Wrap Text
Reviewed Provisional Condensed Consolidated Results for the Year Ended 30 June 2018
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)
Reviewed provisional condensed consolidated results
for the year ended 30 June 2018
Highlights
- Revenue R234,261 million (2017: R205,318 million).
Up 14,1%
- Headline earnings per share 10,09 cents (2017: 14,71 cents). Down 31,4%
- 12-month offtake agreement concluded subsequent to year-end, with
R73,500 million part-payment received
- Investment in tangible assets R72,908 million (2017: R11,602 million).
Up 528,4%
- EBITDA R110,679 million (2017: R122,587 million). Down 9,7%
- CSI spend R7,838 million (2017: R3,066 million). Up 155,6%
Commentary
Financial review
Bauba has reported profit before tax for the year ended 30 June 2018 of
R104,857 million (2017: R134,144 million) and profit attributable to
equity holders of the parent of R38,248 million (2017: R55,756 million),
resulting in diluted headline earnings per share of 10,02 cents (2017:
14,65 cents).
This was primarily due to a weaker chrome ore market and a delay in
excess of the timeframes stipulated by legislation for the Department
of Water & Sanitation (DWS) to grant an application for an amended water
use licence (WULA), which resulted in no opencast production for the
months of May and June.
Bauba sold 204 494t (2017: 112 152t) of chrome ore at an average Cr2O3
grade of 38,72% (2017: 39,68%).
Operating cash flows before working capital changes of R107,075 million
(2017: R140,909 million) were reinvested into the future profitability
of the Moeijelijk Mine with an investment in property, plant and
equipment and intangible assets of R75,101 million (2017: R12,474 million).
Consequently, no distribution has been declared.
At 30 June 2018 there was 37 200t of inventory on hand.
These investments in inventory and fixed assets are expected to help
generate improved future performance through increased sales in a
favourable market.
Outlook
There was a weak start to the chrome ore market in the 2019 financial
year with record inventory levels in Chinese ports, partly due to
higher imports from South African producers and lower consumption in
June, a consequence of environmental inspections. Further, market
confidence was negatively impacted by the US - China "trade war".
Bauba has since received the above-mentioned WULA and re-commenced
opencast production. The result of this will be reflected in the
2019 financial year.
The delay in the granting of Moeijelijk's Section 102 application
with the Department of Mineral Resources (DMR) to amend its
environmental programme (which is a prerequisite to operate the
wash plant) has impacted the commissioning of Moeijelijk's wash
plant. Bauba is of the view that this is only an administrative
delay by the DMR, and the board is cautiously optimistic that the
aforesaid authorisation may be granted shortly.
Once operational, this wash plant will enhance Bauba's profit
margins and diversify its revenue streams away from the Chinese
metallurgical market into less volatile chemical and foundry grade
chrome ore concentrate markets.
The development of the underground operation at Moeijelijk is
progressing well, with stable underground production to reach 30 000t
per month of LG6 chrome ore run of mine (ROM) before the end of the
first half of the 2019 financial year.
In spite of a weaker chrome ore market, Bauba is optimistic about
the 2019 financial year considering the developments of the
underground operation and the wash plant mentioned above, and
that Bauba's business model and Moeijelijk's low cost of
production ensures that Bauba is able to operate sustainably in
a stressed chrome ore market, if need be.
Reviewed condensed consolidated statement of comprehensive income
for the year ended 30 June 2018
2018 2017
R’000 R’000
Revenue 234 261 205 318
Cost of sales (81 595) (63 318)
Gross profit 152 666 142 000
Other income 1 169 24 015
Bad debt recovery - 10 392
Operating and administrative expenses (56 259) (46 250)
Finance income 7 281 3 987
Profit before taxation 104 857 134 144
Income tax (32 947) (38 615)
Profit for the year 71 910 95 529
Other comprehensive income - -
Comprehensive profit for the year 71 910 95 529
Profit attributable to:
Equity holders of the parent 38 248 55 756
Non-controlling interest 33 662 39 773
Comprehensive profit attributable to:
Equity holders of the parent 38 248 55 756
Non-controlling interest 33 662 39 773
Basic earnings per share (cents) 10,09 14,71
Diluted earnings per share (cents) 10,02 14,65
Headline earnings per share (cents) 10,09 14,71
Diluted headline earnings per share (cents) 10,02 14,65
Reviewed condensed consolidated statement of financial position
as at 30 June 2018
2018 2017
Note R'000 R'000
Assets
Non-current assets 231 965 170 231
Intangible assets 6 149 010 158 304
Property, plant and equipment 7 82 955 11 880
Deferred tax - 47
Current assets 90 805 132 351
Inventory 17 441 8 064
Trade and other receivables 3 287 2 089
Cash and cash equivalents 70 077 122 198
Total assets 322 770 302 582
Equity and liabilities
Equity 284 937 270 940
Share capital and premium 512 500 550 402
Reverse asset acquisition reserve (282 988) (282 988)
