Sharenet Sites 
Sharenet Sites
Unaudited Interim Financial Results For The Six Months Ended 31 August 2013
METMAR LIMITED
Incorporated in the Republic of South Africa
(Registration number 1998/007269/06)
Share code: MML & ISIN code: ZAE000078747
(Metmar or the Company or the Group)
Unaudited interim financial results for the six months ended 31 August 2013
- Turnover from continuing operations up by 27% to R933 million
- Operating profit from continuing operations of R11,6 million vs a R9,2 million operating loss
- Cash and cash equivalents increased to R85,4 million
- Construction of FPT Mineral Terminal completed
- Kalagadi tolling agreement signed
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
Note Unaudited at Unaudited at Audited at
31 August 2013 31 August 2012 28 February 2013
R000 R000 R000
ASSETS
Non-current
Property, plant and equipment 33 213 59 581 39 253
Goodwill and other intangible assets 102 207 153 680 150 150
Investment in associates 3 89 750 59 880 89 795
Other long-term financial assets 4 211 409 244 028 207 600
Non-current assets 436 579 517 169 486 798
Current
Inventories 501 536 302 386 423 539
Other short-term financial assets 4 44 132 113 328 47 451
Current tax receivable 2 558 894 6 764
Trade and other receivables 493 259 680 610 560 886
Cash and cash equivalents 6 85 664 151 686 80 148
1 127 149 1 248 904 1 118 788
Non-current assets held-for-sale 33 550 11 842 36 642
Total assets 1 597 278 1 777 915 1 642 228
EQUITY AND LIABILITIES
Capital and reserves 600 159 711 177 644 402
Non-current
Borrowings 13 413 64 679 19 494
Other liabilities 2 930 9 414 3 815
Deferred tax liabilities 32 958 56 494 51 652
Non-current liabilities 49 301 130 587 74 961
Current
Trade and other payables 5 941 208 802 906 811 465
Current tax liabilities - - 5 081
Bank overdraft 6 211 126 846 99 890
Current liabilities 941 419 929 752 916 436
Non-current liabilities held-for-sale 6 399 6 399 6 429
Total liabilities 997 119 1 066 738 997 826
Total equity and liabilities 1 597 278 1 777 915 1 642 228
Net asset value per share (cents) 224,52 266,05 241,07
Net tangible asset value per share (cents) 186,28 208,56 184,90
Number of shares in issue 267 306 552 267 306 552 267 306 552
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Note Unaudited Unaudited Audited
six months to six months to year to
31 August 2013 31 August 2012 28 February 2013
R000 R000 R000
CONTINUING OPERATIONS
Revenue 933 015 736 293 1 396 486
Cost of sales (848 147) (669 561) (1 294 131)
Gross profit 84 868 66 732 102 355
Other income 7 12 574 4 094 8 598
Operating expenses 8 (85 875) (80 007) (215 848)
Operating profit/(loss) 11 567 (9 181) (104 895)
Finance income 11 819 11 744 14 806
Fair value adjustments (3 319) 12 703 (11 454)
(Loss)/income from equity-accounted investment (6 379) 998 (1 815)
Finance costs 9 (38 583) (23 978) (47 199)
Loss before taxation (24 895) (7 714) (150 557)
Taxation 10 (1 908) 1 929 19 729
Loss for the period from continuing operations (26 803) (5 785) (130 828)
DISCONTINUED OPERATIONS
(Loss)/profit before taxation (22 528) 14 899 26 581
Taxation 1 244 (4 275) (7 302)
Total (loss)/profit for the period from
discontinued operations 2 (21 284) 10 624 19 279
TOTAL
(Loss)/profit before taxation (47 423) 7 185 (123 976)
Taxation (664) (2 346) 12 427
(Loss)/profit for the period (48 087) 4 839 (111 549)
Other comprehensive income/(loss) 3 696 524 (27 402)
Revaluations of investments and deferred tax - - (23 574)
on financial assets
Movement in foreign currency reserves 3 696 524 (3 828)
Total comprehensive (loss)/income for the period (44 391) 5 363 (138 951)
(Loss)/profit attributable to:
Owners of the parent (46 625) 5 291 (101 006)
Non-controlling interests (1 462) (452) (10 543)
(48 087) 4 839 (111 549)
