 4 642 |
+--------------------------------------------------+-----------+-----------+
| - management share options granted | - | 446 |
+--------------------------------------------------+-----------+-----------+
| Operating cash flows before changes in | | |
+--------------------------------------------------+-----------+-----------+
| working capital | 276 027 | 317 293 |
+--------------------------------------------------+-----------+-----------+
| Increase/(Decrease) in trade and other | 87 121 | (32 733) |
| receivables | | |
+--------------------------------------------------+-----------+-----------+
| Increase in inventories | (18 562) | (39 757) |
+--------------------------------------------------+-----------+-----------+
| (Decrease)/Increase in trade and other payables | (17 886) | 10 317 |
+--------------------------------------------------+-----------+-----------+
| Cash generated by operations | 326 700 | 255 120 |
+--------------------------------------------------+-----------+-----------+
| Income tax paid | (10 010) | (28 804) |
+--------------------------------------------------+-----------+-----------+
| Finance income | 9 116 | 11 270 |
+--------------------------------------------------+-----------+-----------+
| Finance expenses | (4 948) | (12 238) |
+--------------------------------------------------+-----------+-----------+
| Net cash flow from operating activities | 320 858 | 225 348 |
+--------------------------------------------------+-----------+-----------+
| Cash flows from investing activities | | |
+--------------------------------------------------+-----------+-----------+
| Long-term rehabilitation expenditure incurred | (2 140) | - |
+--------------------------------------------------+-----------+-----------+
| Increase in investment in rehabilitation funds | - | (5 115) |
+--------------------------------------------------+-----------+-----------+
| Investment in equity accounted investee | - | (16 589) |
+--------------------------------------------------+-----------+-----------+
| Investment in preference share | - | (25 000) |
+--------------------------------------------------+-----------+-----------+
| Acquisition of property, plant and equipment | (122 825) | (290 991) |
+--------------------------------------------------+-----------+-----------+
| - To expand operations | (54 855) | (188 092) |
+--------------------------------------------------+-----------+-----------+
| - To expand operations - capitalised pre-strip | (56 725) | (86 408) |
+--------------------------------------------------+-----------+-----------+
| - To maintain operations | (11 245) | (16 491) |
+--------------------------------------------------+-----------+-----------+
| Proceeds from sale of subsidiary, net of cash | - | 77 707 |
| disposed | | |
+--------------------------------------------------+-----------+-----------+
| Proceeds from sale of property, plant and | 10 | 47 |
| equipment | | |
+--------------------------------------------------+-----------+-----------+
| Net cash flows from investing activities | (124 955) | (259 941 |
+--------------------------------------------------+-----------+-----------+
| Cash flows from financing activities | | |
+--------------------------------------------------+-----------+-----------+
| Proceeds from specific and general share issues | | |
| for | | |
+--------------------------------------------------+-----------+-----------+
| cash during the year | 26 640 | 4 907 |
+--------------------------------------------------+-----------+-----------+
| Treasury shares acquired | (14 085) | (8 775 |
+--------------------------------------------------+-----------+-----------+
| Share-based payment included in expenses | 1 454 | - |
+--------------------------------------------------+-----------+-----------+
| Payment on options forfeited | (101) | - |
+--------------------------------------------------+-----------+-----------+
| Repayment of contingent consideration | - | (4 005) |
+--------------------------------------------------+-----------+-----------+
| Repayment of borrowings | (53 093) | (16 776) |
+--------------------------------------------------+-----------+-----------+
| Increase in borrowings | 35 200 | 61 627 |
+--------------------------------------------------+-----------+-----------+
| Net cash flows from financing activities | (3 985) | 36 978 |
+--------------------------------------------------+-----------+-----------+
| Net increase in cash and cash equivalents | 191 918 | 2 385 |
+--------------------------------------------------+-----------+-----------+
| Cash and cash equivalents at beginning of year | 91 096 | 88 711 |
+--------------------------------------------------+-----------+-----------+
| Cash and cash equivalents at end of year | 283 014 | 91 096 |
+--------------------------------------------------+-----------+-----------+
Condensed Preliminary Consolidated Statement of Changes in Equity
for the year ended 30 June 2010
+-----------------------------+----+----------+----------+----------+-----+----------+-------+----------+-----+----------+-----+----------+------+----------+-----+----------+-----+----------+
| | Attributable to equity holders of the Company | |
+-----------------------------+----------------------------------------------------------------------------------------------------------------------------------------------------+----------+
| | | | Share | Contingent | | | | Non- | | |
+-----------------------------+---------------+----------+----------------+------------------+----------------+----------------+-----------------+----------------+----------------+----------+
| | Share | Share | option | consideration | Hedging | Retained | | controlling | Total | |
+-----------------------------+---------------+----------+----------------+------------------+----------------+----------------+-----------------+----------------+----------------+----------+
| | capital | premium | reserve | reserve | reserve | earnings | Total | interest | equity | |
+-----------------------------+---------------+----------+----------------+------------------+----------------+----------------+-----------------+----------------+----------------+----------+
| | R'000 | R'000 | R'000 | R'000 | R'000 | R'000 | R'000 | R'000 | R'000 | |
+-----------------------------+---------------+----------+----------------+------------------+----------------+----------------+-----------------+----------------+----------------+----------+
| Balance at 1 July 2008 | 133 704 | 304 545 | 27 494 | 1 480 | - | 538 201 | 1 005 424 | 2 434 | 1 007 858 | |
+-----------------------------+---------------+----------+----------------+------------------+----------------+----------------+-----------------+----------------+----------------+----------+
