Sentula Mining Ltd FY 2014 financial results presentation

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Sentula Mining Ltd listed on the Johannesburg Stock Exchange has released its Full Year Results Presentation. Check out
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Sentula Mining Ltd FY 2014 financial results presentation

  1. 1. AUDITED SUMMARY FINANCIAL RESULTS FORTHEYEAR ENDED 31 MARCH 2014
  2. 2. NOTES: Sentula Mining Limited 1 AUDITED SUMMARY FINANCIAL RESULTS FORTHEYEAR ENDED 31 MARCH 2014
  3. 3. Sentula Mining Limited 2 www.sentula.co.za Introduction • Overview • Financial review • Operational performance • Strategic review • Outlook • Questions
  4. 4. NOTES: Sentula Mining Limited 3 www.sentula.co.za Overview Sustainability • No serious injuries recorded for the period under review or for the 2014 calendar year to date. • CIFR of 0,78 (2013: 0.29) per million man hours worked for the year – 4 lost time injuries recorded. • Group audited level 5 BBBEE rating – DTI codes. • Empowered underlying SA mining services entities – level 4 BBBEE rating – DTI codes.
  5. 5. Sentula Mining Limited 4 www.sentula.co.za Overview Financial results • Revenue decreased by 24% to R 1 591 million                                                  (2013*: R 2 084 million) • Loss from operating activities improved by 79%  to R(176) million (2013*: R (844) million) • Basic loss per share from continuing operations decreased to (47.7) cents (2013*: (148.9) cents) • Headline loss per share decreased to (43.7) cents                                       (2013*: (24.9) cents) • Net asset value per share: 176 cents (2013*: 265 cents) • Tangible net asset value per share: 170 cents                                                 (2013*: 250 cents) • Debt to equity gearing ratio improved to 31%                (2013*: 32%) *Restated for first time adoption of IFRS11
  6. 6. NOTES: Sentula Mining Limited 5 www.sentula.co.za Overview Impact on results • Curtailment in the South African PGM and global gold sector exploration  resulting in the associated downsizing and restructuring of Geosearch’s operations • Impairment of PPE of R 69m in Geosearch  • Provision for slow‐moving inventory (BE1260 dragline) of R 40m in Benicon  Sales • CCT goodwill impairment of R 35m • Fair value adjustment of R 375m to market value of the coal asset portfolio
  7. 7. Sentula Mining Limited 6 Financial review
  8. 8. NOTES: Sentula Mining Limited 7 www.sentula.co.za Financial review Segment analysis‐ revenue 2014 2013 Opencast mining services 1,177,109 1,189,379 Benicon Opencast 712,368 850,079 CCT 264,330 135,108 JEF Drill and blast 200,411 204,192 Megacube ‐ 64,440 Exploration drilling 301,889 749,854 Crane hire 87,510 64,327 Other 24,974 16,118 Benicon Sales 24,852 16,118 Caston 122 ‐ Continuing operations 1,591,482 2,084,118 Coal Mining – discontinuing 1,396 908 Total external revenue 1,592,878 2,085,026 2014 Benicon Opencast Exploration drilling CCT JEF Crane hire Benicon Sales 2013 Exploration drilling Benicon Opencast JEF CCT Megacube Crane hire Benicon Sales
  9. 9. Sentula Mining Limited 8 www.sentula.co.za Financial review Continuing operations ‐ income statement R’000 Audited  March ’14 Audited  restated March ’13 Revenue 1,591,482 2,084,118 Cost of sales (1,450,228) (1,794,128) Gross profit 141,254 289,990 Other income 25,406 8,347 Loss on sale of assets (10,390) (220,190) Administrative expenses (208,189) (276,583) Results from operations (51,919) (198,436) Recovery of unaccounted funds 30,000 ‐ Provision for slow‐moving/obsolete inventory (43,293) (133,783) Impairment of goodwill (35,138) (300,127) Impairment of plant and equipment (75,697) (186,902) Impairment of assets held‐for‐sale (398) (15,149) Impairment of intangible asset ‐ (9,162) Results from operating activities (176,445) (843,559)
  10. 10. NOTES: Sentula Mining Limited 9 www.sentula.co.za Financial review Continuing operations ‐ income statement R’000  Audited    March ‘14 Audited  restated March ’13 Results from operating activities (176,445) (843,559) Net finance charge (52,220) (57,972) Fair value adjustment on interest rate cap (213) (2,486) Loss before taxation (228,878) (904,017) Taxation  (54,277) 31,187 Loss for the year from continuing operations (283,155) (872,830)
