Announcements 2021

Partial capital redemption – NHM014

Northam noteholders are hereby advised, in accordance with the Terms and Conditions of the Northam Platinum Limited R15.0 billion Domestic Medium Term Note Programme (dated 29 October 2020, as amended and / or supplemented from time to time) (the “Programme”), of the reduction in the nominal amount of notes in bond series NHM014 (the “Relevant Notes”), guaranteed by Booysendal Platinum Proprietary Limited, by an amount of R1 908.3 million (the “Purchased Notes”), on 23 April 2021.


Northam noteholders are hereby advised, in accordance with the Terms and Conditions of the Northam Platinum Limited R15.0 billion Domestic Medium Term Note Programme (dated 29 October 2020, as amended and / or supplemented from time to time) (the “Programme”), of the reduction in the nominal amount of notes in bond series NHM014 (the “Relevant Notes”), guaranteed by Booysendal Platinum Proprietary Limited, by an amount of R1 908.3 million (the “Purchased Notes”), on 23 April 2021.

Bond Code: NHM014
ISIN: ZAG000163650
Reduction in the nominal amount: R1 908 300 000
Remaining nominal amount in issue: R21 700 000

The reduction in the nominal amount of the Relevant Notes was effected through the purchase by Northam of the Purchased Notes in the market and the surrender by Northam of the Purchased Notes to the Transfer Agent under the Programme for cancellation thereof on 23 April 2021.

The reduction in the nominal amount of the Relevant Notes forms part of a note switch whereby the maturity dates of Purchased Notes will be extended through a purchase and cancellation of such notes and the simultaneous issue of new notes for the same nominal amount as a third tranche under series NHM012, which has a longer maturity date.

Johannesburg
21 April 2021

Corporate Advisor and JSE Sponsor to Northam
One Capital

Sole Arranger, Dealer and Debt Sponsor to Northam in respect of the Programme
One Capital

Attorneys to Northam, the Arranger and the Dealer in respect of the Programme
Bowman Gilfillan Inc.

Interest payment notification – NHM009

Northam bondholders are advised of the following interest payment due on Monday, 26 April 2021:


Northam bondholders are advised of the following interest payment due on Monday, 26 April 2021:

Bond Code: NHM009
ISIN No: ZAG000158866
Coupon: 7.392%
Interest Period: 26 January 2021 to 25 April 2021
Interest Amount Due: R1 822 684.93
Payment Date: 26 April 2021
Date Convention: Following Business Day

Johannesburg
21 April 2021

Debt Sponsor
One Capital

Listing of tap issue – NHM012

The JSE Limited (“JSE”) has granted approval for the listing of a tap issuance of Senior Unsecured Floating Rate Notes under series NHM012 (“Notes”), issued under the Northam Platinum Limited ZAR15 000 000 000 Domestic Medium Term Note Programme, dated 29 October 2020, as amended and/or supplemented from time to time (“Programme”), as guaranteed by Booysendal Platinum Proprietary Limited, with effect from 23 April 2021


The JSE Limited (“JSE”) has granted approval for the listing of a tap issuance of Senior Unsecured Floating Rate Notes under series NHM012 (“Notes”), issued under the Northam Platinum Limited ZAR15 000 000 000 Domestic Medium Term Note Programme, dated 29 October 2020, as amended and/or supplemented from time to time (“Programme”), as guaranteed by Booysendal Platinum Proprietary Limited, with effect from 23 April 2021

The details pertaining to the tap issuance of the NHM012 series are as follows:

Instrument Type: Senior Unsecured Floating Rate Notes
Total Notes in Issue: ZAR7 105 422 841 including this issue
Instrument Code NHM012
Tranche Number: 3
Nominal Amount: ZAR1 908 300 000
Issue Price: 100.79250%
Interest Rate: 3 Month ZAR-JIBAR plus 375 bps per annum
Interest Rate Determination Date(s):       13 June, 13 September, 13 December and 13 March of each year (or the first Business Day of each Interest Period) until the Maturity Date
Coupon Rate Indicator: Floating
Issue Date: 23 April 2021
Interest Commencement Date: 15 March 2021
Maturity Date: 13 June 2022
Final Redemption Amount: 100% of Nominal Amount
Last Day to Register: By 17h00 on 2 June, 2 September, 2 December and
2 March of each year until the Maturity Date, or if such day is not a Business Day, the Business Day preceding the Books Closed Period
Books Closed Period: 3 June to 12 June, 3 September to 12 September,
3 December to 12 December and 3 March to 12 March of each year until the Maturity Date (all dates inclusive), or if any early redemption occurs, 10 Days prior to the actual Redemption Date
Floating Interest Payment Date(s): 13 June, 13 September, 13 December and 13 March of each year until the Maturity Date or, if such day is not a Business Day, the Business Day on which interest will be paid, as determined in accordance with the Applicable Business Day Convention
International Securities Identification Number (ISIN): ZAG000160136
Business Day Convention: Following Business Day
Other: The applicable pricing supplement (“APS”) does not contain additional terms and conditions to the Terms and Conditions as contained in the Programme. The APS is available on Northam’s website: https://www.northam.co.za/downloads/send/96-files/1352-applicable-pricing-supplement-nhm012-tranche-3

The Notes will be dematerialised in the Central Securities Depository (CSD) and settlement will take place electronically in terms of JSE Rules.

Johannesburg
21 April 2021

Sole Arranger, Dealer and Debt Sponsor to Northam in respect of the Programme
One Capital

Attorneys to Northam, the Arranger and the Dealer in respect of the Programme
Bowman Gilfillan Inc.

Interest payments notification – NHM006 AND NHM007

Northam bondholders are advised of the following interest payments due on Friday, 16 April 2021:


Northam bondholders are advised of the following interest payments due on Friday, 16 April 2021:

Bond Code: NHM006
ISIN No: ZAG000158577
Coupon: 6.892%
Interest Period: 18 January 2021 to 15 April 2021
Interest Amount Due: R2 050 338.62
Payment Date: 16 April 2021
Date Convention: Following Business Day

Bond Code: NHM007
ISIN No: ZAG000158593
Coupon: 7.392%
Interest Period: 18 January 2021 to 15 April 2021
Interest Amount Due: R2 516 189.74
Payment Date: 16 April 2021
Date Convention: Following Business Day

Johannesburg
13 April 2021

Debt Sponsor
One Capital

Dealing in securities

Northam shareholders (“shareholders”) are advised that on an annual basis the company awards conditional shares (as defined in the rules of the Northam Share Incentive Plan, 2011 (“SIP”)), a portion of which are not subject to performance conditions (“retention shares”) and the balance of which are subject to both operation and market performance conditions (“performance shares”), to all employees within the Paterson D lower band and above, in terms of the SIP (“awards”). In the ordinary course, awards are made in November of each year.


Northam shareholders (“shareholders”) are advised that on an annual basis the company awards conditional shares (as defined in the rules of the Northam Share Incentive Plan, 2011 (“SIP”)), a portion of which are not subject to performance conditions (“retention shares”) and the balance of which are subject to both operation and market performance conditions (“performance shares”), to all employees within the Paterson D lower band and above, in terms of the SIP (“awards”). In the ordinary course, awards are made in November of each year.

Northam was in a prohibited period (as defined in the JSE Limited Listings Requirements and the JSE Debt Listings Requirements (collectively, the “Listings Requirements”)), pursuant to, inter alia, the cautionary announcement published on the Stock Exchange News Service operated by the JSE Limited (“SENS”) on 2 November 2020 and the subsequent renewals thereof published on SENS on 14 December 2020, 28 January 2021 and 11 March 2021, and therefore the granting of the awards for F2021 (“F2021 awards”) was delayed, in accordance with the SIP rules.

Since the publication of the announcement on SENS on 23 March 2021, whereby the cautionary announcement was withdrawn, Northam is no longer in a prohibited period and accordingly the F2021 awards have been granted.