Total comprehensive (loss)/income attributable to:
Owners of the parent (42 929) 6 115 (112 140)
Non-controlling interests (1 462) (752) (26 811)
(44 391) 5 363 (138 951)
(Loss)/earnings per share
Basic and diluted (cents) (17,4) 2,2 (39,5)
- from continuing operations (9,4) (2,2) (47,0)
- from discontinued operations (8,0) 4,4 7,5
Headline (cents) 11 (11,0) 1,7 (32,4)
- from continuing operations (12,4) (2,7) (39,9)
- from discontinued operations 1,4 4,4 7,5
Weighted average number of shares 267 306 552 243 871 979 255 461 640
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
Share Foreign Re- Acquisition Share- Retained Non- Total
capital and currency valuation of additional holder earnings controlling equity
premium translation reserve shares in loans R000 interests R000
R000 reserve R000 subsidiary R000 R000
R000 R000
Balance at 1 March 2012 60 636 4 286 30 094 (27 547) - 603 270 (25 641) 645 098
Issue of shares 99 368 - - - - - - 99 368
Total comprehensive income for the period - 524 - - - 5 292 (752) 5 064
Distribution to shareholders - - - - - (38 353) - (38 353)
Purchase of additional non-controlling interest in subsidiaries - - - (1 989) - - 1 989 -
Balance at 31 August 2012 160 004 4 810 30 094 (29 536) - 570 209 (24 404) 711 177
Total comprehensive loss for the period - (3 619) (8 039) - - (106 297) (26 059) (144 014)
Shareholder loans transferred from liabilities - - - - 72 885 - - 72 885
Dilution of shareholding in Metmar Africa Limited - - - - - - 4 354 4 354
Purchase of additional non-controlling interest in subsidiaries - - - 1 989 - - (1 989) -
Balance at 28 February 2013 160 004 1 191 22 055 (27 547) 72 885 463 912 (48 098) 644 402
Total comprehensive loss for the period - 3 696 - - - (46 625) (1 462) (44 391)
Increase in shareholder loans - - - - 148 - - 148
Purchase of additional non-controlling interest in subsidiary - - - (6 905) - - 6 905 -
Balance at 31 August 2013 160 004 4 887 22 055 (34 452) 73 033 417 287 (42 655) 600 159
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW
Note Unaudited Unaudited Audited
six months to six months to year to
31 August 2013 31 August 2012 28 February 2013
R000 R000 R000
Net cash utilised in operating activities
Cash utilised in operations 12 (11 434) (51 094) (54 405)
Net finance costs (26 764) (12 234) (32 393)
Taxation received/(paid) 445 (6 888) (8 322)
Net cash utilised in operating activities (37 753) (70 216) (95 120)
Net cash generated from/(utilised in) investing activities
Net expenditure on property, plant and equipment (1 086) (1 652) (3 793)
Net movement in financial assets (3 809) (1 511) 35 034
Realisation of derivative financial instruments - - 10 123
Investment in associates (6 334) - (40 397)
Proceeds from sale of division and repayment of overdraft facility 13 148 353 - -
Proceeds from sale of subsidiary 12 790 - -
Net cash generated from/(utilised in) investing activities 149 914 (3 163) 967
Net cash (utilised in)/generated from financing activities
Proceeds from share issue - 99 368 99 368
Net movement in financial liabilities (885) 2 383 (27 734)
Net movement in borrowings (6 081) (4 727) 1 582
Distributions to shareholders - (38 353) (38 353)
Net cash (utilised in)/generated from financing activities (6 966) 58 671 34 863
Total cash movement for the period 105 195 (14 708) (59 290)
Cash at the beginning of the period (19 742) 39 548 39 548
Cash and cash equivalents at the end of the period 6 85 453 24 840 (19 742)
Segment report
Unaudited six months to 31 August 2013
Trading Investment Adjust- Total
ments and
eliminations
Segment revenues 917 143 113 641 (97 769) 933 015
Net finance costs (17 514) (8 158) (1 092) (26 764)
Depreciation, amortisation and impairments of non-financial assets (1 484) (1 461) (47 062) (50 007)
