Impala Platinum Holdings Limited · JSE:IMP

Impala Platinum — H1 2017 Earnings Presentation

34 slides from Impala Platinum's earnings presentation, Feb 23, 2017

  1. Slide 1: Interim Results: Six months ended 31 December 2016

    INTERIM RESULTS Six months ended 31 December 2016 23 February 2017

  2. Slide 2: Forward Looking Statement

    INTERIM RESULTS FEBRUARY 2017 2 FORWARD LOOKING STATEMENT Certain statements contained in this presentation other than the statements of historical fact contain forward‐looking statements regarding Implats’ operations, economic performance or financial condition, including, without limitation, those

  3. Slide 3: Agenda

    INTERIM RESULTS FEBRUARY 2017 3 Agenda MARKET OPERATIONAL FINANCIAL OVERVIEW REVIEW REVIEW REVIEW OUTLOOK Gerhard Potgieter Paul Finney Gerhard Potgieter Brenda Berlin Gerhard Potgieter

  4. Slide 4: Overview

    OVERVIEW Gerhard Potgieter, Acting CEO

  5. Slide 5: Safety performance

    INTERIM RESULTS FEBRUARY 2017 5 Safety performance  Realisation of zero harm remains the Group’s key priority  Safety still remains a significant challenge at the Rustenburg mining operations:  Four employees suffered fatal injuries at Rustenburg during the six month period ended December 2016 

  6. Slide 6: Financial – key features

    INTERIM RESULTS FEBRUARY 2017 6 Financial – key features  Revenue increased 8.3% to R18.2 billion  Gross loss for the period of R318 million (R40 million gross loss)  Headline loss of 71 cents per share  Cash generated from operations (before changes to working capital) of R1.8 billion  Balance

  7. Slide 7: Operational – key features

    INTERIM RESULTS FEBRUARY 2017 7 Operational – key features  Zimplats, Two Rivers, Mimosa and Impala Refining Services delivered outstanding operational performances  Difficult operating conditions at Impala Rustenburg and community disruptions at Marula impacted production  Gross refined platinum

  8. Slide 8: Strategic Response

    INTERIM RESULTS FEBRUARY 2017 8 Strategic Response  We will always remain resolute in achieving zero harm goals  Several initiatives announced in February 2015 in response to low US dollar metal prices:  Cost optimisation  Reprioritising and rescheduling of capital expenditure  Implementing the

  9. Slide 9: Market Review

    MARKET REVIEW Paul Finney, Group Executive – Refining and Marketing

  10. Slide 10: Overview

    INTERIM RESULTS FEBRUARY 2017 10 Overview The global macro economic picture remains uncertain  Brexit  Changing US policy  China appears to be managing a soft landing, await 19th National Congress  Baseline projection of 3.4% global growth in 2017 PGM prices  Average prices year‐on‐year were lo

  11. Slide 11: Light-duty vehicle sales

    INTERIM RESULTS FEBRUARY 2017 11 Light‐duty vehicle sales 2016: A record high for automotive sales  4.6% growth (against our earlier forecast of 2.4%) WORLD LIGHT‐DUTY VEHICLE SALES BY REGION Diesel “demonisation” continues but remains a 2015 2016 2016 key part of OEM CO2 compliance for 2020 Growth

  12. Slide 12: Platinum jewellery

    INTERIM RESULTS FEBRUARY 2017 12 Platinum jewellery 2016 global demand estimated to decline by 110 000 platinum ounces  China: ‐3% to ‐9%  Challenged by changing consumer behaviour  India: +20% to +24%  Evara and PDOL successes overcame challenges of strike, floods and demonetisation  Japan: +1

  13. Slide 13: Investment

    INTERIM RESULTS FEBRUARY 2017 13 Investment 2016 Global ETFs ‐ relatively small moves on platinum, suggesting reluctance to liquidate these holdings at current prices  Platinum ‐9 koz  Palladium ‐640 koz Japanese small bar and coin investment strong  Platinum 425 koz 2016 NYMEX, TOCOM markets  P

  14. Slide 14: 2017 supply and demand

    INTERIM RESULTS FEBRUARY 2017 14 2017 supply and demand Fundamental demand demonstrates steady continued growth Platinum to remain in fundamental deficit  Automotive (Western Europe and Heavy Duty Diesel)  Jewellery (Indian growth and recovery in Chinese market)  Relatively flat supply  Recyclin

  15. Slide 15: The PGM market outlook

    INTERIM RESULTS FEBRUARY 2017 15 The PGM market outlook  Estimate 4 million platinum ounces consumed from above‐ground stocks (2012 ‐ 2017)  Further draw‐down of diminishing liquid surface stocks inevitable, supporting longer term market fundamentals  We see fundamental deficits continuing for bo

  16. Slide 16: Operational Review

    OPERATIONAL REVIEW Gerhard Potgieter, Acting CEO

  17. Slide 17: Impala

    INTERIM RESULTS FEBRUARY 2017 17 Impala  Mill throughput decreased 14.4% to 5.0 million tonnes (5.9 million) due to:  The temporary closure of the decline section at 14 Shaft after the January 2016 fire (39 000 ounces/600 000 mined tonnes)  A disruption in operations at 1 Shaft following the fall

