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 The Sharenet Daily 
Tuesday, 13 May 2014 - 20:00
Top News
SA Business
Company News
Company Results
World Markets (Spot Prices)
JSE Today
JSE Trading Statistics
Major Moves
Index Summary
Latest Consensus Changes / Results Expected
Recent Dividends / Ex Div
Upcoming AGMs
Stock Exchange News Service (SENS)

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Seed Weekly - Lonmin Plc Results

Lonmin Plc, the world’s third largest producer of Platinum Group Metals (PGMs), recently released its Interim Results for the six months ended 31 March 2014. The company also used this opportunity to update the market on the latest developments regarding the ongoing wage disputes, and attempted to soothe investors with a recovery plan to ramp up production when the strike finally ends.


Lonmin has a vertically integrated operational structure, ensuring that it is directly involved in the whole process from mine to market. Its Mining division extracts the ore, the Process division refines it and the Shared Services division provides infrastructure support to the two key units.

On the Mining side, the company’s chief asset is the now infamous Marikana mine near Rustenburg, which contributes more than 90% to annual production. Its second mine, Limpopo, is located near Polokwane and is currently on care and maintenance. Lonmin also holds a 42.5% stake in Pandora, a joint venture with Anglo Platinum.

The Process Division is responsible for converting the ore into refined metal. Concentrators are used to crush the ore into a liquefied concentrate, which is then sent to Lonmin’s smelting facilities. From the resulting metal-rich matte the company then extracts copper, nickel and ultimately refined PGMs.

Interim Results

As could be expected, the ongoing labour disputes had a devastating effect on Lonmin’s operations and subsequent results over the past six months. Total production was 3.2 million tonnes, of which 3.0 million tonnes was attributable to Marikana. This figure is down 43% from the 5.7 million tonnes mined in H1 2013. In Q1 the company suffered from safety stoppages and low productivity due to tensions around wage negotiations, while operations have been at a standstill for 9 out of a possible 12 weeks in Q2 as a result of the strike.

The graph illustrates the effect of labour-related events on underground mining volumes at Marikana over the past 3 years:

Platinum sales were down 19% on the previous period to 263,675 ounces, and management estimates that 155,720 of equivalent saleable ounces were lost due to the strike.

The company has increased its focus on cost containment and cash conservation, and has reduced normal cashfows by 60%. Capital expenditure amounted to $46m, while net cash reduced from $201m to $71.

The graph below illustrates the declining net cash position for the company:

Over the past 18 months Lonmin made significant progress with its unit cost reduction program, but the recent low production caused costs to increase again by 46% to R 13,058 per PGM ounce.

Lonmin benefitted from a weakening rand during the period, but the effect was partially offset by weak PGM prices.

Earnings before interest, tax, dividends and amortisation (EBITDA) amounted to $103m after excluding strike-related special costs of $165m, down 39% from the $171m achieved in the previous reporting period.

Lonmin’s operating loss for the half year amounted to $131 million when including strike related costs, compared to a $90m operating profit in H1 2013.

Finally, Earnings Per Share (EPS) dropped by 71% from 12.3 cents to 3.5 cents.


Ben Magara, CEO of Lonmin, admitted to the short term challenges faced by the entire platinum industry but remained optimistic on the future fundamentals of PGMs. Platinum demand stems mainly from automotive production, which is in turn reliant on a strong economic recovery in Europe and the USA. An exciting emerging opportunity also waits in the increasing manufacture of fuel cell driven cars. Demand for jewellery manufacture, although much less than automotive, also remains strong.

Key risks remain a slowdown in emerging markets, global automotive sales not growing strongly, and the possibility of substitution materials being discovered in automotive applications.

Lonmin’s short term priorities are to resolve the labour disputes and to safely ramp up production, while persisting with cash conservation strategies in order to protect the balance sheet.

The Seed Equity Fund holds a 1.8% position in Lonmin, with the share forming a small part of both the Value and Momentum portfolios.