In accordance with the Listings Requirements, shareholders are advised of the following acceptances of the F2021 awards by directors of the company, a director of a major subsidiary of the company and Northam’s company secretary:

Nature of transactions: Acceptance of awards of conditional shares, comprising retention shares and performance shares, in terms of the SIP
Class of securities: The awards of conditional shares provide participants (as defined in the SIP rules) with the right to settlement, after the vesting date, by way of the equivalent rand value of Northam shares, determined in accordance with the SIP rules
Vesting date: 31 October 2023
Transactions completed on market: No
Clearance obtained in terms of the Listings Requirements: Yes
   
Transaction 1  
Name of director of the company: PA Dunne
Date of award acceptance: 31 March 2021
Total number of Northam shares covered by the awards: 39 600
(9 900 retention shares and 29 700 performance shares)
Strike price and value of transaction: Rnil
Nature and extent of interest: Direct beneficial
   
Transaction 2  
Name of director of the company: AH Coetzee
Date of award acceptance: 31 March 2021  
Total number of Northam shares covered by the awards: 18 330
(4 580 retention shares and 13 750 performance shares)
Strike price and value of transaction: Rnil
Nature and extent of interest: Direct beneficial
   
Transaction 3  
Name of director of a major subsidiary of the company: LC van Schalkwyk
Name of major subsidiary: Booysendal Platinum Proprietary Limited
Date of award acceptance: 31 March 2021 
Total number of Northam shares covered by the awards: 15 340
(3 830 retention shares and 11 510 performance shares)
Strike price and value of transaction: Rnil
Nature and extent of interest: Direct beneficial
   
Transaction 4  
Name of company secretary: PB Beale
Date of award acceptance: 31 March 2021
Total number of Northam shares covered by the awards: 9 530
(2 380 retention shares and 7 150 performance shares)
Strike price and value of transaction: Rnil
Nature and extent of interest: Direct beneficial

Johannesburg
06 April 2021

Sponsor and Debt Sponsor
One Capital

Early maturity of the Zambezi BEE transaction and implementation of an extended BEE transaction, incorporating a firm intention announcement in respect of the acquisition by Northam Platinum Holdings Limited of the entire issued ordinary share capital in Northam, excluding treasury shares and withdrawal of cautionary announcement

KEY FEATURES OF THE COMPOSITE TRANSACTION:

Acceleration of maturity and wind-up of the Zambezi BEE transaction:

  • R39.1 billion of total equity value in Zambezi
  • R25.6 billion of gross value unlock in Zambezi, Northam’s empowerment shareholder
  • R12.9 billion of pre-tax value transfer to Northam group employees, communities and strategic BEE partners
  • R4.8 billion of estimated taxes in support of the South African fiscus
  • More than 25% reduction in Northam’s issued share capital
  • Extinguishment of the guarantee provided by Northam to Zambezi’s preference shareholders
  • Continuation of senior management’s incentive structure ensuring retention of key individuals until 17 May 2025

View full SENS announcement.


KEY FEATURES OF THE COMPOSITE TRANSACTION:

Acceleration of maturity and wind-up of the Zambezi BEE transaction:

  • R39.1 billion of total equity value in Zambezi
  • R25.6 billion of gross value unlock in Zambezi, Northam’s empowerment shareholder
  • R12.9 billion of pre-tax value transfer to Northam group employees, communities and strategic BEE partners
  • R4.8 billion of estimated taxes in support of the South African fiscus
  • More than 25% reduction in Northam’s issued share capital
  • Extinguishment of the guarantee provided by Northam to Zambezi’s preference shareholders
  • Continuation of senior management’s incentive structure ensuring retention of key individuals until 17 May 2025

View full SENS announcement.

Investor presentation and webcast - early maturity of the Zambezi BEE transaction and implementation of an extended BEE transaction

Northam shareholders are referred to the announcement published on SENS today, regarding, inter alia:

  • the proposed acceleration of the maturity and wind-up of the empowerment transaction concluded between Northam and Zambezi Platinum (RF) Limited in May 2015 (“Transaction”); and
  • an extended 15-year broad-based black economic empowerment transaction to maintain ownership by historically disadvantaged persons in the Northam group at c. 26.5%, with an emphasis on participation by Northam group employees and host and affected communities (“Extended BEE Transaction”).


Northam shareholders are referred to the announcement published on SENS today, regarding, inter alia:

  • the proposed acceleration of the maturity and wind-up of the empowerment transaction concluded between Northam and Zambezi Platinum (RF) Limited in May 2015 (“Transaction”); and
  • an extended 15-year broad-based black economic empowerment transaction to maintain ownership by historically disadvantaged persons in the Northam group at c. 26.5%, with an emphasis on participation by Northam group employees and host and affected communities (“Extended BEE Transaction”).

The Transaction and the Extended BEE Transaction are collectively referred to as the “Composite Transaction”.

