Wrap Text
OPT - Optimum Coal Holdings Ltd - Reviewed group financial results for the six
months ended 31 december 2010
Optimum Coal Holdings Ltd
(Registration number: 2006/007799/06)
Share code: OPT
ISIN: ZAE000144663
("Optimum Coal" or the "Group" or the "Company")
REVIEWED GROUP FINANCIAL RESULTS FOR THE SIX MONTHS ENDED
31 DECEMBER 2010
Group highlights for the period ended 31 December 2010
Where applicable comparisons refer to the prior 6 months reporting period to
December 2009
- Revenue increased by 79% to R2.69 billion;
- EBITDA of R566 million generated during the period;
- Headline earnings of R278 million generated during the period;
- Group run-of-mine coal production up 35% to 8.789 million tons;
- Group saleable coal production up 39% to 7.033 million tons and export coal
production up 40% to 3.611 million tons;
- R722 million Kwagga North opencast extension at Optimum Collieries on track
and scheduled for June 2012 completion;
- Koornfontein Mines now fully integrated and delivering ahead of production
targets, with high value 2-seam life extension now confirmed; and
- Cash on hand of R378 million and net debt of R84 million as at 31 December
2010.
Consolidated statement of comprehensive income
for the period ended
Reviewed Reviewed Audited
6 months 6 months 12 months
31 Dec 31 Dec 30 Jun
2010 2009 2010
R`000 R`000 R`000
Revenue 2 691 217 1 499 954 3 359 324
Expenses (2 439 407) (1 743 895) (3 717 070)
Employee related (478 456) (287 321) (709 892)
expenses
Other expenses (1 960 951) (1 456 574) (3 007 178)
Share-based payment (2 450) 3 746 (3 863)
(expense)/income
Other income 191 787 479 904 773 881
Bargain purchase gain - - 14 734
Gain from business - - 95 359
acquisition achieved in
stages
Operational income 191 787 391 769 575 653
Profit on disposal of - 88 135 88 135
available-for-sale
financial asset
Results from operating 441 147 239 709 412 272
activities
Net finance cost (77 341) (90 654) (119 350)
Finance expenses (144 628) (137 911) (226 051)
Finance income 67 287 47 257 106 701
Share of profit from - (791) 2 506
associate
Profit before income 363 806 148 264 295 428
tax expense
Income tax expense (89 163) (78 600) (65 773)
Profit for the period 274 643 69 664 229 655
Other comprehensive
income
Fair value gain on - 24 313 208 942
available-for-sale
financial assets
Fair value gain on - (88 135) (88 135)
available-for-sale
financial assets
transferred to profit
or loss on disposal
Income tax on other - 9 836 (16 913)
comprehensive income
Other comprehensive - (53 986) 103 894
income for the period,
net of income tax
Total comprehensive 274 643 15 678 333 549
income for the period
Profit/(Loss)
attributable to:
Equity holders of the 274 643 69 664 215 499
parent
Non-controlling * * 14 156
interests
274 643 69 664 229 655
Total comprehensive
income attributable to:
Equity holders of the 274 643 15 678 319 393
parent
Non-controlling * * 14 156
interests
Total comprehensive 274 643 15 678 333 549
income for the period
Basic earnings per 137.47 47.07 131.75
share (cents)
Diluted earnings per 137.02 43.89 127.68
share (cents)
Shares in issue (000):
Weighted average number
of ordinary shares
Shares in issue at 251 786 200 000 200 000
beginning of the period
Effect of own shares (52 000) (52 000) (52 000)
held
Issued during the - - 15 566
period
Weighted average number 199 786 148 000 163 566
of ordinary shares at
end of the period
*Nominal amount
Note: A share split (200 000 shares: 1 share) took place during
the 2010 financial year. Accordingly, basic earnings per share and
diluted earnings per share for 2009 have been restated to account
for the share split.
Headline earnings per 139,22 6,59 28,92
share (cents)
Diluted headline 138,76 3,53 25,08
earnings per share
(cents)
*Nominal amountNote: A share split (200 000 shares: 1 share) took place during
the 2010 financial year. Accordingly, headline earnings per share and diluted
headline earnings per share for 2009 have been restated to account for the
share split and in addition have been restated for the omission of the once-
off profit on disposal of the available for sale financial asset in the
corresponding period.
