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Condensed consolidated interim results for the six-month period ended 31 December 2017
Bauba Platinum Limited
Incorporated in the Republic of South Africa
(Registration number 1986/004649/06)
JSE share code: BAU
ISIN: ZAE000145686
(Bauba or the Company or the Group)
www.bauba.co.za
Condensed consolidated interim results
for the six-month period ended 31 December 2017
Condensed consolidated statement of comprehensive income for the six-month
period ended 31 December 2017
Unaudited Unaudited Audited
31 Dec 31 Dec 30 Jun
2017 2016 2017
R'000 R'000 R'000
Revenue 115 241 14 486 205 318
Cost of sales (42 286) (20 162) (63 318)
Gross profit 72 955 (5 676) 142 000
Other income - - 24 015
Bad debt recovery - 10 392 10 392
Operating and administrative
expenses (30 283) (12 176) (46 250)
Finance income 4 070 590 3 987
Profit/(loss) before taxation 46 742 (6 870) 134 144
Income tax (16 791) 567 (38 615)
Profit/(loss) for the period 29 951 (6 303) 95 529
Comprehensive profit/(loss) for
the period 29 951 (6 303) 95 529
Profit/(loss) attributable to:
Equity holders of the parent 15 887 (5 674) 55 756
Non-controlling interest 14 064 (629) 39 773
Comprehensive profit/(loss)
attributable to:
Equity holders of the parent 15 887 (5 674) 55 756
Non-controlling interest 14 064 (629) 39 773
Basic profit/(loss) per share
(cents) 4,19 (1,50) 14,71
Diluted profit/(loss) per share
(cents) 4,16 (1,50) 14,65
Condensed consolidated statement of financial position as at 31 December 2017
Unaudited Unaudited Audited
31 Dec 31 Dec 30 Jun
2017 2016 2017
Notes R'000 R'000 R'000
Assets
Non-current assets 191 740 169 013 170 231
Intangible assets 10 153 225 161 241 158 304
Property, plant and
equipment 38 515 1 074 11 880
Deferred tax - 6 698 47
Current assets 92 806 12 667 132 351
Inventory 18 581 - 8 064
Tax receivable - 476 -
Trade and other
receivables 4 707 1 923 2 089
Cash and cash equivalents 69 518 10 268 122 198
Total assets 284 546 181 680 302 582
Equity and liabilities
Equity 242 569 168 699 270 940
Share capital and premium 512 500 550 402 550 402
Reverse asset acquisition
reserve (282 988) (282 988) (282 988)
Share option reserve 885 68 477
Retained loss (23 153) (100 470) (39 040)
Non-controlling interest 35 325 1 687 42 089
Non-current liabilities 11 617 5 552 3 388
Provision for
rehabilitation 6 5 724 5 552 3 388
Deferred tax 5 893 - -
Current liabilities 30 360 7 429 28 254
Trade and other payables 11 705 3 520 20 876
Other financial
liabilities 5 6 168 3 909 1 425
Provision for
rehabilitation 6 2 551 - 4 870
Current tax payable 9 936 - 1 083
Total equity and
liabilities 284 546 181 680 302 582
Condensed consolidated statement of cash flow for the six-month period
ended 31 December 2017
Unaudited Unaudited Audited
31 Dec 31 Dec 30 Jun
2017 2016 2017
R'000 R'000 R'000
Operating profit before working
capital changes 50 778 (3 524) 140 909
Working capital changes (17 563) 2 367 9 009
Taxation paid (1 998) - (30 972)
Distribution/dividend paid (58 730) - -
Net cash effects from operating
activities (27 513) (1 157) 118 946
Net cash effects from investing
activities (25 167) (314) (8 487)
Investments in intangible assets (1 813) (598) (872)
Investments in property, plant
and equipment (27 424) (306) (11 602)
Interest received 4 070 590 3 987
Total cash movement for the
period (52 680) (1 471) 110 459
Cash and cash equivalents at the
beginning of the period 122 198 11 739 11 739
Cash and cash equivalents at the
end of the period 69 518 10 268 122 198
Condensed consolidated statement of changes in equity for the six-month period
ended 31 December 2017
Share Reverse
capital asset Share
and acquisition option
premium reserve reserve
R'000 R'000 R'000
Balance at 1 July 2016 550 402 (282 988) -
Share-based payment reserve
movement - - 68
Total comprehensive loss for the
period - - –
Balance at 31 December 2016 550 402 (282 988) 68
Share-based payment reserve
movement - - 409
Total comprehensive profit for
the period - - -
Balance at 30 June 2017 550 402 (282 988) 477
Share-based payment reserve
movement - - 408
Total comprehensive profit for
the period - - -
Distribution/dividend paid (37 902) - -
Balance at 31 December 2017 512 500 (282 988) 885
Non-
