TIDMIPLA
IMPALA PLATINUM HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
Registration No. 1957/001979/06
JSE share code: IMP ISIN: ZAE 000083648
LSE: IPLA ADR's: IMPUY
("Implats" or "the Company" or "the Group")
Condensed audited consolidated annual results
Year ended 30 June 2012
Highlights
Safety
Mixed performance and a new cultural transformation model required
Production and costs
Six week strike contributes to a 21% reduction in platinum produced to
1.45 million ounces and a 24% increase in unit costs to R13 450 per platinum
ounce
Profit
Gross profit reduced by 40% to R6.9 billion and net profit by 37% to
R4.3 billion
Capex
Capital investment, primarily on major long-term projects, increased by 38% to
R7.3 billion
Earnings and dividend
Headline earnings 38% lower and the final dividend reduced to 60 cps
Market
The market for PGMs under pressure although automotive demand remains resilient
Commentary
Introduction
The period under review has been dominated by a weakening macro-economic
environment driven primarily by the Eurozone crisis. This crisis has, in
particular, led to lower platinum group metals (PGM) prices which are now
impacting the platinum mining industry. At the same time, the South African
platinum mining industry has seen the emergence of a new labour union which is
impacting workplace dynamics and in turn operational performance.
Disappointingly, the six week illegal strike at the Impala operations had a
significant impact on the production of PGMs and the financial performance of
the Group in FY2012. Cash preservation strategies have been implemented to
manage the economic downturn and operations are continually being assessed to
ensure profitability. A full review of the capital spend has been completed and
spend for FY2013 has been reduced to R6.4 billion as compared to the R7.3
billion spent in the current year. Impala's three new shaft projects, with a
collective further investment of R10.2 billion over the next five years, remain
on track for future replacement production. The US$460 million phase 2
expansion at Zimplats continues to make progress. The conclusion of
indigenisation negotiations with the Zimbabwe government remains outstanding
for both Zimplats and Mimosa.
Safety
A major new initiative is required to change safety performance at the South
African operations. It is with regret that seven employees and five contractors
died in work-related accidents during FY2012. Eleven of these accidents
happened at the Impala operations in Rustenburg and there was one accident at
Marula. The Group fatal injury frequency rate for the year was 0.087 per
million hours worked and regressed by 64% compared to FY2011. The lost time
injury rate at 4.96 per million man hours worked for FY2012 remained at similar
levels to FY2011 and the total injury frequency rate improved by 17% to 11.9
per million man hours worked.
There were a number of notable safety milestone achievements in the year. At
Impala, major achievements in terms of fatality free shifts were as follows: #1
shaft: five million, #12 shaft: three million, #11 shaft: two million, #14
shaft and #16 shaft one million each. Refineries progressed to 8.8 million
fatality free shifts and Marula also achieved two million fatality free shifts.
Zimplats reached eight million fatality free shifts and achieved its lowest
ever lost time injury frequency rate of 0.21 per million man hours worked.
Zimplats' Ngwarati and Rukodzi Mines, Impala's opencast mining section, as well
as Zimplats' Processing section all achieved zero lost time injuries over the
12 month period.
There are a number of major safety initiatives underway. These include the
implementation of new policies, the development and implementation of a new
cultural transformation framework, improved hazard identification and risk
assessment systems, increased training for middle managers, full accredited
training for 3 200 safety representatives by 2014 and driving the DuPont STOP
process. The South African operations have committed to installing safety nets
in addition to hanging wall bolts on both the Merensky and UG2 stoping horizons
and installing proximity warning devices on mobile trackless mining equipment.
Implats has also joined the Chamber of Mines as a full member with a view to
participating in, and contributing to, tripartite industry health and safety
initiatives.
Market review
Events influencing PGM markets were centred around macro-economic events rather
than fundamentals for the metals themselves. The recovery seen in world markets
post the 2008/9 global financial crisis has been impacted by the financial woes
currently being experienced in Europe.
Record average prices for platinum (US$1 732 per ounce) and palladium (US$734
per ounce) during 2011 deflated sharply in September 2011 when first Greece and
then Italy's fiscal problems became known. Investor sentiment shifted to one of
lowering risk through heavily liquidating forward markets. As a result,
platinum prices fell from a high of US$1 880 per ounce in September 2011 to a
low of US$1 538 per ounce in that month - an 18% decline. In the same month,
palladium prices fell from a high of US$786 per ounce to a low of US$626 per
ounce - a reduction of 20%.
