anglo platinum limited/media/files/a/anglo... · 2019-05-15 · financial summary 2005 annual...
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2005 Annual Results
Overview
• Significantly improved earnings - higher metal prices
• Strong PGM demand - supports firm prices
• Production growth continues
• Operational initiatives - on track
• BEE process ongoing
• Headline earnings up 64% - R4,23bn
• Dividends up 61% - R11,80 per share
• Increased sales volumes
- Refined PGM’s up 5,1%
- Refined Platinum unchanged: 2,45m oz
• Average rand basket price up 16%
Improved earnings
Overview2005 Annual Results
Higher metal prices
Overview2005 Annual Results
2000
4000
6000
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10000
2001 2002 2003 2004 2005200
400
600
800
1000
Rand basket price(R/Pt oz sold)Average US$Platinum
• Platinum average US$ price $894 – up 6% year on year • Rhodium average US$ price $1 966 – up 111% year on year
• Strong platinum demand– Diesel autocatalyst driving growth
– Unique beneficial role of jewellery sector
• Sound palladium demand– Stable autocatalyst demand
– Significant new jewellery offtake
• Tight rhodium market– Strong autocatalyst and glass demand
Strong PGM demand – supports firm prices
2005 Annual Results Overview
Strong platinum demand
2005 Annual Results
! Firm industrial – electrical and glass
! Strong autocatalyst - diesel
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1000
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2001 2002 2003 2004 2005
Industrial
Autocatalyst
(oz 000's)
Overview
Compound annual demand growth – 2001 to 2005: 11%
• Continued increase in diesel car popularity
• Continued tighter legislation - Euro IV 2006
• Early voluntary particulate filter fitment
• Heavy duty vehicle retrofitting - high loadings
2005 Annual Results Overview
Strong platinum autocatalyst demand
• ‘Shock absorber’ effect (at any price level)– Jewellery price elastic - Industrial price inelastic– Demand balance results in lower price volatility
• Price tension (upward pressure on price)– Strong consumer demand– Consumer has adjusted to higher prices over
time– Chinese market low margin, high turnover and
unsaturated
Unique role of jewellery sector
2005 Annual Results Overview
Jewellery sector healthy
2005 Annual Results Overview
Shanghai Exchange platinum volumes are up
• Platinum brand strength is high
• Retailer has the most accurate view of consumer
• Retail response to consumer demand
• Reduced manufacturer risk
• Positive indicator of jewellery business health
Growth continues
2005 Annual Results
1000
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3000
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Anglo Platinumrefined Pt oz(000's)
• Anglo Platinum refined output growth 2000 - 2005: 5,5% pa
• Anglo Platinum expected average growth 2006 onwards: 5% pa
Global compound demand growth 3,4% pa
Overview
• Focus on long term safe and sustainable production
• People and actions are in place
• Volume improvements in second half of 2005
• Volume and cost improvements by end of 2006
Operational initiatives – good progress
2005 Annual Results Overview
• Firm commitment to broad based BEE
• Conversion process commenced
• 13 applications over 5 areas submitted
• Ongoing Government engagement
• Discussions with existing and potential HDSA partners continue
BEE progressing
2005 Annual Results Overview
Results features
• Headline earnings up 64,1% - R4,23bn
• Average rand basket price up 16%
• Strong operational cash flows
• Net debt at R2,46bn
• Final dividend R7,00 per share
2005 Annual Results Financial overview
Financial summary
Financial overview2005 Annual Results
2005 2004 %
Prof it on metal sales Rbn 5,84 4,59 27,2Total headline earnings Rbn 4,23 2,58 64,1Net debt * Rbn 2,46 3,43 28,3
Headline earnings per share cps 1 828 1 121 63,1
Ordinary dividend cps 1 180 735 60,5
Ref ined Pt product ion 000 oz 2 453,2 2 453,5 0,0
Interest bearing debt to equity % 20,5 32,2 36,3
EBITDA - Interest cover 21,6 9,6 125,0
ROCE % 27,2 18,6 46,2
Year ended December
* Borrowings less cash and cash equivalents
Headline earnings (Rm) 2005 vs 2004
Financial overview2005 Annual Results
2 579
215
(432)1 824
389
4 231
(411)
430
(363)
2004 Price Exchange Inf lat ion Salesvolume
Cash costs Amort Other 2005
Operating margin and volume per mine
Financial overview2005 Annual Results
Group average 29,9%LPM
22,4%
BRPM13,8%
Modikwa9,7%
US24,5% RS
28,4%PPL25,8%
WLTR26,4%
KPM PSA37,2%
AS48,3%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
