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Article Excerpt
Original Source: FD (FAIR DISCLOSURE) WIRE
OPERATOR: Good afternoon and welcome to the Aquarius Platinum half year results. All participants are now in listen-only mode. There will be an opportunity for you to ask your questions at the end of today's presentation. (OPERATOR INSTRUCTIONS). Please also note that this conference is being recorded.
I would now like to turn the conference over to Stuart Murray. Please go ahead sir.
STUART MURRAY, EXECUTIVE CHAIRMAN, AQUARIUS PLATINUM: Thank you Dylan. Good, for us here in Melbourne, Australia and we are in Melbourne not Sydney, and not confused about the matter, welcome to our conference call. I'm here with Nick Bias, the Investor Relations Coordinator and Willi Boehm, our Company Secretary. And welcome to the over 20 people on the call. Given I'm probably cutting into your golf course time at Indaba thank you very much for your attendance.
For those of you who have had access to the web and your email we released our half year financial results this morning, and we've coupled that with a presentation available on the website. I'll refer to that presentation as we move on through.
Skipping past the usual disclaimers we have a quick reintroduction to those of you that don't know the Company so well in terms of who we are and what we are. Of note since we last talked to you we have done a 3 for 1 share split, so we are talking about some 250m shares in issue compared to the previous period under discussion. I must say at times, and you must forgive me, I still do think in terms of our pre share-split numbers, but I'm getting used to the numbers.
Moving over, production and exploration assets. We are concentrating, of course, on the fact that we are a producer producing out of five assets, still four mines and Tailings opportunity. And we are delighted, today, to also announce a modest transaction by our standards, where we introduce a Tailings re-treatment opportunity of Mined Tailings as opposed to Chrome Tailings in the form of Platinum Mile to you. I'll also refer a little bit to some of the exploration that we've been doing notably in respect of the Bakgaga opportunity.
Turning on, the highlights of the half year. We've continued, despite the challenges, to try and take this Company in the direction of 600,000 ounces and it's fair to say that we believe that at the end of our first quarter we were firmly on track for that. The second quarter knocking us back, as well reported in our second quarterly results. And, unfortunately, as I think you are aware, some significant challenges now facing not only ourselves but the wider mining industry in South Africa with respect to power availability. And therefore we're probably in a situation where I think we will miss that 600,000 ounce target but we're unable to give you proper guidance as to where that will go over the rest of the year.
Production attributable, up a very modest 0.25%, Everest being the star of the show. So despite the drop of total on mine production across the Group, Everest being 100% owned by Aquarius South Africa did enable us to actually manage a flat, slightly up production performance. I don't need to tell you what the dollar prices of the platinum group metals are currently doing, suffice to say they are pleasantly upward and compensating and ameliorating the operational challenges in both South Africa and Zimbabwe.
The highlights, net profits up 25% and we're very pleased to announce a substantial increase in the interim dividend. Feeling confident that the cash flow generation that we're achieving, despite the challenges, will be met going here on out, prices excepting. But importantly the fact that we have come largely to the end of our South African CapEx program which no longer requires much in the way of cash. We've also fully refunded our rehabilitation liabilities, largely linked to the Marikana open pit and that's enabled us to raise the amount of cash available to shareholders.
Moving on, commodity price, charted here and the belle of the ball Platinum, followed up certainly with a very powerful and strong Rhodium result. I think most of you are probably better qualified to tell me about what's driving these prices given your contacts into the market. But I think supply concerns, the interests of commodity funds, ETS and the like, these metals are definitely under the watchful eye of these sort of people. And I think it is fair to say that given the problems around power and project or short term ability of companies to deliver projects we're probably into a very strong Dollar price arena for some time to come.
That is then coupled with the recently weakening Rand and in terms of our PGM baskets, which is on slide 7, we've seen a nice perk-up in not only the Dollar price but as of this morning our Kroondal mine has hit an all time record basket price in Rand terms of some ZAR15,059 per PGM ounce.
This is a number that even I find somewhat unbelievable at times but it is a sign of the times in this sector. In Zimbabwe a very credible improvement in the basket price there but we do draw attention to the fact that the Nickel price has taken a significant knock over the course of the six months and, in fact, did knock our results back probably to the tune of $2m to $3m in terms of our total profit number, in terms of net revenue adjustments from the sales base to the actual realization date on the Nickel price. Nickel falling from some $57,000 a ton to $28,000 a ton across the period under consideration.
The basket price slide on the next page, I won't go into too much great detail, we've talked much about it. I think there is a reality that chasing the basket prices and underlying inflationary pressure in South Africa is such that whilst we've had a very substantial margin gains this last six months I've got no doubt that despite these prices probably being held, the inflationary pressures on the other side may well narrow margins into the future. And that seems to be a cycle we've seen in the basket price when expressed in local currency terms both in Zimbabwe and in South...
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