Retained controlling Total
loss interest equity
R'000 R'000 R'000
Balance at 1 July 2016 (94 796) 2 316 174 934
Share-based payment reserve
movement - - 68
Total comprehensive loss for the
period (5 674) (629) (6 303)
Balance at 31 December 2016 (100 470) 1 687 168 699
Share-based payment reserve
movement - - 409
Total comprehensive profit for
the period 61 430 40 402 101 832
Balance at 30 June 2017 (39 040) 42 089 270 940
Share-based payment reserve
movement - - 408
Total comprehensive profit for
the period 15 887 14 064 29 951
Distribution/dividend paid - (20 828) (58 730)
Balance at 31 December 2017 (23 153) 35 325 242 569
Notes to the condensed consolidated interim results for the six-month
period ended 31 December 2017
1. Basis of preparation
These condensed consolidated financial results have been prepared by
Jonathan Knowlden CA(SA), the Financial Director, in accordance with IAS
34: Interim Financial Reporting, the framework concepts and the measurement
and recognition requirements of International Financial Reporting Standards
(IFRS) as issued by the International Accounting Standards Board (IASB),
SAICA Financial Reporting Guides as issued by the Accounting Practices
Committee, the Financial Reporting Pronouncements as issued by the Financial
Reporting Standards Council, the requirements of the South African Companies
Act and the JSE Listings Requirements.
The same accounting policies, presentation and measurement principles have
been followed in the preparation of the condensed report for the period ended
31 December 2017 as were applied in the preparation of the Group's annual
financial statements for the year ended 30 June 2017 except for the application
of IFRIC 20: Stripping Costs in the Production Phase of a Surface Mine.
These condensed consolidated financial results have not been reviewed or
audited by the Group's auditors.
2. Financial review
Bauba reported profit before tax for the six months ended 31 December
2017 of R46,742 million (2016: loss of R6,870 million) and profit attributable
to equity holders of the parent of R15,887 million (2016: loss of R5,674 million)
resulting in diluted headline earnings per share of 4,16 cents
(2016: loss of 1,50 cents).
This improved performance compared to the comparative six month period was due
to Bauba's only operating mine, Moeijelijk, resuming production in January 2017
after the mine was placed on care and maintenance for the full six-month
comparative period.
This lower performance compared to the second half of the 2017 financial year
was driven by the delayed development of Moeijelijk's underground mine, weak
pricing for this six-month period and consequent slower implemented opencast
production.
The Moeijelijk underground mine design was revised to increase the life of
mine (LOM) from the 2,9 million extractable tonnes (t) initially reported to
3,8 million t, extending the LOM from nine to twelve years.
Chrome ore prices were volatile over this six-month interim period. Reported
cost, insurance, freight (CIF) US$ prices for 38 – 40% Cr2O3 chrome ore run of
mine (ROM) averaged US$153 t for the first two months of this interim period
and then briefly spiked above US$200 t before falling shortly thereafter and
averaged US$174 t for last two months to 31 December 2017. Chrome ore prices
from the middle of December to the date of this report have continued to
strengthen with current CIF market prices for 38 - 40% Cr2O3 ROM above US$220 t.
Monthly production remained low in the first three months of the period
continuing from the prior year's decision to slow production after May
2017's price drop. As prices picked up in September 2017, a decision was made
to increase production. At 31 December 2017 there was 42 300 t of inventory
on hand.
Investments in intangible assets and property, plant and equipment totalled
R29,237 million for the six months to 31 December 2017 mainly attributable to
the development of Moeijelijk's underground mine and capitalised stripping of
overburden relating to chrome ore reef to be mined in the second half of this
financial year. These investments in inventory and fixed assets will help
generate an improved second half earnings performance through increased sales
in a favourable market.