A short-term platinum price recovery was seen early in 2012 and this was driven
by lower interest rates and the strike at Impala in Rustenburg. However,
European concerns and negative investor sentiment saw platinum prices reduce
from a high of US$1 700 per ounce in February 2012 to US$1 400 per ounce by the
end of June 2012. Palladium was similarly affected and closed the year at
US$568 per ounce. These prices, in conjunction with low productivity and high
mining costs, have stressed the platinum mining industry.
AUTOMOTIVE DEMAND
When compared to 2010, light duty vehicle sales for 2011 increased by 4% to 75
million units. For the six months of 2012, in excess of 40 million vehicles
were sold, pointing to an annualised rate of nearly 81 million units, driven
primarily by increases in the US, China and Japan, offsetting the weakness in
Europe. This level of sales underpins demand for PGMs.
JEWELLERY DEMAND
Platinum jewellery sales for 2011 increased by 2.5% when compared to sales in
2010. This increase was driven by Chinese purchasers taking advantage of lower
platinum metal prices and its relative discount to the price of gold. Sales for
the first half of 2012 have continued at these modest rates.
INVESTMENT DEMAND
On the physical exchange traded fund (ETF) market investment in platinum
increased by 140 000 ounces during 2011 and continued to grow marginally to
June 2012 with the current balance now totalling 1.45 million ounces. Palladium
holdings reduced by over half a million ounces during 2011 to end at 1.74
million ounces. This has since recovered somewhat and the balance at the end of
June 2012 was 2.06 million ounces.
However it is in the forward markets that most of the change has occurred. In
September 2011 over 0.8 million ounces of platinum and 1.1 million ounces of
palladium were liquidated and were the main drivers for the price reductions
during that period. During the first six months of 2012 there has been a
marginal increase in platinum holdings whilst palladium witnessed further
liquidation.
Financial review
The financial performance of the Group for FY2012 was significantly affected by
the six week strike at Impala during February and March 2012. Revenues, at
R27.6 billion, were R5.5 billion lower from that achieved in FY2011. Reduced
volumes contributed R6.1 billion of this and was made up as follows:
* The strike reduced platinum production by 150 000 ounces, palladium
production by 77 000 ounces, rhodium production by 19 000 ounces and nickel
production by 900 tonnes. This reduced revenue by R2.8 billion.
* A stock build-up in the current year, compared to a release in the previous
year, resulted in lower revenue of R2.2 billion.
* Other reductions in volumes at Impala, partially due to safety stoppages
combined with lower volumes through IRS, resulted in lower revenues of R1.1
billion.
In total, lower dollar metal prices reduced revenues by R1.9 billion, primarily
due to reduced US$ prices for platinum, rhodium and nickel which each reduced
by 5%, 30% and 19% respectively. This was more than offset by the weaker rand
of R7.71 (previous year of R7.03) which resulted in revenues increasing by R2.4
billion.
Group unit costs increased by 24% from R10 867 per platinum ounce to R13 450
per ounce and were affected by:
* Group inflation of 13.9% comprising:
Inflation for the South African operations of 12.3% due to:
- normal wage increases of 10.0%;
- once off additional wage adjustments of 3.9%;
- consumables increasing by 7.4%; and
- an increase in the price of utilities of 22.8%.
Inflation at the Zimbabwean operations of 23.1% comprising dollar inflation of
11.2% compounded by a weaker rand.
The dollar inflation was mainly due to:-
- wage increases of 7.2%;
- consumables increasing by 5.4%; and
- electricity price increases of 47.8%.
* The lower volumes due to the strike (marginally offset by reduced costs)
resulted in unit costs increasing by 10.9%. Other reductions in volumes
accounted for a further 3% increase in unit costs, which was offset by the
change in the accounting estimate for the capitalisation of development costs.
Cash generated from operations amounted to R5.0 billion (FY2011: R8.3 billion).
Cash utilised on capital expenditure amounted to R7.3 billion (FY2011: R5.3
billion) mainly on #20, #16 and #17 shafts at Impala and the Ngezi phase 2
project at Zimplats. Cash reduced from R4.5 billion to R0.6 billion and total
borrowings in the Group increased by R1.2 billion to R3.0 billion, leaving the
Group in a net borrowed position at the year end. As a result, and given
expected continued pressure on margins, the Board has resolved to increase the
dividend cover to 3.5 times earnings, thereby limiting the final dividend to 60
cents per share.
Operational review
IMPALA
Performance at Impala was adversely affected by the six week illegal strike in
February and March 2012 and the slow build-up of mining volumes once the strike
had ended. The strike was caused by rock drill operators' dissatisfaction with
their wages. Initiatives are underway to normalise employee relations and
engender respect throughout the organisation.