| Shares issued during the | | | | | | | | | | |
| year | | | | | | | | | | |
+-----------------------------+---------------+----------+----------------+------------------+----------------+----------------+-----------------+----------------+----------------+----------+
| - To acquire 30% of Petmin | 188 | 3 188 | - | - | - | - | 3 376 | (2 056) | 1 320 | |
| Logistics (Pty) Limited | | | | | | | | | | |
+-----------------------------+---------------+----------+----------------+------------------+----------------+----------------+-----------------+----------------+----------------+----------+
| - Share options exercised | 1 945 | 7 161 | (4 199) | - | - | - | 4 907 | - | 4 907 | |
+-----------------------------+---------------+----------+----------------+------------------+----------------+----------------+-----------------+----------------+----------------+----------+
| - Issued to Springlake | 117 | 163 | - | (280) | - | - | - | - | - | |
| Vendors | | | | | | | | | | |
+-----------------------------+---------------+----------+----------------+------------------+----------------+----------------+-----------------+----------------+----------------+----------+
| Treasury shares acquired | (1 768) | (11 012) | - | - | - | - | (12 780) | - | (12 780) | |
| during the year | | | | | | | | | | |
+-----------------------------+---------------+----------+----------------+------------------+----------------+----------------+-----------------+----------------+----------------+----------+
| Treasury shares transferred | 500 | 700 | - | (1 200) | - | - | - | - | - | |
| to Springlake Vendors | | | | | | | | | | |
+-----------------------------+---------------+----------+----------------+------------------+----------------+----------------+-----------------+----------------+----------------+----------+
| Share options granted | - | - | 446 | - | - | - | 446 | - | 446 | |
+-----------------------------+---------------+----------+----------------+------------------+----------------+----------------+-----------------+----------------+----------------+----------+
| Effective portion of | - | - | - | - | (636) | - | (636) | - | (636) | |
| changes in fair value of | | | | | | | | | | |
| cash flow hedges | | | | | | | | | | |
+-----------------------------+---------------+----------+----------------+------------------+----------------+----------------+-----------------+----------------+----------------+----------+
| Profit for the year | - | - | - | - | - | 118 364 | 118 364 | (378) | 117 986 |
+-----------------------------+---------------+---------------------+----------------+------------------+----------------+----------------+-----------------+----------------+----------------+
| Balance at 30 June 2009 | 134 686 | 304 745 | 23 741 | - | (636) | 656 565 | 1 119 101 | - | 1 119 101 | |
+-----------------------------+---------------+----------+----------------+------------------+----------------+----------------+-----------------+----------------+----------------+----------+
| Shares issued during the | | | | | | | | | | |
| year | | | | | | | | | | |
+-----------------------------+---------------+----------+----------------+------------------+----------------+----------------+-----------------+----------------+----------------+----------+
| - Share options exercised | 9 617 | 37 661 | (20 578) | - | - | - | 26 700 | - | 26 700 | |
+-----------------------------+---------------+----------+----------------+------------------+----------------+----------------+-----------------+----------------+----------------+----------+
| Share issue costs | - | (60) | - | - | - | - | (60) | - | (60) | |
| capitalised to share | | | | | | | | | | |
| premium | | | | | | | | | | |
+-----------------------------+---------------+----------+----------------+------------------+----------------+----------------+-----------------+----------------+----------------+----------+
| Treasury shares acquired | (1 804) | (12 281) | - | - | - | - | (14 085) | - | (14 085) | |
| during the year | | | | | | | | | | |
+-----------------------------+---------------+----------+----------------+------------------+----------------+----------------+-----------------+----------------+----------------+----------+
| Share options forfeited | - | - | (42) | - | - | - | (42) | - | (42) | |
| during the year | | | | | | | | | | |
+-----------------------------+---------------+----------+----------------+------------------+----------------+----------------+-----------------+----------------+----------------+----------+
| Share-based payment | 182 | 1 272 | - | - | - | - | 1 454 | - | 1 454 | |
+-----------------------------+---------------+----------+----------------+------------------+----------------+----------------+-----------------+----------------+----------------+----------+
| Effective portion of | - | - | - | - | 636 | - | 636 | - | 636 | |
| changes in fair value of | | | | | | | | | | |
| cash flow hedges | | | | | | | | | | |
+-----------------------------+---------------+----------+----------------+------------------+----------------+----------------+-----------------+----------------+----------------+----------+
| Profit for the year | - | - | - | - | - | 107 717 | 107 717 | - | 107 717 |
+-----------------------------+----+--------------------------------+----------------+------------------+----------------+----------------+-----------------+----------------+----------------+
| Balance at 30 June 2010 | 142 681 | 331 337 | 3 121 | - | - | 764 282 | 1 241 421 | - | 1 241 421 | |
+-----------------------------+---------------+----------+----------------+------------------+----------------+----------------+-----------------+----------------+----------------+----------+
| | | | | | | | | | | | | | | | | | | |
+-----------------------------+----+----------+----------+----------+-----+----------+-------+----------+-----+----------+-----+----------+------+----------+-----+----------+-----+----------+
Segment reporting
Segment information is presented in the condensed consolidated reviewed
financial statements in respect of the Group's business
segments.
The business segment reporting format reflects the Group's management and
internal reporting structure.
Inter-segment pricing is determined on an arm's length basis.
Segment results include items directly attributable to a segment as well as
those that can be allocated on a reasonable basis.
Business segments
The Group comprises the following main business segments:
- Silica mining and marketing ("Silica").
- Anthracite mining and
marketing ("Anthracite").
- Iron ore mining and beneficiation ("Iron Ore").
- Corporate office.
