27/02/2014
1
Interim Results
February 2014
Interim Results February 2014 www.implats.co.za
Forward looking statement
Certa...
27/02/2014
2
Interim Results February 2014 www.implats.co.za
Agenda
3
OVERVIEW Terence Goodlace
Safety  Wage Negotiations...
27/02/2014
3
Interim Results February 2014 www.implats.co.za
OVERVIEW
Operation Achievement
Implats FIFR 31% improvement o...
27/02/2014
4
Interim Results February 2014 www.implats.co.za
OVERVIEW
Wage negotiations
 Settled with NUM at Marula and 
...
27/02/2014
5
Interim Results February 2014 www.implats.co.za
OVERVIEW
Operational ‐ key features
 Gross refined platinum ...
27/02/2014
6
Operational review
Interim Results February 2014 www.implats.co.za
OPERATIONAL OVERVIEW
390
115
39
51
83
109 ...
27/02/2014
7
Interim Results February 2014 www.implats.co.za
OPERATIONAL OVERVIEW
 0
5 000
10 000
15 000
20 000
25 000
Imp...
27/02/2014
8
Interim Results February 2014 www.implats.co.za
OPERATIONAL OVERVIEW
Progress on key metrics
H1 2012 H1 2013 ...
27/02/2014
9
Interim Results February 2014 www.implats.co.za
OPERATIONAL OVERVIEW
Marula
 Tonnes milled increased 12.6% b...
27/02/2014
10
Interim Results February 2014 www.implats.co.za
OPERATIONAL OVERVIEW
Mimosa and Two Rivers
Mimosa
 Tonnes m...
27/02/2014
11
Interim Results February 2014 www.implats.co.za
FINANCIAL REVIEW
Gross income statement
 Revenue 9% higher ...
27/02/2014
12
Interim Results February 2014 www.implats.co.za
FINANCIAL REVIEW
Implats Group unit cost
 Unit costs contai...
27/02/2014
13
Interim Results February 2014 www.implats.co.za
FINANCIAL REVIEW
R million H1 2013 H1 2014 % change 2013
Imp...
27/02/2014
14
Market review
Derek Engelbrecht
Interim Results February 2014 www.implats.co.za
MARKET REVIEW
Dec 2012 Dec 2...
27/02/2014
15
Interim Results February 2014 www.implats.co.za
MARKET REVIEW
Dec 2012 Dec 2013 % change
Platinum ($/oz) 1 5...
27/02/2014
16
Interim Results February 2014 www.implats.co.za
MARKET REVIEW
Palladium demand
 Automotive demand exceeds 
...
27/02/2014
17
Interim Results February 2014 www.implats.co.za
MARKET REVIEW
000 oz 2010 2011 2012 2013
% Increase 
2012/13...
27/02/2014
18
Interim Results February 2014 www.implats.co.za
MARKET REVIEW
000 oz 2012 2013 2014 (Forecast)
DEMAND
Automo...
27/02/2014
19
Interim Results February 2014 www.implats.co.za
MARKET REVIEW
Market challenges and opportunities
 Global e...
27/02/2014
20
Outlook
Terence Goodlace, CEO
Interim Results February 2014 www.implats.co.za
OUTLOOK
Outlook
 Safety
• Ong...
27/02/2014
21
Interim Results February 2014 www.implats.co.za
OUTLOOK
Outlook
 Positive engagement with Government of Zim...
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Impala Platinum Holdings Ltd FY 2014 financial results presentation

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Impala Platinum Holdings Ltd Listed on the Nigerian Stock Exchange has released its Full Year Results. Check out
Insights into this company in their presentation which appears below.