Volumes mined reduced by 24% to 10.65 million tonnes for FY2012 while headgrade
reduced to 4.38 g/t and 1.71 million tonnes of low grade surface material was
processed. Production from the Merensky Reef horizon increased marginally to
43.4%. Conventional development metres, again mainly as a result of the strike,
reduced by 28% to 70.6 kilometres and this reduction has had a negative effect
on ore reserve flexibility. Overall, Impala had a 20% reduction in refined
platinum production to 750 100 ounces. Unit costs per refined platinum ounce
excluding share-based payments increased by 29% to R13 913 primarily due to the
low production volumes.
Capital expenditure increased by 24% to R5.3 billion, the bulk of which was
spent on the new #20, #16, and #17 shaft development projects and decline
brownfield projects. It is pleasing to report that #20 shaft has now commenced
with its production build-up. The equipping of the #16 shaft commenced during
the year and underground development continues via the ventilation shaft. At #
17 shaft, sinking has reached a position of 1 609m below surface and the
Merensky Reef intersection is being excavated and supported prior to the
resumption of sinking. Development on the 22nd level continued through the
ventilation shaft. The refrigeration plant construction is progressing well and
commissioning is planned for the December 2012 quarter.
A project to replace the final metals processing facility of the precious
metals refining plant has been approved for R2.1 billion. Subject to
legislative approvals, the project will start during FY2013 and is planned for
completion by 2019.
ZIMPLATS
Zimplats once again delivered an excellent operational performance. Tonnes
milled increased by 4% from FY2011 to 4.39 million resulting in a 3% increase
in platinum matte production of 187 100 ounces. Unit cost per platinum ounce in
matte increased by 6% to US$1 239, driven by steep increases in power tariffs
and wages.
The phase 2 expansion project remained on track. The concentrator and related
infrastructure development are on schedule for commissioning in April 2013,
whilst the tailings dam will be completed in September this year.
A new indigenisation plan presented to the Government of Zimbabwe in March 2012
was accepted in principle.
Management remains in discussions with the Government to finalise certain
critical details of the plan.
MIMOSA
Mimosa had a marginal increase in tonnes milled, grade and recoveries to 2.32
million, 3.9 g/t and 77.3% respectively. This resulted in a 1% increase in
platinum production in concentrate to 105 950 ounces. Unit costs per platinum
ounce in concentrate increased by 6% to US$1 453 due to a combination of higher
wage and power costs. The indigenisation plan is being advanced with the
Goverment of Zimbabwe and is receiving priority attention.
MARULA
Tonnes milled at Marula increased by 2.4% to 1.58 million tonnes which was in
line with planned levels. Grade declined by 4.8% to 4.18 g/t due to a higher
proportion of development tonnage in the latter part of the financial year.
With recoveries unchanged at 85.2%, platinum production in concentrate was 69
100 ounces. Unit costs per platinum ounce in concentrate, excluding share based
compensation, declined by 2.4% to R16 483.
TWO RIVERS
Tonnes milled at Two Rivers increased by 5.2% to 3.1 million tonnes. Whilst the
processing of the Merensky Reef trial mining reduced the headgrade by 2.1% to
3.86g/t, recoveries improved to 84.3%. The increase in tonnes milled boosted
platinum production to 149 900 ounces in concentrate. Unit costs increased by
12.5% to R10 814 per platinum ounce which was in line with planned levels.
IMPALA REFINING SERVICES (IRS)
Refined platinum production declined by 22% to 698 000 ounces due to a fall in
the third party and toll treatment contracts over which the Group has no
control. This was due to a combination of the once-off toll treatment for
Lonmin in the corresponding period a year ago, the closures at Aquarius
Platinum and operational challenges at Eastern Platinum.
AFPLATS
It is pleasing to announce that the Implats Board has approved the first phase
of the Leeuwkop capital project located on the Afplats property. The mine is
designed to produce 2.16 million tonnes per annum and 145 000 ounces of
platinum per annum from the UG2 Reef horizon between 1 000m and 1 800m below
surface. First production is planned in 2021 and will be sustained for a period
of 19 years. The UG2 will be mined at a relatively wide average 137cm channel
width. The total capital required in real terms is R9.8 billion of which R261
million has been approved for the sinking of the 10m diameter Main Shaft down
to 330m below surface during the next financial year.
Prospects
The global economic climate is finely balanced between a gradual recovery,
supported in some measure by further government stimulus packages, and an
unwelcome visit back to recession, driven by the inability of world leaders,
particularly those in Europe, to find sustainable solutions to their financial
woes. Whilst the former scenario, coupled with meaningfully reduced South
African supply would see the markets move towards tighter conditions thereby
supporting prices, the latter would result in further reduction in margins and
a reassessment of capital plans going forward.