898 145 104 022 (145 923) 856 244
The totals presented for the Groups operating segments reconcile
to the entitys key financial results as presented:
Segment revenues 917 143 113 641 (97 769) 933 015
Other income 17 258 4 451 (9 135) 12 574
934 401 118 092 (106 904) 945 589
Segment operating profit/(loss)
Segment operating (loss)/profit 14 986 10 078 (13 497) 11 567
Fair value adjustments (1 289) (1 260) (770) (3 319)
Net finance costs (17 514) (8 158) (1 092) (26 764)
Discontinued operations (22 495) - (33) (22 528)
(Loss)/income from equity-accounted investment - (6 379) - (6 379)
Total (loss)/profit before taxation (26 312) (5 719) (15 392) (47 423)
Taxation expense 2 426 - (3 090) (664)
(Loss)/profit for the period (23 886) (5 719) (18 482) (48 087)
Segment assets 853 574 750 930 (7 226) 1 597 278
853 574 750 930 (7 226) 1 597 278
Segment liabilities 561 953 754 745 (319 579) 997 119
561 953 754 745 (319 579) 997 119
Segment report (continued)
Unaudited six months to 31 August 2012
Trading Investment Adjust- Total
ments and
eliminations
Segment revenues 729 783 58 278 (51 768) 736 293
Net finance costs (4 168) (8 092) 26 (12 234)
Depreciation, amortisation and impairments of non-financial assets (2 396) (1 248) - (3 644)
723 219 48 938 (51 742) 720 415
The totals presented for the Groups operating segments reconcile
to the entitys key financial results as presented:
Segment revenues 729 783 58 278 (183 019) 605 042
Other income 19 158 16 281 (31 345) 4 094
748 941 74 559 (214 364) 609 136
Segment operating profit/(loss)
Segment operating (loss)/profit 786 547 (10 514) (9 181)
Fair value adjustments 12 195 (444) 952 12 703
Net finance costs (4 168) (8 092) 26 (12 234)
Discontinued operations 14 899 - - 14 899
(Loss)/income from equity-accounted investment - 998 - 998
Total (loss)/profit before taxation 23 712 (6 991) (9 536) 7 185
Taxation expense (1 438) (908) - (2 346)
(Loss)/profit for the period 22 274 (7 899) (9 536) 4 839
Segment assets 1 191 042 807 688 (220 815) 1 777 915
1 191 042 807 688 (220 815) 1 777 915
Segment liabilities 799 531 837 207 (570 000) 1 066 738
799 531 837 207 (570 000) 1 066 738
Segment report (continued)
Audited year to 28 February 2013
Trading Investment Adjust- Total
ments and
eliminations
Segment revenues 1 377 692 43 547 (24 753) 1 396 486
Net finance costs (15 822) (16 845) 274 (32 393)
Depreciation, amortisation and impairments of non-financial assets (4 851) (3 856) 255 (8 452)
1 357 019 22 846 (24 224) 1 355 641
The totals presented for the Groups operating segments reconcile
to the entitys key financial results as presented:
Segment revenues 1 377 692 43 547 (24 753) 1 396 486
Other income 2 886 24 445 (18 733) 8 598
1 380 578 67 992 (43 486) 1 405 084
Segment operating profit/(loss)
Segment operating (loss)/profit (35 361) (68 300) (1 234) (104 895)
Fair value adjustments 10 044 (18 095) (3 403) (11 454)
Net finance costs (15 822) (16 845) 274 (32 393)
Discontinued operations 27 096 (515) - 26 581
(Loss)/income from equity-accounted investment - (1 815) - (1 815)
Total (loss)/profit before taxation (14 043) (105 570) (4 363) (123 976)
Taxation expense (1 309) 11 444 2 292 12 427
(Loss)/profit for the period (15 352) (94 126) (2 071) (111 549)
Segment assets 1 148 280 783 915 (289 967) 1 642 228
1 148 280 783 915 (289 967) 1 642 228
Segment liabilities 794 695 815 200 (612 069) 997 826
794 695 815 200 (612 069) 997 826
NOTE FROM THE CEO
Commodity prices have in general remained depressed in the first half of this year even though certain
commodities showed signs of recovery. Similarly demand for commodities remained stagnant from the beginning of this
financial year due to Chinas growth forecast being revised downwards and the expected US recovery being
delayed.