Kind regards,

Cor van Deventer

021 914 4966

Tue, 13 May 2014
Top News
Platinum and palladium both rose nearly 1.5 percent on Tuesday on the back of lingering supply worries as South Africa sent more police to the strike-hit platinum belt to protect miners after four were killed returning to work over the weekend.  Full story

South African stocks retreated from record highs on Tuesday, dipping 0.13 percent led by platinum producer Lonmin, as it prepares to open its shafts for workers who have decided to ditch a 16-week wage strike.  Full story
Hundreds of stick-wielding miners barricaded roads and torched roadside vegetable stalls near Lonmin's South African platinum mine on Tuesday, in an attempt to block fellow strikers from breaking rank and going back to work.  Full story
Israel's ex-prime minister Ehud Olmert was sentenced to six years in jail on Tuesday for taking bribes in a real estate deal, a crime the judge said was akin to treason.  Full story
Signs that a U.N. watchdog investigation into suspected atomic bomb research by Iran is making little progress could further complicate broader diplomatic efforts to end the decade-old nuclear dispute that resume in Vienna this week.  Full story
U.S. stocks were mostly flat on Tuesday as the benchmark S&P 500 retreated slightly from an intraday record, while an index of European. . .  Full story
U.S. stocks mostly edged higher on Tuesday, with the S&P 500 briefly rising above 1,900 for the first time and more developments on. . .  Full story
European equities ended higher on Tuesday, with some benchmarks hitting multi-year highs following upbeat company results from major companies such as aerospace giant Airbus. . .  Full story
Britain's top share index hit its highest closing level since December 1999 on Tuesday, led by housebuilding stocks, with technical analysts betting the broader. . .  Full story

European equities rose on Tuesday, with some benchmarks hitting multi-year highs, on upbeat company results and a report that Germany's central bank is ready. . .  Full story
U.S. stocks were little changed on Tuesday as investors found few reasons to keep pushing shares higher with major indexes coming off record. . .  Full story
European stocks rose on Tuesday, with a number of benchmarks hitting multi-year highs, boosted by upbeat company results and a report saying Germany's. . .  Full story
The euro fell to a one-month low against the dollar on Tuesday after a report that Germany's powerful Bundesbank would back monetary easing. . .  Full story
SA Business
When the world's top three platinum firms opted to tackle South Africa's worst mining strike by sidestepping the militant AMCU union,. . .  Full story
A continuation of recent economic policies following a decisive victory for the ruling African National Congress in last week's South African. . .  Full story
Statistics South Africa released its monthly mining production data for March on Tuesday. Below is the breakdown of the main minerals.. . .  Full story
South African police deployed additional officers to the platinum belt on Tuesday to protect miners returning to work this week, a. . .  Full story

South Africa's rand extended gains to a 2014 high of 10.2725 against the dollar on Tuesday, breaking through a 10.3000 technical. . .  Full story
South Africa's third-biggest mobile operator Cell C said on Tuesday it plans capital expenditure of 2.3 billion rand ($221.62 million) in. . .  Full story
Indian equities climbed 2 percent on Tuesday, leading emerging markets to one-month highs. Wall Street's strong showing the day before session also boosted sentiment.. . .  Full story
South Africa sold 2.35 billion rand ($226 million) worth of 2030, 2037 and 2048 bonds.. . .  Full story

South Africa's Nedbank reported an 8.7 percent jump in net interest income in the first quarter after a lending push grew total advances by nearly 15 percent. South. . .  Full story
The Islamic Financial Services Board (IFSB) will release an updated 10-year industry roadmap next week as it places greater emphasis on the implementation of its standards with regulators around the globe.. . .  Full story
South Africa's rand held largely steady against the dollar on Tuesday but could pull away from its recent 2014 highs as investors fret over reports of violence flaring up at the. . .  Full story
World Markets (Spot Prices)
NameTimeRPMove% Move
JSE Overall17:0049199.70-39.59-0.08%
JSE Top 4017:0044086.05-49.60-0.11%
JSE Gold17:001469.51-18.69-1.26%
JSE Financial17:0036877.1895.760.26%
JSE Industrial17:0063124.94-124.32-0.20%
JSE Indust 2517:0055491.34-147.48-0.27%
JSE Resource17:0057527.79-23.09-0.04%
DJ Futures19:4216670.0015.000.09%
DJ Ind19:5816713.0617.590.11%
SP 50019:581896.970.320.02%
FTSE 10017:356873.0821.330.31%
All Ords09:025475.4046.400.85%
NZSE 5007:485199.3436.920.72%
NameTimeRPMove% Move
Gold $19:591293.26-1.70-0.13%
Gold R19:5913333.23-74.04-0.55%
Gold R/kg19:58428633-3700-0.86%
Silver $19:5919.5010-.0050-0.03%
Platinum $19:591450.1016.401.14%
Palladium $19:59814.8011.551.44%
Brent Crude19:58108.87.980.91%
Rand / Dollar19:5910.3105-0.0426-0.41%
Rand / Pound19:5517.3174-0.1169-0.67%
Rand / Euro19:5514.1260-0.1202-0.84%
Rand / NZD19:598.9045-0.0214-0.24%
Rand / AUD19:559.6432-0.0537-0.55%
Yen / Dollar19:59102.27600.13300.13%
Euro / Dollar19:590.73000.00310.43%
Dollar / Euro19:591.3699-0.0059-0.43%
Pound / Dollar19:550.59410.00150.25%

