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A N N U A L R E S U L T S for the year ended 30 September 2018 - PowerPoint PPT Presentation

Jan 01, 2024 •16 likes •326 views

A N N U A L R E S U L T S for the year ended 30 September 2018 Discover Develop Deliver RECORD PRODUCTION YEAR FREE CASH FLOW PER SHARE HIGHLIGHTS FOR ALL PGM AND CHROME US$ 18.9 cents PRODUCTS (FY2017: US$ 19.0 cents) REEF MINED PGM

  1. A N N U A L R E S U L T S for the year ended 30 September 2018 Discover Develop Deliver

  2. RECORD PRODUCTION YEAR FREE CASH FLOW PER SHARE HIGHLIGHTS FOR ALL PGM AND CHROME US$ 18.9 cents PRODUCTS (FY2017: US$ 19.0 cents) REEF MINED PGM PRODUCTION CHROME CONCENTRATE PRODUCTION (5PGE+Au) 152.2 koz 1.4 Mt 4.9 Mt up 6.0% up 8.8% down 3.0% (2017: 143.6 koz) (2017: 1.3 Mt) (2017: 5.0 Mt) REVENUE OPERATING PROFIT EBITDA US$406.3 m US$72.5 m US$101.9 m up 16.3% down 26.3% down 11.8% (2017: US$349.4 m) (2017: US$98.4 m) (2017: US$115.6 m) PROFIT BEFORE TAX HEADLINE EARNINGS PER SHARE PROPOSED TOTAL DIVIDEND * US$65.0 m US$ 19 cents US$ 4 cents down 28.6% down 13.6% 20.5% of NPAT (2017: US$91.0 m) (2017: US$ 22 cents) (2017: US$ 5 cents) Interim dividend of US$ 2 cents and final dividend of US$ 2 cents SECURED OPTIONALITY IN TWO EXPLORATION PROJECTS ON MINERAL RICH GREAT DYKE 2

  3. FY2018 IN REVIEW IMPROVED PRODUCTION INCREASED CHROME SALES increase of 6.0% in PGM production to 152.2 koz increase of 24.8% in total chrome sales increase of 8.8% in chrome concentrate production to 1.4 Mt RALLY IN PD, RH AND RU TA I LW I N D S IMPROVED RECOVERIES PRICES * ¾ in our control increase of 5.5% in PGM recovery to 84.1% increases of 24.9% - Pd, 111.2% - Rh increase of 3.0% in chrome recovery to 66.0% and 297.2% - Ru EBITDA US$101.9 m MUTED PT AND CHROME INCREASED FUEL PRICES H E A D W I N D S PRICES * increase of 38.4% per litre all out of our control diesel accounts for 14.0% of on mine costs decrease of 5.2% - Pt and 29.3% - Cr 2 O 3 VOLATILE INCREASED EXCHANGE RATE TRANSPORT RATES strengthened by 2.2% increase of 19.2% * Year on year change in average market prices 3

  4. TWO YEAR WAGE AGREEMENT BEST IN CLASS AWARD AT 4 000 FATALITY FREE SAFETY AND SUSTAINABILITY CONCLUDED WITH AMCU MINESAFE PRODUCTION SHIFTS 0.18 3 2 LTIFR YEARS FATALITY FREE SAFETY AWARDS LOST TIME INJURY FREQUENCY RATE 4 21 82 ENGINEERING LEARNERSHIPS INTERNS AND GRADUATES ADULT EDUCATION AND TRAINING LEARNERS 4

  5. PRODUCTION Discover Develop Deliver

  6. LOM OPEN PIT STRIPPING RATIO PRODUCTION - MINING 9.5 m 3 :m 3 (FY2017: 9.6 m 3 :m 3 ) REEF MINED [Mtpa] ▪ Reef mined decreased by 3.0% from FY2017 ▪ Stripping ratio improved year on year 7 15 ▪ Comprehensive maintenance programme implemented to return 6 10.6 10.7 10 fleet to OEM standards, which reduced availability in FY2018 7.9 7.5 7.3 ▪ Fleet capable of moving +1.3 Mm 3 of waste per month and 5 5.0 5 4.9 +430 ktpm of reef 4.8 4 4.2 ▪ Transitioning to 24 hour, four shift operations, which will increase 3.9 0 production capability by approximately 15% 3 ▪ FY2019 will focus on improving efficiencies in drill and blast -5 operations 2 -10 1 0 -15 FY2014 FY2015 FY2016 FY2017 FY2018 Reef mined Stripping ratio 6