KDK Mokhele TP Goodlace Johannesburg
Chairman Chief Executive Officer 23 August 2012
Declaration of final cash dividend
Notice is hereby given that a gross final dividend of 60 cents per share for
the year ended 30 June 2012 has been declared payable to shareholders of
ordinary shares. The dividend has been declared out of income reserves. The
number of ordinary shares in issue at the date of this declaration is 631.99
million. The dividend will be subject to a local dividend tax rate of 15% which
will result in a net dividend, to those shareholders who are not exempt from
paying dividend tax, of 51 cents per share. There are no Secondary Tax on
Companies (STC) credits to be set off against the dividend tax. The Company's
tax reference number is 9700/178/71/9. The salient dates relating to the
payment of the dividend are as follows:
Last day to trade cum dividend on the JSE Friday, 7th September 2012
First trading day ex dividend on the JSE Monday, 10th September 2012
Record date Friday, 14th September 2012
Payment date Monday, 17th September 2012
The dividend is declared in the currency of the Republic of South Africa.
Payments from the London transfer office will be made in United Kingdom
currency at a spot rate of exchange ruling on Thursday, 13th September 2012, or
on the first day thereafter on which a rate of exchange is available.
A further announcement stating the Rand/GBP conversation will be released
through the relevant South African and United Kingdom news services on Friday,
14th September 2012.
No share certificates may be dematerialised or rematerialised between Monday,
10th September 2012 and Friday, 14th September 2012, both days inclusive.
Dividends in respect of certificated shareholders will be transferred
electronically to shareholders' bank accounts on the payment date. In the
absence of specific mandates, dividend cheques will be posted to shareholders.
Shareholders who hold dematerialised shares will have their accounts at their
Central Securities Depository Participant ("CSDP") or broker credited on
17 September 2012.
By order of the Board
A Parboosing Johannesburg
Company Secretary 23 August 2012
Operating statistics
Year Year
ended ended
30June 30June
2012 2011
Gross refined production
Platinum (000oz) 1448 1836
Palladium (000oz) 950 1192
Rhodium (000oz) 210 262
Nickel (000t) 15.4 16.3
IRS metal returned (toll refined)
Platinum (000oz) 121 220
Palladium (000oz) 148 210
Rhodium (000oz) 25 42
Nickel (000t) 3.1 3.4
Sales volumes
Platinum (000oz) 1368 1665
Palladium (000oz) 765 1011
Rhodium (000oz) 183 221
Nickel (000t) 13.9 15.5
Prices achieved
Platinum (US$/oz) 1614 1691
Palladium (US$/oz) 687 670
Rhodium (US$/oz) 1601 2275
Nickel (US$/t) 19513 23965
Consolidated statistics
Average exchange rate achieved (R/US$) 7.71 7.03
Closing exchange rate for the period (R/US$) 8.17 6.77
Revenue per platinum ounce sold (US$/oz) 2601 2799
(R/oz) 20054 19677
Tonnes milled ex-mine (000t) 17788 20974
PGM refined production (000oz) 3016 3772
Capital expenditure (Rm) 8142 5540
Group unit cost per platinum ounce: (US$/oz) 1737 1545
Excluding share based cost (R/oz) 13450 10867
Group unit cost per PGM ounce: (US$/oz) 848 761
Excluding share based cost (R/oz) 6564 5350
Additional statistical information is available on the Company's internet
website.
Approval of the financial statements
The directors of the Company are responsible for the maintenance of adequate
accounting records and the preparation of the financial statements and related
information in a manner that fairly presents the state of the affairs of the
Company. These financial statements are prepared in accordance with
International Financial Reporting Standards and incorporate full and
responsible disclosure in line with the accounting policies of the Group which
are supported by prudent judgements and estimates.
The financial statements have been prepared under the supervision of the Chief
Financial Officer Ms B Berlin, CA(SA).
The directors are also responsible for the maintenance of effective systems of
internal control which are based on established organisational structure and
procedures. These systems are designed to provide reasonable assurance as to
the reliability of the financial statements, and to prevent and detect material
misstatement and loss.
The financial statements have been prepared on a going-concern basis as the
directors believe that the Company and the Group will continue to be in
operation in the foreseeable future.
