Impala Platinum Holdings Limited · JSE:IMP
Impala Platinum — H1 FY2004 Earnings Presentation
24 slides from Impala Platinum's earnings presentation, 2004
Slide 1: Overview
Overview Highlights Keith Rumble Financials David Brown Operations and corporate issues Keith Rumble Market Derek Engelbrecht Conclusion Keith Rumble 2 1
Slide 2: Key features; Refined platinum production
Key features • Platinum production increases significantly • Rand appreciation causes decline in basket price • Impala unit costs well-contained • Net profit decreases to R1.1 billion • Continued improvement in safety • Sale of Lonplats stake progressing 3 Refined platinum production FY2004 FY2003 0
Slide 3: Platinum production; Sales volumes
Platinum production FY2004 FY2003 000oz Interim Interim Impala Platinum 546 545 Impala Refining Services 529 228 Barplats 16 16 Zimplats 38 35 Mimosa Platinum 26 8 Aquarius Platinum 89 66 Lonplats 206 - Other and toll refining 154 103 Total platinum production 1 075 773 5 Sales volumes FY2004 FY2003
Slide 4: Metal prices; Revenue per platinum ounce received
Metal prices FY2004 FY2003 % Interim Interim change Platinum $/oz 707 553 27.8 Palladium 195 312 (37.5) Rhodium 482 757 (36.3) Nickel $/t 9 600 7 057 36.0 $ revenue per Pt oz 997 927 7.6 Exchange rate 7.12 10.09 (29.4) R revenue per Pt oz 7 099 9 353 (24.1) 7 Revenue per platinum ounce received $/oz
Slide 5: Contribution to revenue by metal; Key ratios and margins
Contribution to revenue by metal Interim FY2003 Interim FY2004 5% 7% 7% 10% 12% 6% 59% 68% 9% 17% Platinum Palladium Rhodium Nickel Other 9 Key ratios and margins Interim Interim FY2003 FY2004 FY2003 Ratios Return on equity 22 43 37 Return on assets 17 38 30 Margins Gross 31 47 43 Impala lease area
Slide 6: Share price performance; Financials
Share price performance 200 180 160 140 Indexed to 100 120 100 80 60 Jul-01 Dec-01 Jul-02 Dec-02 Jul-03 Dec-03 MSCI EM Index Implats Anglo Platinum Lonmin Source: UBS, Reuters 11 Financials 12 6
Slide 7: Headline earnings; Income statement (Rm)
Headline earnings HEPS – 1 604 cps DPS – 500 cps SA cps 8000 7000 6000 5000 4000 3000 2000 1000 0 2000 2001 2002 2003 2004 Interims Full year 13 Income statement (Rm) Interim FY2004 FY2003 % change Sales 5 632 6 411 (12.1) Operating expenses (3 910) (3 376) (15.8) Profit from operations 1 722 3 035
Slide 8: Sales variance analysis (Rm); Exchange rate
Sales variance analysis (Rm) Half year to Dec 2003 Dec 2002 Variance % Sales 5 632 6 411 (779) (12.1) Volumes 905 14.1 Price 579 9.0 Exchange rate (2 263) (35.3) Half year to Dec 2003 Jun 2003 Variance % Sales 5 632 5 396 236 4.4 Volumes 558 10.3 Price 407 7.5 Exchange rate (729) (13.5) 15 Exchange
Slide 9: Operating expenses; Contributions to net profit
Operating expenses Rm FY2004 FY2003 % change Interim Interim On-mine operations 1 693 1 592 (6) Concentrating and 490 377 (30) smelting Refining 228 202 (13) Amortisation 259 176 (47) Other costs 167 141 (19) Metals purchased 1 303 844 (54) (Increase)/decrease (230) 45 612 in stock Total 3 910 3 376
Slide 10: Group capex; Operations and corporate issues
Group capex Rm 2000 1750 1500 1250 1000 750 500 250 0 FY2002 FY2003 FY2004 Impala Barplats Marula Zimbabwe 19 Operations and corporate issues 20 10
Slide 11: Implats – safety; Lost time injury frequency rate
Implats – safety Various safety initiatives are underway • Tsiboga – on the look out • Platinum safety rules • Fall of ground campaign and ground control districts 21 Lost time injury frequency rate Per million man hours 14 12 10 8 6 4.71 4 2 0 2000 1 2001 2 2002 3 2003 4 2004 5 Interim 22 11
Slide 12: Fatal injury frequency rate; Impala – production
Fatal injury frequency rate Per million man hours 0.18 0.16 0.14 0.12 0.1 0.084 0.08 0.06 0.04 0.02 0 1 2000 2 2001 3 2002 4 2003 5 2004 Interim 23 Impala – production Mining • Production from decline levels coming on stream – contributing 10% to overall production • Good progress with mechanised mi