Northam will be hosting a live presentation in respect of the Composite Transaction in the auditorium at 52 Glenhove Road, Melrose Estate, Johannesburg today, Tuesday 23 March 2021 at 10:00. The presentation will be available online through the Northam website at https://www.corpcam.com/Northam23032021.

A call-in facility has also been provided for the presentation. Kindly use the following link to register for the teleconference: www.diamondpass.net/6221212.

A media round table is also planned for today, Tuesday 23 March 2021 at 11:30. Kindly use the following link to register for the media round table: https://www.diamondpass.net/5320122.

A copy of the presentation document will be available before the live presentation begins at https://www.northam.co.za/downloads/send/151-2021/1349-proposed-composite-transaction-presentation.

Enquiries:

  • Patience Mtshali, R&A Strategic Communications, Johannesburg, Telephone +27 11 880 3924
  • Marion Brower, R&A Strategic Communications, Johannesburg, Telephone +27 71 493 0387

Johannesburg

23 March 2021

Corporate advisor to Northam and Northam Platinum Holdings Limited

One Capital Advisory Proprietary Limited

Transaction Sponsor and Sponsor to Northam and Northam Platinum Holdings Limited and Debt Sponsor to Northam

One Capital Sponsor Services Proprietary Limited

Attorneys to Northam and Northam Platinum Holdings Limited

Webber Wentzel

Northam proposes transaction to accelerate maturity of Zambezi transaction

…and extends HDP ownership for a further 15 years…

NORTHAM ANNOUNCES –

  • The accelerated conclusion of its R39.1 billion Zambezi BEE transaction
  • A more than 25% share buy-back by Northam, funded by Northam’s 87.5% holding of Zambezi preference shares and an additional R7.3 billion of capital to be applied by Northam
  • A R25.6 billion gross value unlock in Zambezi, net of Zambezi’s funding structure
  • An approximate R2 billion offer by Northam to acquire all remaining Zambezi preference shares
  • A R33.1 billion extended BEE transaction for the next 15 years with a strong focus on Northam’s employees and communities, to retain HDP ownership at c. 26.5%


…and extends HDP ownership for a further 15 years…

NORTHAM ANNOUNCES –

  • The accelerated conclusion of its R39.1 billion Zambezi BEE transaction
  • A more than 25% share buy-back by Northam, funded by Northam’s 87.5% holding of Zambezi preference shares and an additional R7.3 billion of capital to be applied by Northam
  • A R25.6 billion gross value unlock in Zambezi, net of Zambezi’s funding structure
  • An approximate R2 billion offer by Northam to acquire all remaining Zambezi preference shares
  • A R33.1 billion extended BEE transaction for the next 15 years with a strong focus on Northam’s employees and communities, to retain HDP ownership at c. 26.5%

Accelerated winding-up of the Zambezi BEE transaction

Northam Platinum Limited (Northam) today announced its intention to accelerate the maturity date of its Broad-Based Black Economic Empowerment (BEE) transaction with Zambezi Platinum (RF) Limited (Zambezi), approximately 4 years earlier than the originally envisaged 10 year term. Zambezi owns c. 31.4% of the ordinary share capital of Northam, currently valuing its Northam stake in excess of R39 billion as at 19 March 2021. After accounting for the preference shares issued by Zambezi, of which Northam currently owns c. 87.5%, approximately R25.6 billion of gross value has been created in Zambezi to date.

Northam and Zambezi have agreed, subject to certain conditions, including Northam shareholder and regulatory approvals, to release c. R13 billion of unencumbered pre-tax value to Zambezi’s ordinary shareholders, combined with a share buy-back of more than 25% of Northam’s shares in issue. Northam shareholders, including Zambezi’s BEE shareholders upon becoming direct unencumbered Northam shareholders, will share in the value uplift of the residual value created in Zambezi, upon implementation by Northam of the simultaneous share buy-back.

Offer to acquire all remaining Zambezi preference shares

Northam will make a c. R2 billion offer to acquire the remaining c. 12.5% of Zambezi preference shares not currently held by Northam. The Zambezi preference share offer is priced at a premium of 15.99% to the instrument’s face value and will be settled in cash. Northam today announced almost 80% upfront support for the Zambezi preference share offer, from the holders of Zambezi preference shares. The combined holdings of Zambezi preference shares by Northam and the supportive Zambezi preference shareholders accounts for c. 97% of all the Zambezi preference shares in issue.

