Strong second half recovery for Northam Platinum
Johannesburg, Thursday 4 August 2005. Northam Platinum Limited issued its preliminary results for the June 2005 year end today, posting net income of R249 million, in line with the previous year’s levels.
A strong operating performance during the second half of the year contributed to the recovery following the Section 54 closure in the first half, which resulted in a loss of approximately 12% of available production shifts. Tonnages, at 2.2 million, were only 3.7% lower year on year. This, combined with the effect of an increase in the head grade to 5.6 g/t, limited the decline in PGM output to only 4.5% at 10 115 kg (325 214 oz).
Some progress was made on development on the Merensky reef horizon, with available ore reserves increasing from 15 months in F2004 to 18 months for the period under review. In line with planning however, the UG2 ore reserve availability is at 18 months.
Commenting on costs, which in the first half of the year had increased by 23% to R119 742/kg owing to the lower volumes and the high fixed cost component associated with the production delay, chief executive Glyn Lewis pointed to a decline in unit cash costs in the second half of the year to R102 208/kg, reducing costs for the year to R110 267/kg, a rise of only 10.8% year on year.
The sustained strength of the platinum price and the US dollar basket price, failed to translate into a significantly higher rand basket price (some 5.1% higher than the previous year), owing largely to the strength of the rand over the period, which was also characterized by some volatility. Lower sales volumes, reflecting primarily the lower output, contributed to the 9.6% decline in revenue to R1.6 billion.
Net income at R249 million includes an amount of R75.9 million, being the proceeds from the insurance claim in respect of business interruption.
An amount of R90 million is being retained to pay for the cash component of the Booysendal transaction. A final dividend of 45 cents per share was declared for the period, bringing the total dividend for the year to 70 cents per share, 47 cents less than headline earnings for the year. This reflects the company’s previously stated policy of paying excess cash to shareholders after providing for growth and working capital.
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