+--------------------+-----------+-----------+-----------+---------+-----------+---------+---------+---------+----------+-----------+-----------+-----------+-----------+----------+
| | | Silica | Anthracite | Iron ore | Corporate | Eliminations | Consolidated |
| | | | | | office | | |
+--------------------+-----------+-----------------------+---------------------+-------------------+--------------------+-----------------------+----------------------------------+
| | Units | Year | Year | Year | Year | Year | Year | Year | Year | Year | Year | Year | Year | |
| | in | | | | | | | | | | | | | |
+--------------------+-----------+-----------+-----------+---------+-----------+---------+---------+---------+----------+-----------+-----------+-----------+-----------+----------+
| | R'000 | ended | ended | ended | ended | ended | ended | ended | ended | ended | ended | ended | ended | |
+--------------------+-----------+-----------+-----------+---------+-----------+---------+---------+---------+----------+-----------+-----------+-----------+-----------+----------+
| | unless | 30 | 30 | 30 | 30 | 30 | 30 | 30 | 30 | 30 | 30 | 30 | 30 | |
| | | June | June | June | June | June | June | June | June | June | June | June | June | |
+--------------------+-----------+-----------+-----------+---------+-----------+---------+---------+---------+----------+-----------+-----------+-----------+-----------+----------+
| | otherwise | 2010 | 2009 | 2010 | 2009 | 2010 | 2009 | 2010 | 2009 | 2010 | 2009 | 2010 | 2009 | |
+--------------------+-----------+-----------+-----------+---------+-----------+---------+---------+---------+----------+-----------+-----------+-----------+-----------+----------+
| | specified | R'000 | R'000 | R'000 | R'000 | R'000 | R'000 | R'000 | R'000 | R'000 | R'000 | R'000 | R'000 | |
+--------------------+-----------+-----------+-----------+---------+-----------+---------+---------+---------+----------+-----------+-----------+-----------+-----------+----------+
| Saleable tonnes | (tonnes) | 1 255 559 | 1 333 613 | 467 843 | 1 016 940 | - | - | - | - | - | - | 1 723 402 | 2 350 553 | |
| produced | | | | | | | | | | | | | | |
+--------------------+-----------+-----------+-----------+---------+-----------+---------+---------+---------+----------+-----------+-----------+-----------+-----------+----------+
| Tonnes sold | (tonnes) | 1 171 355 | 1 511 850 | 411 630 | 960 764 | - | - | - | - | - | - | 1 582 985 | 2 472 614 | |
+--------------------+-----------+-----------+-----------+---------+-----------+---------+---------+---------+----------+-----------+-----------+-----------+-----------+----------+
| Segment revenue | | 154 474 | 180 795 | 334 880 | 607 829 | - | - | - | - | - | - | 489 354 | 788 624 | |
+--------------------+-----------+-----------+-----------+---------+-----------+---------+---------+---------+----------+-----------+-----------+-----------+-----------+----------+
| Segment revenue | (R/tonne) | 131.88 | 119.59 | 813.55 | 632.65 | | | | | | | | | |
| per tonne sold | | | | | | | | | | | | | | |
+--------------------+-----------+-----------+-----------+---------+-----------+---------+---------+---------+----------+-----------+-----------+-----------+-----------+----------+
| Segment | | | | | | | | | | | | | | |
| profit/(loss) | | | | | | | | | | | | | | |
| before tax | | | | | | | | | | | | | | |
+--------------------+-----------+-----------+-----------+---------+-----------+---------+---------+---------+----------+-----------+-----------+-----------+-----------+----------+
| Segment profit per | (R/tonne) | 33.05 | 31.43 | 292.50 | 134.10 | | | | | | | | | |
| tonne sold | | | | | | | | | | | | | | |
+--------------------+-----------+-----------+-----------+---------+-----------+---------+---------+---------+----------+-----------+-----------+-----------+-----------+----------+
| - Segment result | | 38 715 | 47 524 | 120 402 | 128 840 | - | - | (5 | 504 | - | (3 943) | 153 616 | 172 925 | |
| | | | | | | | | 501)* | | | | | | |
+--------------------+-----------+-----------+-----------+---------+-----------+---------+---------+---------+----------+-----------+-----------+-----------+-----------+----------+
| - Impairment loss | | - | - | - | (1 327) | - | - | - | - | - | - | - | (1 327) | |
| on goodwill | | | | | | | | | | | | | | |
| acquired | | | | | | | | | | | | | | |
+--------------------+-----------+-----------+-----------+---------+-----------+---------+---------+---------+----------+-----------+-----------+-----------+-----------+----------+
| - Loss on sale of | | - | - | - | - | - | - | - | (79 170) | - | - | - | (79 170) | |
| subsidiary | | | | | | | | | | | | | | |
+--------------------+-----------+-----------+-----------+---------+-----------+---------+---------+---------+----------+-----------+-----------+-----------+-----------+----------+
| - Share of profit | | - | - | - | - | - | 78 185 | - | - | - | - | - | 78 185 | |
| of equity | | | | | | | | | | | | | | |
| accounted investee | | | | | | | | | | | | | | |
+--------------------+-----------+-----------+-----------+---------+-----------+---------+---------+---------+----------+-----------+-----------+-----------+-----------+----------+
| Segment | | 38 715 | 47 524 | 120 402 | 127 513 | - | 78 185 | (5 501) | (78 666) | - | (3 943) | 153 616 | 170 613 | |
| profit/(loss) | | | | | | | | | | | | | | |
| before tax | | | | | | | | | | | | | | |
+--------------------+-----------+-----------+-----------+---------+-----------+---------+---------+---------+----------+-----------+-----------+-----------+-----------+----------+
| Segment capital | | 21 614 | 16 327 | 81 384 | 277 327 | - | - | 19 827 | 2 598 | - | (2 288) | 122 825 | 293 964 | |
| expenditure - | | | | | | | | | | | | | | |
| combined | | | | | | | | | | | | | | |
+--------------------+-----------+-----------+-----------+---------+-----------+---------+---------+---------+----------+-----------+-----------+-----------+-----------+----------+
| Segment capital | | 21 614 | 16 327 | 24 659 | 190 919 | - | - | 19 827 | 2 598 | - | (2 288) | 66 100 | 207 556 | |
