Annual Integrated Report 2016

Focus on delivery

  • KEY FEATURES FOR FY2016

  • Financial Capital [icon]

    Exemplary group safety performance

  • Capex [icon]

    R1.2billion capex invested

  • Production [icon]

    PGM production up 15.7%

  • Financial Capital [icon]

    Normalised headline earnings 87.1c/share

  • Financial Capital [icon]

    Unit costs well contained

  • Financial Capital [icon]

    US$ basket price down 25%

  • Financial Capital [icon]

    Booysendal South expansion project approved

FIVE-YEAR OPERATING AND FINANCIAL REVIEW

Statement of comprehensive income – group (R’000)
20162015201420132012
Sales revenue 6 097 070 6 035 535 5 339 397 4 420 977 3 684 000
Cost of sales 5 713 722 5 439 722 5 277 915 3 813 301 3 345 311
Operating costs 5 007 233 4 342 571 3 536 002 2 826 094 2 632 926
Concentrates purchased 350 514 602 395 918 605 657 540 624 774
Refining and other costs 133 186 199 470 267 117 161 591 100 612
Depreciation and write-offs 403 545 339 949 445 875 234 690 190 287
Change in metal inventories (180 756) (44 663) 110 316 (66 614) (203 288)
Operating profit 383 348 595 813 61 482 607 676 338 689
Share of (losses)/earnings from associate (32 253) 28 769 3 464 13 783 16 602
Investment revenue 265 258 72 043 59 963 33 434 53 951
Finance charges (39 634) (145 170) (176 124) (17 946)
Net sundry income/(expenditure) 88 806 (1 319 014) 97 011 60 108 43 343
Profit/(loss) before preference share dividends 665 525 (767 559) 45 796 697 055 452 585
Amortisation of liquidity fees paid on preference shares (18 088)
Preference shares (918 806) (100 767)
(Loss)/profit before tax (271 369) (868 326) 45 796 697 055 452 585
Taxation (236 894) 165 619 26 199 169 054 142 073
(Loss)/profit for the year (508 263) (1 033 945) 19 597 528 001 310 512
Other comprehensive income          
Share of other comprehensive income from associate 19 822 (4 482) (1 327) (4 145) (9 868)
Total comprehensive income for the year (488 441) (1 038 427) 18 270 523 856 300 644
Headline (loss)/earnings (492 837) (794 963) 8 601 522 182 309 248
Normalised headline earnings 444 057 422 681
Statement of financial position – group (R’000)
20162015201420132012
Non-current assets 14 110 084 13 367 048 12 745 424 12 622 989 9 831 213
Property, plant and equipment including mining properties and mineral resources 13 468 087 12 701 830 11 940 390 11 931 051 9 135 822
Investment in associate 192 164 275 847 496 509 495 498 505 415
Other non-current assets 449 833 389 371 308 525 196 440 189 976
Current assets 4 867 779 5 784 288 1 995 572 1 734 675 1 232 339
Inventories 1 330 270 1 126 550 1 076 853 878 530 811 183
Trade and other receivables 375 204 498 854 244 672 547 920 303 268
Cash and cash equivalents 3 105 080 4 138 189 666 174 298 580 104 980
Receiver of revenue 57 225 20 695 7 873 9 645 12 908
Mineral resources classified as held for sale 1 180 300
Total assets 18 977 863 19 151 336 14 740 996 14 357 664 12 243 852
Shareholders’ equity 8 727 984 9 216 425 11 391 872 10 815 635 10 413 247
Non-current liabilities 9 072 179 7 310 753 2 157 462 1 997 826 648 600
Deferred tax 590 637 521 452 502 097 476 053 504 628
Domestic medium term notes 419 287 1 370 000 1 250 000
Preference share liability 7 429 549 6 492 655
Other non-current liabilities and provisions 632 706 296 646 285 365 271 773 143 972
Current liabilities 1 177 700 2 624 158 1 191 662 1 544 203 1 182 005
Total equity and liabilities 18 977 863 19 151 336 14 740 996 14 357 664 12 243 852
Statement of cash flows – group (R’000)
20162015201420132012
Operating cash flow 839 081 340 950 885 379 542 200 437 662
Cash generated from operations 951 650 745 187 693 774 915 317 608 378
Interest received 265 258 72 043 52 583 29 290 50 723
Movement in land and township development (41 341)
Change in working capital (162 131) (221 248) 270 414 (281 104) (90 367)
Tax paid (175 355) (255 032) (131 392) (139 303) (131 072)
Investing cash flow (1 126 793) (1 101 462) (765 945) (1 703 238) (2 010 021)
Financing cash flow (745 397) 4 232 645 248 042 1 372 638 (20 514)
Dividends paid (3 908) (11 066) (21 747) (57 364)
Issue of preference share liability 4 599 426
Acquisition of non-controlling interest (50 000) (10 000)
Proceeds from issue of shares 579 033 2 007
Finance charges (39 634) (145 170) (176 124) (123 703)
Revolving credit facilities utilised (250 000) 250 000
Domestic medium term notes (repaid)/issued (950 713) 120 000 1 250 000
Liquidity fees paid (163 903)
Other financing cash flows 244 950 (3 800) (3 801) 16 081 368 850
Net cash flow (1 033 109) 3 472 133 367 476 193 600 (1 592 873)
Cash and cash equivalents at beginning of year 4 138 189 666 056 298 580 104 980 1 697 853
Cash and cash equivalents at end of year 3 105 080 4 138 189 666 056 298 580 104 980
Operating performance
 20162015201420132012