Share option reserve 1 294 477
Retained loss (792) (39 040)
Non-controlling interest 54 923 42 089
Non-current liabilities 23 082 3 388
Provision for rehabilitation 8 3 620 3 388
Deferred tax 19 462 -
Current liabilities 14 751 28 254
Trade and other payables 10 994 20 876
Other financial liabilities 9 461 1 425
Provision for rehabilitation 8 - 4 870
Current tax payable 3 296 1 083
Total equity and liabilities 322 770 302 582
Reviewed condensed consolidated statement of cash flow
for the year ended 30 June 2018
2018 2017
R'000 R'000
Cash flow from operating activities
Operating profit before working capital
changes 107 075 140 909
Working capital changes (21 421) 9 009
Taxation paid (11 225) (30 972)
Distribution/dividend paid (58 730) -
Net cash effects from operating
activities 15 699 118 946
Cash flow from investing activities
Net cash effects from investing activities (67 820) (8 487)
Investments in intangible asset (2 193) (872)
Investments in property, plant and equipment (72 908) (11 602)
Interest received 7 281 3 987
Total cash movement for the year (52 121) 110 459
Cash and cash equivalents at the
beginning of the year 122 198 11 739
Cash and cash equivalents at the end of
the year 70 077 122 198
Reviewed condensed consolidated statement of changes in equity
for the year ended 30 June 2018
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 - - 477
Total comprehensive profit
for the year - - -
Balance at 30 June 2017 550 402 (282 988) 477
Share-based payment reserve
movement - - 817
Total comprehensive profit
for the year - - -
Distribution/dividend paid (37 902) - -
Balance at 30 June 2018 512 500 (282 988) 1 294
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 - - 477
Total comprehensive profit
for the year 55 756 39 773 95 529
Balance at 30 June 2017 (39 040) 42 089 270 940
Share-based payment reserve
movement - - 817
Total comprehensive profit
for the year 38 248 33 662 71 910
Distribution/dividend paid - (20 828) (58 730)
Balance at 30 June 2018 (792) 54 923 284 937
Notes to the reviewed provisional
Condensed consolidated results for the year ended 30 June 2018
1. Basis of preparation
These provisional condensed consolidated results have been prepared under the
supervision of 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 Companies Act and the
Listings Requirements of the JSE Limited (JSE Listings Requirements).
The same accounting policies, presentation and measurement principles have
been followed in the preparation of the provisional condensed consolidated
results for the year ended 30 June 2018 as were applied in the preparation
of the group's annual financial statements for the year ended 30 June 2017.
2. Auditor's review conclusion
These provisional condensed consolidated results for the year ended
30 June 2018 have been reviewed by BDO South Africa Incorporated, who
expressed an unmodified conclusion. A copy of the auditor's review report
is available for inspection at the company's registered office.
3. 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 year under review.
4. Board
During the year under review, up to the date of this report, no changes
were made to the board.
5. Changes in share capital
There were no changes to the issued share capital during the year
under review.
6.Intangible assets
Accumulated
amortisaton
and Carrying
Cost impairments value
R'000 R'000 R'000
30 June 2018
Platinum mineral rights 30 555 (10 394) 20 161
Chrome mineral rights 156 907 (28 058) 128 849
Total mineral rights 187 462 (38 452) 149 010
30 June 2017
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
Reconciliation
Opening Closing
balance Additions Amortisation balance
R'000 R'000 R'000 R'000
30 June 2018
Platinum mineral
rights 20 161 - - 20 161
Chrome mineral
rights 138 143 2 193 (11 487) 128 849
Total mineral
rights 158 304 2 193 (11 487) 149 010
30 June 2017
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
7. Property, plant and equipment
Mine
Furniture infra-
Motor and office structure and
vehicles equipment equipment Total
R'000 R'000 R'000 R'000
Cost
At 1 July 2017 2 849 191 10 497 13 537
Additions 406 148 72 354 72 908
Disposals (257) - - (257)
At 30 June 2018 2 998 339 82 851 86 188
Accumulated depreciation
At 1 July 2017 796 56 805 1 657
Depreciation 460 75 1 080 1 615
Disposals (39) - - (39)
At 30 June 2018 1 217 131 1 885 3 233
Carrying value at
30 June 2018 1 781 208 80 966 82 955
Cost
At 1 July 2016 1 073 92 798 1 963
Additions 1 776 127 9 699 11 602
Disposals – (28) - (28)
At 30 June 2017 2 849 191 10 497 13 537
Accumulated
depreciation
At 1 July 2016 578 54 376 1 008
Depreciation 218 30 429 677
Disposals – (28) - (28)
At 30 June 2017 796 56 805 1 657
Carrying value at
30 June 2017 2 053 135 9 692 11 880
During the current year there were additions of R72,354 million (2017:
R9,699 million) to mine infrastructure and equipment. The additions
relate mainly to the development of the Moeijelijk underground mine of
R28,743 million (2017: R7,907 million), construction of the wash plant
of R23,699 million (2017: nil) and capitalisation of the pre-stripping
costs in accordance with IFRIC 20 of R17,624 million (2017: nil).
None of the items of property, plant and equipment have been encumbered.