Reconciliation of headline earnings
for the period ended
Reviewed Reviewed Audited
6 months 6 months 12 months
31 Dec 31 Dec 30 Jun
2010 2009 2010
R`000 R`000 R`000
Profit attributable to 274 643 69 664 215 499
equity holders of the
parent
Adjust for:
Loss on sale of plant 4 854 22 072 24 566
and equipment
Gain from business - - (95 359)
acquisition achieved in
stages
Fair value gain on
available-for-sale
financial assets
transferred to profit or
loss on disposal - (88 135) (88 135)
Bargain purchase gain - - (14 734)
Tax effects of the above (1 359) 6 159 5 460
adjustments
278 138 9 760 47 297
Consolidated statement of financial position
as at
Reviewed Reviewed Audited
31 Dec 31 Dec 30 Jun
2010 2009 2010
R`000 R`000 R`000
Assets
Property, plant and 6 419 886 4 782 853 6 375 205
equipment
Intangible assets 919 721 903 782 938 106
Restricted 1 232 398 966 730 1 183 942
rehabilitation
investment
Available-for-sale 1 272 642 850 494 1 272 643
financial assets
Deferred taxation 5 436 13 148 5 436
Disposal group held for - 179 918 43 363
sale
Non-current assets 9 850 083 7 696 925 9 818 695
Inventories 433 393 234 196 391 817
Trade and other 234 393 193 176 257 054
receivables
Taxation 5 037 781 5 798
Cash and cash 377 748 368 699 750 536
equivalents
Disposal group held for 45 534 - -
sale
Current assets 1 096 105 796 852 1 405 205
Total assets 10 946 188 8 493 777 11 223 900
Equity and liabilities
Equity
Share capital and 2 519 850 850 001 2 519 850
premium
Available-for-sale fair 165 218 6 436 165 218
value reserve
Share-based payment 818 058 814 000 818 058
reserve
Treasury share reserve * * *
Retained earnings 2 983 069 2 548 459 2 708 426
Discount on acquisition 56 045 - 56 045
of non-controlling
interest
Non-controlling interest * * *
Total equity 6 542 240 4 218 896 6 267 597
attributable to equity
holders of the Company
Loans and borrowings 110 000 600 000 90 284
Finance lease liability 135 446 235 090 233 665
Share appreciation 14 834 8 832 12 384
rights liability
Environmental liability 1 786 264 2 008 284 1 899 286
provision
Post retirement medical 1 941 2 720 1 941
benefit
Deferred taxation 1 306 552 865 662 1 287 726
Non-current liabilities 3 355 038 3 720 588 3 525 286
Loans and borrowings 352 023 42 729 681
Finance lease liability 99 183 95 254 46 804
Trade and other payables 533 016 424 005 611 026
Taxation 64 690 34 992 43 506
Current liabilities 1 048 911 554 293 1 431 017
Total equity and 10 946 188 8 493 777 11 223 900
liabilities
Net asset value per 3 275 2 851 3 832
share (cents)
Tangible net asset value 2 814 2 240 3 258
per share (cents)
*Nominal amount
Note: A share split (200 000 shares: 1 share) took place during the 2010
financial year. Accordingly, net asset value per share and tangible net asset
value per share for 2009 have been restated to account for the share split.