The financial statements have been approved by the Board of directors and are
signed on their behalf by:
KDK Mokhele TP Goodlace Johannesburg
Chairman Chief Executive Officer 23 August 2012
Consolidated statement of financial position
As at As at
30June 30June
R millions Notes 2012 2011
Assets
Non-current assets
Property, plant and equipment 5 40169 33137
Exploration and evaluation assets 4294 4294
Intangible assets 1018 1018
Investment in associates 1021 904
Available-for-sale financial assets 32 15
Held-to-maturity financial assets 49 61
Loans 6 1227 2236
Prepayments 11129 11143
58939 52808
Current assets
Inventories 7081 5471
Trade and other receivables 4305 3989
Loans 6 538 232
Prepayments 571 562
Cash and cash equivalents 1193 4542
13688 14796
Total assets 72627 67604
Equity and liabilities
Equity attributable to owners of the Company
Share capital 15187 14228
Retained earnings 34949 34136
Other components of equity 32 (801)
50168 47563
Non-controlling interest 2307 2047
Total equity 52475 49610
Liabilities
Non-current liabilities
Deferred tax liability 9625 8337
Borrowings 7 2882 1698
Liabilities 812 831
Provisions 757 614
14076 11480
Current liabilities
Trade and other payables 4858 5656
Current tax payable 176 226
Borrowings 7 121 144
Bank overdraft 606 -
Liabilities 315 488
6076 6514
Total liabilities 20152 17994
Total equity and liabilities 72627 67604
Consolidated statement of comprehensive income
Year Year
ended ended
30June 30June
R millions Notes 2012 2011
Revenue 27593 33132
Cost of sales 8 (20641) (21490)
Gross profit 6952 11642
Other operating expenses (696) (645)
Royalty expense (664) (804)
Profit from operations 5592 10193
Finance income 314 343
Finance cost (305) (530)
Net foreign exchange transaction gains/(losses) 520 (448)
Other income/(expenses) 12 (235)
Share of profit of associates 117 238
Profit before tax 6250 9561
Income tax expense (1951) (2751)
Profit for the period 4299 6810
Other comprehensive income, comprising items
subsequently
reclassified to profit or loss:
Available-for-sale financial assets (3) 6
Deferred tax thereon - -
Exchange differences on translating foreign 1356 (692)
operations
Deferred tax thereon (379) 195
Other comprehensive income, comprising items not
subsequently
reclassified to profit or loss:
Actuarial loss on post-employment medical benefit (4) -
Deferred tax thereon 1 -
Total comprehensive income 5270 6319
Profit attributable to:
Owners of the Company 4180 6638
Non-controlling interest 119 172
4299 6810
Total comprehensive income attributable to:
Owners of the Company 5010 6213
Non-controlling interest 260 106
5270 6319
Earnings per share (cents per share)
Basic 690 1105
Diluted 689 1104
For headline earnings per share and dividend per share refer notes 9 and
10.
Consolidated statement of changes in equity
Number Share-
of shares based Total
issued Ordinary Share payment share Retained
R millions (million) shares premium reserve capital earnings
*
Balance at 30 June 2011 600.99 15 12 223 1 990 14 228 34 136
Shares issued
Share option scheme 0.13 - 8 8
Employee Share Ownership 5.45 1 868 82 951
Programme
Total comprehensive income 4 177
Dividends (3 364)
Balance at 30 June 2012 606.57 16 13 099 2 072 15 187 34 949
Balance at 30 June 2010 600.44 15 12 146 1 990 14 151 30 017
Shares issued
Share option scheme 0.11 - 7 7
Employee Share Ownership 0.44 - 70 70
Programme
Total comprehensive income 6 638
Dividends (2 519)
Balance at 30 June 2011 600.99 15 12 223 1 990 14 228 34 136
*The table above excludes the treasury shares, Morokotso Trust and the Implats
share incentive scheme as these special purpose entities are consolidated
Consolidated statement of changes in equity
Foreign Attributable to:
currency Total Owners Non-
other
Fair translation components of the controlling Total
value
R millions reserve reserve of equity Company interest equity
Balance at 30 June (9) (792) (801) 47 563 2 047 49 610
2011
Shares issued
Share option 8 8
scheme
Employee Share 951 951
Ownership Programme
Total comprehensive (3) 836 833 5 010 260 5 270
income
Dividends (3 364) (3
364)
Balance at 30 June (12) 44 32 50 168 2 307 52 475
2012
Balance at 30 June (15) (361) (376) 43 792 1 941 45 733
2010
Shares issued
Share option 7 7
scheme
Employee Share 70 70
Ownership Programme
Total comprehensive 6 (431) (425) 6 213 106 6 319
income
Dividends (2 (2
519) 519)
Balance at 30 June (9) (792) (801) 47 563 2 047 49 610
2011
*The table above excludes the treasury shares, Morokotso Trust and the Implats
share incentive scheme as these special purpose entities are consolidated
Consolidated statement of cash flows
Year Year
ended ended
30 June 30 June
R millions 2012 2011
Cash flows from operating activities
Profit before tax 6 250 9 561
Adjustments to profit before tax 1 499 1 107
Cash from changes in working capital (1 133) (371)
Exploration costs (63) (44)
Finance cost (150) (179)
Income tax paid (1 425) (1 805)
Net cash from operating activities 4 978 8 269
Cash flows from investing activities
Purchase of property, plant and equipment (7 284) (5 293)
Proceeds from sale of property, plant and equipment 52 4
Purchase of investment in associate (5) (55)
Payment received from associate on shareholders' loan 22 272
Loans granted (120) (33)
Loan repayments received 509 394
Prepayment made (233) -
Prepayments refunded 11 -
Finance income 281 250
Dividends received 9 5
Net cash used in investing activities (6 758) (4 456)
Cash flows from financing activities
Issue of ordinary shares 877 77
Lease liability repaid (44) (19)
Repayments of borrowings (197) (836)
Proceeds from borrowings 464 253
Dividends paid to Company's shareholders (3 364) (2 519)
Net cash used in financing activities (2 264) (3 044)
Net (decrease)/increase in cash and cash equivalents (4 044) 769
Cash and cash equivalents at beginning of year 4 542 3 858
Effect of exchange rate changes on cash and cash
equivalents held in
foreign currencies 89 (85)
Cash and cash equivalents at end of year 587 4 542
Segment information
The Group distinguishes its segments between mining operations, refining
services (which include metals purchased and toll refined) and other.