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Transcript of " Impala Platinum Holdings Ltd FY 2014 financial results presentation"

  1. 1. 27/02/2014 1 Interim Results February 2014 Interim Results February 2014 www.implats.co.za Forward looking statement Certain statements contained in this presentation other than the statements of historical fact contain forward‐ looking statements regarding Implats’ operations, economic performance or financial condition, including, without limitation, those concerning the economic outlook for the platinum industry, expectations regarding metal prices, production, cash costs and other operating results, growth prospects and the outlook of Implats’ operations, including the completion and commencement of commercial operations of certain of Implats’ exploration and production projects, its liquidity and capital resources and expenditure, and the outcome and consequences of any pending litigation or enforcement proceedings. Although Implats believes that the expectations reflected in such forward‐looking statements are reasonable, no assurance can be given that such expectations will prove to be correct. Accordingly, results may differ materially from those set out in the forward‐looking statements as a result of, among other factors, changes in economic and market conditions, success of business and operating initiatives, changes in the regulatory environment and other government actions, fluctuations in metal prices and exchange rates and business and operational risk management. For a discussion on such factors, refer to the risk management section of the company’s Annual Report. Implats is not obliged to update publicly or release any revisions to these forward‐looking statements to reflect events or circumstances after the dates of the Annual Report or to reflect the occurrence of unanticipated events. All subsequent written or oral forward‐looking statements attributable to Implats or any person acting on its behalf are qualified by the cautionary statements herein. 2
  2. 2. 27/02/2014 2 Interim Results February 2014 www.implats.co.za Agenda 3 OVERVIEW Terence Goodlace Safety  Wage Negotiations  Operational  Financial OPERATIONAL REVIEW Terence Goodlace Production  Costs  Rustenburg  Zimplats  Marula  Capital Projects  Mimosa / Two Rivers FINANCIAL REVIEW Brenda Berlin MARKET REVIEW Derek Engelbrecht OUTLOOK Terence Goodlace Overview Terence Goodlace, CEO
  3. 3. 27/02/2014 3 Interim Results February 2014 www.implats.co.za OVERVIEW Operation Achievement Implats FIFR 31% improvement on FY 2013 Impala  Impala operations achieve six million fatality  free shifts in October 2013 • Six months fatality free   Achieve 16 months without a FOG fatality  14 Shaft achieved two million fatality free  shifts in November 2013  Roll out of nets and bolts completed  All trackless machinery equipped with  Proximity Detection Systems  Self‐contained Self Rescuers project 88%  completed  2 958 safety representatives trained Zimplats and  Refineries Zero injuries in Q2 2014 Safety achievements 5 (per million man hours worked) Interim Results February 2014 www.implats.co.za OVERVIEW Safety strategy 0.122 0.053 0.087 0.065 0.045  Changing the safety culture • Cultural transformation framework • CEO “elimination of fatalities task team”  Ensuring effective supervision • Training of supervisors • Triggered Action Response Plan  Implementing technical initiatives • Nets and Bolts • Proximity Detection Systems • Trackless mobile machinery • Track bound equipment • Flammable Gas Management Plan 6 (per million man hours worked)(per million man hours worked) Fatal injury frequency rate Lost time injury frequency rate 4.61 4.94 4.96 4.21 4.62