Consolidated statement of changes in equity
for the period ended
Available-for-
Share Share sale fair value
capital premium reserve
Group R`000 R`000 R`000
Balance at beginning of 1 2 519 849 165 218
the period
Total comprehensive income - - -
for the period
Profit for the period
Net change in fair value
of available-for-sale
financial assets
1 2 519 849 165 218
Transactions with owners,
recorded directly in
equity
Issue of shares - - -
Non-controlling interest - - -
as a result of business
combination
Acquisition of non- - - -
controlling interest
Balance at end of the 1 2 519 849 165 218
period
*Nominal amount
Consolidated statement of changes in equity (continued)
for the period ended
Share-based Treasury
payment share Retained
reserve reserve earnings
Group R`000 R`000 R`000
Balance at beginning of the 818 058 * 2 708 426
period
Total comprehensive income - - 274 643
for the period
Profit for the period 274 643
Net change in fair value of -
available-for-sale financial
assets
818 058 * 2 983 069
Transactions with owners,
recorded directly in equity
Issue of shares - - -
Non-controlling interest as a - - -
result of business
combination
Acquisition of non- - - -
controlling interest
Balance at end of the period 818 058 * 2 983 069
*Nominal amount
Consolidated statement of changes in equity (continued)
for the period ended
Discount on
acquisition of Non-
non-controlling controlling
interest Total interest
Group R`000 R`000 R`000
Balance at beginning 56 045 6 267 597 *
of the period
Total comprehensive 274 643 *
income for the period
Profit for the period 274 643 *
Net change in fair -
value of available-for-
sale financial assets
56 045 6 542 240
Transactions with
owners, recorded
directly in equity
Issue of shares - - -
Non-controlling - - -
interest as a result
of business
combination
Acquisition of non- - - -
controlling interest
Balance at end of the 56 045 6 542 240 *
period
*Nominal amount
Consolidated statement of changes in equity (continued)
for the period ended
Reviewed Reviewed Audited
Total equity Total equity Total equity
31 Dec 31 Dec 30 Jun
2010 2009 2010
Group R`000 R`000 R`000
Balance at beginning of 6 267 597 4 203 218 4 203 194
the period
Total comprehensive 274 643 15 678 333 549
income for the period
Profit for the period 274 643 69 664 229 655
Net change in fair - (53 986) 103 894
value of available-for-
sale financial assets
6 542 240 4 218 896 4 536 743
Transactions with
owners, recorded
directly in equity
Issue of shares - - 1 673 907
Non-controlling - - 733 640
interest as a result of
business combination
Acquisition of non- - - (676 693)
controlling interest
Balance at end of the 6 542 240 4 218 896 6 267 597
period
*Nominal amount
The following table reconciles EBITDA to profit for the period:
for the period ended
Reviewed Reviewed Audited
6 months 6 months 12 months
31 Dec 31 Dec 30 Jun
2010 2009 2010
R`000 R`000 R`000
Results from operating 441 147 239 709 412 272
activities
Other income (191 787) (479 904) (773 881)
Bargain purchase gain - - (14 734)
Gain from business - - (95 359)
acquisition in stages
Net release from (191 787) (391 769) (575 653)
rehabilitation provision
Profit on disposal of shares - (88 135) (88 135)
Share-based payment expense 2 450 (3 746) 3 863
Depreciation and amortisation 314 130 218 217 502 143
EBITDA 565 940 (25 724) 144 397
Operating segments
Group
The Group has three reportable segments as described below, which are the
Group`s strategic business units. The business units offer different products
and services and are managed separately because of their different business
strategies. The following summary describes the operations in each of the
Group`s reportable segments:
Coal mining: includes the production of coal for both local and export market.
Logistics: involves the process to route coal to Richards Bay Coal Terminal
(RBCT).
Coal exploration: includes coal exploration through several subsidiary
companies.
Information regarding the results of each reportable segment is included
below. The basis of measurement of reportable segment items are in terms of
IFRS. Performance is measured based on segment profit before tax. These
measures are used as management believes that such information is the most
relevant in evaluating the results of certain segments operating within these
industries and for comparability. Inter-segment pricing is determined on an
arm`s length basis.