Management has determined the operating segments based on the business
activities and management structure within the Group. Operating segments have
consistently adopted the consolidated basis of
accounting and there are no differences in measurement applied.
Capital expenditure comprises additions to property, plant and equipment (note
5), including additions resulting from acquisitions through business
combinations.
Sales to the two largest customers in the Impala mining segment comprised 10%
and 12% (2011: 10% each) of total sales.
The statement of comprehensive income shows the movement from gross profit to
total profit before income tax.
Summary of business
segments:
2012 2011
R millions Revenue Gross profit Revenue Gross
profit
Mining
Impala 27 029 3 289 32 030 7 511
Mining 13 009 3 284 18 441 7 486
Metals purchased 14 020 5 13 589 25
Zimplats 3 665 1 784 3 709 2 133
Marula 1 197 (80) 1 300 (41)
Mimosa 1 201 518 1 284 717
Afplats* - (1) - (1)
Inter-segment adjustment (5 796) 140 (5 975) (34)
External parties 27 296 5 650 32 348 10 285
Refining services 14 069 1 372 14 273 1 419
Inter-segment adjustment (13 772) (70) (13 489) (62)
External parties 297 1 302 784 1 357
Total external parties 27 593 6 952 33 132 11 642
Capital Total Capital Total
R millions expenditure assets expenditure assets
Mining
Impala 5 269 45 149 4 240 43 500
Zimplats 2 137 8 394 840 5 568
Marula 223 3 268 242 3 317
Mimosa 248 1 979 186 1 593
Afplats* 265 7 514 32 7 264
Total mining 8 142 66 304 5 540 61 242
Refining services 4 972 5 330
Other 1 351 1 032
Total 8 142 72 627 5 540 67 604
*Includes Imbasa and Inkosi.
Notes to the financial information
1. General information
Impala Platinum Holdings Limited (Implats) is a primary producer of
platinum and associated platinum group metals (PGMs). The Group has
operations on the Bushveld Complex in South Africa and the Great Dyke in
Zimbabwe, the two most significant PGM-bearing ore bodies globally.
The Company has its primary listing on the Johannesburg Stock Exchange and
a secondary listing on the London Stock Exchange.
The condensed consolidated financial information was approved for issue on
23 August 2012 by the Board of directors.
2. Audit opinion
The consolidated statement of financial position at 30 June 2012 and the
related consolidated statement of comprehensive income, statement of changes in
equity and cash flow statement for the year then ended was audited by the
Group's auditors, PricewaterhouseCoopers Inc. The individual auditor assigned
to perform the audit is Mr JP van Staden. Their unqualified audit opinion is
available for inspection at the Company's registered office.
3. Basis of preparation
The condensed consolidated financial information for the year ended 30
June 2012 has been prepared in accordance with International Financial
Reporting Standards (IFRS) of the International Accounting Standards Board (in
particular IAS 34, 'Interim financial reporting'), the AC 500 standards as
issued by the Accounting Practices Board or its successor, requirements of the
South African Companies Act, 2008 and Listings Requirements of the JSE Limited.
The condensed consolidated financial information should be read in
conjunction with the annual financial statements for the year ended 30 June
2011, which have been prepared in accordance with IFRS. The condensed
consolidated financial information has been prepared under the historical cost
convention except for certain financial assets, financial liabilities and
derivative financial instruments which are measured at fair value and
liabilities for cash-settled share-based payment arrangements which are
measured with a binomial option model.