Slide 13: UG2 plant; Tailings scavenging plant
UG2 plant • Throughput has increased by 20% since start of project 30 months ago • Recoveries up 4% following optimisation programme • Introduction of new reagent suite • Implementation of open-circuit high-grade re-grind milling • Still investigating upgrading of cleaner circuit 25 Tailings scaveng
Slide 14: Tailings scavenging plant; Impala – operating costs
Tailings scavenging plant 27 Impala – operating costs • Unit costs increase by 8.4% - well contained • Higher than CPIX due to above inflation increase in wages, steel prices and explosives • Labour costs constitute around 60% of total FY2004 FY2003 % Interim Interim change Total cost Rm 2 171 2 001
Slide 15: Efficiencies; Refineries performance
Efficiencies FY2004 FY2003 FY2002 Interim Impala employees 27 600 28 400 27 900 Impala panel efficiencies ca/man 41 41 40 Group tonnes per employee 51 46 47 Group Pt oz per employee 4.7 4.4 4.1 29 Refineries performance • Safety – zero lost time injuries in 24 months • Record refined platinum produc
Slide 16: Marula Platinum
Marula Platinum • Commissioning of surface infrastructure going well • Geological conditions proving more difficult • Development and stockpile build-up behind schedule • FY2004 production of 16 000 oz Pt in concentrate • Target remains 100 000 oz Pt 31 Marula Platinum 32 16
Slide 17: Zimplats; Mimosa Platinum
Zimplats • Shareholding - 82% • Sale of BEE stake announced Potential Pt production (000oz) 400 Phase 3 300 Phase 2 200 Phase 1 100 Current 0 2004 2006 2008 2010 33 Mimosa Platinum • Currently at annualised full production of 65 000 oz Pt • One of the lowest cost producers in the world • Phase 2 exp
Slide 18: Lonplats; The market
Lonplats • Transaction is still under cautionary • Progressing sale of 27.1% holding • Two pre-conditions • Reasonable assurance on BEE credits • Suitable financing arrangements • Working towards agreement by end February 2004 35 The market 36 18
Slide 19: Platinum price; Platinum supply and demand
Platinum price $/oz R/oz 900 6500 6000 750 5500 5000 600 4500 450 4000 3500 300 3000 Jul-01 Nov-01 Mar-02 Jul-02 Nov-02 Mar-03 Jul-03 Nov-03 $/oz R/oz 37 Platinum supply and demand 000oz 2003 2002 Demand Automobile 2 660 2 615 Jewellery 2 625 2 845 Industrial/investment 1 610 1 670 Total demand 6 89
Slide 20: Overview – platinum market; Palladium price
Overview – platinum market • Price at a 24-year high in US dollars • High and volatile prices impact on jewellery market • Tighter emission legislation and further growth in diesel vehicle sales have supported demand • Growth in RoW vehicle sales becoming a factor • Heightened profile for fuel cell
Slide 21: Palladium supply and demand; Overview – palladium market
Palladium supply and demand 000oz 2003 2002 Demand Automobile 4 240 4 530 Electronics 965 980 Dental 815 770 Other 605 615 Total demand 6 625 6 895 Total supply 7 150 7 140 Net surplus 525 245 41 Overview – palladium market • Fundamentals not supportive of current price levels • High inventory level
Slide 22: Other markets; Conclusion
Other markets Rhodium • Drop in rhodium price reflects a market that is adequately supplied Nickel • Rapid growth in stainless steel production drives demand • Lack of new capacity in tight market will keep pressure on prices in short to medium term 43 Conclusion 44 22
Slide 23: A multi-resource company; Production outlook
A multi-resource company 1999 2004 2% 30% 28% 72% 4% 64% Impala Barplats Impala Marula Zimplats Mimosa 69 Moz Pt 254 Moz Pt 45 Production outlook On target for 1.9 million ounces in FY2004 000oz 2,000 1,500 1,000 500 0 FY99 FY00 FY01 FY02 FY03 FY04 FY05 FY06 Impala Growth Lonplats toll refining 46 2
Slide 24: Prospects
Prospects • Above inflation price escalations adversely affecting business performance • Similar profitability expected in second half of year, dependent on rand basket prices • Well-positioned for expansion 47 24
Impala Platinum Holdings — H1 FY2004 Earnings Presentation on 6ix