3. Outlook
Bauba expects an improved second half performance as it capitalises on the
positive chrome ore market.
Planned stable monthly underground LG6 chrome ore production of 30 000 t is
still expected to be achieved by the first half of the 2019 financial year.
Underground production of 25 000 t is now forecast for the 2018 financial year.
This is down from previously guided production due to additional safety
measures implemented when installing the underground declines, which are now
established.
A contract to build a spiral wash plant and crushing circuit (plant) to
upgrade Moeijelijk's current ROM saleable product to foundry, chemical and
metallurgical grade concentrates has been concluded and work has commenced.
This plant will be commissioned by July 2018 and will enhance Bauba's profit
margins and diversify its revenue stream into less volatile, premium
speciality grade products.
4. Distribution
A maiden distribution of 10,0 cents per share was declared on 1 September
2017 and paid to shareholders on 30 October 2017. No further distribution or
dividend has been declared for the period under review.
5. Other financial liabilities
Unaudited Unaudited Audited
31 Dec 31 Dec 30 Jun
2017 2016 2017
R'000 R'000 R'000
Royalty taxes 3 501 2 921 -
The amount relates to royalty
taxes due according to the
Mineral and Petroleum Resources
Royalty Act.
Income received in advance 2 485 - -
Other 182 988 1 425
6 168 3 909 1 425
Current liabilities
At amortised cost 6 168 3 909 1 425
6. Provision for rehabilitation
Unaudited Unaudited Audited
31 Dec 31 Dec 30 Jun
2017 2016 2017
R'000 R'000 R'000
Balance at the beginning of the
period 8 258 5 552 5 552
Movement in provision during the
period recognised in profit or
loss 17 - 2 706
Balance at the end of the period 8 275 5 552 8 258
Due within one year or less 2 551 - 4 870
Due after more than one year 5 724 5 552 3 388
Environmental obligations are based on the Group's environmental plans.
Full provision is made based on the net present value of the estimated cost
of restoring the environmental disturbance that has occurred up to the
reporting date.
7. Board
During the period under review, up to the date of this report, no changes
were made to the board.
8. Operating segments
Platinum Intragroup
Chrome Explo- Corpo- Elimina-
project ration rate tion Total
R'000 R'000 R'000 R'000 R'000
31 December
2017 (unaudited)
Revenue 115 241 - 6 358 (6 358) 115 241
Profit before
tax 45 262 - 1 480 - 46 742
Taxation (16 791) - - - (16 791)
Profit after tax 28 471 - 1 480 - 29 951
Interest
received 2 580 - 1 490 - 4 070
Depreciation,
amortisation and
impairment (7 656) - (25) - (7 681)
Investment in
intangible
assets 1 813 - - - 1 813
Total assets 263 881 20 161 28 044 (27 540) 284 546
Total
liabilities (68 793) - (724) 27 540 (41 977)
31 December
2016 (unaudited)
Revenue 14 486 - 1 665 (1 665) 14 486
Loss before tax (2 140) - (4 730) - (6 870)
Taxation 567 - - - 567
Loss after tax (1 573) - (4 730) - (6 303)
Interest
received 39 - 551 - 590
Depreciation,
amortisation and
impairment (3 860) - (8) - (3 868)
Investment in
intangible
assets 598 - - - 598
Total assets 151 123 20 161 28 308 (17 912) 181 680
Total
liabilities (30 321) - (572) 17 912 (12 981)
30 June 2017
(audited)
Revenue 205 318 - 10 435 (10 435) 205 318
Profit before
tax 131 359 - 2 785 - 134 144
Taxation (38 615) - - - (38 615)
Profit after tax 92 744 - 2 785 - 95 529
Interest
received 1 913 - 2 074 - 3 987
Depreciation,
amortisation and
impairment (7 543) - (26) - (7 569)
Investment in
intangible
assets 872 - - - 872
Total assets 249 058 20 161 45 036 (11 673) 302 582
Total
liabilities (30 368) - (12 947) 11 673 (31 642)
The Bauba group segmental analysis is based on the Moeijelijk chrome project,
platinum exploration and corporate activities. The Group was reliant on one
major customer in respect of chrome ore sales.
9. Changes in share capital
There were no changes to the issued share capital during the period under
review except for the distribution paid under note 4.
