Wrap Text
Shareholder And Trading Update For The Six Months Ended 31 December 2012
PETMIN LIMITED
Incorporated in the Republic of South Africa
Registration Number 1972/001062/06
Share Code JSE: PET & ISIN: ZAE000076014
Share Code AIM: PTMN
("Petmin" or "the Company")
15 February 2013
SHAREHOLDER AND TRADING UPDATE FOR THE SIX MONTHS ENDED 31 DECEMBER 2012
In terms of the Listings Requirements of JSE Limited ("Listings Requirements"), listed
Companies are required to publish a trading statement as soon as they are satisfied that a
reasonable degree of certainty exists that the financial results for the period to be reported
upon next will differ by at least 20% from those of the prior comparative period.
Petmin expects that earnings per share from continuing operations (taking into account the sale of
the SamQuarz Silica operation) will be down approximately 16% for the six month period to 31
December 2012.
Earnings for the six months ended 31 December 2012 at Petmin’s wholly?owned subsidiary, Tendele
Coal Mining (Pty) Limited, were affected by production delays due to the previously reported
unprotected strike by contractor employees and excessive rainfall which prevented the delivery of
available coal to the wash plants. Despite the difficult operating conditions, the Group’s operations
remain cash generative, generating approximately R160 million cash in the six months ended 31
December 2012 (2011: R200 million).
Management is confident that these difficulties have been largely overcome and Tendele is now
operating at its budgeted production levels. In the year ending 30 June 2013, Petmin anticipates that
Tendele will sell approximately 876 000 tonnes (previous estimate 900 000 tonnes) of anthracite
and, with the commissioning of the third wash plant in February 2013, the benefits of the sales of
energy products will be seen.
Earnings per share (EPS) and headline earnings per share (HEPS) for the six months ended 31
December 2012 will be approximately 36% below the earnings reported for the comparative six
months ended 31 December 2011 (these results included the results of SamQuarz).
For the six months ended 31 December 2012, Profit after tax is estimated to be R30 million, HEPS is
estimated to be approximately 5.20 cents (2011, 8.15 cents), and EPS is estimated to be 5.20 cents
(2011: 8.15 cents)
Anthracite Division
Tendele Coal Mining (Pty) Ltd Somkhele anthracite mine
Production in the six months ended 31 December 2012 at Somkhele was severely constrained by:
- the unprotected strike by contractor employees (see announcements released on the
Securities Exchange News Service and to RNS dated 28 September 2012 and 8 October
2012),
- unusually high rainfall encountered in Kwa-Zulu-Natal, South Africa, during October,
November and December 2012, which prevented the delivery of coal from the open pits.
In the six months ended 31 December 2012, Somkhele lost a total of 42 production days to the
unprotected strike and rainfall.
Fifteen production days were lost as a result of the unprotected strike action which was
widespread in the South African mining industry and a further 27 production days were lost due
to excessive rainfall encountered in Kwa-Zulu-Natal, South Africa (more than double the historic
average).
The approximate quantitative effect of the above is summarised below:
Reason Production days lost ROM tonnes shortfall Anthracite saleable
tonnes shortfall
Strike 15 days 127,500 53,550
Rainfall 15 days unplanned lost 127,500 53,550
production
(Total 27 days lost to rain
of which 12 were Planned
Total 30 days 255,000 107,100
Total saleable tonnes 293,765
produced to 31
December 2012
Percentage tonnes lost 27%
At the end of December 2012, Somkhele had 192,000 tonnes of exposed coal (coal that is
available in the pits to be loaded and hauled to the wash plants) that could not be delivered to
the wash plants in December due to the heavy rainfall. At the time of this report, these sections
have been de-watered to grant access to the coal and the mine is operating at budgeted levels.
Had this coal been delivered to the wash plants and sold (Tendele had outstanding orders),
management estimates that this would have resulted in a profit after tax for the six months
ended 31 December 2012 of R44 million (up some 47% from the estimated profit after tax of R30
million) and the earnings per share for the period would have been approximately 22% up on the
EPS from continuing operations for the comparative period ended 31 December 2011 (6.18
cents).
In the six months ended 31 December 2012, Somkhele maintained its expected sales volumes
and prices as demand remained steady and deliveries were made from stockpiles on hand.
Production at Somkhele increased by 44% to 293 765 tonnes (2011: 203 425 tonnes) of saleable
anthracite in the six months to 31 December 2012 and tonnes sold increased by 63% to 370 562
tonnes (2011: 227 041 tonnes).
The significant capital investment in Somkhele during the past two years is largely completed and
Tendele is now geared to produce some 1.2 million tonnes of anthracite annually and some 480
000 tonnes of energy product from the newly commissioned third plant.
During the period under review an extension to an existing mining right was obtained for the
Luhlanga area. Once the Luhlanga mining area is in production (expected to commence in April
2013), Somkhele will operate in four different pit areas that will provide the flexibility to blend
production to supply improved qualities and to reduce the risk of production delays should
production in one of the pits be delayed. Following severe rains in January 2013, production
levels have returned to normal. In order to mitigate the impact of rain on production going
forward, Somkhele has commenced a campaign to stockpile run-of-mine (ROM) coal at the pit-
head so that it may still be delivered to the wash plants in the event of sustained heavy rainfall.
The aim of the campaign is to ensure some 100 000 ROM material on stockpile that will allow the
plants to operate at full capacity for 10 days in the event that the pits can’t be accessed due to
rain. At the time of writing this report, some 40 000 ROM tonnes are on the stockpile.
With production levels improving and an anthracite market that is showing reasonable demand
at prices better than during the previous six months, Petmin expects production from Somkhele
to increase significantly in the six months ending 30 June 2013.
North?Atlantic Iron Corporation (NAIC)
Petmin will provide feedback on the positive progress made at the North Atlantic Iron Corporation
pig iron project when it publishes its interim results on 4 March 2013.
The financial information on which this trading statement is based has not been reviewed, audited
nor reported on by Petmin's external auditors.
Enquiries:
Petmin
Bradley Doig
+27 11 706 1644 (office)
+27 82 459 7818 (mobile)
Media
Jonathon Rees +27 76 185 1827
Jonathon@proofafrica.co.za
Sponsor and Corporate Advisor (JSE)
River Group
Andrew Lianos +27 834 408 365
Nominated Adviser and Broker (AIM)
Macquarie Capital (Europe) Limited
Steve Baldwin +44 20 3037 2362
Nicholas Harland +44 20 3037 2369
River Group
Johannesburg
15 February 2013
Date: 15/02/2013 03:31:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
Sharenet Sites 