  18. Slide 18: Impala

    INTERIM RESULTS FEBRUARY 2017 18 Impala  Refined platinum production decreased by 2.2% to 318 700 ounces (325 900 ounces)  Cash costs well contained, increasing 2.1% to R7.43 billion compared to mining inflation of 7.2%  This was due to ongoing efforts in reducing headcount and procurement spend

  19. Slide 19: IRS

    INTERIM RESULTS FEBRUARY 2017 19 IRS  IRS remains a strategic competitive advantage for Implats (000oz) 1H17 1H16  Efficiently leverages Impala’s infrastructure Zimplats 118.3 100.9  Contributes significantly to the bottom line, despite low PGM Marula 41.2 41.6 prices  IRS delivered R729 million

  20. Slide 20: Zimplats

    INTERIM RESULTS FEBRUARY 2017 20 Zimplats  All mining units sustained outstanding operational performances and benefited from increased production  Tonnes milled increased by 6% to 3.3 million tonnes (3.1 million)  Platinum in matte production (including concentrate sales to IRS) increased 5.2% t

  21. Slide 21: Marula

    INTERIM RESULTS FEBRUARY 2017 21 Marula  Tonnes milled increased 2.5% to 909 000 tonnes (887 000)  Head grade improved to 4.42 g/t (4.37 g/t)  Platinum in concentrate production increased 3.1% to 43 100 ounces (41 800) despite the impacts of:  Regulatory safety stoppages (1 500 ounces of platinu

  22. Slide 22: Mimosa

    INTERIM RESULTS FEBRUARY 2017 22 Mimosa  Delivered another excellent operational performance  Tonnes milled improved 4.3% to 1.37 million tonnes (1.31 million)  Head grade declined 2.4% to 3.83 g/t  Platinum in concentrate production increased to 60 900 ounces (60 000)  Unit costs increased 5.0

  23. Slide 23: Two Rivers

    INTERIM RESULTS FEBRUARY 2017 23 Two Rivers  Two Rivers had a first‐rate six months  Tonnes milled increased 2.8% to 1.75 million tonnes (1.70 million), of which 58 700 tonnes was toll‐treated by a third‐party  Head grade was marginally lower at 4.03 g/t (4.09 g/t)  Platinum in concentrate produ

  24. Slide 24: Financial Review

    FINANCIAL REVIEW Brenda Berlin, CFO

  25. Slide 25: Income statement

    INTERIM RESULTS FEBRUARY 2017 25 Income statement R million December 2016 December 2015 Change  Revenue increased due to higher rand metal prices Sales 18 195 16 807 1 388 Cost of sales (18 513) (16 847) (1 666)  Gross margin of (1.7%) Gross profit (318) (40) (278)  Insurance proceeds from 14 Sha

  26. Slide 26: Sales revenue

    INTERIM RESULTS FEBRUARY 2017 26 Sales revenue  Revenue up by R1.4 billion:  Higher dollar metal prices  Weaker exchange rate (Rm) FINANCIAL REVIEW

  27. Slide 27: Cost of sales movement

    INTERIM RESULTS FEBRUARY 2017 27 Cost of sales movement  R1.7 billion negative movement in cost of sales impacted by:  5% higher cash cost – unit cost increased by 1.9% to R22 797  Higher volumes metals purchased by IRS – higher rand metal prices (Rm) FINANCIAL REVIEW

  28. Slide 28: Headline earnings movement

    INTERIM RESULTS FEBRUARY 2017 28 Headline earnings movement  Forex gain of R1 070 million includes R791 million conversion gain on the dollar bond  Sundry items of R1 027 million includes a negative movement of R943 million on the valuation of derivatives  Tax: prior period included a tax credit

  29. Slide 29: Cash generated

    INTERIM RESULTS FEBRUARY 2017 29 Cash generated R billion H1 FY2017 H1 FY2016 Cash generated from operations before working capital 1.8 1.2 R billion H1 FY2017 Capital expenditure (excluding 16 and 20 Shafts) (1.0) (1.1) 1.8 Underlying cash generation from operations 0.8 0.1 (1.4) 16 and 20 Shafts c

  30. Slide 30: Net debt

    INTERIM RESULTS FEBRUARY 2017 30 Net debt  Net debt of R1.1 billion at 31 December 2016 R million Dec‐2016 Dec‐2015 % change excluding leases Gross cash 5 346 6 355 (15)  Available – R9.4 billion Convertible bond (5 308) (5 508) 4  R5.4 billion cash  Unutilised facilities of R4.0 billion availab

  31. Slide 31: Outlook

    OUTLOOK Gerhard Potgieter, Acting CEO

  32. Slide 32: Outlook

    INTERIM RESULTS FEBRUARY 2017 32 Outlook  Fundamental market deficits are expected to continue boding well for an improved supply/demand environment  Consequently, approval to restart the 17 Shaft replacement project at Rustenburg in two years’ time  Approval also granted for the Mupani replaceme

  33. Slide 33: Ensuring long-term shareholder value

    INTERIM RESULTS FEBRUARY 2017 33 Ensuring long‐term shareholder value Our strategy seeks to Key deliverables • Positive long‐term PGM fundamentals sustain optimal levels of  Restore Impala output to at least 800kozpa from 2020 • Lower‐for‐longer prices near‐term Improve efficiencies through operati

  34. Slide 34: Interim Results

    INTERIM RESULTS 31 December 2016 23 February 2017

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