Royal Bafokeng Platinum — H1 2014 Earnings Presentation
20 slides from Royal Bafokeng Platinum's earnings presentation, 2014
Slide 1: Interim Results Presentation
Interim Results Presentation 17
Slide 2: Condensed Consolidated Interim Results Disclaimer
18 Royal Bafokeng Platinum Interim Results 2014 Royal Bafokeng Platinum Condensed Consolidated Interim Results for the six months ended 30 June 2014 Notes Disclaimer The information presented in this presentation is of a general nature and the forward-looking information, opinions and beliefs of the
Slide 3: Content
19 Content H1 2014 1. Overview Operational stability during a 2. Safety period of unprecedented 3. Market review industrial action in the platinum sector 4. Operational review and project update 5. Financial review 6. Outlook 3 Notes SECTION 1 OVERVIEW Notes
Slide 4: Operational stability amidst widespread industrial action
20 Royal Bafokeng Platinum Interim Results 2014 Operational stability amidst widespread industrial action > Operational stability with no disruptions to Revenue production 2 000 > 4% increase in tonnes milled to 1 140kt 1 800 R ’million 1 600 > Built-up head grade remained flat at 4.25g/t 1 400 > 3%
Slide 5: Safety
21 Safety Description Unit H1 2013 H1 2014 Var LTIFR Fatal injuries No. 1 0 - 1.00 0.91 LTIFR Rate 0.61 0.68 -11% 0.90 SIFR Rate 0.32 0.34 -6% 0.80 0.68 0.68 Safety stoppages No. 4 4 0% 0.70 0.61 /200 000 hrs Production shifts affected No. 19 16 16% 0.60 4E ounces lost koz 4.9 4.0 18% 0.50 0.40 0.30
Slide 6: Platinum production impacted by strikes
22 Royal Bafokeng Platinum Interim Results 2014 Platinum production impacted by strikes Platinum ˃ Total platinum supply is forecast to fall 13% to 7Moz in Global primary Pt supply forecasts (Moz) 2014 7.0 Peak = 6.9 • Five-month strike action results in estimated losses of 1.2Moz of production • So
Slide 7: Palladium deficit continues to widen
23 Palladium deficit continues to widen Palladium demand: 2013-2014 10 200 10 000 9 800 koz 9 600 9 400 2013-2014: Largest growth = +390 9 200 autos (light vehicles) 9 000 Autos (light Jewellery 2013 Non-road Autos (HDD) Other 2014 Chemical Electrical Dental vehicles) Source: SFA (Oxford) ˃ Industri
Slide 8: Steady production/Styldrift schedule
24 Royal Bafokeng Platinum Interim Results 2014 Steady production/Styldrift schedule • 4E oz production up by 3% • No significant structural changes BRPM • Unit cost per 4E oz up by 8.5% • No strike action • Capex expenditure below budget • Safety performance • Lost previous schedule advance • Shaft
Slide 9: 3% increase in ounce production
25 3% increase in ounce production Description Unit H1 2013 H1 2014 Var BRPM Plant - concentrate recovery (4E) Tonnes milled - total kt 1 095 1 140 4% 100.0 Tonnes milled - MER kt 896 890 -1% 90.0 86.98 87.12 86.97 Tonnes milled - UG2 kt 199 250 26% UG2% milled % 18% 22% 22% 80.0 Tonnes milled - BRP
Slide 10: Unit cost increase below mining inflation
26 Royal Bafokeng Platinum Interim Results 2014 Unit cost increase below mining inflation Description Unit H1 2013 H1 2014 Var Cash operating cost R'm 988 1 109 -12.2% Key drivers Cash operating cost/tonne R/t 917 983 -7.2% > Inflation at 6.6% Cash operating cost/4E oz R/oz 7 637 8 288 -8.5% > Above
Slide 11: Phase III Merensky replacement project - ahead of schedule and below budget