More than 25% share buy-back by Northam

The combination of Northam’s acquisition of all the Zambezi preference shares, followed by the settlement by Zambezi of all the Zambezi preference shares through the transfer of Northam shares to Northam, coupled with a share buy-back by Northam of Northam shares held by Zambezi in order to provide liquidity for Zambezi and the BEE shareholders, will result in Northam implementing a share buy-back in excess of 25%.

Extended ownership by historically disadvantaged persons (HDP) for the next 15 years focusing on close to 10 000 Northam employees as well as host and affected communities

The accelerated unlock of the value creation in Zambezi, combined with the significant share buy-back by Northam, have enabled Northam to simultaneously implement an extended BEE transaction for a period of 15 years, ensuring that Northam will retain at least 26.5% ownership by HDPs (Extended BEE Transaction). The Extended BEE Transaction will focus on empowering Northam's employees and host and affected communities by providing them with c. 23% ownership in Northam, with other HDPs such as women's groups and youth groups participating in the balance through a new empowerment vehicle to be listed on the JSE’s BEE Segment. None of the current Zambezi strategic partners will participate in the Extended BEE Transaction. At the current Northam share price, the Extended BEE Transaction is valued at c. R33.1 billion and will be funded exclusively by Northam. No external funding will be introduced.

Upfront Northam shareholder and Zambezi preference shareholder support

Northam announced that, excluding Zambezi, c. 39% of Northam’s shareholders (including through asset managers) eligible to vote on all the transaction resolutions have already provided support for the transaction, including the Extended BEE Transaction. Furthermore, almost 80% of Zambezi preference shareholders have provided support for Northam’s offer to acquire the remaining Zambezi preference shares.

Paul Dunne, Northam’s chief executive officer, said “This is a momentous occasion in Northam’s history and indeed for black economic empowerment in South Africa. Our innovative initial transaction with Zambezi, fully funded by Northam’s shareholders in 2015, has allowed Northam to proactively return more than R12 billion of value to Northam’s shareholders to date. The transaction announced today will see Northam apply a further R7.3 billion towards shareholder value creation and simultaneously convert its R12.1 billion Zambezi preference shareholding acquisition strategy into a collective share buy-back of more than 25% of the Northam shares currently in issue. We are tremendously pleased that, with the support of Northam shareholders in 2015, and again in relation to this transaction, Northam will be able to deliver real, unencumbered value for our BEE partners and do so roughly 4 years earlier than what was originally anticipated. Our BEE partners played a key role in Northam’s counter-cyclical asset acquisition programme. The level of value that has been created for all stakeholders surpasses all expectations and ahead of the anticipated maturity date. Northam would also like to thank our corporate advisors, One Capital, for their advisory and execution excellence on this innovative composite transaction, as well as the Webber Wentzel team, our legal advisors.”

Alet Coetzee, Northam’s chief financial officer, said “Northam very carefully planned and executed on its capital allocation and treasury decisions, which included a R12.1 billion investment in Zambezi preference shares to date. Our current c. 87.5% holding of Zambezi preference shares, combined with sustained healthy gearing levels, with our Domestic Medium-Term Note Programme currently at R7.2 billion in issue, enables us to apply current cash generation in the business towards accelerating the maturity of the Zambezi structure in a planned and responsible manner, with meaningful value returned to shareholders through a share buy-back of more than 25%.”

Brian Khomotso Mosehla, Chairman of both Northam and Zambezi, said “Zambezi’s journey with Northam started in 2014 and has been one of mutual respect and absolute focus on Northam’s growth, shareholder value creation and retention. Zambezi agreed to a very unusual initial share issue to take place at a premium to market value, as opposed to the typical BEE discount, in order to maximise the capital raised for Northam and to minimise shareholder dilution. This efficient capital raising, combined with Northam’s insightful capital allocation decisions, proved pivotal. A special thank you to the Public Investment Corporation and Coronation, specifically for the early support in this transaction.

