Slide 1: Year End Results
YEAR END RES ULTS 12 Mo n th s to 31 De c e m b e r 2007 1
Slide 2: Contents
Co n te n ts • Hig h lig h ts • Fin a n c ia l re vie w • S h a re p ric e p e rfo rm a n c e • In te rn a tio n a l s h a re h o ld in g • Op e ra tio n a l u p d a te • Ma rke t re vie w • P ro s p e c ts 2
Slide 3: Highlights
MERAFE RESOURCES
Slide 4: Highlights
Hig h lig h ts • Re c o rd twe lve -m o n th EBITDA o f R465m u p 161% • Ne t p ro fit a fte r ta x o f R240m u p 73% • Fe Cr p ric e a t re c o rd le ve l o f US $1.00 • Ma rke t c a p u p o f R5.7b n e n d o f FY07 u p 217% • S h a re p ric e u p 212% fro m e n d FY06 • Bo ka m o s o c o m m is s
Slide 5: Financial review
Fin a n c ia l re vie w 5
Slide 6: Abridged Income Statement
Ab rid g e d In c o m e S ta te m e n t fo r 12 m o n th s Year ended Year ended 31 Dec 2006 31 Dec 2007 Audited Audited R’m R’m % Change Re ve n u e 1 030 1 656 +61% EBITDA 179 465 +160% De p re c ia tio n (25) (46) +84% In te re s t (39) (54) +38% Ta xa tio n 25 (124) +396% P ro fit fo r th e p e
Slide 7: Cost pressures
Co s t p re s s u re s In c re a s e s in c o s t o f p ro d u c tio n fo r S o u th Afric a n p ro d u c e rs c o n tin u e d to p u t p re s s u re o n e a rn in g s Ele c tric ity – Es ko m a n n o u n c e d 15% in c re a s e fo r 2008 La b o u r/wa g e s u p b y +-10.5% a c ro s s th e m in
Slide 8: Gearing
Ge a rin g R’m Op e n in g b a la n c e 1 J a n u a ry 2007 • P re fe re n c e s h a re s 225 • ABS A (Lio n ) 300 • Xs tra ta 225 750 Ne w ABS A fa c ility (Bo ka m o s o ) 100 De b t re p a id d u rin g 2007 • P re fe re n c e s h a re s (105) • ABS A (Lio n ) (45) • ABS A (Bo ka m o s o ) (5) • X
Slide 9: Merafe's gearing programme
Me ra fe ’s g e a rin g p ro g ra m m e • Co n ve rs io n o f R350m a m o rtis in g d e b t in to five ye a r fa c ility with n o c a p ita l re p a ym e n ts • P la n to re p a y R120m o f p re fe re n c e s h a re s a n d R147m o win g to Xs tra ta d u rin g 2008 • Ta rg e t d e b t:e q u ity ra t
Slide 10: Share price performance
S h a re p ric e p e rfo rm a n c e 10
Slide 11: Share price performance
Rebased to 100 50 70 90 110 130 150 170 190 210 230 250 270 290 310 330 350 370 390 410 430 03-Jan-06 23-Jan-06 12-Feb-06 04-Mar-06 24-Mar-06 13-Apr-06 03-May-06 23-May-06 and JSE Mining Index 12-Jun-06 02-Jul-06 22-Jul-06 11-Aug-06 31-Aug-06 20-Sep-06 10-Oct-06 Merafe 30-Oct-06 19-Nov-06 09-Dec-06
Slide 12: International shareholding
In te rn a tio n a l s h a re h o ld in g 12
Slide 13: International shareholding
In te rn a tio n a l s h a re h o ld in g International shareholding for 2007 12.00% 10.00% 8.00% 6.00% 4.00% 2.00% 0.00% r ry ne y r ch ly ril r No ber st ay be be be ar Ju Ap ua gu Ju ar M m nu m em o M br Au ct ve ce Ja Fe O pt De Se Merafe’s international shareholding has increased from just ove
Slide 14: Operational update
MERAFE Re E-S%O"U Ru GeaEsS
Slide 15: Operational update
Op e ra tio n a l u p d a te Op e ra tio n s • All s e ve n fu rn a c e s wh ic h we re te m p o ra rily s u s p e n d e d , we re re s u m e d d u rin g s e c o n d h a lf 2007 • All twe n ty fu rn a c e s o p e ra tio n a l a t e n d o f ye a r Lio n Fe rro c h ro m e • S lo we r th a n e xp e c t