| expenditure | | | | | | | | | | | | | | |
+--------------------+-----------+-----------+-----------+---------+-----------+---------+---------+---------+----------+-----------+-----------+-----------+-----------+----------+
| Segment capital | | - | - | 56 725 | 86 408 | - | - | - | - | - | - | 56 725 | 86 408 | |
| expenditure - | | | | | | | | | | | | | | |
| pre-strip** | | | | | | | | | | | | | | |
+--------------------+-----------+-----------+-----------+---------+-----------+---------+---------+---------+----------+-----------+-----------+-----------+-----------+----------+
| Segment | | 12 433 | 10 335 | 102 984 | 120 702 | - | - | 293 | 177 | - | - | 115 710 | 131 214 | |
| depreciation - | | | | | | | | | | | | | | |
| combined | | | | | | | | | | | | | | |
+--------------------+-----------+-----------+-----------+---------+-----------+---------+---------+---------+----------+-----------+-----------+-----------+-----------+----------+
| Segment | | 12 433 | 10 335 | 15 288 | 29 425 | - | - | 293 | 177 | - | - | 28 014 | 39 937 | |
| depreciation | | | | | | | | | | | | | | |
+--------------------+-----------+-----------+-----------+---------+-----------+---------+---------+---------+----------+-----------+-----------+-----------+-----------+----------+
| Segment | | - | - | 87 696 | 91 277 | - | - | - | - | - | - | 87 696 | 91 277 | |
| depreciation - | | | | | | | | | | | | | | |
| pre-strip** | | | | | | | | | | | | | | |
+--------------------+-----------+-----------+-----------+---------+-----------+---------+---------+---------+----------+-----------+-----------+-----------+-----------+----------+
| Share option costs | | | | | | | | | | | | | | |
| included in | | | | | | | | | | | | | | |
| segment | | | | | | | | | | | | | | |
+--------------------+-----------+-----------+-----------+---------+-----------+---------+---------+---------+----------+-----------+-----------+-----------+-----------+----------+
| profit/(loss) | | - | - | - | - | - | - | - | 446 | - | - | - | 446 | |
| before tax | | | | | | | | | | | | | | |
+--------------------+-----------+-----------+-----------+---------+-----------+---------+---------+---------+----------+-----------+-----------+-----------+-----------+----------+
| Segment assets | | 296 714 | 228 612 | 690 707 | 653 148 | 495 661 | 495 661 | 486 516 | 355 908 | (367 108) | (259 999) | 1 602 490 | 1 473 330 | |
+--------------------+-----------+-----------+-----------+---------+-----------+---------+---------+---------+----------+-----------+-----------+-----------+-----------+----------+
| Segment | | 107 453 | 66 931 | 407 959 | 451 964 | - | - | 40 473 | 42 497 | (194 816) | (207 163) | 361 069 | 354 229 | |
| liabilities | | | | | | | | | | | | | | |
+--------------------+-----------+-----------+-----------+---------+-----------+---------+---------+---------+----------+-----------+-----------+-----------+-----------+----------+
*The losses in the Corporate Office in 2010 include an impairment charge of
R4.98 million against capital projects that are work-in-progress. In the year
ahead, this impairment charge will be re-assessed.
**The open pit mining profile at Somkhele requires that overburden be removed
from the pit before coal may be extracted. This overburden removal is
capitalised to the development cost of the open pit (so called "pre-stripping")
and is then expensed on a units-of-production basis as the coal is extracted
from the open pits.
The comparative results for the Anthracite division for the year ended 30 June
2009 include the results of Springlake. Springlake was sold on 29 June 2009. The
table included in the operational review depicts the Anthracite division's
operating performance for the comparative year with Springlake shown separately.
Notes to the Condensed Preliminary Consolidated Financial Statements for the
year ended 30 June 2010
1. Reporting entity
Petmin is a company domiciled in South Africa. The condensed preliminary
consolidated financial statements of the Group for the year ended 30 June 2010
comprise the Company and its subsidiaries (together referred to as the "Group")
and the Group's interests in associates.
The condensed preliminary consolidated financial statements were authorised for
issue by the directors on 6 September 2010.
2. Statement of compliance
The condensed preliminary consolidated financial statements have been prepared
in accordance with the recognition and measurement requirements of International
Financial Reporting Standards (IFRS), the AC 500 Standards, the presentation and
disclosure requirements of IAS 34 - Interim Financial Reporting, the JSE Limited
("JSE") Listings Requirements and the South African Companies Act. The condensed
preliminary consolidated financial statements do not include all of the
information required for full annual financial statements and should be read in
conjunction with the consolidated annual financial statements for the year ended
30 June 2009, which are available upon request from the Company's registered
office at Parc Nouveau, Third Floor, Block C, 225 Veale Street, Brooklyn,
Pretoria or at www.petmin.co.za.
3. Significant accounting policies
The condensed preliminary consolidated financial statements are prepared on the
historical cost basis, except for financial instruments which are stated at fair
value, where applicable, in terms of IAS 32 - Financial Instruments:
Presentation and IAS 39 - Financial instruments: Recognition and Measurement.
The accounting policies have been applied consistently by Group entities and
have been applied consistently to all periods presented in these condensed
preliminary consolidated financial statements, with the exception of the
adoption of the following amendments, standards or interpretations with effect
from 1 July 2009:
IFRS 8 - Operating Segments
IFRS 8 introduces a management reporting approach to identifying and measuring
the results of reportable segments. The characteristics of the reportable
segments are no longer strictly linked to geography or product line. The
adoption of IFRS 8 had no material effect on the disclosures in the financial
statements.