  11. 11. Sentula Mining Limited 10 www.sentula.co.za Financial review Discontinuing operations ‐ income statement R’000 Audited  March ’14 Audited  restated March ’13 Revenue 1,396 908 Cost of sales (14,786) (15,096) Gross profit (13,390) (14,188) Other income 30 30 Administrative expenses (7,049) (1,215) Impairment of plant and equipment (10,000) ‐ Impairment of mineral rights (365,431) ‐ Operating loss (395,840) (15,373) Net finance income 485 501 Loss before taxation (395,355) (14,872) Taxation 102,432 26 Loss for the year from discontinued operations (292,923) (14,846) Total loss for the year (576,078) (887,676)
  12. 12. NOTES: Sentula Mining Limited 11 www.sentula.co.za Financial review Consolidated statement of financial position R’000 Audited  March ‘14 Audited  restated March ‘13 ASSETS Property, plant and equipment 932,313 1,381,243 Mineral rights ‐ 410,761 Intangible assets 2,019 10,205 Investment in equity‐accounted joint venture ‐ ‐ Goodwill 37,427 72,565 Restricted investment ‐ 8,693 Deferred tax assets 12,947 50,525 Total non‐current assets 984,706 1,933,992 Inventories 113,979 189,792 Trade and other receivables 323,725 535,176 Cash and cash equivalents 60,358 109,991 Current tax receivables 1,435 18,127 Total current assets Assets of disposal group classified as held‐for‐sale 499,497 853,086 300,983 1,807 TOTAL ASSETS 1,785,186 2,788,885
  13. 13. Sentula Mining Limited 12 www.sentula.co.za Financial review Consolidated statement of financial position R’000 Audited    March ‘14 Audited  restated March ’13 LIABILITIES Loans and borrowings 25,082 ‐ Finance lease obligations 6,118 3,371 Rehabilitation provision ‐ 66,899 Deferred tax liabilities 103,956 221,375 Total non‐current liabilities 135,156 291,645 Loans and borrowings 309,852 543,744 Finance lease obligations 5,110 2,129 Trade and other payables 169,452 282,763 Deferred revenue 2,351 ‐ Bank overdraft 28,134 58,062 Taxation payable 40,367 40,564 Total current liabilities 555,266 927,262 Liabilities of disposal group classified as held‐for‐sale 68,680 ‐ TOTAL LIABILITIES 759,102 1,218,907
  14. 14. NOTES: Sentula Mining Limited 13 www.sentula.co.za Financial review Consolidated statement of financial position R’000 Audited March ‘14 Audited  restated  March ’13 EQUITY Share capital and share premium 1,994,406 1,994,406 Reserves (969,789) (457,170) Total equity attributable to the equity holders of the  company 1,024,617 1,537,236 Non‐controlling interest 1,467 32,742 TOTAL EQUITY 1,026,084 1,569,978 TOTAL EQUITY AND LIABILITIES 1,785,186 2,788,885
  15. 15. Sentula Mining Limited 14 www.sentula.co.za Financial review Consolidated statement of cash flows R’000 Audited  March ‘14 Audited  restated  March ’13 Loss for the year (576,078) (887,676) Non cash flow items: 716,451 1,077,302 Depreciation and amortisation 193,614 165,104 Impairments 486,674 512,214 Other non‐operational cash flow items 36,163 399,984 140,373 189,626 Movement in working capital 148,409 16,899 Cash flows from operations 288,782 206,525 Income tax paid (29,934) (41,968) Interest paid (51,527) (58,139) Cash flows from operating activities 207,321 106,418
  16. 16. NOTES: Sentula Mining Limited 15 www.sentula.co.za Financial review Consolidated statement of cash flows R’000 Audited    March ‘14 Audited  restated  March ’13 Cash flows from operating activities 207,321 106,418 Purchase of property, plant and equipment (94,462) (214,716) Proceeds from disposal of property, plant and equipment 42,124 121,673 Other investing activities 20,414 (10,069) 175,397 3,306 Net change in borrowings (203,772) (160,029) Other financing activities ‐ 14,279 Net decrease in cash and cash equivalents (28,375) (142,444) Cash and cash equivalents at the end of the year 33,744 51,929
  17. 17. Sentula Mining Limited 16 Operational performance Mining services
  18. 18. NOTES: Sentula Mining Limited 17 www.sentula.co.za Operational performance Opencast mining services ‐ Benicon • Phillip van Vuuren (CEO) Marthinus de Jager (CFO) • Acquisition date: 2007 • D/E – FY2014: 47% – (FY2013: 110%) • Annualised ROE – FY2014: -11% – (FY2013: -30%) • ATR – FY2014: 1.6 – (FY2013: 1.5)
  19. 19. Sentula Mining Limited 18 www.sentula.co.za Operational performance Opencast mining services ‐ Benicon • Operational results impacted by: – Ramp up of Spitskop contract; – Margins under pressure due to cost and operational pressures • Net capex inflow- R18.7 m • Company fully contracted for the remainder of the 2015 financial year
  20. 20. NOTES: Sentula Mining Limited 19 www.sentula.co.za Operational performance Opencast mining services ‐ Benicon Anglo Coal - Landau - Excellsior - minipit - Umlalazi – minipit and boxcut - Schoongezicht – minipit Anglo Coal - Zondagsfontein - Zibulo – minipit Anglo Coal - Goedehoop - Vlaklaagte – rehabilitation Anglo Coal - Other - New Vaal – coal hauling - Mafube – topsoil and boxcut CCT – Samancor - Spitskop – minipit