Information about reportable segments
Coal
Reviewed mining Logistics
31 December 2010 R`000 R`000
External revenues 2 690 335 882
Inter-segment revenues - 445 031
Finance income 65 602 1 685
Finance expenses (144 628) -
Depreciation and amortisation (314 130) -
Other operating expense (1 573 511) (336 164)
Total profit or loss for reportable 723 669 111 434
segments
Other corporate profit or loss
Inter-segment revenues
Share-based payment expense
Elimination of inter-segment profits
Consolidated profit before income tax
Capital expenditure (354 127) -
Reportable segment assets 7 619 409 1 372 795
Other corporate assets
Elimination of inter-segment assets
Consolidated total assets
Reportable segment liabilities (5 121 499) (372 539)
Other corporate liabilities
Elimination of inter-segment liabilities
Consolidated total liabilities
Coal
Reviewed mining Logistics
31 December 2009 R`000 R`000
External revenues 1 476 308 23 647
Inter-segment revenues - 339 496
Finance income 37 145 91
Finance expenses (137 786) (108)
Depreciation and amortisation (218 217) -
Other operating expense (1 169 194) (265 306)
Total profit or loss for reportable (11 744) 97 820
segments
Other corporate profit or loss
Inter-segment revenues
Share of profit from associate
Share-based payment expense
Elimination of inter-segment profits
Consolidated profit before income tax
Capital expenditure (705 836) -
Reportable segment assets 6 119 633 930 189
Other corporate assets
Elimination of inter-segment assets
Consolidated total assets
Reportable segment liabilities (4 157 868) (207 984)
Other corporate liabilities
Elimination of inter-segment liabilities
Consolidated total liabilities
Information about reportable segments (continued)
Coal
Reviewed exploration Total
31 December 2010 R`000 R`000
External revenues - 2 691 217
Inter-segment revenues - 445 031
Finance income 67 287
Finance expenses - (144 628)
Depreciation and amortisation - (314 130)
Other operating expense - (1 909 675)
Total profit or loss for reportable - 835 102
segments
Other corporate profit or loss (23 815)
Inter-segment revenues 54 151
Share-based payment expense (2 450)
Elimination of inter-segment profits (499 181)
Consolidated profit before income tax 363 806
Capital expenditure (2 205) (356 332)
Reportable segment assets - 8 992 204
Other corporate assets 4 335 355
Elimination of inter-segment assets (2 381 370)
Consolidated total assets 10 946 188
Reportable segment liabilities - (5 494 038)
Other corporate liabilities (1 291 281)
Elimination of inter-segment liabilities 2 381 370
Consolidated total liabilities (4 403 949)
Coal
Reviewed exploration Total
31 December 2009 R`000 R`000
External revenues - 1 499 955
Inter-segment revenues - 339 496
Finance income 4 37 240
Finance expenses - (137 894)
Depreciation and amortisation - (218 217)
Other operating expense (32 241) (1 466 741)
Total profit or loss for reportable (32 237) 53 839
segments
Other corporate profit or loss 430 966
Inter-segment revenues 22 754
Share of profit from associate (791)
Share-based payment expense 3 746
Elimination of inter-segment profits (362 250)
Consolidated profit before income tax 148 264
Capital expenditure (4 564) (710 400)
Reportable segment assets 103 173 7 152 995
Other corporate assets 1 608 664
Elimination of inter-segment assets (267 882)
Consolidated total assets 8 493 777
Reportable segment liabilities (20 173) (4 386 025)
Other corporate liabilities (156 738)
Elimination of inter-segment liabilities 267 882
Consolidated total liabilities (4 274 881)
Consolidated statements of cash flow
for the period ended
Reviewed Reviewed Audited
6 months 6 months 12 months
31 Dec 31 Dec 30 Jun
2010 2009 2010
R`000 R`000 R`000
CASH FLOWS FROM OPERATING
ACTIVITIES
Cash generated/(utilised) by 443 205 8 178 (6 628)
operations
Interest received 18 831 10 112 35 765
Interest paid (42 047) (29 078) (96 479)
Taxation paid (43 712) (4 013) (69 253)
Net cash flows from 376 277 (14 801) (136 595)
operating activities
CASH FLOWS FROM INVESTING
ACTIVITIES
Acquisition of property, (354 127) (600 762) (881 568)
plant and equipment
Proceeds from sale of 11 049 4 607 2 595
property, plant and
equipment
Acquisition of capitalised (2 205) (4 564) (9 604)
exploration costs
Acquisition of other - (11 585) -
investments
Acquisition of subsidiary, - - (196 494)
net of cash acquired
Disposal of available-for- - 227 728 227 776
sale financial assets
Dividend from equity - 2 490 -
accounted investee
Long-term loan provided - (35 003) (42 160)