  7. PRODUCTION - PGM PGM PRODUCTION [kozpa] ▪ PGM production increased by 6.0% to 152.2 koz 200 90.0% 84.1% ▪ PGM rougher feed grade of 1.51 g/t (FY2017: 1.56 g/t) 180 79.7% 80.0% 160 ▪ Improved recoveries by 5.5% to 84.1%, against a target of 80.0% 69.9% 70.0% 65.8% 152.2 140 ▪ Phase 1 of PGM optimisation implemented at the Voyager Plant 143.6 60.0% 132.6 120 ▪ Phase 2 of PGM optimisation to be implemented in FY2019 118.0 50.0% 48.8% 100 40.0% 80 78.2 30.0% 60 20.0% 40 10.0% 20 0 0.0% FY2014 FY2015 FY2016 FY2017 FY2018 PGM production PGM recovery 7

  8. PRODUCTION - CHROME CHROME PRODUCTION [Mtpa] ▪ Chrome concentrate production increased by 8.8% to 1.4 Mt 2.0 70.0% 66.0% 64.1% ▪ Cr 2 O 3 ROM grade of 18.2% (FY2017: 17.8%) 1.8 62.7% 60.0% 59.4% 58.0% 1.6 ▪ Chrome recoveries improved by 3.0% to 66.0%, above the target of 65.0% 50.0% 1.4 1.4 1.3 ▪ Specialty grade chrome concentrate production increased by 13.8% 1.2 1.2 40.0% to 367.7 kt 1.1 1.1 1.0 30.0% 0.8 0.6 20.0% 0.4 10.0% 25.4% 24.3% 21.7% 0.2 13.7% 10.1% - 0.0% FY2014 FY2015 FY2016 FY2017 FY2018 Chrome production Specialty chrome production Chrome recovery 8

  9. PGM BASKET PRICE 42% CHROME CIF PRICE SPECIALTY GRADE PRODUCTION SALES US$923/oz ↑17.4% US$186/t ↓7.0% 367.7 kt ↑13.8% (FY2017: US$786/oz) (FY2017: US$200/t) (FY2017: 323.1 kt) PGM CONCENTRATE SALES CHROME CONCENTRATE SALES [kozpa] [Mtpa] 1200 250 200 2 1103 180 1.8 1000 200 200 186 923 885 160 1.6 158 158 1.6 800 150 786 152.2 736 140 1.4 143.5 120 132.9 600 100 1.3 120 1.2 119.9 1.2 1.2 1.1 400 50 100 1 80 0.8 200 0 80.4 60 0.6 0 -50 40 0.4 -200 -100 20 0.2 -400 -150 0 0 FY2014 FY2015 FY2016 FY2017 FY2018 FY2014 FY2015 FY2016 FY2017 FY2018 PGM sales PGM basket price [US$/oz] Chrome sales (includes third party sales) Average 42% chrome price [US$/t] 9

  10. REVENUE PRODUCT AND REVENUE DIVERSIFICATION US$406.3 m ↑16.3% (FY2017: US$349.4 m) REVENUE CONTRIBUTION EX WORKS BASIS ▪ Leverage business model through trusted supply chain Platinum 17.6% ▪ Direct relationships with customers and end users Third party 11.4% ▪ Diversified customers for our products ▪ Geographic customer spread extends beyond Asia Palladium 6.3% Gold Metallurgical Rhodium 0.1% 7.9% 35.5% Copper Ruthenium 0.1% 0.9% Iridum 1.5% Nickel 0.4% Specialty 18.5% 10