IAS 27 (revised) - Consolidated and Separate Financial Statements
The adoption of IAS 27 will primarily impact on future business combinations
with the main changes being the expensing of transaction costs, accounting for
contingent consideration and step acquisitions and additional disclosure
requirements.
Functional and presentation currency: The condensed preliminary consolidated
financial statements are presented in Rand, which is the Company's functional
currency. All financial information presented in Rand has been rounded to the
nearest thousand.
4. Estimates and judgements
The preparation of the condensed preliminary consolidated reviewed financial
statements in conformity with IAS 34 - Interim Financial Reporting requires
management to make judgements, estimates and assumptions that affect the
application of policies and reported amounts of assets and liabilities, income
and expenses. The estimates and associated assumptions are based on historical
experience and various other factors that are believed to be reasonable under
the circumstances, the results of which form the basis for making the judgements
about carrying values of assets and liabilities that are not readily apparent
from other sources. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis.
Revisions to accounting estimates are recognised in the period in which the
estimate is revised if the revision affects only that period or in the period of
the revision and future periods if the revision affects both current and future
periods.
The significant judgements made by management in applying the Group's accounting
policies and the key sources of estimation uncertainty were the same as those
applied to the consolidated financial statements as at and for the year ended 30
June 2009.
5. Review of results
The results of the Group as set out above have been reviewed by the Group's
auditors, KPMG Inc. The review report is available for inspection at the Group's
registered office.
6. Earnings per share
Earnings per share ("EPS") are based on the Group's profit for the year, divided
by the weighted average number of shares in issue during the year.
+----------------------------+----------+-----------+----------+----------+-----------+--------+
| | Reviewed | Audited |
| | Year ended | Year ended |
| | 30 June | 30 June |
| | 2010 | 2009 |
+----------------------------+---------------------------------+-------------------------------+
| | Profit | Number | | Profit | Number | |
| | for | of | | for | of | |
+----------------------------+----------+-----------+----------+----------+-----------+--------+
| | the year | shares | Per | the year | shares | Per |
| | | in | share | | in | share |
+----------------------------+----------+-----------+----------+----------+-----------+--------+
| | R'000 | thousands | in cents | R'000 | thousands | in |
| | | | | | | cents |
+----------------------------+----------+-----------+----------+----------+-----------+--------+
| Basic earnings per share | 107 717 | 564 135 | 19.09 | 118 364 | 541 354 | 21.86 |
+----------------------------+----------+-----------+----------+----------+-----------+--------+
| Share options and | | | | | | |
| contingent | | | | | | |
+----------------------------+----------+-----------+----------+----------+-----------+--------+
| consideration | - | 3 559 | (0.12) | - | 31 035 | (1.18) |
+----------------------------+----------+-----------+----------+----------+-----------+--------+
| Diluted EPS | 107 717 | 567 694 | 18.97 | 118 364 | 572 389 | 20.68 |
+----------------------------+----------+-----------+----------+----------+-----------+--------+
Headline earnings per share
Headline earnings per share is based on the Group's headline earnings divided by
the weighted average number of shares in
+-----------------------------+---------+----------+----------+-----------+----------+---------+
| issue during the year. |
+----------------------------------------------------------------------------------------------+
| Reconciliation between earnings and headline earnings per share: |
+----------------------------------------------------------------------------------------------+
| Basic EPS | 107 717 | 564 135 | 19.09 | 118 364 | 541 354 | 21.86 |
+-----------------------------+---------+----------+----------+-----------+----------+---------+
| Adjustments: | | | | | | |
+-----------------------------+---------+----------+----------+-----------+----------+---------+
| - Impairment of goodwill | - | - | - | 1 327 | - | 0.25 |
+-----------------------------+---------+----------+----------+-----------+----------+---------+
| - Loss on sale of | - | - | - | 79 170 | - | 14.62 |
| subsidiary | | | | | | |
+-----------------------------+---------+----------+----------+-----------+----------+---------+
| - Share of profit of equity | - | - | - | ( 78 185) | - | (14.44) |
| accounted investee | | | | | | |
+-----------------------------+---------+----------+----------+-----------+----------+---------+
| Headline EPS | 107 717 | 564 135 | 19.09 | 120 676 | 541 354 | 22.29 |
+-----------------------------+---------+----------+----------+-----------+----------+---------+
| Share options and | - | 3 559 | (0.12) | - | 31 035 | (1.21) |
| contingent consideration | | | | | | |
+-----------------------------+---------+----------+----------+-----------+----------+---------+
| Diluted headline EPS | 107 717 | 567 694 | 18.97 | 120 676 | 572 389 | 21.08 |
+-----------------------------+---------+----------+----------+-----------+----------+---------+
Headline earnings in the 2009 comparatives included R21.848 million of earnings
from Springlake which was disposed of in June 2009. If these earnings are
removed from the comparative headline earnings, "like-for-like" headline
earnings for the year ended 30 June 2009 were 18.26 cents per share.
7. Directors' valuation
The directors' valuation of the Group's life of mine cash flows including the
cost of the Corporate Office (discounted on a real basis at 10%), amounts to 445
cents per share on a fully diluted basis. This valuation is based on current
operations plus the second coal processing plant at Somkhele, but excludes any
benefits from the exploration programme at Somkhele.
8. Related parties
Dark Capital (Pty) Limited ("Dark Capital"), Petmin's anchor black economic
empowerment shareholder, is a material shareholder in Petmin and is therefore a
related party as defined by Section 10 of the JSE Listings Requirements.