Slide 16: Operational update (cont)
Op e ra tio n a l u p d a te (c o n t) Bo ka m o s o • S u c c e s s fu lly c o m m is s io n e d d u rin g th e s e c o n d h a lf o f 2007 • La rg e s t p e lle tis in g a n d s in te rin g p la n t o f its kin d in th e wo rld • Exp e c te d to re d u c e o p e ra tin g c o s ts wh ils t im p ro
Slide 17: Bokamoso pelletising and sintering plant
Op e ra tio n a l u p d a te (c o n t) Bokamoso pelletising and sintering plant 17
Slide 18: Operational update: Eskom
Op e ra tio n a l u p d a te (c o n t) Es ko m • 25 J a n u a ry 2008, Ve n tu re re d u c e d e le c tric ity lo a d to th e m in im u m p o s s ib le • 30 J a n u a ry 2008, Es ko m a llo we d in c re a s in g th e lo a d to 80% • 1 Fe b ru a ry 2008, Es ko m a llo we d in c re a s in g th e lo a
Slide 19: Market review
MERAFE Re E-S%O"U Ru GeaEsS
Slide 20: Market review
Ma rke t re vie w • Firs t h a lf o f 2007 c h a ra c te ris e d b y s tro n g g ro wth in s ta in le s s s te e l (s s ) p ro d u c tio n • Drive n b y Ch in e s e s s m e lt p ro d u c tio n g ro wth o f o ve r 20% c o m p a re d to th e s a m e p e rio d in 2006 • Hig h n ic ke l p ric e s in th
Slide 21: Market review (cont)
Ma rke t re vie w (c o n t) Relationship between FeCr, SS and Ni prices over the past 2 years 7,000 60,000 7,000 1.20 Stainless sheet 304 (LHS) Stainless sheet 304 6,000 50,000 6,000 1.00 Charge chrome 5,000 5,000 Nickel (RHS) 40,000 0.80 4,000 4,000 30,000 0.60 3,000 3,000 20,000 0.40 2,000 2,000 1
Slide 22: Market review: Consumption of Ferrochrome
Ma rke t re vie w (c o n t) Consumption of Ferrochrome De m a n d b y m a jo r Fe Cr c o n s u m in g c o u n trie s h a s in c re a s e d b y 19.8% in 2007 c o m p a re d to 2006 to 7.4m to n n e s OTHER USA 11% 7% JAPAN BELGIUM 12% 5% ITALY 6% S.KOREA 6% GERMANY 7% TAIWAN 5% S.A 6% Data: Heinz H.
Slide 23: Ferrochrome prices
Ma rke t re vie w (c o n t) Fe rro c h ro m e p ric e s • S u s ta in e d s tro n g d e m a n d fo r Fe Cr h a s re s u lte d in s ig n ific a n t p ric e in c re a s e s in 2007 • Th e b a s e p ric e h a s in c re a s e d a s fo llo ws : Q1 2007 75US c /lb US $1/lb Q4 2007 Q1 2008 US $1.21/lb
Slide 24: Merafe Coal
MERAFE Re E-S%O"U Ru GeaEsS
Slide 25: Merafe Coal
Me ra fe Co a l • 50/50 jo in t ve n tu re with S e n tu la Min in g Lim ite d (fo rm e rly S c h a rrig Min in g ) • P a rtie s p o o le d re s p e c tive c o a l re s o u rc e s • Re s o u rc e s to b e b ro u g h t to a c c o u n t d u rin g 2009 • S e n tu la a c q u ire d 49.998% in Ko o rn fo
Slide 26: Prospects
MERAFE R E-SyJO.U R Cubes
Slide 27: Prospects
P ro s p e c ts • Ou tlo o k fo r Fe Cr p ric e s in 2008 re m a in s p o s itive • S ta in le s s m e lt fo re c a s t to in c re a s e b y o ve r 10% to 32 m illio n to n n e s in 2008 • S S p ro d u c tio n e xp e c te d to s lo w in firs t q u a rte r o f 2008 d u e to p ro d u c tio n c u ts in
Slide 28: www.meraferesources.co.za
www.m e ra fe re s o u rc e s .c o .za 28