10. Intangible assets
Accumulated
amortisation
and Carrying
Cost impairments value
R'000 R'000 R'000
31 December 2017 (unaudited)
Platinum mineral rights 30 555 (10 394) 20 161
Chrome mineral rights 156 527 (23 463) 133 064
Total mineral rights 187 082 (33 857) 153 225
31 December 2016 (unaudited)
Platinum mineral rights 30 555 (10 394) 20 161
Chrome mineral rights 154 440 (13 360) 141 080
Total mineral rights 184 995 (23 754) 161 241
30 June 2017 (audited)
Platinum mineral rights 30 555 (10 394) 20 161
Chrome mineral rights 154 714 (16 571) 138 143
Total mineral rights 185 269 (26 965) 158 304
Opening Amor- Closing
balance Additions tisation balance
R'000 R'000 R'000 R'000
Reconciliation
31 December 2017
(unaudited)
Platinum mineral
rights 20 161 - - 20 161
Chrome mineral
rights 138 143 1 813 (6 892) 133 064
Total mineral
rights 158 304 1 813 (6 892) 153 225
31 December 2016
(unaudited)
Platinum mineral
rights 20 161 - - 20 161
Chrome mineral
rights 144 163 598 (3 681) 141 080
Total mineral
rights 164 324 598 (3 681) 161 241
30 June 2017
(audited)
Platinum mineral
rights 20 161 - - 20 161
Chrome mineral
rights 144 163 872 (6 892) 138 143
Total mineral
rights 164 324 872 (6 892) 158 304
11. Earnings per share
Unaudited Unaudited Audited
31 Dec 31 Dec 30 Jun
2017 2016 2017
Headline earnings
reconciliation:
Profit/(loss) attributable to
equity holders of the parent
(R'000) 15 887 (5 674) 55 756
Headline profit/(loss) (R'000) 15 887 (5 674) 55 756
Basic profit/(loss) per share
(cents) 4,19 (1,50) 14,71
Diluted profit/(loss) per share
(cents) 4,16 (1,50) 14,65
Headline profit/(loss) per share
(cents) 4,19 (1,50) 14,71
Diluted headline profit/(loss)
per share (cents) 4,16 (1,50) 14,65
Number of shares in issue at the
end of the period ('000) 379 020 379 020 379 020
Reconciliation of weighted
average number of shares to
diluted weighted average number
of shares:
Weighted average number of
shares ('000) 379 020 379 020 379 020
Dilutive effect of share options
('000) 2 560 - 1 563
Diluted weighted average number
of shares ('000) 381 580 379 020 380 583
12. Fair value and financial instruments
The carrying value of all financial instruments approximates fair value.
All financial instruments are measured at amortised cost.
13. Going concern
At the date of this report, Bauba had a cash and cash equivalents balance of
R100,4 million with no interest-bearing borrowings. The cash flow forecasts
prepared by the directors based on current available information indicate the
Company will be able to meet its commitments within the next 12 months as they
fall due. The Company has sufficient resources to continue as a going concern
and has therefore concluded that it is appropriate to prepare the financial
statements on a going concern basis. Accordingly, the financial statements
do not include the adjustments that would result if the Company was unable
to continue as a going concern.
9 March 2018
Johannesburg
Corporate information
Postal address: PO Box 1658, Witkoppen, 2068. Tel no: +27 (011) 699 5720
Board of directors: NPJ van der Hoven# (Chairman), M Luyt*, SM Dolamo*,
Dr NM Phosa#, DS Smith* King TV Thulare# (Alternate), JA Knowlden
#Non-executive *Independent non-executive
Sponsor: Merchantec Capital, 2nd Floor, North Block Hyde Park Office
Tower Corner 6th Road and Jan Smuts Avenue, Hyde Park, Johannesburg, 2196
(PO Box 41480, Craighall, 2024)
Registered Office: Cube Workspace, 1 Wedgewood Link, Bryanston,
Johannesburg, 2191, South Africa
Company Secretary: Merchantec Proprietary Limited
Transfer Secretaries: Computershare Investor Services Proprietary Limited,
Rosebank Towers, 15 Biermann Avenue, Rosebank, 2196
(PO Box 61051, Marshalltown, 2107)
Auditors: BDO South Africa Incorporated, 22 Wellington Road, Parktown,
2193
Date: 09/03/2018 08:30:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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