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The JSE Today

Trading Statistics
* Includes all listed instruments on the JSE
Major Moves Up
SharenameSaleMove% MoveVolume
1 PUTPROP  790658.97.%1500
2 ELBGROUP  48003006.67.%7649
3 WESCOAL  209115.56.%75550
4 ARGENT  569295.37.%314686
5 GRANPRADE  602295.06.%1133496
6 AMECOR  300144.90.%23767
7 CADIZ  11054.76.%72296
8 RCL  1700764.68.%65554
9 ILIAD  700304.48.%320036
10 AUSTRO  15364.08.%93991
11 DAWN  1050403.96.%82920
12 SASFIN  49021823.86.%4668
13 GRINDROD  2737873.28.%1500080
14 TRANSCAP  575183.23.%351403
15 TSOGO-SUN  2887873.11.%1413745
16 ARROW-B  767233.09.%217055
17 HCI  159454452.87.%81031
18 SAPPI  37641032.81.%989248
19 CMH  1310352.75.%10500
20 SUNINT  106482772.67.%19850

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Major Moves Down
SharenameSaleMove% MoveVolume
1 DIAMONDCP  108-21-16.28.%10500
2 ZCI  365-65-15.12.%1250
3 CSG  210-18-7.89.%82156
4 TOWER  830-70-7.78.%100
5 ABIL  811-58-6.67.%21407237
6 TORRE  245-15-5.77.%589378
7 YORK  350-20-5.41.%11850
8 ADVHLTH  180-10-5.26.%2222357
9 LITHA  180-10-5.26.%42312
10 LONMIN  4533-227-4.77.%1912916
11 CBH  335-14-4.01.%29500
12 INTEWASTE  142-5-3.40.%142000
13 ROLFES  433-15-3.33.%46407
14 CAT  1541-48-3.02.%353110
15 PNR-FOODS  9199-283-2.98.%19779
16 BRIMST-N  1362-38-2.71.%1400
17 MAZOR  215-5-2.27.%68679
18 KELLY  230-5-2.13.%68807
19 FONEWORX  230-5-2.13.%50000
20 ADAPTIT  736-16-2.13.%178555

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New Highs
SharenameSaleHighMove% MoveVolume
1 GRANPRADE  602625295.06.%1133496
2 HCI  15945160994452.87.%81031
3 OMNIA  23416234165192.27.%171378
4 MRPRICE  16755168033302.01.%259423
5 NIVEUS  28302830401.43.%61079
6 SUPRGRP  30453050421.40.%185827
7 BEE-SASOL  47500475005001.06.%122
8 FIRSTRAND  39503975350.89.%6545350
9 SABVEST-N  35203520250.72.%100
10 ADVTECH  88590050.57.%121156
11 SABVEST  440046000.2957
12 B-AFRICA  1565015890-5-0.03.%1006611
13 RBPLAT  70807199-8-0.11.%541329
14 ANGLO  2840829344-262-0.91.%2520675
15 ADVHLTH  180200-10-5.26.%2222357

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New Lows
SharenameSaleLowMove% MoveVolume
1 ABIL  811799-58-6.67.%21407237