Total volumes from continuing trading operations are lower than the previous year but, despite this, the
Company has managed to increase turnover as a result of better product mix. The 19% weaker average rand-dollar
exchange rate contributed to the turnover increase.
Good progress has been made on the Companys core investments including the completion of the FPT Mineral
Terminal in Mozambique, the conclusion of the Kalagadi tolling agreement, and the submission of a mining right
application and small-scale mining permits in respect of Sefateng Chrome Mine. The Company continues to review
its investment portfolio on an ongoing basis, and is engaged in discussions with interested buyers for certain
of the non-current assets held-for-sale.
GROUP PERFORMANCE
Gross margin from continuing operations is the same as the prior interim period at 9,1%, however the net
trading margin is down to 6,3% (2012: 7,5%). Net trading margin is calculated as gross margin less marketing fee,
contract bank charges, contract interest costs, bank commissions, storage and logistics costs, handling fees
and realised foreign exchange differences. The decrease in net margin was caused mainly by increases in
marketing fees in line with a different product mix and increased interest costs in line with increased trade
finance facilities and stock balances.
Operating profit from continuing operations increased to R11,6 million (2012: R9,2 million operating loss).
Operating expenses are 7% higher than the previous period at R85,9 million (2012: R80,0 million). Major
contributors to this increase are stock writedown to net realisable value of R4,2 million (2012: R0,2 million),
marketing fees of R18,4 million (2012: R13,9 million) due to different product mix, handling and logistics costs
of R3,5 million (2012: negative R2,7 million as a result of reversal of provisions), operating lease charges of
R4,8 million (2012: R3,0 million) resulting from relocation to new headquarters at the beginning of the year;
and provision for bad debts of R2,2 million (2012: R0,5 million) raised following the sale of the West
African Group division (WAG).
Loss per share for the interim period was 17,4 cents per share (2012: 2,2 cents earnings per share) while
headline loss was 11,0 cents per share (2012: 1,7 cents headline earnings per share).
The net asset value per share decreased to 224,52 cents (2012: 266,05 cents) while the net tangible asset
value per share decreased to 186,28 cents (2012: 208,6 cents) resulting from the loss for the period of R48,1
million.
Net cash utilised in operating activities decreased to R37,8 million (2012: R70,2 million) following a
decrease in the net working capital and increase in utilisation of trade finance facilities to fund stock purchases
in preparation for the sintered manganese toll project at Kalagadi. The sale of WAG generated R148,3 million
of which R53,7 million was cash received by the Company and R94,6 million related to a reduction in bank
overdraft.
DIVISIONAL PERFORMANCE
Metals Trading
Turnover from continuing operations increased by 26% to R917,1 million (2012: R729,8 million) following a
better product mix and a weaker exchange rate. Volumes were down compared to last year but are expected to pick
up in the second half of the year once expected orders are confirmed and delivered. Operating expenses
increased by 5% compared to the prior period. The reported loss after tax of R23,9 million includes a loss from
discontinued operations (WAG) of R21,3 million.
WAG was sold in a management buyout transaction at the end of June 2013. For the period up to date of sale,
WAG incurred loss after tax of R21,3 million from turnover of R176,9 million. The loss after tax includes an
after-tax goodwill writedown of R44,2 million and a profit on sale of net asset value of R19,2 million.
Metmar Investment and Resources (MIR)
MIR revenue increased significantly to R113,6 million (2012: R58,3 million) as a result of delivery of coke
breeze. This resulted in a 30% gross margin and operating profit of R10,1 million (2012: R0,5 million). The
interest expense of R8,2 million and loss incurred from investments in associates of R6,4 million resulted in
MIR incurring a net loss after tax of R5,7 million.