ZONDEREINDE

         
Merensky          
Tonnes milled 815 167 795 885 803 736 958 211 884 660
Head grade – g/tonne (3PGE + Au) 5.9 5.7 5.8 5.8 5.9
UG2          
Tonnes milled 1 205 258 1 064 499 920 420 1 157 501 1 049 017
Head grade – g/tonne (3PGE + Au) 4.2 4.3 4.3 4.2 4.4
Combined – Zondereinde          
Tonnes milled 2 020 425 1 860 384 1 724 156 2 115 712 1 933 677
Head grade – g/tonne (3PGE + Au) 4.9 4.9 5.0 4.9 5.1
Precious metals in concentrates produced – kg 8 795 7 950 7 331 9 041 8 979
Precious metals in concentrates purchased – kg 6 076 2 338 1 975 1 633 1 877
Precious metals sold – kg 14 071 9 636 9 827 10 704 9 980
Precious metals in concentrates produced – oz 282 765 255 595 235 693 290 675 288 675
Precious metals in concentrates purchased – oz 195 348 75 168 63 488 52 502 60 347
Precious metals sold – oz 452 393 309 801 315 941 344 128 320 861

BOOYSENDAL

         
Merensky          
Tonnes milled 92 645
Head grade – g/tonne (3PGE + Au) 1.9
UG2          
Tonnes milled 2 072 958 1 786 375 1 517 109
Head grade – g/tonne (3PGE + Au) 2.7 2.6 2.6
Combined          
Tonnes milled 2 165 603 1 786 375 1 517 109
Head grade – g/tonne (3PGE + Au) 2.7 2.6 2.6
Precious metals in concentrates produced – kg 5 017 3 809 2 882
Precious metals in concentrates produced – oz 161 300 122 475 92 668
Precious metals sold – oz* 164 579 112 829 80 476

* With effect from 1 June 2015, Booysendal’s metal is sold to Zondereinde at 88% of the market value.

Group sales
 20162015201420132012
Group sales per metal – oz          
Platinum 270 194 253 784 241 831 212 373 195 735
Palladium 134 101 124 580 117 305 100 716 92 000
Rhodium 42 632 38 430 31 007 25 281 27 095
Gold 5 466 5 837 6 275 5 757 6 031
Total – 3PGE + Au 452 393 422 631 396 417 344 128 320 861
Group prices realised – US$/oz          
Platinum 964 1 248 1 433 1 568 1 622
Palladium 586 799 756 683 679
Rhodium 721 1 168 1 010 1 117 1 523
Gold 1 174 1 222 1 289 1 584 1 686
Basket – 3PGE + Au 831 1 108 1 198 1 276 1 345
Financial performance – group
 20162015201420132012
Operating margin – % 6.3 9.9 1.2 13.7 9.2
Effective tax rate – % (87.3) (19.1) 57.2 24.3 31.4
Current ratio 4.1 2.2 1.7 1.1 1.0
Acid ratio 3.0 1.8 0.6 0.2 0.1
US dollar/rand exchange rate          
– average 14.33 11.45 10.35 8.82 7.77
– at year end 14.71 12.16 10.61 10.01 8.16
Share performance
 20162015201420132012
Weighted average number of shares in issue – 000 349 876 391 835 390 970 382 561 382 426
Number of shares at year end – 000 509 781 509 781 397 586 382 586 382 497
Treasury shares at year end – 000 159 905 159 905
Shares after adjusting for Treasury shares 349 876 349 876
Operating cash flow per share – cents 239.8 87.2 226.5 137.0 114.4
(Loss)/earnings per share – cents (145.3) (264.3) 2.4 132.0 81.2
Headline (loss)/earnings per share – cents (140.9) (202.9) 2.2 136.5 80.9
Normalised earnings – cents 87.1 82.9
Dividends per share – cents 5.0
Dividend cover 16.2
Net assets value per share – cents 1 712.1 1 808.0 2 865.0 2 827.0 2 722.0
Share price (cents)          
– high 5 080 5 200 4 790 4 098 2 398
– low 1 610 3 120 3 186 2 251 2 281
– at year end 4 300 4 026 4 550 3 200 2 325
Platinum sector index at year end 24.0 26.8 46.8 37.1 51.2
Compound return over 5 years – % 0.4 (2.3) 9.0 (13.2) (13.0)
Average monthly volume of shares traded – 000 21 659 23 619 14 793 20 257 23 555
Annual liquidity (%) 51.0 72.3 45.4 63.5 73.9