Northam’s management initiated dramatic growth in production output into a strong market, following counter-cyclical acquisitions and ambitious growth projects. I am grateful for the strategic vision and support of our CEO, Paul Dunne, on this transaction which has been difficult to implement, and for the operational excellence of his team, under his astute leadership, has shown in ramping up production. All these actions combined to create a unique platform for an acceleration of value unlock for Zambezi 6 years into the transaction period. Zambezi is fully cognisant of the risks of remaining in the structure until 2025 and, taking this into account, we are happy to have found an equitable outcome that materialises value for Zambezi whilst simultaneously returning additional significant value to Northam shareholders. The future prospects for Northam post this transaction look positive and we look forward to our continued journey as shareholders into the future.

The transaction has also been structured to ensure that there is no share overhang upon implementation, to protect future shareholder value for Zambezi’s BEE shareholders and all other Northam shareholders. I would also like to thank our advisors Nisela Capital and One Capital who have advised both Zambezi and Northam respectively, in delivering a truly landmark transaction.”

With regards to the Extended BEE Transaction focusing on Northam’s employees and host and affected communities, Paul Dunne said “the acceleration of the Zambezi BEE transaction’s maturity provides a unique platform for Northam to demonstrate its commitment to maintaining at least 26.5% ownership by HDPs. Northam has made a tremendous contribution towards BEE, including to strategic partners. Now we want to focus our empowerment initiatives primarily on our employees, with additional further participation by our host and affected communities. Northam is in the position to fully fund these transactions, whilst simultaneously returning substantial value to our shareholders. Northam is also committing to an annual value transfer to employees and communities, with the ability for them to enjoy participation in equity upside over the term of the extended transaction.”

Karl Leinberger, Chief Investment Officer of Coronation Asset Management, currently a c. 8% shareholder in Northam, said “The innovative Zambezi transaction implemented in 2015 allowed Northam to attract significant capital in a cyclical downturn. Coronation supported the Zambezi transaction from the outset and Northam’s subsequent capital allocation decisions have been exceptionally well made and executed. That is why we want the management team lock-in and incentive structure to be prolonged and to be fully aligned with total shareholder returns, including dividends. We also believe the proposed extension of empowerment to key stakeholders, being mine employees and communities, is a critical element to the long-term sustainability of mining companies embarking on large, long-term empowerment transactions. This is a smart deal presented by Northam that protects and significantly enhances shareholder value and crystallises real value for empowerment.”

Tim Acker, Portfolio Manager at Allan Gray, whose clients are currently holders of approximately 3% of Northam’s equity, said “The Zambezi transaction has created significant value for participants in the black economic empowerment transaction. The share buy-back will deliver value for these participants, while at the same time being positive for shareholders. It addresses a potential share overhang upon conclusion of the Zambezi transaction and removes future uncertainty for both Zambezi and Northam’s other shareholders. We are very supportive of the combination of all of this with an extension in empowerment, with a broad-based focus on employees and communities.”

Cornelius Zeeman, Portfolio Manager at Fairtree Asset Management, currently a c. 3.6% shareholder in Northam, said “We really like what Northam has proposed to shareholders. It is a complex composite deal, but it secures significant value for all stakeholders, transfers real and unencumbered value to support black economic empowerment and creates a new long-term empowerment platform for Northam’s employees and communities. The clever deal structure includes a significant upfront share buy-back, which protects and enhances shareholder value ahead of the extended empowerment transaction. There is a guaranteed minimum benefit transferring every year to employees and communities, which is a responsible and sustainable approach. We think the deal sets an excellent example for the market.”

Distributed by R&A Strategic Communications, Johannesburg, Tel +27 (0)11 880 3924

  • Marion Brower +27 71 493 0387
  • Memory Johnstone +27 82 719 3081
  • Taryn van Olden +27 79 527 6882

Condensed reviewed interim financial results for the six months ended 31 December 2020

Despite the backdrop of the ongoing global COVID-19 pandemic, Northam has delivered a solid performance for the six months ended 31 December 2020 (“H1 F2021”), whilst maintaining the health and safety of its employees. In addition, Northam’s growth strategy remains on track and the group continues to return significant value to shareholders through the ongoing purchase of Zambezi Platinum (RF) Limited (“Zambezi”) preference shares, trading under the share code ZPLP.