  4. 4. 27/02/2014 4 Interim Results February 2014 www.implats.co.za OVERVIEW Wage negotiations  Settled with NUM at Marula and  Refineries in December 2013  Have been on strike at Impala  Rustenburg since 23 January 2014  and five weeks have now elapsed  Have implemented a total  shutdown at the mine for the  safety of our employees • Impala has lost 80 000 production  ounces to date and R1.7bn in revenue • It is imperative that we get our  employees back to work  AMCU’s R12 500/month basic pay demand is unaffordable  7  Note: Includes living out allowance; ER provident/retirement; medical contribution; 13th cheque and other Current R9297/ month Year 1 Offer  R10117/ month Year 2 Offer  R10926/ month Year 3 Offer  R11746/ month AMCU 9% 8% 7.5% AMCU basic wage demand:  R12 500150% Interim Results February 2014 www.implats.co.za OVERVIEW Wage negotiations 8 7,315 1,062 3,942 2,431 1 947 57 ‐2,000 ‐1,000 0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 Revenue Wages and salaries paid Other consumables Investing in future production Tax paid Cash lost R million
  5. 5. 27/02/2014 5 Interim Results February 2014 www.implats.co.za OVERVIEW Operational ‐ key features  Gross refined platinum production  down 9.1% to 786 500 ounces • Managed mine‐to‐market up 9.2% • Third party IRS production down 55%  Group unit costs 2% higher at  R16,310 per refined platinum ounce  as a result of higher volumes  Major capital projects progressing  well • Zimplats:  • Phase 2 expansion on track • Rustenburg:  • 20 Shaft stoping tonnage on track • 16 Shaft commenced stoping in August 2013 • Sinking at 17 Shaft on track 0 200 400 600 800 1000 H1 FY13 H1 FY14 Mine‐to‐market Third party  IRS Platinum Production 9 000 oz H1 2013 H1 2014 Interim Results February 2014 www.implats.co.za OVERVIEW Financial ‐ key features  Revenue increased 9.5 % to R16.5bn  from R15.1bn  Gross profit declined 28.5% to R1.8bn  from R2.5bn  Headline earnings increased 10.8% to  R860m from R776m  Group capital expenditure lowered to  R2.7bn from R3.2bn  Net debt increased from R2.7bn to R4.3bn  No interim dividend declared - 50 100 150 H1 2013 H1 2014 HEPS 10 cents
  6. 6. 27/02/2014 6 Operational review Interim Results February 2014 www.implats.co.za OPERATIONAL OVERVIEW 390 115 39 51 83 109 787 0 100 200 300 400 500 600 700 800 900 Impala Zimplats Marula Mimosa Two Rivers Third Party IRS Total Group refined platinum production 12 000 oz Mine‐to‐market 677 300ozs 
  7. 7. 27/02/2014 7 Interim Results February 2014 www.implats.co.za OPERATIONAL OVERVIEW  0 5 000 10 000 15 000 20 000 25 000 Impala Zimplats Marula Group Mimosa Two Rivers Unit costs plus capital (R/Pt oz) Cash costs Stay in business capital Replacement capital Expansion capital Revenue per platinum ounce (basket) Profitability 13 Interim Results February 2014 www.implats.co.za OPERATIONAL OVERVIEW Rustenburg  Tonnes milled down 5.3%, impacted by • Conveyor belt fire at 12 North Shaft • Open cast, 2 and 5 Shaft complexes depleted • Work stoppages • 1 540 (internal) stop notes • 72 section 54’s  Refined platinum production up 6.0% to 389 700 ounces   • 1.6% increase in head grade • 4.3% increase in recoveries • Pipeline build‐up of 22 000 ounces at refineries in  previous year  Unit cost per ounce contained by higher production volumes 14
