Safety is our number one priority:
o Improved LTIFR to3.23 incidents per million man hours compared to 3.66 in the prior year period
o We regret that we suffered one fatality at the start of H1 2014
Results significantly impacted by the industrial action:
o Minimal operations during the striking period - 3.2 million tonnes produced, down 43%
o 155,720 of equivalent saleable Platinum ounces lost as result of the strike
o Saleable metal in concentrate of 215,117 Platinum ounces, down 41% on prior year period
o Platinum sales of 263,675 ounces - down 19% on the prior year period
o Basket price down 16% to $1,056 per PGM ounce despite supply side concerns around the strike action
o Rand unit cost at R13,058 per PGM ounce, up 46% on prior year period
o Underlying EBIT $34 million, down from $93 million in the prior year period
o Solid track record in overall concentrator recoveries - improved from 86.8% in prior year period to 87.7%
o Net cash of $71 million with available committed debt facilities of $589 million
o Cash flow requirements on resumption of operations may put the business in a net debt position.
o Force majeure notices issued to customers, suppliers and contractors during strike period
Focus on maintaining integrity of operations, in readiness for re-start and safe and effective ramp up:
o Furnaces idling and being monitored; concentrators and refineries shut
o Pipeline stocks not fully depleted. It is intended to resume processing operations in May to process remaining pipeline
o Available ore reserve position at 3.7 million centares provides for flexibility
o Cash conservation measures reduced cash outflows by around 60% of normal operating costs and capital expenditure
Market outlook:
o Deficits in 2014 as protected strike continues and South African supply shrinks
o Improving automotive demand and sustained and increasing jewellery demand
Guidance:
o K4 return to be delayed
o Sales guidance will be predicated on timing of return to work
o Expect unit cost per PGM ounce to be above wage inflation and capex to be lower than previous guidance of $210 million - we will provide guidance in due course
Ben Magara Chief Executive Officer, said: "This has been a challenging first half of the year, latterly dominated by protracted industrial action across the PGM sector. Whilst we continue to work to resolve this dispute we have also taken decisive and early action to reduce cash burn, to safeguard our great assets and protect our balance sheet integrity ahead of a safe and successful ramp up when the strike ends; something we have demonstrated we excel in."