Metmar (MML)
Metmar Limited achieved a profit after tax of R4,3 million following a profit on sale of the 24 Sloane
Street property of R6,5 million and the collection of administration and management fees of R11,4 million.
Investment Projects Status
MIR currently holds 14 investments which may be categorised as follows:
Core with the potential to produce cash flow in the short (next 12 months) to medium term (12 to 24
months) (Kalahari Resources and Sefateng Chrome Mine);
Core with the potential to produce cash flow in the medium (12 to 24 months) to long term (24 months
onward) (Alphamin Resources Corp. and FPT Mineral Terminal);
Under review (Kivu Resources, Metmar Industrial, SA Metals Equity, Steelpoort Chrome Mine and Zimbabwe
Alloys Chrome); and
Non-core (Clay Fusion Technologies, Metmar Speciality Metals, Pering, certain Property, Plant and
Equipment, and Tufflex Plastic Products).
Core Investment Projects Review
Kalahari Resources (11,66% interest):
- Kalahari Resources owns a 40% interest in the Kalagadi Manganese integrated mine and sinter project in
the Northern Cape;
- Sinter plant is complete, and is in the process of hot commissioning. As announced earlier this year,
Metmar entered into a tolling agreement with Kalagadi Manganese to toll convert manganese fines and coke breeze
into upgraded manganese sinter. To date, only some 2 000 tonnes of upgraded sinter have been produced owing to
commissioning delays. Subject to the completion of commissioning, Sinter production levels are however
expected to improve during the 4th quarter of this financial year;
- Project financing arrangements for the residual funding requirement to complete the mine and supporting
infrastructure nearing completion with signature expected during November; and
- Almost final drafts of Metmar off-take agreement in respect of 40% of Kalagadi Manganeses production
(approximately 2,5 million tonnes of upgraded sinter per annum) exchanged with signature expected during
November.
Eastern Belt Chrome Mines (100% interest):
- Eastern Belt Chrome Mines owns inter alia an effective 20% interest in Sefateng Chrome Mine, a chrome
mining and beneficiation project located in the Steelpoort area of South Africa;
- Mining right application submitted, and currently completing Environmental Management Plan for
submission towards the end of this financial year; and
- Small-scale mining permits applied for in order to provide production while awaiting the award of the
mining right. A final decision from the DMR in this regard is anticipated towards the end of this calendar year.
Alphamin Resources (9,2% interest):
- Alphamin Resources owns the Bisie high-grade tin project in the Democratic Republic of Congo;
- Exploration activities are continuing with encouraging results;
- Maiden resource estimate and preliminary economic assessment expected in the 4th quarter of this
financial year; and
- In the process of raising funds to complete bankable feasibility study.
FPT Mineral Terminal (26% interest):
- FPT Mineral Terminal owns and will operate a specialist minerals containerisation facility in the
vicinity of the port of Maputo; and
- Terminal construction is complete (opening ceremony held on 21 October 2013), and terminal marketing
activities are well under way.
Review procedures in respect of investments/projects under review are expected to be completed towards the
end of this financial year, and will be reported on in further detail in the year end annual financial
statements.
Initiatives to dispose of/realise non-core assets are continuously being pursued, although current market
conditions are not overly conducive to these processes. Further details in this regard will be provided in the
year end annual financial statements.
DIRECTORATE
During the interim period the following changes to the directorate took place:
Colin Brayshaw retired and resigned as Chairman of the Board and non-executive director of the Company on
7 August 2013.
Luigi Matteucci, the Independent non-executive director and Chairman of the Audit and Risk Committee, was
appointed the Acting Chairman of the Board on 7 August 2013 on which date he resigned as Chairman but
remained a member of the Audit and Risk Committee.
Dawn Earp, the Independent non-executive director and Chairperson of the Social and Ethics Committee of
the Board was appointed the Acting Chairperson of Audit and Risk Committee on 7 August 2013.