  8. 8. 27/02/2014 8 Interim Results February 2014 www.implats.co.za OPERATIONAL OVERVIEW Progress on key metrics H1 2012 H1 2013 % change Increasing face length Total development km 52.3 58.0 11 Primary on‐reef development km 13.7 18.3 33 Mineable face length km 18.8 20.5 9 Productivity Stope productivity m2 per team 312 318 2 Mining quality Off‐reef mining % 12.8 11.7  9 Sweepings % 69.1 92.4 34 Rustenburg progress 15  16 Shaft – Hex River Fault challenges  Solid performance interrupted by strike  Interim Results February 2014 www.implats.co.za OPERATIONAL OVERVIEW Zimplats  Tonnes milled up 36.7% as operations at the new  Mupfuti Mine were ramped‐up   Head grade reduced by 2.5% • Mining width increased • Bad ground conditions  Platinum in matte production increased by 58%  • Phase 2 ramp‐up • Comparable period was impacted by smelter fire  Unit costs benefited from increased volumes • Decreased by 19.5% in dollar terms (4.5% in rand terms) 16
  9. 9. 27/02/2014 9 Interim Results February 2014 www.implats.co.za OPERATIONAL OVERVIEW Marula  Tonnes milled increased 12.6% benefiting from  operational improvements in 2013  Platinum in concentrate production increased 14% • Stoping productivity up 2.6% • Head grade up 1.6%  Marula on track to increase production to 80 000   ounces for 2014  Unit costs per platinum ounce decreased by 4.9%,  and were positively impacted by higher volumes  and well contained costs 17 Interim Results February 2014 www.implats.co.za OPERATIONAL OVERVIEW 20 shaft 16 shaft 17 shaft Zimplats Ph 2 Capital Spend for H1 2014 R443m R584m R297m US$29.6m Remaining Capital Spend R1.1bn R1.0bn R8.0bn US$114m Full production date FY2018 FY2018 FY2023 FY2015 Steady‐state throughput 1.7mtpa 2.7mtpa 2.7mtpa 2.0mtpa Steady‐state platinum  production 125kozpa 185kozpa 180kozpa 90kozpa Current primary activities Development of   ancillary inclines and  declines completed  beyond  5 year  footprint.  Production  build‐up to 39koz  planned for FY2014 Main shaft  commissioned.  Access   development to lower  levels commenced.  Production build‐up to  12 Koz planned for FY 2014 Sinking of refrigeration  and ventilation shafts  complete. Main shaft  sinking continues.  Station development  and construction  through ventilation  shaft  Construction of both  the concentrator plant  and development of  Portal 3 complete.  Production ramp‐up  on target Major capital projects 18
  10. 10. 27/02/2014 10 Interim Results February 2014 www.implats.co.za OPERATIONAL OVERVIEW Mimosa and Two Rivers Mimosa  Tonnes milled up 3.6% to 1.24 million tonnes  Platinum in concentrate production of 52 600 ounces  Unit costs rose 19.5% to R16 692 per platinum  ounce in concentrate (0.8% in dollar terms)  Two Rivers  Tonnes milled increased by 4.2% to 1.66 million tonnes  Platinum in concentrate up by 8.3% to 90 100 ounces  Unit costs rose by 1.6% to R10 999 per platinum  ounce in concentrate 19 Financial  review Brenda Berlin, CFO
  11. 11. 27/02/2014 11 Interim Results February 2014 www.implats.co.za FINANCIAL REVIEW Gross income statement  Revenue 9% higher at R16.5 billion  Profit up 14% to R922 million  HEPS increased by 11% to  142 cents  No interim dividend  R million H1 2013 H1 2014 % change 2013 Sales 15 074 16 502 9 29 844 Cost of sales (12 612) (14 742) (17) (25 132) Gross profit 2 462 1 760 (29) 4 712 Gross margin 16 11 (34) 16 Profit before tax 1 657 1 359 (18) 2 467 Profit 808 922 14 1 075 HEPS (cps) 128 142 11 330 Dividend (cps) 35 ‐ (100) 95 Interim Results February 2014 www.implats.co.za FINANCIAL REVIEW Gross profit movement  Cash costs R920m or        11.1% higher mainly due to inflation  Gross profit  down R702  million to R1.8 billion  Gross margin at 11% 0 500 1000 1500 2000 2500 3000 3500 4000 4500 2 462 1 428 920 163 63 322 791 1 760 197 (Rm)