Net cash outflows from (345 283) (417 089) (899 455)
investing activities
CASH FLOWS FROM FINANCING
ACTIVITIES
Proceeds from issue of share - - 1 669 850
capital
Acquisition of non- - - (691 751)
controlling interest
Borrowings raised 50 000 600 000 688 307
Repayment of borrowings (407 942) (150 000) (180 535)
Finance lease liability (45 840) (51 843) (101 717)
repayment
Net cash (outflows)/inflows (403 782) 398 157 1 384 154
from financing activities
Net (decrease)/increase in (372 788) (33 733) 348 104
cash and cash equivalents
Cash and cash equivalents at 750 536 402 432 402 432
the beginning of the period
Cash and cash equivalents at 377 748 368 699 750 536
the end of the period
Commentary
Group financial highlights
During the first six months of FY2011 (the "reporting period") we produced
7.033 million tons of saleable coal, generated revenue of R2.691 billion and
earnings before interest, tax and depreciation and amortisation ("EBITDA1") of
R566 million, with profit for the period of R275 million. This is a
significant improvement from the first six months of FY2010 (the
"corresponding period"), during which we produced 5.072 million tons of
saleable coal, generated revenue of R1.500 billion, with profit for the period
of R70 million and negative EBITDA of R26 million.
During the reporting period, our operating profit increased by R201 million
from R240 million to R441 million primarily as a result of improved production
volumes from both opencast and underground operations at Optimum Collieries
and attributable underground production at Koornfontein Mines which was not
consolidated during the period ended 31 December 2009. Additionally, the
export coal price has strengthened in rand terms over the period. Higher
profitability resulted in cash generated from operations having increased by
R435 million from cash generated of R8 million to cash generated of R443
million in the reporting period.
Our statement of financial position remains strong, with low gearing at 6,6%
and net debt at R84 million as at 31 December 2010.
Strategic review and objectives
Our vision is to become the country`s benchmark South African owned and
controlled coal mining and exploration group. Our mission is to enhance
commercial prosperity by supplying both local and international coal
consumers.
Optimum Coal has demonstrated that it is a robust coal operator and the
Company is well-positioned to further develop its coal producing capabilities
by optimising resource life at current operations and by progressing its
existing development projects. However, the Company remains ready to take
advantage of any value generating acquisition opportunities by maximising our
exposure to the export coal market and by pursuing opportunities with Eskom.
We continue to be a significant supplier of coal to South Africa`s power grid
and are continuously exploring opportunities together with Eskom to increase
our coal supply to them. The arbitration process in respect of Optimum Coal`s
coal supply agreement to supply coal from its Optimum Collieries operations to
Eskom`s Hendrina Power Station, continues and the Company expects to complete
the process by the end of April 2011.
As the fourth largest coal exporter out of Richards Bay Coal Terminal where we
own 8.44 million tons per annum of export entitlement, we have the ability to
export coal efficiently providing us with direct exposure to international
thermal coal markets. We continue to evaluate further opportunities to
increase our access and exposure to international coal markets.
As at 31 December 2010, we have 318kt of export coal at our operations. We are
working closely with Transnet Freight Rail ("TFR") to ensure that this coal is
timeously railed to RBCT.
We are in the process of disposing of our platinum exploration assets and this
will allow us to continue focusing on our core business of producing coal.
Our empowerment credentials remain excellent, with more than 60% of Optimum
Coal`s shares being held by HDSA shareholders. We currently enjoy an
empowerment rating of 3 at Optimum Collieries and 4 at Koornfontein Mines.
Safety
Zero Harm to anyone at our operations is the top priority for us and we
continue to work diligently to ensure that our operations are safe at all
times. Our various safety initiatives implemented during the period have
raised safety awareness across our operations and we are pleased to report no
fatal accidents during the period. Furthermore, our safety rates continue to
improve compared to industry benchmarks.