Key features

    Reviewed 6 months ended 31 December 2020 Reviewed 6 months
ended 31 December
2019
Variance %
Normalised headline earnings R000 3 270 084 1 883 912 73.6
Normalised headline earnings per share cents 641.5 369.6 73.6
Sales revenue R000 11 884 898 7 824 901 51.9
Operating profit R000 5 191 659 2 959 543 75.4
Operating profit margin % 43.7 37.8 15.6
Profit for the period R000 2 099 031 1 147 600 82.9
Total comprehensive income for the period R000 2 083 307 1 147 636 81.5
Headline earnings per share cents 599.9 328.3 82.7
Earnings per share cents 599.9 328.0 82.9
Cash generated from operating activities R000 3 144 590 2 033 332 54.7
EBITDA R000 5 411 578 3 192 549 69.5
Capital expenditure R000 1 298 511 1 352 238 (4.0)

Financial results

Despite the backdrop of the ongoing global COVID-19 pandemic, Northam has delivered a solid performance for the six months ended 31 December 2020 (“H1 F2021”), whilst maintaining the health and safety of its employees. In addition, Northam’s growth strategy remains on track and the group continues to return significant value to shareholders through the ongoing purchase of Zambezi Platinum (RF) Limited (“Zambezi”) preference shares, trading under the share code ZPLP.

The financial results achieved were underpinned by satisfactory performance from all operations. Normalised headline earnings is calculated taking into account the headline earnings adjusted for items relating to the 2015 Zambezi broad-based black economic empowerment (“BEE”) transaction (“BEE transaction”); these include the Zambezi preference share dividends associated with the BEE financing structure as well as the loss on derecognition of the Zambezi preference share liability. Stripping out the impact of the BEE transaction resulted in normalised headline earnings increasing to R3.3 billion (31 December 2019 (“H1 F2020”): R1.9 billion and 30 June 2020 (“F2020”): R3.4 billion), which equates to normalised headline earnings per share, based on the total number of 509 781 212 issued shares, of 641.5 cents (H1 F2020: 369.6 cents and F2020: 676.3 cents). This is an increase of 73.6%.

Sales revenue increased by 51.9% from R7.8 billion in H1 F2020 to R11.9 billion for the period under review. This increase is attributable to a 49.7% increase in the average 4E basket price to USD2 160/oz (H1 F2020: USD1 443/oz), a 9.0% weaker ZAR/USD exchange rate realised and a 4.4% decrease in refined 4E ounces sold.

A 37.6% increase in cost of sales and a corresponding 51.9% increase in revenue, resulted in operating profit increasing from R3.0 billion in H1 F2020 to R5.2 billion for the period under review. This translates to an operating profit margin of 43.7% (H1 F2020: 37.8%).

Production growth across the group and favourable rand denominated Platinum Group Metals prices are expected to positively impact the free cash flow generation in the short to medium-term.

The board of directors of Northam (“board”) has resolved not to declare an interim dividend for the 2021 financial year (H1 F2020 and F2020: R Nil per share). The board is of the view that at this time the most efficient way to return value to shareholders is to purchase the Zambezi preference shares.

About this announcement

This short-form announcement is the responsibility of the directors of Northam and is only a summary of the information in the group’s full condensed reviewed interim financial results for H1 F2021 and does not contain full or complete details. Any investment decisions by investors and/or shareholders should be based on the full condensed reviewed interim financial results accessible via the JSE link at https://senspdf.jse.co.za/documents/2021/JSE/ISSE/NHM/Interim_21.pdf and on the company’s website at https://www.northam.co.za/downloads/send/150-fy2021/1342-interim-financial-results-for-the-six-months-ended-31-december-2020. Shareholders can also access the full condensed reviewed interim financial results by logging in/registering on the JSE ShareHub link http://www.sharehub.co.za/ which is also available on the Northam website at www.northam.co.za.

The full condensed reviewed interim financial results are also available for inspection at no charge at the company’s registered office and the offices of its sponsor, One Capital Sponsor Services Proprietary Limited (17 Fricker Road, Illovo), during normal business hours.

Johannesburg
19 March 2021

Sponsor and Debt Sponsor
One Capital

Northam posts solid H1 operational results…

Northam Platinum’s results for the half-year ended 31 December 2020 were released today. The unabridged results are available on the company’s website at www.northam.co.za.


Northam Platinum’s results for the half-year ended 31 December 2020 were released today. The unabridged results are available on the company’s website at www.northam.co.za.

The group’s results for the half-year are characterised by a solid operational performance, which has underpinned the company’s share price appreciation.