0 200 400 600 800 1 000 1 200 1 400 1 600 1 800 2 000 2 200 2 400 2 600
Equivalent Pt oz (000's)
Ope
ratin
g M
argi
n
2005 cash flows (Rm)
Financial overview2005 Annual Results
(3 429)
7 542
(2 460)
(2 029)
(4 097)
(818)371
Dec 2004Net Debt
Cash fromoperations
Dividends Capex Other Tax & Interest Dec 2005Net Debt
• Second joint venture with Aquarius at Marikana
• New Mototolo Mine JV with Xstrata
• Elandsfontein BEE transaction
Corporate activity
2005 Annual Results Financial overview
• Safety
• Mining performance
• Process performance
• Cost performance
• Capital expenditure and projects
Operational overview
2005 Annual Results Operational overview
• Firm commitment to safety - management’s top priority
• Du Pont training of executive and senior management
• Additional management resources
• 60% reduction in fall-of-ground fatalities
• Despite reduction in injuries unacceptable 2005 fatalities record
• Turnaround initiatives to benefit safety improvements
Safety
Operational overview2005 Annual Results
Mining performance
• Cash operating cost per equivalent ref. Pt oz - up 9,4%
• Mining output, equivalent ref. Pt oz - up 2,0%
• Increased production - Kroondal, Modikwa
• Production lower - Amandelbult, Rustenburg
- Volume decline halted in second half
• Flexibility improved - rate of volume increase up
2005 Annual Results Operational overview
Mining performanceImproved second-half of 2005
2005 Annual Results
700
900
1100
1300
1500
H1 04 H2 04 H1 05 H2 0525
35
45
55
Equivalent RefinedPt oz(000's)% UG2 mined
Operational overview
Mining performance – second half 2005
Second half volumes up in response to initiatives:
• Increase in equipped raise lines
• Breast mining development generating more reserves
• 14% increase in stoping from breast mining
• 10% increase in primary development meters
• Immediately available reserves up 8%
2005 Annual Results Operational overview
• Remedial activities continue – year 1 of the 2 year programme completed
• Steady mining production from Rustenburg and increase at Amandelbult
• Benefit from breast mining method at Modikwa
• Continued focus on cost reduction and efficiency improvement
• Focus on long term stability and flexibility
2005 Annual Results Operational overview
Mining outlook
Process performance
• Overall increase in platinum recovery of 2,9%
• Smelting and refining unit cost increase of 2,7%
• Polokwane smelter back on line in December
• 123 600 pt oz net increase in pipeline stock - to be
refined in the first half of 2006
2005 Annual Results Operational overview
Process performance
• Continuing stable ACP performance
– Average SO2 emissions down 43% in 2005
– Acid plant commissioned
– Standby reactor being commissioned
• 75 ktpm Amandelbult UG2 concentrator commissioned
2005 Annual Results Operational overview
Change in cash unit cost per platinum ounce(excluding purchased ounces and associated costs)
Cost performance2005 Annual Results
0,0%
2,0%
4,0%
6,0%
8,0%
10,0%
12,0%
14,0%
CPI4,0%
Wages above CPI
1,6%
Diesel above CPI
0,5%
Tonnage increase-1,1%
On-mine cost perton milled
5,0%
Grade - downRecovery - up
4,4%
Operating costper equivalentrefined Pt oz
9,4%
Polokwaneshutdown
3,0%
Operating costper refined Pt oz
12,4%
(% in
crea
se)
Capital expenditureSignificant project activity to maintain and increase
production
• 2005 capex R4,36bn
– R2,80bn on ongoing - Rustenburg, Amandelbult
– R1,42bn on expansion - Kroondal, Process
• 2006 total capex R5,5 – R6 bn
– Lebowa Merensky, Waterval Retrofit, PPRustreplacement, Mototolo JV
2005 Annual Results Operational overview
Growth projectsUnder development:
• Kroondal PSA R375m 280 000 Pt oz pa *
• Marikana JV R115m 145 000 Pt oz pa *
• Mototolo JV R675m 132 000 Pt oz pa *
Under evaluation:
• Booysendal, Der Brochen, Ga Phasha, Pandora, PPRust North expansion, Styldrift, Twickenham
* 50% of this production attributable at full margin
2005 Annual Results Operational overview
2005 Annual Results
Growth projects - continuedPPRust North project
• Replacement project approved – R1,4bn (2005 terms)
– 385 000 tpm, 200 000 replacement Pt oz pa
– Water supply secured
• Project to be further expanded
– by 600 000 tpm, 230 000 additional Pt oz pa
– Current capex estimate – R4bn (2006 terms)
– Regulatory and board approval expected shortly
Operational overview
Outlook • Buoyant and robust PGM markets
• 2006 target of between 2,7m – 2,8m refined Pt oz on
track – includes impact of Polokwane shutdown
• Lower unit cost increase expected in 2006
• Platinum production growth expected at around 5%
per annum
2005 Annual Results