27 Phase III Merensky replacement project - ahead of schedule and below budget Actual/ Progress Description Unit Plan Var forecast > 7% ahead of schedule % complete % 59 66 7 Development m 5 945 7 182 1 237 > Forecasted completion four months ahead of schedule Completion date month Aug-17 Apr - 17 4
Slide 12: Styldrift project progress
28 Royal Bafokeng Platinum Interim Results 2014 PROJECT UPDATE STYLDRIFT I PROJECT Notes Styldrift project progress Description Unit Plan Actual Var Progress > Overall progress 0.4% below plan Mining and construction to date % 47.0 46.6 -0.4% • Sinking and development 8.7% behind Engineering and des
Slide 13: Styldrift below budget
29 Styldrift below budget Description Unit Plan Actual Var Capital expenditure Expenditure > Expenditure remains below capital budget H1 2014 R'm 757 627 130 > Limited use of escalation Project to date (PTD) R'm 3 416 3 138 278 > No contingency utilised to date Earned value PTD R'm 3 442 3 138 304 >
Slide 14: Styldrift II study work progressing well
30 Royal Bafokeng Platinum Interim Results 2014 PROJECT UPDATE STYLDRIFT II STUDY PROJECT Notes Styldrift II study work progressing well Pre-feasibility study > Commenced in 2013, planned completion Q1 2015 > Five options are being evaluated • Mine access methodology (shaft/decline options) • Mine d
Slide 15: 50% increase in gross profit
31 SECTION 5 FINANCIAL REVIEW Notes 50% increase in gross profit 6 months ended 6 months ended Full year ended 30 June 30 June % 31 December Description Unit 2014 2013 change 2013 Average basket price* R/Pt oz 21 148 18 294 15.6 17 927 Average Rand:US$ received R/US$ 10.70 9.30 15.1 9.65 Revenue R’m
Slide 16: 45% increase in headline earnings
32 Royal Bafokeng Platinum Interim Results 2014 45% increase in headline earnings 6 months 6 months Description Unit ended 30 June ended 30 % change 2014 June 2013 Headline earnings R’m 207.1 143.2 44.6 Weighted average shares outstanding #m 178.5 164.3 8.6 HEPS R/share 1.16 0.87 33.0 Fair value dep
Slide 17: Strong platinum and base metals bias
33 Strong platinum and base metals bias H1 2014 6 months ended 6 months ended 1% 0.5% 0.3% Description 30 June 2014 30 June 2013 2% Pt 3% Pd 4% Volume US$ Volume US$ Ni 8% Rh Au Platinum (oz) 86 370 1 440/oz 84 628 1 519/oz Cu 66% Ir Palladium (oz) 36 046 820/oz 34 338 749/oz 15% Ru Co Gold (oz) 4 1
Slide 18: Exchange rate boosts revenue
34 Royal Bafokeng Platinum Interim Results 2014 Exchange rate boosts revenue 255.3 (131.2) 450 43.1 (23.5) (12.8) 400 46.4 (14.7) (30.9) (92.8) 220.2 350 300 6.5 (0.9) (16.5) 17.7 (47.8) 250 (30.1) R’ million 207.1 200 143.2 150 100 50 0 33 Notes Strong cash balance to fund growth 2 500.0 1 478.5 36
Slide 19: Strong cash and funding position
35 Strong cash and funding position ˃ R2 210 million cash on hand for the Group (includes R1.5 billion from equity raise) • RBPlat R1 844 million • BRPM JV R366 million of which R245 million (67%) is attributable to RBPlat ˃ R258 million working capital facilities • R152.5 million utilised for Eskom
Slide 20: Strongly positioned to achieve our goals in 2014
36 Royal Bafokeng Platinum Interim Results 2014 Strongly positioned to achieve our goals in 2014 ˃ Safety, health and wellness of every employee remains our key focus ˃ Production of between 2.3 and 2.4 million tonnes milled expected for the year ˃ Operating cost increases estimated to remain below
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