KEY FEATURES - FINANCIAL

  • Normalised headline earnings up by 73.6% to c. R3.3 billion
  • 51.9% increase in sales revenues to c. R11.9 billion
  • Operating profit 75.4% higher at c. R5.2 billion, with a margin of 43.7%
  • HEPS 599.9 cents
  • Cash generated from operating activities up by 54.7% to R3.1 billion
  • EBITDA increases by 69.5% to R5.4 billion
OPERATIONAL HIGHLIGHTS
  • 21.1% increase in tonnages to 4.0Mt
  • Own production equivalent refined metal up by 15.0% to 352 741 oz 4E
  • 11% increase in production of chrome concentrate

In his half-yearly address to shareholders, CEO Paul Dunne highlighted the normalisation of production following the COVID-19 associated disruptions. “Our production statistics bear testament to this. Especially significant is the first meaningful metal contribution from the Booysendal South mine.

“We are currently operating at close to full production. However, COVID-19 remains a threat to the health of our employees and we are still following the risk mitigation protocols implemented during F2020. We will continue to closely monitor the situation.”

Notwithstanding the 15% growth in group metal production, sales volumes declined by 4.4% to 315 320 ounces, owing primarily to COVID-19 associated disruptions. Lower production volumes in Q4 of F2020 together with logistical hurdles resulted in reduced metal volumes sent to Northam’s refinery in Germany, thereby creating a refining backlog.

In turn, this impacted available metals for sale during the period under review, owing to the restocking of the inventory pipeline. The varying lead times for individual PGMs impacted rhodium in particular during the period. The resultant rhodium surplus in the pipeline should be released in the ordinary course of business and the relative contribution of rhodium to sales is expected to normalise during the remainder of the current financial year.

Nevertheless, sales revenues grew to R11.9 billion, attributable predominantly to a 49.7% increase in the average 4E basket price to USD2 160/oz, and a 9.0% weakening in the average ZAR/USD exchange rate.

Operational growth projects, initiated in a period of lacklustre metal prices, are now coming on track, and delivering valuable contributions into a rising metal-price environment, thereby vindicating the company’s growth strategy. Projects which were temporarily scaled back have been resumed, reducing the impact of the stoppages on the group’s strategy.

CORPORATE DEVELOPMENT

As at 31 December 2020, Northam’s holding in Zambezi had reached 80.4% of all Zambezi preference shares in issue. Subsequent acquisitions post the reporting period have taken the Northam holding to 87.5%.
The rationale of these acquisitions is to:

  • reduce the preference share dividend expense and liability included in Northam’s consolidated financial results; and
  • reduce Northam’s potential financial exposure under the guarantee it provided in favour of the holders of Zambezi preference shares.

Also, if Zambezi were to redeem the Zambezi preference shares through a distribution of ordinary shares in Northam held by Zambezi, then the redemption of the Zambezi preference shares held by Northam at such time will result in a distribution of Northam shares to Northam, thereby reducing the number of Northam shares in issue, tantamount to effecting a share buy-back.

A further benefit would be the reduction of Northam’s financial exposure in terms of the guarantee provided to Zambezi preference shareholders, should the guarantee be called upon.

The transaction with Zambezi, along with the new holding of 87.5% of all Zambezi preference shares, has created significant value for all Northam shareholders. This development, together with the inherent share buy-back implied by the holding, provides a unique opportunity to unlock permanent value for our shareholders, whilst maintaining Northam’s BEE ownership.

Commenting on these developments, Dunne said today, “At the corporate level, we are pleased to have been able to continue the purchase of Zambezi preference shares, returning significant value to shareholders.”

OUTLOOK

Looking ahead, the major factors which are likely to affect future financial results, are:

  • the safety performance and health and wellness of our workforce;
  • dealing with an unreliable energy supply;
  • effective cost control;
  • exchange rate and commodity price volatility;/li>
  • management of production and performance targets to ensure the successful execution of our business strategy; and/li>
  • effective project execution

The global economic outlook remains uncertain. “We are confident that the group’s strong financial position, prudent financial controls and the successful execution of our expansion strategy will position Northam favourably in continuing to take advantage of improved market conditions going forward,” concludes Dunne.

Distributed by R&A Strategic Communications, Johannesburg, Tel +27 (0)11 880 3924

  • Marion Brower +27 71 493 0387
  • Taryn van Olden +27 79 527 6882