Operational review
Optimum Coal is a diversified coal operator of significant scale with two
wholly-owned operations, Optimum Collieries and Koornfontein Mines. Through
significant efforts to optimise our operations mainly by maximising the
utilisation of our mining and infrastructure assets, we have significantly
increased our production performance across the group.
Optimum Collieries, the third largest opencast coal mine in South Africa
comprises three opencast mines and one underground mine, with estimated coal
resources of 710.7 million tons and an estimated reserve base of 250.2 million
tons of run-of-mine coal, of which 175.7 million tons are classified as
saleable as at 31 December 2010. A total of 5.39 million tons of saleable coal
was produced at Optimum Collieries during the reporting period, with a total
of 2.64 million tons of saleable export coal and 2.75 million tons of Eskom
sales tons produced.
Koornfontein Mines, a large underground mine, with estimated coal resources of
175.1 million tons and an estimated reserve base of 68.7 million tons of run-
of-mine coal, of which 44.1 million tons were classified as saleable as at 31
December 2010. A total of 1.64 million tons of saleable coal was produced
during the first six months of FY2011, with a total of 0.97 million tons of
saleable export coal and 0.67 million tons of Eskom saleable tons produced.
Opencast mines
Our opencast mines performed well during the reporting period, despite the
effects of heavy rain as well as contractor under-performance. We anticipated
unusually heavy summer rainfall and spent a significant amount of time and
capital to install additional in-pit water management infrastructure, which
was effective in mitigating the various effects of rain in the reporting
period. Under-performance of a pre-stripping contractor resulted in our
primary coal exposure process being affected. As a consequence, the scope of
the contractor was scaled down and another contractor was brought in to assist
in fulfilling the role. Another performance enhancing initiative is the re-
evaluation of mining methodologies, an optimisation project which we recently
commenced with.
Underground mines
Koornfontein Mines performed on target and we are pleased that we were able to
extend the life of the 2-seam reserve at Koornfontein Mines while work on the
4-seam project continues. We experienced protracted wage negotiations, now
resolved, and challenging geological conditions at Boschmanspoort Mine.
Boschmanspoort is in its development phase and we anticipate the geological
challenges will be overcome as the mine reaches maturity in the next year. To
expedite the process, we are in the process of implementing various
operational initiatives, which includes the recent acquisition of a Sandvik
road header.
Capital expenditure/development and exploration
During the period we spent a total of R354 million of capital expenditure on
our operations and project development. Capital spent on our existing
operations comprised R254 million at Optimum Collieries and R90 million at
Koornfontein Mines. Project development capital of R10 million was spent on
our greenfield development projects.
The Boschmanspoort Underground- and Water Reclamation Plant Projects costing a
total of R1.13 billion have been completed at Optimum Collieries, and the
development of the R722 million Kwagga North Opencast Mine is progressing
well. Scheduled for completion in mid-2012, we remain on track with this key
life of mine expansion project and continue to deliver progress within
timeframes and budgets.
Work on our brownfield projects, specifically the Schoonoord Project at
Optimum Collieries and our 4-seam Development Project at Koornfontein Mines
has also progressed during the reporting period. Schoonoord has a new order
mining right and we have commenced discussions with Eskom for the sale of
product to be mined from the reserve. The timing of the development of the
Koornfontein 4-seam reserve will depend on the Koornfontein Life of Mine
Optimisation currently being performed. We have been able to extend the
mineable high value 2-seam reserve life by two to three years at current
production rates, enabling us to continue producing high value exports at
Koornfontein Mines at a competitive cost and also enabling the deferral of the
4-seam Development Project.
Our greenfield developments projects, Overvaal, Vlakfontein and Mpefu provide
the group with substantial additional growth optionality. Feasibility work
continues on these projects and stakeholder engagement is well underway. The
timing of these developments will also depend on the results of the
Koornfontein Life of Mine Optimisation, where we have already confirmed the
mineability of additional high value 2-seam resource.
Our development strategy is to deliver incremental coal volume growth to both
Eskom and the export markets in a capital and margin efficient manner.
Projects will continue to be evaluated on a quarterly basis, and the board
will continue to adopt a robust and prudent approach to project approvals to
ensure that shareholder value is maximised and project risk is suitably
addressed.