Kgomotso Moroka was appointed as an independent non-executive director of the Company on 13 March 2013.
She was further appointed as the member of the Audit and Risk Committee on 7 August 2013.
Thomas Borman was appointed as a non-executive director of the Company on 12 March 2013.
EVENTS SUBSEQUENT TO INTERIM PERIOD
On 5 September 2013 the Company exercised its option to purchase two-thirds of the shares and shareholder
loans in Arengo 203 Proprietary Limited (Arengo) for R12,2 million. Arengo owns 100% of the 25 Culross Road,
Bryanston building as its major asset. The building is the Headquarters and registered office of Metmar Limited.
The construction of 25 Culross was completed in January 2013 and the Company occupied it from February 2013 as
a tenant with an option to purchase a two-thirds majority.
OUTLOOK
The USA economic growth rate is expected to increase but at a slow rate, the Chinese economy rate of growth
is expected to slow and the Euro zone is expected to remain stagnant. As a result of these expectations prices
and volumes of commodities are expected to remain under pressure for the foreseeable future. Metmar has
however been working on a number of projects which are expected to start contributing to the Groups revenues and
returns in the near future.
These include:
New orders for a wide spectrum of commodities.
Trading of sintered manganese toll treated at Kalagadi sinter plant currently completing hot
commissioning. The Company has secured the manganese ore and coke breeze to be toll treated in this sinter plant.
Sefateng small scale mining permits applied for in order to provide production whilst awaiting the award of the mining right.
Implementation of the restructured plastics business likely to start ramping up towards the end of this
financial year.
NOTES TO THE UNAUDITED INTERIM FINANCIAL STATEMENTS
1. Basis of preparation
The unaudited consolidated interim financial results have been prepared in accordance with, and containing the
information required by IAS 34 Interim Financial Reporting, International Financial Reporting Standards (IFRS),
the SAICA Financial Reporting Guides as issued by the Accounting Practices Committee and Financial Reporting
Pronouncements as issued by the Financial Reporting Standards Council, the South African Companies Act, as amended,
and the JSE Listings Requirements.
Except for the new standards adopted below, all accounting policies applied by the Group in the preparation of
these condensed consolidated interim financial statements are consistent with those applied by the Group in its
consolidated financial statements for the year ended 28 February 2013. The Group has adopted the following new
standards:
Amendment to IFRS 7 - Disclosures - Offsetting Financial Assets and Liabilities
IFRS 10 - Consolidated Financial Statements
IFRS 11 - Joint Arrangements
IFRS 12 - Disclosure of Interests in Other Entities
IFRS 13 - Fair Value Measurements
Amendments to IAS 1 - Presentation of Items of Other Comprehensive Income
Revised IAS 27 and 28 - Investments in Associates and Joint Ventures
There was no material impact on the interim financial statements identified based on managements assessment of these standards.
Unaudited Unaudited Audited
six months to six months to year to
31 August 31 August 28 February
2013 2012 2013
R000 R000 R000
2. Discontinued operations
Includes:
Revenue 176 952 292 691 628 047
Expenses (171 588) (277 792) (601 466)
Profit before taxation 5 364 14 899 26 581
Taxation (1 668) (4 275) (7 302)
Profit for the period from discontinued operations (before impairments) 3 696 10 624 19 279
Profit on sale of discontinued operation 19 170 - -
Impairment of goodwill and intangible assets (net of tax) (44 150) - -
(Loss)/profit for the period from discontinued operations (after impairments) (21 284) 10 624 19 279
3. Investment in associates
Sefateng Chrome Mine Proprietary Limited 61 851 58 882 60 378
Kivu Resources Limited (Registered in Mauritius) 32 810 - 29 764
FPT Mineral Terminal Limited (Registered in Mozambique) 1 468 - 1 468
96 129 58 882 91 610
(Loss)/income from associate - Sefateng Chrome Mine Proprietary Limited (29) 998 1 473
Loss from associate - Kivu Resources Limited (5 015) - (3 288)
Loss from associate - FPT Mineral Terminal Limitada (1 335) - -
(6 379) 998 (1 815)
89 750 59 880 89 795
4. Other financial assets
Other long-term financial assets
Kalahari Resources Proprietary Limited 166 000 108 800 166 000
SA Metals Equity Proprietary Limited 28 500 28 500 28 500
Zimbabwe Alloys Chrome (Private) Limited 16 909 46 728 13 100
Pering Base Metals Proprietary Limited - 60 000 -
211 409 244 028 207 600
Other short-term financial assets
Deferred payment consideration PGR17 Investments Proprietary Limited - 57 402 -
Alphamin Resources Corp. (Canada)
9 884 606 shares of CAD$0,18 each 17 308 54 185 19 700
77 740 purchased options of CAD$0,18 each - 381 156
Afarak Limited (Finland) (Previously Ruukki Group Plc (Finland)) 26 824 - 27 595
5 211 916 listed shares of EUR0,38 each
Investment in FPT Mineral Terminal Limitada - 1 360 -
44 132 113 328 47 451
* All financial assets are carried at fair value.