8.1 Loan to and transactions with related party
As disclosed in the annual financial statements for the year ended 30 June 2009,
the Company advanced an interest-bearing loan of R11 million to Dark Capital.
The loan is secured by the cession of the shareholders' claim held by the Dark
Trust in Dark Capital.
The Company paid corporate and deal structuring advisory fees of GBP 184,241.00
(2009: nil) to Dark Research Limited, a company in the Dark Capital group of
companies.
8.2 Exercise of options and share-based payment
As disclosed in the interim results for the six months ended 31 December 2009,
the Company was informed that directors and employees exercised 4 250 000
options with an exercise price of 45 cents per share and 12 050 000 options with
an exercise price of 65 cents per share during the six months to 31 December
2009.
Between 1 January 2010 and 30 June 2010, the Company was informed that executive
directors and employees exercised 17 370 000 options with an exercise price of
65 cents per share. The options were awarded in terms of a share incentive
scheme approved by shareholders on 19 July 2005.
On 16 September 2009, the Company transferred 727 222 Petmin shares from the
treasury to Bradley Doig, in accordance with his contract of employment with the
Company, signed in 2006.
8.3 Executive remuneration scheme
In order to attract and retain quality management and as an incentive to ensure
the continued growth of the Group, and at all times to ensure alignment with
shareholders, the Remuneration Committee established the original incentive
scheme on 1 July 2005. The original scheme continued for three years to 30 June
2008 and the Executive Committee ("Exco") at the time agreed to renew their
employment agreements for a further three-year period to 30 June 2011 ("the
Amended Scheme").
The Petmin Remuneration Committee continues to monitor the remuneration scheme
to ensure effective alignment of the interests of management to those of
Petmin's shareholders. As evidence of this alignment, in the twelve months to 30
June 2010, Petmin executive directors acquired 18 734 000 Petmin shares on the
open market at an average price of R2.57 per share for a total consideration of
R48 241 400.
With the appointment of Ian Cockerill as executive chairman for an initial
period of three years from 1 July 2010, Jan du Preez, Bradley Doig, Lebo Mogotsi
and Bruce Tanner have extended their individual service contracts with the
Company for a further two years to 30 June 2013.
In respect of the three years to 30 June 2013, the Amended Scheme is to be
further amended ("the June 2013 Scheme") to take into account various views from
shareholders in order to align the goals of the executives more closely with
shareholders. The June 2013 Scheme is to be presented to shareholders for their
approval at the next Annual General Meeting.
8.4 Other transactions with related parties
No other related party transactions were entered into.
9. Change in directors
On 7 July 2009, Petmin announced the appointment of Bruce Tanner as Financial
Director of Petmin with effect from 1 July 2009. Bruce joined Petmin in 2005 as
Group Financial Manager and Chief Financial Officer and has served on the
Executive Committee since joining the Group.
On 1 March 2010, Petmin announced that Ian Cockerill was appointed as an
executive director with immediate effect and he assumed the role of Executive
Chairman with effect from 1 July 2010. Ian's role is to guide the Petmin team in
pursuit of its aggressive growth strategy. Ian has served Petmin as a
non-executive director since 1 October 2007.
Petmin extends its thanks to former Chairman Piet Nel who has guided Petmin
through its formative years. Piet remains a director of Petmin.
10. Subsequent events
10.1 Declaration of Dividend
The Company approved a dividend policy whereby a dividend of 20% of headline
earnings per share will be paid annually after year-end, with consideration
being given to the underlying growth in earnings, working capital and capital
expenditure requirements.
The Company declared a dividend of 6 cents per share, comprising 4 cents per
share which is in line with the approved dividend policy and a special dividend
of 2 cents per share which is based on the proceeds received on the sale of
Springlake. The record date for payment of the cash dividend is 1 October 2010.
Please refer to the separate announcement of the notice of declaration of
dividend dated 8 September 2010 for more details.
10.2 Financial assistance to Dark Capital
As approved by shareholders at the AGM held on 27 January 2010. Petmin provided
the financial assistance to Dark Capital on 20 August 2010 in order to maintain
Petmin's BEE shareholding for a three-year period.
As security for Petmin's assistance, Dark Capital has pledged to Petmin 45
million Petmin shares registered in the name of Dark Capital and has furthermore
agreed to a lock-in clause for a further 75 million Petmin shares held by the
Dark Capital group. The lock-in clause precludes Dark Capital from selling, or
otherwise alienating or encumbering the 75 million lock-in shares until such
time as there are no further actual or contingent obligations arising from
Petmin's financial assistance.
There have been no other events that have occurred subsequent to 30 June 2010
which require adjustment of, or disclosure in the financial statements or notes
thereto in accordance with IAS
10 - Events After the Reporting Date.
(i) Operations
Revenue for the year ended 30 June 2010 was R489 million (2009: R789 million).
The comparative revenue amount included R264 million from Springlake Colliery,
which was sold on 29 June 2009. Revenues at both the Silica and Anthracite
divisions were affected by poor market conditions in the first quarter of
financial year ("FY") 2010, with market conditions steadily improving throughout
the remainder of FY 2010.
Profit before tax was R154 million (2009: R171 million). The reduction of R17
million from 2009 was principally due to the comparative number including profit
before tax of R33 million from Springlake.
The Group achieved a gross profit margin of 37% (2009: 27%) as a result of
improved cost management and an increase in selling prices at both the Silica
and Anthracite segments.
Operations remained strongly cash generative with cash of R321 million (2009:
R225 million) being generated by operations after inflows from changes in
working capital of R51 million (2009: outflows of R62 million).
Capital expenditure of R123 million (2009: R291 million) was incurred in the
year to
30 June 2010, with R57 million spent on pre-stripping of the open pits at
Somkhele (2009: R86 million), R55 million to expand operations (2009: R188
million) and R11 million to maintain operations (2009: R17 million).