  21. 21. Sentula Mining Limited 20 www.sentula.co.za Operational performance Opencast mining services ‐ CCT • Allan Hepburn (CFO & Act.CEO) • Acquisition date: 2008 • D/E – FY 2014: 34% – (FY2013: 42%) • Annualised ROE – FY2014: -18% – (FY2013: -21%) • ATR – FY2014: 2.8 – (FY2013: 1.2)
  22. 22. NOTES: Sentula Mining Limited 21 www.sentula.co.za Operational performance Opencast mining services ‐ CCT • Results for 2014 were impacted by ramp up of the Spitskop contract • Net capex inflow – R161k • Operational synergies unlocked with Benicon during FY2014 • Company fully contracted for the remainder of the 2015 financial year
  23. 23. Sentula Mining Limited 22 www.sentula.co.za Operational performance Opencast mining services ‐ CCT Samancor • Tweefontein – minipit • Spitskop – minipit (sub contracted to Benicon and JEF) • Hooggenoeg - minipit • Klarinet – rehabilitation • Quartzite – minipit
  24. 24. NOTES: Sentula Mining Limited 23 www.sentula.co.za Operational performance Opencast mining services ‐ JEF • Jaap Beyers (CEO) Zander Potgieter (CFO) • Acquisition date: 2008 • D/E – FY2014: 46% – (FY2013: 51%) • Annualised ROE – FY2014: 23% – (FY2013: 24%) • ATR – FY2014: 2.6 – (FY2013: 2.5)  (100 000 000)  (50 000 000)  ‐  50 000 000  100 000 000  150 000 000  200 000 000  250 000 000  300 000 000  350 000 000  400 000 000 2008 2009 2010 2011 2012 2013 2014 Turnover Ops profit
  25. 25. Sentula Mining Limited 24 www.sentula.co.za Operational performance Opencast mining services ‐ JEF • Operations impacted by the sudden termination of the Tharissa contract • Capacity and resources retained for new/replacement contracts in 2014 financial year • Net capex invested – R30.3 m – 3 x replacement DM30 drill rigs and support vehicles • Materially (80%) contracted for the 2015 financial year
  26. 26. NOTES: Sentula Mining Limited 25 www.sentula.co.za Operational performance Opencast mining services ‐ JEF Optimum Coal - Pullen’s Hope – Optimum Coal - Eikeboom – Optimum Coal Keaton Energy - Vanggatfontein – Liveiro Anglo Coal - Zibulo – Benicon - Isibonelo BECSA - MMS - BECSA - Wolwekrans - BECSA - Zondagsvlei Ext. – BECSA Xstrata Coal - Tweefontein Samancor - Spitskop – Benicon/CCT - Tweefontein - CCT
  27. 27. Sentula Mining Limited 26 www.sentula.co.za Operational performance Exploration ‐ Geosearch • Mike Fitzgerald (CEO) • Johann Lemmer (CFO) • Acquisition date: 2007/2008 • D/E – FY2014: 10% – (FY2013: 10%) • Annualised ROE – FY2014: -65% – (FY2013: -63%) • ATR – FY2014: 2.4 – (FY2013: 3.8)
  28. 28. NOTES: Sentula Mining Limited 27 www.sentula.co.za Operational performance Exploration ‐ Geosearch • Ongoing restructuring costs associated with the rightsizing of the business • Maintenance of bases in Botswana, Mozambique and South Africa • Very limited visibility of gold exploration in the North eastern DRC and Ethiopia • Demobilising of assets from the Ivory Coast • Net capex invested – R7.2 m (2 grade control rigs for PPL in SA)
  29. 29. Sentula Mining Limited 28 www.sentula.co.za Operational performance Crane Hire ‐ Ritchie • Danie Jacobs (CEO) Macy Sidu (CFO) • Acquisition date: 2008 • D/E – FY2014: 17% – (FY2013: 10%) • Annualised ROE – FY2014: 23% – (FY2013: 23%) • ATR – FY2014: 0.8 – (FY2013: 0.8)
  30. 30. NOTES: Sentula Mining Limited 29 www.sentula.co.za Operational performance Crane Hire ‐ Ritchie • Remains a solid contributor, through being a leading medium and heavy duty mobile crane hire company in the Mpumalanga region, supported by dedicated rigging expertise • Demand in the coal mining, construction and infrastructure development sectors (large capital projects: Eskom and mining projects), remains strong • Has contracts in place to supply crane services to AngloCoal, Samancor, Eskom and Glencore Coal • Continues to forecast good earnings in the current climate as growth opportunities continue to be explored • Net capex invested – R25.3m
  31. 31. Sentula Mining Limited 30 Operational performance Coal mining investments
  32. 32. NOTES: Sentula Mining Limited 31 www.sentula.co.za Coal mining investments Coal asset disposals Nkomati Anthracite - 60% • Management has progressed with the process of disposing of its stake in this operation • Cash consideration of R100m – 31 July 2014 • Deferred payment of R50m – two annual tranches Schoongezicht - 100% • Disposal for cash consideration of R22m • S11 transfer granted – 8 November 2013 Bankfontein - 74% • Disposal in process • Total proceeds of R40m on S11 transfer