  12. 12. 27/02/2014 12 Interim Results February 2014 www.implats.co.za FINANCIAL REVIEW Implats Group unit cost  Unit costs contained at R16 310 per platinum ounce 10,000 11,000 12,000 13,000 14,000 15,000 16,000 17,000 18,000 Dec‐12 Inflation Volumes and other Dec‐13 23 Rand per platinum ounce 15 966 1 629 1 285 1 6 310 Interim Results February 2014 www.implats.co.za FINANCIAL REVIEW Profit movement – December 2013  Once off impairment and tax charges December 2012  Net foreign exchange loss  Lower tax charges  Profit of R922 million 0 100 200 300 400 500 600 700 800 900 1000 808 545 255 702 309 922325 (Rm)
  13. 13. 27/02/2014 13 Interim Results February 2014 www.implats.co.za FINANCIAL REVIEW R million H1 2013 H1 2014 % change 2013 Impala 942 (171) (118) 1 661 IRS (85) 807 1049 (170) Zimplats 73 246 237 467 Marula (177) (93) 47 (297) Mimosa (1) 30 70 Two Rivers 70 94 34 156 Other (46) (53) (15) 114 Headline profit 776 860 11 2 001 HEPS (cps) 128 142 11 330 Dividend (cps) 35 ‐ (100) 95 Headline earnings per operations Interim Results February 2014 www.implats.co.za FINANCIAL REVIEW Movement in gross cash position   Operating cash flow of R1.9 billion  R2.7 billion capital  investments for the future  Gross cash R3.4 billion and  debt of R6.3 billion 275 4 256 3 447 ‐2,863 2 720 405 371 1 877 ‐4000 ‐3000 ‐2000 ‐1000 0 1000 2000 3000 4000 5000 6000 7000 26 (Rm)
  14. 14. 27/02/2014 14 Market review Derek Engelbrecht Interim Results February 2014 www.implats.co.za MARKET REVIEW Dec 2012 Dec 2013 % change South African sales  (CY2013) (%) Platinum (000oz) 733 720 (2) 8 Palladium (000oz) 422 426 1 34 Rhodium (000oz) 92 80 (13) 19 Nickel (000t) 6.4 5.7 (10) 61 Sales volumes by metal 28  Volumes lower than prior year
  15. 15. 27/02/2014 15 Interim Results February 2014 www.implats.co.za MARKET REVIEW Dec 2012 Dec 2013 % change Platinum ($/oz) 1 541 1 426 (8) Palladium ($/oz) 623 723 16 Rhodium ($/oz) 1 144 973 (15) Nickel ($/oz) 16 505 13 953 (16) Basket ($/Pt oz sold) 2 397 2 226 (7) (R/Pt oz sold) 20 207 22 460 11 Exchange rate (R/$) 8.43 10.09 20 Average prices achieved – Major metals 29  Dollar values lower but rand weakness compensates Interim Results February 2014 www.implats.co.za MARKET REVIEW Platinum demand  European automotive market weak  Local ETF shines 7000 7500 8000 8500 Dec‐12 Automotive Jewellery Industrial Investment Dec‐13 30 (Pt 000 oz)
  16. 16. 27/02/2014 16 Interim Results February 2014 www.implats.co.za MARKET REVIEW Palladium demand  Automotive demand exceeds  new mine supply  Recycling has to grow 8500 9000 9500 10000 2012 Automotive Industrial Investment 2013 31 (Pd 000 oz) Interim Results February 2014 www.implats.co.za MARKET REVIEW Vehicle sales 32 World Light Vehicle Sales by Region Region Calendar years % Change YTD 2012 (000) 2013 (000) North America 14 492 15 594 7.6 Asia / Pacific 22 871 25 016 9.4 Europe 11 781 11 550 (2.0) South America 3 364 3 850 14.5 Other 3 691 3 532 (4.3) World Total  80 684 83 838 3.9 40,000 60,000 80,000 100,000 120,000 (000 units) Light duty vehicles 6,000 8,000 10,000 12,000 14,000 (000 units) Heavy duty vehicles