The ratio of interest-bearing debt to equity at 30 June 2010 was 7.55% (2009:
9.97%) . An amount of R35 million was drawn on the medium-term facility at
SamQuarz during FY 2010. The Rand Asia debtor financing facility of R38 million
was repaid during FY 2010.
The Group currently has unutilised debt facilities of approximately R110 million
with its bankers. With significant cash resources, low gearing and available
debt facilities, Petmin has created a platform for future growth.
Anthracite division
Somkhele anthracite mine, Springlake Colliery (sold effective 29 June 2009) and
Petmin Logistics
Management is pleased to report that the Anthracite division produced 467 843
tonnes (2009: excluding Springlake 454 187 tonnes) (2009: including Springlake 1
016 940 tonnes) and sold 411 630 tonnes (2009: excluding Springlake 481 638
tonnes) (2009: including Springlake 960 764 tonnes) of anthracite in the year to
30 June 2010.
During the first three months of FY 2010 the anthracite market was severely
curtailed with the local ferrochrome industry reducing production by 90%. We are
pleased to report that the market for metallurgical anthracite has subsequently
recovered and, during the second half of FY 2010, we were in a fully sold
position.
A net profit margin of 36% was achieved in the Anthracite division during the
year ended 30 June 2010 (2009: 21%) (2009: 28% excluding Springlake). This was a
result of improved selling prices and effective cost control at the Somkhele
colliery.
Due to market conditions prevailing in the first half of FY 2010, commencement
of extraction of coal from Area 1 was delayed, pending a visible sustainable
increase in market demand. Mine development has commenced in Area 1 subsequent
to 30 June 2010.
+--------------------------------+-----------+------------+------------+------------+-----------+----------+
| | Anthracite - analysis of comparative periods |
+--------------------------------+-------------------------------------------------------------------------+
| | | | Excluding | | | |
+--------------------------------+-----------+------------+------------+------------+-----------+----------+
| | | Anthracite | Springlake | Springlake | Combined | |
+--------------------------------+-----------+------------+------------+------------+-----------+----------+
| | Units in | Year | Year | Year | Year | |
+--------------------------------+-----------+------------+------------+------------+-----------+----------+
| | R'000 | ended | ended | ended | ended | |
+--------------------------------+-----------+------------+------------+------------+-----------+----------+
| | unless | 30 June | 30 June | 30 June | 30 June | |
+--------------------------------+-----------+------------+------------+------------+-----------+----------+
| | otherwise | 2010 | 2009 | 2009 | 2009 | |
+--------------------------------+-----------+------------+------------+------------+-----------+----------+
| | specified | R'000 | R'000 | R'000 | R'000 | |
+--------------------------------+-----------+------------+------------+------------+-----------+----------+
| Saleable tonnes produced | (tonnes) | 467 843 | 454 187 | 562 753 | 1 016 940 | |
+--------------------------------+-----------+------------+------------+------------+-----------+----------+
| Tonnes sold | (tonnes) | 411 630 | 481 638 | 479 126 | 960 764 | |
+--------------------------------+-----------+------------+------------+------------+-----------+----------+
| Segment revenue | | 334 880 | 343 506 | 264 323 | 607 829 | |
+--------------------------------+-----------+------------+------------+------------+-----------+----------+
| Segment revenue per tonne | | | | | | |
+--------------------------------+-----------+------------+------------+------------+-----------+----------+
| sold* | (R/tonne) | 813.55 | 713.20 | 551.68 | 632.65 | |
+--------------------------------+-----------+------------+------------+------------+-----------+----------+
| Segment profit/(loss) before | | | | | | |
| tax: | | | | | | |
+--------------------------------+-----------+------------+------------+------------+-----------+----------+
| Segment profit per tonne sold** | 292.50 | 198.34 | 69.53 | 134.10 | |
| (R/tonne) | | | | | |
+--------------------------------------------+------------+------------+------------+-----------+----------+
| - segment result | | 120 402 | 95 526 | 33 314 | 128 840 | |
+--------------------------------+-----------+------------+------------+------------+-----------+----------+
| - Impairment loss on goodwill | | | | | | |
+--------------------------------+-----------+------------+------------+------------+-----------+----------+
| Acquired | | - | (1 327) | - | (1 327) | |
+--------------------------------+-----------+------------+------------+------------+-----------+----------+
| Segment profit before tax | | 120 402 | 94 199 | 33 314 | 127 513 | |
+--------------------------------+-----------+------------+------------+------------+-----------+----------+
| Segment capital expenditure | | | | | |
+--------------------------------------------+------------+------------+------------+-----------+----------+
| - combined | | 81 384 | 263 409 | 13 918 | 277 327 | |
+--------------------------------+-----------+------------+------------+------------+-----------+----------+
| Segment capital expenditure | | 24 659 | 177 001 | 13 918 | 190 919 | |
+--------------------------------+-----------+------------+------------+------------+-----------+----------+
| Segment capital expenditure - | | | | | | |
+--------------------------------+-----------+------------+------------+------------+-----------+----------+
| pre-strip | | 56 725 | 86 408 | - | 86 408 | |
+--------------------------------+-----------+------------+------------+------------+-----------+----------+
| Segment depreciation | | | | | | |
+--------------------------------+-----------+------------+------------+------------+-----------+----------+
| - combined | | 102 984 | 104 660 | 16 042 | 120 702 | |
+--------------------------------+-----------+------------+------------+------------+-----------+----------+
| Segment depreciation | | 15 288 | 13 383 | 16 042 | 29 425 | |
+--------------------------------+-----------+------------+------------+------------+-----------+----------+
| Segment depreciation - | | 87 696 | 91 277 | - | 91 277 | |
| pre-strip | | | | | | |
+--------------------------------+-----------+------------+------------+------------+-----------+----------+
*The weighted average Rand/US Dollar exchange rate for the year ended 30 June
2010 was 7.4092 (2009: 9.090).