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Index Summary
Index NameRPMove% Move
Top 4044,086.05-49.60-0.11%
Mid Cap63,926.9526.100.04%
Small Cap54,396.88162.310.30%
Resource 2057,527.79-23.09-0.04%
Industrial 2555,491.34-147.48-0.27%
Financial 1514,179.8258.800.42%
Financial & Ind. 3059,551.44-95.35-0.16%
All Share49,199.70-39.59-0.08%
Oil & Gas 45,450.14499.451.11%
Mining 34,257.10-128.75-0.37%
Gold Mining1,469.51-18.69-1.26%
Platinum Mining50.18-.21-0.42%
GENERAL MINING9,960.81-26.22-0.26%
Oil & Gas Producers 24,437.70268.541.11%
Basic Materials 30,202.03-108.11-0.36%
Chemicals 24,679.66157.910.64%
Forestry & Paper 30,768.62-184.37-0.60%
Industrial Metals 20,886.3878.880.38%
Industrials 46,409.78324.310.70%
General Industrials 145.65.940.65%
Consumer Goods 58,189.24-439.07-0.75%
Automobiles & Parts 9,216.35-72.46-0.78%
Household Goods369.5620.50%
Health Care 78,089.8273.490.09%
Beverages 189.54-.92-0.48%
Index NameRPMove% Move
Food Producers 70,456.71-200.45-0.28%
Personal Goods 1,006.65-14.69-1.44%
Consumer Services 11,120.12-17.56-0.16%
General Retailers 64,957.50610.670.95%
Travel & Leisure 5,908.20101.571.75%
Media 235.46-1.71-0.72%
Support Services 2,791.1825.830.93%
Telecommunications 10,583.0563.190.60%
Financials 36,877.1895.760.26%
Banks 64,305.25311.820.49%
Non-life Insurance 52,979.00913.701.75%
Life Insurance 35,391.86225.040.64%
General Financial 3,731.00-21.77-0.58%
Technology 42,560.77-36.45-0.09%
SHARIAH TOP40 4,252.9840.09%
FTSE/JSE SHARIAH ALL4,360.7730.06%
COAL MINING17,900.73-51-0.28%
FTSE JSE Fledgling 6,868.41160.23%
FTSE/JSE Alt X 1,203.51-15-1.22%
CAPPED PROPERTY 442.30-0.30%
RESOURCE 31,448.51-31-0.10%
DIVIDEND PLUS227.0810.40%
FTSE/JSE RAFI 409,909.79-4-0.04%
Capped Top 4023,338.23-27-0.12%
Capped All Share24,911.67-20-0.08%
JSE TABACO 7,678.96-49-0.64%

Click here for the Sharenet Index Summary page
Latest Consensus Changes**
CodeCompany NameStatusUpdated
Results Expected**
ExpectedCompany NameFin. Date
14/05/2014ACCPROPMarch 2014 (Final)
14/05/2014ALTRONFebruary 2014 (Final)
14/05/2014ALTRON PPFebruary 2014 (Final)
14/05/2014CONDUITFebruary 2014 (Interim)
14/05/2014DATATECFebruary 2014 (Final)

Recent Dividends**
Share NameDec-DateLDTPay-DateAmount
RAUBEX12/05/1430/05/1409/06/14ZAR 0.3500
ARROWB12/05/1430/05/1409/06/14ZAR 0.1619
ARROWA12/05/1430/05/1409/06/14ZAR 0.1619
REDEFINE08/05/1423/05/1402/06/14ZAR 0.3640
OCEANA08/05/1420/06/1430/06/14ZAR 1.0600
Ex Div**
Share NameDec-DateLDTPay-DateAmount
PSG16/04/1409/05/1419/05/14ZAR 0.9000
GLENCORE04/03/1409/05/1430/05/14USD 0.1110
DCENTRIX15/04/1409/05/1419/05/14ZAR 0.0817
BARWORLD6%P14/04/1409/05/1419/05/14ZAR 0.0600

Upcoming AGMs**
CodeCompany NameDateStatus
ZSAZurich Insurance Company South Africa Lt...13/05/2014Confirmed
NBKPNedbank Ltd.13/05/2014Confirmed
NBKONedbank Ltd.13/05/2014Confirmed
ANGAngloGold Ashanti Ltd.14/05/2014Confirmed
ANGBAngloGold Ashanti Ltd.14/05/2014Confirmed