FIVE-YEAR SUSTAINABILITY REVIEW

Zondereinde
 20162015201420132012

SOCIAL PERFORMANCE

         
Safety          
Fatal injury incidence rate (FIIR) 0.00 0.00 0.00 0.01 0.02
Lost time injury incidence rate (LTIIR) LA 1.92 1.31 1.70 1.50 1.91
Reportable injury incidence rate (RIIR) LA 1.11 0.94 0.86 0.83 0.88
Number of fatalities 0 0 0 1 2
Health          
New cases of noise induced hearing loss (NIHL) 16 27 20 43 44
New cases of tuberculosis (TB) 75 111 97 70 85
Voluntary counselling and testing (VCT) encounters 1 876 1 250 1 049 1 088 1 659
Employment and human rights          
Average number of employees          
(including indirect employees) 8 392 8 548 8 788 9 148 9 163
Turnover rate (%) 6 7 4 1 7
HDSAs in management (%) LA 48 45 38 37 35
Women in mining (%) LA 8 8 7 7 7
HDSAs at board level (%) 70 50 44 56 64

ENVIRONMENTAL PERFORMANCE

         
Rock mined (000t) 2 226 2 070 1 907 2 276 2 154
Ore milled (000t) 2 020 1 860 1 724 2 116 1 934
Water usage (000m³)          
Potable water from external sources 2 803 2 488 2 335 2 633 2 540
Fissure water used 1 607 1 155 1 084 1 493 1 273
Water recycled in process LA 27 413 25 664 25 524 25 909 24 390
% water recycled* LA 86 91 89 91 91
Electricity consumption (MWh)          
Energy from electricity purchased by shafts 498 993 489 203 470 117 485 654 467 893
Energy from electricity purchased by plant 147 792 140 882 108 600 101 732 125 548
Total electricity purchased LA 646 785 630 085 578 717 587 386 593 441
Greenhouse gas emissions (CO2e tonnes):          
Scope 1 (direct) emissions LA 27 830 29 743 23 451 15 509 15 401
Scope 2 (indirect) emissions LA 666 189 648 988 596 079 605 008 611 244
Scope 3 (indirect) emissions 798 746 580 665 815
Total emissions 694 817 679 477 620 110 621 183 627 460
Land use (hectares)          
Land disturbed by mining-related activities 137 137 137 137 137
Land leased for farming purposes 273 273 273 273 273
Land protected for conservation 800 800 800 800 800
Total land under management (freehold) 4 439 4 439 4 439 4 439 4 439

* The FY2016 figure reflects a more accurate methodology adopted by Northam to calculate recycled water

TWO-YEAR SUSTAINABILITY REVIEW

Booysendal
 20162015

SOCIAL PERFORMANCE

   
Safety    
Fatal injury incidence rate (FIIR)
Lost time injury incidence rate (LTIIR) LA 0.44 0.54
Reportable injury incidence rate (RIIR) LA 0.32 0.41
Number of fatalities
Health    
New cases of noise induced hearing loss (NIHL) 31 18
New cases of tuberculosis (TB) 8 4
Voluntary counselling and testing (VCT) encounters 319 459
Employment and human rights    
Average number of employees (including indirect employees) 2 920 1 508
Turnover rate (%) 8 11
HDSAs in management (%) LA 50 68
Women in mining (%) LA 23 17

ENVIRONMENTAL PERFORMANCE

   
Rock mined (000t) 2 138 1 670
Ore milled (000t) 2 166 1 786
Water usage (000m³)    
Potable water from external sources 376 569
Borehole water used N/A N/A
Water recycled in process LA 2 519 1 479
% water recycled* LA 87 72
Electricity consumption (MWh)    
Energy from electricity purchased by shafts 44 052 43 362
Energy from electricity purchased by plant 88 738 72 023
Total electricity purchased LA 132 790 115 385
Greenhouse gas emissions (CO2e tonnes):    
Scope 1 (direct) emissions LA 7 098 6 337
Scope 2 (indirect) emissions LA 136 773 118 847
Scope 3 (indirect) emissions 98 N/A
Total emissions 143 969 125 184
Land use (hectares)    
Land disturbed by mining-related activities 771 521
Land leased for farming purposes N/A N/A
Land protected for conservation 960 960
Total land under management (freehold) 11 120 6 773

* The FY2016 figure reflects a more accurate methodology adopted by Northam to calculate recycled water

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