  11. MARKETS Discover Develop Deliver

  12. PGM MARKET PGM DEMAND AND SUPPLY MARKET PRICES FY2018 FY2019 3 000 ▪ Vital industrial metals largely used in automotive catalytic converters, other drivers of demand include jewellery, industrial 2 500 uses and investment 2 000 ▪ Platinum demand is expected to marginally weaken in 2018, while 1 500 forecast demand for palladium and ruthenium is set to increase 1 000 ▪ Further advances in the deployment of fuel cell technologies are likely to see a rise in platinum demand 500 ▪ Increased promotion of platinum jewellery in China - Oct-17 Jan-18 Apr-18 Jul-18 Oct-18 Ir Copper Platinum Palladium Rhodium Iridium Ruthenium Iridum 4.4% Nickel 0.3% Ru 4.3% 1.2% Ruthenium 14.0% 2.6% CHANGE IN AVERAGE MARKET PRICE FROM Au Rhodium Gold FY2017 TO FY2018 22.7% 0.2% 0.2% PGM REVENUE Platinum ↓5.2% THARISA Rh Platinum CONTRIBUTION Pt 9.8% PRILL SPLIT 50.7% Palladium ↑24.9% ex works 54.9% Rhodium ↑111.2% Iridium ↑40.9% Pd 16.7% Ruthenium ↑297.2% Palladium 18.0% 12

  13. CHROME MARKET DEMAND AND SUPPLY MARKET PRICES AVERAGE MONTHLY FY2018 FY2019 ▪ Demand for metallurgical grade chrome concentrate is mainly 250 4 000 driven by its use in the manufacture of stainless steel 3 500 200 ▪ China is wholly dependent on imports of chrome ores 3 000 ▪ Spot chrome prices traded between US$156/t and US$240/t, 2 500 150 current market pricing is US$165/t 2 000 100 ▪ Chrome stocks at Chinese ports remain below the 3.0 Mt mark at 1 500 2.8 Mt – almost two and half months' supply 1 000 50 ▪ Indonesian installed annual stainless steel melt capacity of 2.0 Mt, 500 with a further 1.0 Mt being brought online - - Oct-17 Jan-18 Apr-18 Jul-18 Oct-18 42% SA chrome concentrate price [US$/t] Port stocks in China [kt] CHEMICAL GRADE FOUNDRY GRADE   CHROME ORE FERROCHROME STAINLESS STEEL Cr 2 O 3 – 45% to 47% Cr 2 O 3 >46% SiO 2 <1.2% SiO 2 <1.0% 0.6 tonnes 0.25 tonnes 1 tonne Used to produce sodium Used in moulds for metal castings dichromate used in leather tanning, and nozzle sands pigments and plating 13

  14. FINANCIAL REVIEW Discover Develop Deliver

  15. FY2018 THEMES HEALTHY MARGINS DIVIDEND PAYER WELL STRUCTURED STRONG CASHFLOW DISCIPLINED CAPITAL BALANCE SHEET GENERATION ALLOCATION 15

  16. REVENUE GROUP REVENUE [US$ million] ▪ Higher sales volumes for both PGM and chrome concentrates 500 ▪ Increase in specialty grade chrome concentrate sales +US$50/t 450 premium on an equivalent CIF basis 400 406.3 ▪ PGM basket price increased to US$923/oz 350 349.4 ▪ Third party agency and trading – first full year 300 ▪ Decrease in chrome concentrate prices at US$186/t 250 246.8 240.7 219.6 200 150 100 50 0 FY2014 FY2015 FY2016 FY2017 FY2018 Group revenue The Group has early adopted:  IFRS 9 – Financial instruments  IFRS 15 – Revenue from contracts with customers  IFRS 16 – Leases 16

  17. GROSS PROFIT GROSS PROFIT [US$ million] 40.0% 175 FY2018 FY2017 Agency and Agency and 155 35.1% 35.0% Segmental analysis PGMs Chrome trading PGMs Chrome trading 135 Revenue 117.4 250.4 38.5 90.9 252.9 5.6 30.0% Gross profit 29.2 75.7 3.6 36.2 86.2 0.3 122.7 26.7% 115 24.8% 25.0% Gross profit margin 24.9% 30.2% 9.4% 39.8% 34.1% 5.4% 108.5 95 Sales volume 152.2 koz 1.4 Mt 143.5 koz 1.3 Mt 20.0% Shared cost allocation 50.0% 50.0% 35.0% 65.0% 75 17.5% 15.0% 13.5% 55 54.5 10.0% 43.1 35 32.6 5.0% 15 0.0% -5 FY2014 FY2015 FY2016 FY2017 FY2018 Gross profit Gross profit margin 17

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