**Segment profit per tonne sold is the segment profit before tax (after
depreciation, amortisation and interest) divided by the tonnes sold.
Silica division
SamQuarz silica mine
SamQuarz produced 1 255 559 tonnes (2009: 1 333 613 tonnes) of silica and chert
in the year ended30 June 2010.
ales volumes reduced by 22.5% to 1 171 355
tonnes (2009: 1 511 850 tonnes). Silica rock sales were affected by
poor
arket conditions for the first three-quarters of the period under
review but subsequently improved. Chert rock sales declined as sales into
parastatal infrastructure development in areas within an economic transport
radius of SamQuarz declined. With the reduced sales volumes, the Silica
division's profit before tax declined by 18.5% to R39 million (2009: R48
million). Profit margin per tonne sold improved by 5% in 2010.
Capital expenditure totalling R21.6 million (2009: R16.3 million) was incurred
in the year ended30 June 2010. 72% of the capital spend was focused on the
development of the open pit to ensure safe mining conditions and to ensure
continued supply of correct quality material to our customers. 26% of the
capital spend was on plant and equipment to maintain production, with the
remaining balance on office and computer equipment.
(ii) Investment in the Veremo pig-iron project
Petmin is a 25 percent shareholder in Veremo Holdings (Pty) Limited and 75
percent is ultimately controlled by Kermas Limited ("Kermas"). Veremo is the
owner of the Stoffberg magnetite project containing iron ore and titanium ("the
Project").
During the year under review, Veremo finalised a core drilling and core sampling
programme together with a trenching campaign as part of a final geological
scoping study. The infill drill programme covered high priority areas identified
from previous drilling campaigns with the aim of delineating a SAMREC compliant
measured resource. The prime objective of the drilling programme was to
establish the thickness of the highly weathered "cap" of Ti-magnetite Layer 21
("L21") in the so-called "platform" areas where L21 outcrops over a width of up
to 600 metres.
As disclosed in the interim financial statements for the six months ended 31
December 2009, this drilling programme has delineated measured and inferred
resources in the weathered zone of the ore body. This weathered material is
easier and cheaper to mine and process than the fresh ore and, as a result,
additional weathered material is beneficial to the Project economics.
Petmin's position in Veremo remains unchanged and Petmin is working closely with
Kermas on all aspects of the Project and believes these recent events signal a
positive trend for the future development of the Project.
(iii)Prospects
Anthracite division
The colliery is operating at full production capacity and is currently in a
fully sold position.
Consequently, as announced on 22 July 2010, the Petmin Board has approved
capital expenditure of R120 million for the construction of a second coal
processing plant at Somkhele. The construction of the second plant will double
the current production capacity to approximately 1.1 million sales tonnes a
year.
It is anticipated that construction and commissioning will be completed during
the first quarter of 2012.
We have also approved an R18 million accelerated exploration programme for FY
2011 at Somkhele with the aim of significantly increasing our measured
resources.
Silica division
We anticipate improved sales volumes in the year ahead with demand from the
metallurgical sector resulting in increased sales of silica rock and with
requests for increased off-take of glass-grade silica from our glass customers.
Capital expenditure is expected to increase to approximately R60 million in the
year ahead with increased investment in pit development, production expansion
and plant optimisation programmes at SamQuarz in order to meet increased demand
from our glass industry customers.
Iron ore project
Our focus in the year ahead will be to assist our partners in the Veremo Project
with the finalisation of the mining right application over the Project area. A
Veremo project team is in the process of completing a bankable feasibility study
in support of the mining right application.
(iv)General
Petmin is well positioned for organic and acquisitive growth with low gearing
and substantial cash resources. The objective of our growth strategy is to
provide superior returns to investors. The opportunities currently being
assessed relate primarily to commodities that feed into infrastructure growth
and urbanisation (in essence the steel value chain) and comprise a mix of cash
producing assets and projects with a diverse geographic spread.
More details on Petmin can be found on our website www.petmin.com.
+-----------------------------+--------------------------------+
| By order of the Board | |
+-----------------------------+--------------------------------+
| I D Cockerill | J C du Preez |
+-----------------------------+--------------------------------+
| Executive Chairman | Chief Executive Officer |
+-----------------------------+--------------------------------+
| Pretoria | Sponsor |
+-----------------------------+--------------------------------+
| 8 September 2010 | River Group |
+-----------------------------+--------------------------------+
Directors: I Cockerill# (Executive Chairman), L Mogotsi (Deputy Chairman), J C
du Preez (Chief Executive Officer), B B Doig (Chief Operating Officer), B Tanner
(Financial Director), E de V Greyling*, A Martin*, P J Nel*, J A Strijdom*, J
Taylor* *Non-executive #British
Registered office: Parc Nouveau, Third Floor, Block C, 225 Veale Street,
Brooklyn, Pretoria, 0002 (PO Box 899, Groenkloof, 0027)
Corporate office: 37 Peter Place, Bryanston, 2021 Tel: (011) 706 1644 Fax: (011)
706 1594 Website: www.petmin.co.za
Secretary and sponsor - JSE: River Group
Nominated adviser - AIM: Numis Securities Limited, Tel: +44 (0) 207 260 1000
Transfer secretaries: JSE: Computershare Investor Services (Proprietary)
Limited, AIM: Computershare Investor Services PLC
Auditors: KPMG Inc.
A PDF version of these results is available on our website: www.petmin.co.za
This information is provided by RNS
The company news service from the London Stock Exchange
END
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