  17. 17. 27/02/2014 17 Interim Results February 2014 www.implats.co.za MARKET REVIEW 000 oz 2010 2011 2012 2013 % Increase  2012/13 Chinese imports  1 514 1 680 1 666 2 210 Chinese net imports 2 420 2 542 2 472 3 087 Total Chinese net imports 2 703 3 101 3 307 4 108 24% Platinum turnover at SGE 879 1 045 1 027 1 406 37% Where have all the ounces gone? 33 Platinum total net import in China 2010 ‐ 2013 Interim Results February 2014 www.implats.co.za MARKET REVIEW 000 oz 2012 2013 2014 (Forecast) DEMAND Automobile Jewellery Industrial  Investment 3 470                   2 525 1 700 200 3 150 2 650 1 780 750 3 200 2 700 1 810 100 Total Demand 7 895 8 330 7 810 SUPPLY South Africa Zimbabwe North America Recycle ‐ Auto Recycle ‐ Other Russian Sales 4 025 350 380 1 040 900 800 4 080 390 385 1 125 890 850 3 800* 410 395 1 210 820 750 Total Supply Balance 7 495 ‐ 400 7 720 ‐610 7 385 ‐425 Platinum supply / demand outlook 34 * Assumes results of strike to date
  18. 18. 27/02/2014 18 Interim Results February 2014 www.implats.co.za MARKET REVIEW 000 oz 2012 2013 2014 (Forecast) DEMAND Automobile Industrial  Investment 6 000 3 110 300 6 500 3 125 250 7 150 3 190 ‐ Total Demand 9 410 9 875 10 340 SUPPLY South Africa North America Other Recycle Russian Sales 2 245 930 1 080 1 850 2 700 2 220 960 955 2 250 2 700 2 100* 980 930 2 400 2 700 Total Supply Balance 8 805 ‐605 9 085 ‐790 9 110 ‐1 230 Palladium supply / demand outlook 35 * Assumes results of strike to date Interim Results February 2014 www.implats.co.za MARKET REVIEW 000 oz 2012 2013 2014 (Forecast) DEMAND Automobile Industrial  790 190 800 190 820 200 Total Demand 980 990 1 020 SUPPLY South Africa North America Other Recycle Russian Sales 580 20 30 260 65 580 20 35 300 65 545* 20 40 320 65 Total Supply Balance 955 ‐25 1 000 10 990 ‐30 Rhodium supply / demand outlook 36 * Assumes results of strike to date
  19. 19. 27/02/2014 19 Interim Results February 2014 www.implats.co.za MARKET REVIEW Market challenges and opportunities  Global economic recovery not widely entrenched  Growth in recycle market offsets SA mining  Security and stability of supply causing reputational damage, but …….   Will erode above ground stock levels (at a price)  New industry demand initiatives being explored  Heavy duty catalyst fitment gains momentum  Euro 6 implementation now effective  China pollution crackdown  Non‐investment demand continues to hold up reasonably well 37 Interim Results February 2014 www.implats.co.za MARKET REVIEW Is this the decade of the fuel cell? 38
  20. 20. 27/02/2014 20 Outlook Terence Goodlace, CEO Interim Results February 2014 www.implats.co.za OUTLOOK Outlook  Safety • Ongoing safety strategy starting to show benefits   PGM markets • Fundamentals for PGMs remain robust • The slowly eroding (above‐ground) inventories should positively impact prices   Cost pressures • Potential wage settlements – no resolution as yet • Mining inflation – cause for concern  • Impact of strike   Third‐party processing opportunities  Resolution of current industrial action is a priority 40
  21. 21. 27/02/2014 21 Interim Results February 2014 www.implats.co.za OUTLOOK Outlook  Positive engagement with Government of Zimbabwe regarding • Indigenisation • Beneficiation  Grow mine‐to‐market production • Improved recovery from all operations • As at 31 December 2013: Impala Rustenburg on‐track to deliver 850 000  platinum ounces by 2018 • Complete the 90 000 ounce Phase 2 expansion at Zimplats by 2015 • Grow Marula from 70 000 to 86 000 ounces of platinum by 2016  Mechanise and modernise our mines 41 Interim Results February 2014 www.implats.co.za OUTLOOK Interim Results February 2014

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