  33. 33. Sentula Mining Limited 32 www.sentula.co.za Strategic review Sentula, with its suite of diversified service offerings, remains well positioned to take advantage of contract mining services opportunities across Southern Africa. Through the group’s African experience, Sentula is well positioned to capitalise on opportunities that may present themselves across the continent. Value preservation of the group’s current mining services business in the short term through: • investment in growth opportunities in its drilling and blasting and mobile crane hire businesses, • consolidation of its bulk earthmoving businesses and the extraction of operational efficiencies, • restructuring of its exploration business to take advantage of a recovery of the exploration sector, and • ensuring financial robustness, in the prevailing volatile economic environment. Sustainable growth in the medium term, off the back of: • Recovery in global demand for resources is expected to continue to drive interest in Africa and its potential as a new source of supply. • Established African asset, knowledge and resource base. • Existing business structures in key jurisdictions.
  34. 34. NOTES: Sentula Mining Limited 33 www.sentula.co.za Outlook • Four focused core operating mining services entities, bulk  earthmoving, overburden drilling and blasting, exploration drilling and  mobile crane hire • Visibility in the disposal of the Group’s portfolio of coal assets to settle the Group’s residual debt • Continue to work closely with our strategic B-BBEE partner, Thebe, to unlock value across the Group
  35. 35. Sentula Mining Limited 34 www.sentula.co.za Disclaimer This presentation contains forward‐looking statements relating to the business, financial performance and results of the Company and/or the industry in which the Company operates. These statements are generally identified by words such as “believes,” “expects,” “predicts,” “plans,” “estimates,” “aims,” “foresees,” “anticipates,” “targets,” and similar expressions. The forward‐looking statements, including but not limited to assumptions and views of the Company or information from third party sources, contained in the presentation are based on current plans, estimates, assumptions and projections and involve uncertainties and risks. Various factors could cause actual future results, performance or events to differ materially from those described in these statements. Neither the Company or its advisors represent nor guaranty that the assumptions underlying such forward‐looking statements are free from errors nor do they accept any responsibility for the future accuracy of the opinions expressed in this presentation. No obligation is assumed to update any forward‐looking statements. No representation or warranty, expressed or implied, is made and no reliance should be placed on the accuracy, actuality, fairness, or completeness of the information presented. None of the Company, its advisors, or any of their respective affiliates, directors, officers, employees and advisors nor any other person shall have any liability whatsoever for any losses arising, directly or indirectly, from any information contained in the presentation. This presentation does not constitute an offer or invitation to purchase or subscribe for any shares of the Company, and no part of this presentation shall form the basis of or be relied upon in connection with any contract or commitment. Any decision to purchase shares of the Company should be made solely on the basis of information, which has been publicly filed with the Johannesburg Securities Exchange. By viewing this presentation you acknowledge that you will be solely responsible for your own assessment of the market position of the Company and that you will conduct your own analysis and be solely responsible for forming your own view of the potential future performance of the Company’s business. This presentation speaks as of Thursday 26 June 2014. Neither the delivery of this presentation nor any further discussions of the Company with any of the recipients shall, under any circumstances, create any implication that there has been no change in the affairs of the Company since such date.
  36. 36. NOTES: Sentula Mining Limited 35 www.sentula.co.za Questions
  37. 37. BASTION GRAPHICS
  38. 38. www.sentula.co.za

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