The condensed consolidated financial information is presented in South
African rand, which is the Company's functional currency.
4. Accounting policies
The principal accounting policies applied are in terms of IFRS and are
consistent with those of the annual financial statements for the previous year,
except for the adoption of various revised and new standards. The adoption of
these standards had no impact on the financial results of the Group, except as
indicated below:
- IAS 1 (amendment) Presentation of Financial Statements (effective 1 July
2012). Amendment requiring items of other comprehensive income being grouped
into those that will subsequently not be reclassified to profit and loss and
those that will. This amendment required disclosure in the statement of
comprehensive income indicating that all items will subsequently be
reclassified to profit and loss.
- IAS 19 (amendment) Employee Benefits (effective 1 January 2013). The
amendments eliminates the option to defer the recognition of actuarial gains
and losses, streamlines the presentation of changes in assets and liabilities
arising from defined benefit plans including the requirement that
remeasurements be presented in other comprehensive income, and enhances the
disclosure requirements for defined benefit plans to provide better information
about the characteristics of defined benefit plans and the risks that entities
are exposed to through participation in those plans.
- IAS 34 Interim Financial Reporting (effective 1 January 2013).
Consequential amendment from IFRS 13 requiring additional disclosure for
Financial Instruments in the Interim Financial Report.
5. Property, plant and equipment
R millions 2012 2011
Opening net book amount 33 137 29 646
Additions 8 104 5 539
Interest capitalised 38 1
Disposals (579) (54)
Depreciation (1 708) (1 372)
Exchange adjustment on translation 1 177 (623)
Closing net book amount 40 169 33 137
Capital commitment
Capital expenditure approved at 30 June 2012 amounted to R23.3 billion (2011:
R25.5 billion), of which R4.3 billion (2011: R2.0 billion) is already
committed. This expenditure will be funded internally and, if necessary, from
borrowings.
6.Loans
R millions 2012 2011
Summary - Balances
Shanduka Resources - 176
Employee housing 39 30
Advances 1 402 1 923
Reserve Bank of Zimbabwe (RBZ) 308 339
Contractors 16 -
1 765 2 468
Short-term portion (538) (232)
Long-term portion 1 227 2 236
Summary - Movement
Beginning of the year 2 469 2 558
Loans granted during the year 123 912
Present value adjustment - (284)
Interest accrued 76 140
Impairment (378) (87)
Repayment received (963) (446)
Exchange adjustments 438 (325)
End of the year 1 765 2 468
7.Borrowings
R millions 2012 2011
Summary - Balances
Standard Bank Limited - BEE Partners Marula 882 885
Standard Bank Limited - Loan 1 Zimplats expansion - 102
Standard Bank Limited - Loan 2 Zimplats expansion 637 244
Stanbic & Standard Chartered 63 -
Finance leases 1 421 611
3 003 1 842
Short-term portion (121) (144)
Long-term portion 2 882 1 698
Summary - Movement
Beginning of the year 1 842 2 128
Proceeds 464 253
Leases capitalised 769 373
Interest accrued 210 168
Repayments (372) (1
029)
Exchange adjustments 90 (51)
End of the year 3 003 1 842
8.Cost of sales
Included in cost of sales:
On-mine operations 9 906 9 862
Wages and salaries 5 811 5 590
Share-based compensation* (307) (90)
Materials and consumables 3 697 3 781
Utilities 705 581
Concentrating and smelting operations 2 777 2 601
Wages and salaries 561 517
Materials and consumables 1 375 1 355
Utilities 841 729
Refining operations 855 833
Wages and salaries 390 358
Share-based compensation (28) 8
Materials and consumables 392 383
Utilities 101 84
Depreciation of operating assets (note 5) 1 708 1 372
Metals purchased 6 855 6 835
Change in metal inventories (1 460) (13)
20 641 21 490
The following disclosure items are included in cost of sales:
Repairs and maintenance expenditure on property, plant and 1 119 1 038
equipment
Operating lease rentals 49 28
*Includes concentrating and smelting
9.Headline earnings
R millions 2012 2011
Headline earnings attributable to equity holders of the Company
arises
from operations as follows:
Profit attributable to owners of the Company 4 180 6 638
Adjustments:
Profit on disposal of property, plant and equipment (40) (1)
Loss on disposal of investment - 3
Total tax effect of adjustments 11 (1)
Headline earnings 4 151 6 639
Weighted average number of ordinary shares in issue for basic
earnings per share (millions) 606.21 600.76
Weighted average number of ordinary shares for diluted earnings
per share (millions) 606.34 601.10
Weighted average number of ordinary shares increased mainly due
to the
sale of 5.07 million shares held by the Morokotso Trust
Headline earnings per share (cents)
Basic 685 1 105
Diluted 685 1 104
10. Dividends
On 23 August 2012, a sub-committee of the Board declared a final
dividend of 60 cents per share amounting
to R364 million for distribution in financial year 2013 in
respect of financial year 2012. The dividend will be
subject to new dividend tax imposed by the South African Revenue
Services authority which became effective
1 April 2012. Secondary Tax on Companies (STC) will not apply to
the dividend. The new dividend tax will result
in the shareholder being taxed on the dividend and not the
Company.