Stock Exchange News Service
13/05/201417:40CAPITAL PROPERTY FUND - Consent Request
13/05/201417:20VALUE GROUP LIMITED - Reviewed condensed consolidated financial results for the ...
13/05/201417:17REDEFINE PROPERTIES LIMITED - Results of Scheme Meetings
13/05/201417:05NUTRITIONAL HOLDINGS LIMITED - Updated Trading Statement
13/05/201416:00SHERBOURNE CAPITAL LIMITED - Reviewed provisional results for the year ended 31 ...
13/05/201415:56CAFCA LIMITED - Unaudited Financial Results for the six months ended 31 March 20...
13/05/201415:45REDEFINE PROPERTIES LIMITED - New Financial Instrument Listing RDFC14
13/05/201415:42BHP BILLITON PLC - 2014 Global Metals, Mining and Steel Conference Presentation
13/05/201415:27ADCORP HOLDINGS LIMITED - Trading statement for the year ended 28 February 2014
13/05/201415:08GRINDROD LIMITED - Claw-Back Offer to Grindrod Shareholders
13/05/201415:06MAZOR GROUP LIMITED - Condensed Results of the Audited Consolidated Annual Finan...
13/05/201415:04STANDARD BANK OF SOUTH AFRICA LD - SCIB: The Standard Bank Of South Africa Limit...
13/05/201415:03STANDARD BANK OF SOUTH AFRICA LD - CANCELLATION OF S344462 SCIB: The Standard Ba...
13/05/201415:03AFRICA ETF ISSUER LTD (RF) - ETFPLD - Listing of additional Africa Palladium deb...
13/05/201414:58STANDARD BANK OF SOUTH AFRICA LD - SCIB: The Standard Bank Of South Africa Limit...
13/05/201414:57STANDARD BANK OF SOUTH AFRICA LD - CANCELLATION OF S344460 SCIB: The Standard Ba...
13/05/201413:35INTU PROPERTIES PLC - Directors' and PDMRs Shareholdings
13/05/201413:00OLD MUTUAL PLC - Public Opening Position Disclosure/Dealing Disclosure by a Pers...
13/05/201412:50TORRE INDUSTRIAL HOLDINGS LIMITED - Share dealings by associates of a director o...
13/05/201412:33KAP INDUSTRIAL HOLDINGS LIMITED - Dealing In Securities By A Director Of A Major...
13/05/201412:00SENTULA MINING LIMITED - Disposal of property
13/05/201410:59INDWA INVESTMENTS LIMITED - Listing of Tap Issue - INA422
13/05/201410:50INDWA INVESTMENTS LIMITED - New Instrument Listing - INA433
13/05/201410:45SYNTHESIS FUNDING LIMITED - New Financial Instrument Listing - SY1088
13/05/201410:15NEDBANK GROUP LIMITED - Results of annual general meeting
13/05/201410:12ARGENT INDUSTRIAL LIMITED - Disclosure of acquisition of securities
13/05/201410:10TAWANA RESOURCES NL - Appendix 3B New issue announcement Application for quotati...
13/05/201410:00FIRESTONE ENERGY LIMITED - FSE response to ASX query
13/05/201410:00FORTRESS INCOME FUND LIMITED - Rights offer finalisation announcement
13/05/201409:45NEDBANK LIMITED1 - Results of annual general meeting
13/05/201409:30NEW GOLD ISSUER LIMITED - NGPLT-Additional Listing of NewGold Platinum Debenture
13/05/201408:01OLD MUTUAL PLC - Nedbank Group First Quarter 2014 Trading Update
13/05/201408:00FERRUM CRESCENT LIMITED - Change of registered address
13/05/201408:00SUN INTERNATIONAL LIMITED - Detailed Terms Announcement
13/05/201408:00TSOGO SUN HOLDINGS LIMITED - Acquisition by Tsogo of a minority interest in each...
13/05/201408:00GRAND PARADE INVESTMENTS LIMITED - Detailed terms announcement
13/05/201408:00REBOSIS PROPERTY FUND LIMITED - Ascension Pro Ltd\Delta Pro Fund Ltd\Rebosis Pro...
13/05/201408:00NEDBANK GROUP LIMITED - Nedbank Group First Quarter 2014 Trading Update
13/05/201407:30REMGRO LIMITED - Claw-back offer to Grindrod shareholders
13/05/201407:05BRITISH AMERICAN TOBACCO PLC - Transaction in own shares
13/05/201407:05LIFE HEALTHCARE GROUP HOLDINGS LTD - Unaudited Group Results, cash dividend decl...

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