8.Provision for rehabilitation
2018 2017
R'000 R'000
Balance at the beginning of the year 8 258 5 552
Movement in provision during the year
recognised in profit or loss (4 638) 2 706
Balance at the end of the year 3 620 8 258
Due within one year or less - 4 870
Due after more than one year 3 620 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.
9. Other financial liabilities
2018 2017
R'000 R'000
Current liabilities
At amortised cost 461 1 425
Royalty taxes1 205 -
Chrome ore advance receipt - 1 242
Other 256 183
461 1 425
1 The amount relates to royalty taxes due according to the Mineral and
Petroleum Resources Royalty Act.
10. Operating segments
Chrome Platinum
projects exploration Corporate
R'000 R'000 R'000
30 June 2018
Revenue 234 261 - 11 750
Profit/(loss) before tax 105 953 - (1 096)
Taxation (32 947) - -
Profit/(loss) after tax 73 006 - (1 096)
Interest received 5 433 - 2 452
Depreciation, amortisation
and impairment (13 048) - (54)
Investment in intangible
assets 2 193 - -
Total assets 283 124 20 161 26 448
Total liabilities (43 498) - (1 298)
30 June 2017
Revenue 205 318 - 10 435
Profit before tax 131 359 - 2 785
Taxation (38 615) - -
Profit after tax 92 744 - 2 785
Interest received 1 913 - 2 074
Depreciation, amortisation
and impairment (7 543) - (26)
Investment in intangible assets 872 - -
Total assets 249 058 20 161 45 036
Total liabilities (30 368) - (12 947)
Intragroup
elimination Total
R'000 R'000
30 June 2018
Revenue (11 750) 234 261
Profit/(loss) before tax - 104 857
Taxation - (32 947)
Profit/(loss) after tax - 71 910
Interest received (604) 7 281
Depreciation, amortisation and impairment - (13 102)
Investment in intangible assets - 2 193
Total assets (6 963) 322 770
Total liabilities 6 963 (37 833)
30 June 2017
Revenue (10 435) 205 318
Profit before tax - 134 144
Taxation - (38 615)
Profit after tax - 95 529
Interest received - 3 987
Depreciation, amortisation and impairment - (7 569)
Investment in intangible assets - 872
Total assets (11 673) 302 582
Total liabilities 11 673 (31 642)
Bauba’s 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.
11. Earnings per share
2018 2017
R'000 R'000
Headline earnings reconciliation:
Profit attributable to equity holders of
the parent 38 248 55 756
Headline earnings 38 248 55 756
Basic earnings per share (cents) 10,09 14,71
Diluted earnings per share (cents) 10,02 14,65
Headline earnings per share (cents) 10,09 14,71
Diluted headline earnings per share (cents) 10,02 14,65
Number of shares in issue at the end of the
year ('000) 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
Dilutive effect of share options ('000) 2 560 1 563
Diluted weighted average number of shares ('000) 381 580 380 583
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
Despite the payment of a dividend/distribution of R58,730 million
(2017: nil) and significant cash investment in the development of the
Moeijelijk mine of R72,908 million (2017: R11,602 million), Bauba ended
the 2018 financial year with a cash and cash equivalents balance of
R70,077 million (2017: R122,198 million) and no interest-bearing borrowings.
The group has net current assets of R76,054 million (2017: R104,097 million)
and shareholder’s equity of R284,937 million (2017: R270,940 million). The
cash flow forecast prepared by Bauba management, based on current available
information, indicates that the group will be able to meet its commitments
within the next 12 months as they fall due. The group has sufficient
resources to continue as a going concern and has therefore concluded that
it is appropriate to prepare the provisional condensed consolidated results
on a going concern basis.
14. Subsequent events
After year-end, Bauba successfully concluded an offtake agreement for the
supply of 240 000t of chrome ore to be supplied over a 12-month period.
In August 2018, Bauba received a prepayment of R73,500 million which
represents a part-payment of the offtake agreement.
The directors are not aware of any significant matter or circumstance
arising since the end of the financial year, not otherwise dealt with
in this report or the financial results, which significantly affects
the financial position of the group or the results of its operations
to the date of this report.
30 August 2018
Johannesburg
Corporate information
Nature of business
Exploration and mining of mineral resources
Registration number 1986/004649/06
Country of incorporation
Republic of South Africa
Registered address
Cube Workspace
1 Wedgewood Link, Bryanston, Johannesburg, 2191
Republic of South Africa
Telephone +27 (0) 11 699 5720
Fax +27 (0) 11 388 3962
E-mail: info@bauba.co.za
Web: www.bauba.co.za
Postal address
PO Box 1658, Witkoppen, 2068
Directors
Non-executive
Mr NPJ van der Hoven
Mr M Luyt*
Mr SM Dolamo*
Mr D Smith*
Dr NM Phosa
King TV Thulare (Alternate)
* Independent
Executive
Mr NW van der Hoven
Mr JA Knowlden
Company secretary
Merchantec Proprietary Limited
Bankers
Nedbank Limited
Transfer secretaries
Computershare Investor Services Proprietary Limited
Sponsor
Merchantec Capital
Auditors
BDO South Africa Incorporated
Attorneys
Venter de Villiers
Tabacks Legal Advisors
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