Outlook
The outlook for thermal coal remains robust on the back of strong
international demand coupled with supply constraints across key coal producing
regions. Global demand has been supported by the cold European winter combined
with increased power generation and continued growth in Asian countries.
Extreme weather conditions experienced since November 2010 have materially
impacted local and international thermal coal supply and this supply tightness
has caused a 45% rise in API#4 dollar thermal coal prices out of Richard Bay
since October 2010. We believe that global supply constraints will take some
time to resolve and that international thermal coal demand remains robust and
sustainable.
Optimum Coal is well placed to take advantage of these current market
conditions, and will continue to grow the Company by optimising resource life
at current operations and developing our brownfield and greenfield projects
and by seeking value-generating acquisition opportunities during the next six
months.
Local coal transport logistics have been challenging and we continue to work
with TFR to address these logistics challenges.
With diversified operations in our group, we have the ability to better manage
overall operational and production risk, as and when this arises. We remain
focused on delivering group production targets for FY11 and we believe that
the successful implementation of operational initiatives especially at our
Boschmanspoort underground section and in our opencast sections, will enable
us to meet group targets. Our successfully implemented water management
initiatives at our opencast sections continue to mitigate various excess rain
effects which are still being experienced.
Board and Corporate Governance
Optimum Coal Holdings Limited is fully compliant with the King III Code of
Good Governance in terms of the board of directors following the appointment
of Mr. Bobby Godsell as chairman and Mr. Paul Nkuna as deputy chairman, both
of them being independent non-executive directors. The audit committee now
consists of three independent non-executive directors and the majority of the
board of directors are independent.
Basis of presentation
These condensed consolidated interim financial statements are prepared in
accordance with International Financial Reporting Standards, including IAS34
and the AC 500 series issued by the Accounting Practices Board ("APB") and the
requirements of the Companies Act of South Africa.
The same accounting policies and methods of computation were followed in these
financial statements as compared with the consolidated annual financial
statements for the year ended
30 June 2010.
Review opinion
This media release has been reviewed by the Company`s auditors, KPMG Inc.
Their unqualified review report is available for inspection at the Company`s
registered office.
Forward looking information
Certain statements in this press release may constitute forward-looking
information within the meaning of securities laws. In some cases, forward
looking information can be identified by the use of such terms such as "may",
"will", "should", "expect", "believe", "plan", "scheduled", "intend",
"estimate", "forecast", "predict", "potential", "continue", "anticipate" or
other similar expressions concerning matters that are not historical facts.
Forward looking information may relate to management`s future outlook and
anticipated events or results, and may include statements or information
regarding the future plans or prospects of the Company.
You should not place undue importance on forward looking information and
should not rely upon this information as of any other date. The Company
undertakes no obligation to update publicly or release any revisions of these
forward looking statements to reflect events or circumstances after the date
of this document or to reflect the occurrence of unanticipated events except
where required by applicable laws.
Dividend
No dividend has been declared by the board in respect of the six months ended
31 December 2010.
On behalf of the board
Bobby Godsell Mike Teke
Chairman Chief Executive Officer
Johannesburg
2 February 2011
Note 1: We define EBITDA as results from operating activities, excluding other
income, share-based payment income, depreciation and amortisation and releases
from the environmental provision.
First Floor, Marlborough Gate, Hyde Lane, Hyde Park, Sandton 2196. PO Box
411333 Craighall 2024
Tel: +27 (0) 11 325 0403 Fax: +27 (0) 11 325 0392
Directors
Non-Executive Independent Chairman: Mr Bobby Godsell
Executive Directors: Mike Teke, Douglas Gain, Henry White Non-Executive
Directors: Tom Borman, Peter Gain, Eliphus Monkoe, Dr Mlungisi Kwini
Non-Executive Independent Directors: Nomavuso Mnxasana,
Loutjie Smit, Lulu Letlape, Deon Dhlomo, Paul Nkuna
www.optimumcoal.com
Sponsor
RAND MERCHANT BANK (a division of FirstRand Bank Limited)
Date: 03/02/2011 07:05:01 Supplied by www.sharenet.co.za
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