R millions 2012 2011
Dividends paid
Final dividend No 87 for 2011 of 420 (2010: 270) cents per share 2 546 1 622
Interim dividend No 88 for 2012 of 135 (2011: 150) cents per 818 897
share
3 364 2 519
11. Contingent liabilities and guarantees
The Group has a contingent liability of US$36 million for Additional Profits
Tax (APT) raised by ZIMRA (Zimbabwe Revenue Authority) consisting of an
additional assessment of US$27 million in respect of the tax period 2007 to
2009 and an APT amount of US$9 million for 2011 based on the assumption that
this amount would be payable should the Zimplats appeal against the ZIMRA
interpretation of the APT provisions fail in the Special Court of Tax Appeals.
Management, supported by the opinions of its tax advisors, strongly disagrees
with the ZIMRA interpretation of the provisions.
As at the end of June 2012 the Group had bank and other guarantees of R598
million (2011: R606 million) from which it is anticipated that no material
liabilities will arise.
12. Related party transactions
- The Group entered into purchase transactions of R2 469 million (2011: R2 292
million) with Two Rivers Platinum, an associate company, resulting in an amount
payable of R607 million (2011: R652 million). It also received refining fees
and interest to the value of R22 million (2011: R30 million). After capital
repayment received during the period the shareholders loan amounted to R49
million (2011: R71 million). These transactions are entered into on an arm's
length basis at prevailing market rates.
- The Group entered into sale and leaseback transactions with Friedshelf, an
associate company. A profit of R200 million (2011: R253 million) was made on
the sale of the property which is deferred and amortised over the lease term.
At the end of the year an amount of R1 202 million (2011: R373 million) was
outstanding in terms of the lease liability. During the year interest of R80
million (2011: Rnil) was charged and a R20 million (2011: Rnil) repayment was
made. The lease has an effective interest rate of 10.1% and 10.8% (2011:
10.8%).
Key management compensation:
R millions 2012 2011
Non-executive directors remuneration 7 435 6 201
Executive directors remuneration 25 532 28 320
Prescribed officers 9 777 11 708
Senior executives and Company Secretary 24 325 30 512
Total 67 069 76 741
13. Financial instruments
Financial assets - carrying amount
Loans and receivables 6 218 10 092
Financial instruments at fair value through profit and loss1 24 33
Held-to-maturity financial assets 49 61
Available-for-sale financial assets1 32 15
6 323 10 201
Financial liabilities - carrying amount
Financial liabilities at amortised cost 7 777 7 255
Financial instruments at fair value through profit and loss1 24 33
7 801 7 288
The carrying value of financial instruments is a reasonable approximation of
fair value.
(1) Level 1 of the fair value hierarchy - Quoted prices in active markets for
the same instrument
Corporate information
IMPALA PLATINUM HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
Registration No. 1957/001979/06
JSE share code: IMPISIN: ZAE 000083648
LSE: IPLAADR's: IMPUY
("Implats" or "the Company" or "the Group")
Registered Office
2 Fricker Road, Illovo, 2196. (Private Bag X18, Northlands, 2116)
Transfer Secretaries
South Africa: Computershare Investor Services (Pty) Limited
70 Marshall Street, Johannesburg, 2001. PO Box 61051, Marshalltown, 2107
United Kingdom: Computershare Investor Services plc. The Pavilions, Bridgwater
Road, Bristol, BS13 8AE
Sponsor
Deutsche Securities (SA) (Pty) Limited
Directors
KDK Mokhele (Chairman), TP Goodlace (Chief Executive Officer), B Berlin (Chief
Financial Officer),
HC Cameron, PA Dunne, MSV Gantsho, JM McMahon*, AA Maule, B Ngonyama, TV
Mokgatlha, NDB Orleyn,
OM Pooe
*British
Please contact the Company Secretary at (011) 731 9000, or via e-mail at
avanthi.parboosing@implats.co.za or by post at Private Bag X18, Northlands
2116, South Africa, for
further information, if required.
www.implats.co.za
END
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