Reconciliation of financial assets at fair value through other comprehensive income measured at level 3
31 August 2012 Gain/(loss) Increase Transfers 31 August 2013
Opening through other in investment out of level 3 Closing
balance comprehensive R000 R000 balance
R000 income R000
R000
Kalahari Resources Proprietary Limited 108 800 57 200 - - 166 000
SA Metals Equity Proprietary Limited 28 500 - - - 28 500
Zimbabwe Alloys Chrome (Private) Limited 46 728 (35 808) 5 989 - 16 909
Pering Base Metals Proprietary Limited 60 000 (34 130) - (25 870) -
244 028 (12 738) 5 989 (25 870) 211 409
Pering Base Metals Proprietary Limited has been transferred to non-current assets and disposal groups held-for-sale.
Investment in Alphamin Resources Corp. options and shares as well as Afarak Group Plc shares are level 1 fair value
measurements since their fair value is determined from quoted prices in the active Toronto Stock Exchange and Finland
Stock Exchange markets respectively.
Other financial assets are classified as level 3 fair value measurements since its fair value determination is not based
on observable market data. Discounted cash flow valuation methods were used to determine fair value. An independent
valuation was performed at 28 February 2013 year end for level 3 fair value measurements.
No independent valuation of level 3 transactions was undertaken at the two interim reporting periods and the next independent
valuation will be undertaken for the financial year ending 28 February 2014.
Unaudited Unaudited Audited
six months to six months to year to
31 August 31 August 28 February
2013 2012 2013
R000 R000 R000
5. Trade and other payables
Trade and other payables 226 290 309 583 320 032
Trade finance facilities 714 918 462 997 469 459
Deferred purchase considerations - 30 326 21 974
941 208 802 906 811 465
6. Cash and cash equivalents
Cash and cash equivalents 85 664 151 686 80 148
Less: Bank overdrafts (211) (126 846) (99 890)
85 453 24 840 (19 742)
7. Other income from continuing operations
Includes:
Profit on sale of 24 Sloane Street Properties Proprietary Limited 9 107 - -
Gain on disposal of property, plant and equipment 4 2 210 3 331
Other 3 463 1 884 5 267
12 574 4 094 8 598
8. Operating expenses from continuing operations
Operating expenses for the period are stated after accounting for the period:
Marketing fee 18 371 13 882 33 639
Consulting and professional fees 3 610 3 843 5 693
Depreciation 2 945 3 181 4 339
Employee costs 29 616 31 810 64 163
Legal fees 2 253 1 990 2 793
Operating lease charges 4 806 3 034 6 204
Repairs and maintenance 1 176 2 860 5 230
Travel and accommodation (local and overseas) 2 156 1 700 3 566
Logistics and handling fees 3 502 (2 663) 2 774
Stock written down to net realisable value 4 171 204 18 694
Impairment of property, plant and equipment - - 20 736
Impairment of trade and other receivables - - 20 933
Loss on foreign exchange 3 059 8 058 9 747
Other 10 210 12 108 17 337
85 875 80 007 215 848
9. Finance costs from continuing operations
Includes:
Contract interest 19 944 14 127 26 558
Bank overdrafts 15 617 2 319 3 008
Financing effect on purchases and trade and other payables 3 022 6 061 17 633
Discounting on deferred payments - 1 471 -
38 583 23 978 47 199
10. Taxation charge/(credit) from continuing operations
Normal taxation 2 405 3 453 2 714
Capital gains taxation 1 271 - -
Deferred taxation (1 768) (5 382) (22 443)
1 908 (1 929) (19 729)
11. Reconciliation of headline (loss)/earnings
(Loss)/profit for the period (46 625) 5 291 (101 006)
Adjustments for:
- loss/(gain) on disposal of property, plant and equipment 117 (1 591) (2 376)
- capital gain on disposal on West African Group Division (19 170) - -
- capital gain on disposal of 24 Sloane Street Properties (7 892) - -
- impairment of assets - - 20 736
- impairment of goodwill and intangibles (West African Group Division) 44 150 - -
- fair value adjustments - 496 -
Headline (loss)/earnings (29 420) 4 196 (82 646)
Headline (cents) (11,0) 1,7 (32,4)
Weighted average number of shares in issue* 267 306 552 243 871 979 255 461 640
Weighted number of shares in issue 267 306 552 243 871 979 255 461 640
- at 1 March 2013 267 306 552 232 440 480 232 440 480
- new issue - 11 431 499 23 021 160
* Weighted average number of shares is equal to the number of shares in issue
as at 31 August 2013.
12. Cash (utilised in)/generated from operations
Profit before taxation (47 423) 7 185 (123 976)
Adjustments for:
- Non-cash items 22 554 (10 917) 18 905
- Net finance costs 26 764 12 234 32 393
- Impairment loss 4 171 204 60 363
Changes in working capital:
- Inventories (169 001) 37 310 (102 537)
- Trade and other receivables (124 244) 91 589 186 526
- Trade and other payables 275 745 (188 699) (126 079)
(11 434) (51 094) (54 405)
13. Disposal of West African Group (Division of Metmar Trading Proprietary Limited)
Total net asset value 78 727 - -
Impairment of goodwill and intangible assets (net of tax) (44 150) - -
Gain on disposal of Division 19 170 - -
Total consideration received 53 747 - -
Bank overdraft facility reduced Division being sold 94 606 - -
Net increase in cash and cash equivalents 148 353 - -
14. Segment report
In identifying its operating segments, management generally distinguishes investment
in resource-based operations from the trading activities of the Group.
The following factors have been used to identify reportable segments of the Group:
- Distinction between the investment and trading activities.
- Investments segment includes investment in equity, property, plant and equipment.
- Trading segment relates to the traditional core trading activities of the Group
together with the resource-based activities emanating from off-take agreements and
arrangements in place as a result of investment in equity, property, plant and
equipment.
There has been no aggregation of the two segments identified as:
- investments; and
- trading.
(See segment report)
15. Corporate governance
The Metmar Group complies with the Code of Good Corporate Practice and Conduct published in the King III report on
Corporate Governance.
16. Related party transactions
During the period, the Company and its subsidiaries in the ordinary course of business, entered into various transactions
with their associates. These transactions were subject to terms that are no less favourable than those arranged with
third parties.
L Matteucci DJ Ellwood
Non-executive Acting Chairman Chief Executive Officer
29 October 2013
Directors: L Matteucci* (Acting Chairman), DJ Ellwood (Chief Executive Officer), TI Borman*, PP Boshoff,
D Earp*, GP Lotis, D Mashile-Nkosi*, KD Moroka*, SMS Nkosi (Chief Financial Officer) *Non-executive
Company Secretary: AC Swart
Registered office: 25 Culross Road, Bryanston, 2191 (PO Box 98549, Sloane Park, 2152)
Transfer secretaries: Computershare Investor Services Proprietary Limited (PO Box 61051, Marshalltown, 2107)
Sponsor: One Capital
Auditors: Grant Thornton
These results may be viewed on the internet on http://www.metmar.com
Date: 29/10/2013 04:00:00 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.
