TIDMPTMN
RNS Number : 0110Y
Petmin Limited
15 February 2013
PETMIN LIMITED
Incorporated in the Republic of South Africa
Registration Number 1972/001062/06
Share Code JSE: PET & ISIN: ZAE000076014
Share Code AIM: PTMN
("Petmin" or "the Company")
15 February 2013
SHAREHOLDER AND TRADING UPDATE FOR THE SIX MONTHS ENDED 31
DECEMBER 2012
In terms of the Listings Requirements of JSE Limited ("Listings
Requirements"), listed
Companies are required to publish a trading statement as soon as
they are satisfied that a
reasonable degree of certainty exists that the financial results
for the period to be reported
upon next will differ by at least 20% from those of the prior
comparative period.
Petmin expects that earnings per share from continuing
operations (taking into account the sale of the SamQuarz Silica
operation) will be down approximately 16% for the six month period
to 31 December 2012.
Earnings for the six months ended 31 December 2012 at Petmin's
wholly-owned subsidiary, Tendele Coal Mining (Pty) Limited, were
affected by production delays due to the previously reported
unprotected strike by contractor employees and excessive rainfall
which prevented the delivery of available coal to the wash plants.
Despite the difficult operating conditions, the Group's operations
remain cash generative, generating approximately R160 million cash
in the six months ended 31 December 2012 (2011: R200 million).
Management is confident that these difficulties have been
largely overcome and Tendele is now operating at its budgeted
production levels. In the year ending 30 June 2013, Petmin
anticipates that Tendele will sell approximately 876 000 tonnes
(previous estimate 900 000 tonnes) of anthracite and, with the
commissioning of the third wash plant in February 2013, the
benefits of the sales of energy products will be seen.
Earnings per share (EPS) and headline earnings per share (HEPS)
for the six months ended 31 December 2012 will be approximately 36%
below the earnings reported for the comparative six months ended 31
December 2011 (these results included the results of SamQuarz).
For the six months ended 31 December 2012, Profit after tax is
estimated to be R30 million, HEPS is estimated to be approximately
5.20 cents (2011, 8.15 cents), and EPS is estimated to be 5.20
cents (2011: 8.15 cents)
Anthracite Division
Tendele Coal Mining (Pty)Ltd - Somkhele anthracite mine
Production in the six months ended 31 December 2012 at Somkhele
was severely constrained by:
-- the unprotected strike by contractor employees (see
announcements released on the Securities Exchange News Service and
to RNS dated 28 September 2012 and 8 October 2012),
-- unusually high rainfall encountered in Kwa-Zulu-Natal, South
Africa, during October, November and December 2012, which prevented
the delivery of coal from the open pits.
In the six months ended 31 December 2012, Somkhele lost a total
of 42 production days to the unprotected strike and rainfall.
Fifteen production days were lost as a result of the unprotected
strike action which was widespread in the South African mining
industry and a further 27 production days were lost due to
excessive rainfall encountered in Kwa-Zulu-Natal, South Africa
(more than double the historic average).
The approximate quantitative effect of the above is summarised
below:
Reason Production ROM tonnes Anthracite
days lost shortfall saleable
tonnes shortfall
------------------ ------------------- ----------- ------------------
Strike 15 days 127,500 53,550
------------------ ------------------- ----------- ------------------
15 days unplanned
lost production
(Total 27
days lost
to rain of
which 12 were
Rainfall planned) 127,500 53,550
------------------ ------------------- ----------- ------------------
Total 30 days 255,000 107,100
------------------ ------------------- ----------- ------------------
Total saleable
tonnes produced
to 31 December
2012 293,765
--------------------------------------- ----------- ------------------
Percentage
tonnes lost 27%
--------------------------------------- ----------- ------------------
At the end of December 2012, Somkhele had 192,000 tonnes of
exposed coal (coal that is available in the pits to be loaded and
hauled to the wash plants) that could not be delivered to the wash
plants in December due to the heavy rainfall. At the time of this
report, these sections have been de-watered to grant access to the
coal and the mine is operating at budgeted levels.
Had this coal been delivered to the wash plants and sold
(Tendele had outstanding orders), management estimates that this
would have resulted in a profit after tax for the six months ended
31 December 2012 of R44 million (up some 47% from the estimated
profit after tax of R30 million) and the earnings per share for the
period would have been approximately 22% up on the EPS from
continuing operations for the comparative period ended 31 December
2011 (6.18 cents).
In the six months ended 31 December 2012, Somkhele maintained
its expected sales volumes and prices as demand remained steady and
deliveries were made from stockpiles on hand.
Production at Somkhele increased by 44% to 293 765 tonnes (2011:
203 425 tonnes) of saleable anthracite in the six months to 31
December 2012 and tonnes sold increased by 63% to 370 562 tonnes
(2011: 227 041 tonnes) .
The significant capital investment in Somkhele during the past
two years is largely completed and Tendele is now geared to produce
some 1.2 million tonnes of anthracite annually and some 480 000
tonnes of energy product from the newly commissioned third
plant.
During the period under review an extension to an existing
mining right was obtained for the Luhlanga area. Once the Luhlanga
mining area is in production (expected to commence in April 2013),
Somkhele will operate in four different pit areas that will provide
the flexibility to blend production to supply improved qualities
and to reduce the risk of production delays should production in
one of the pits be delayed. Following severe rains in January 2013,
production levels have returned to normal. In order to mitigate the
impact of rain on production going forward, Somkhele has commenced
a campaign to stockpile run-of-mine (ROM) coal at the pit-head so
that it may still be delivered to the wash plants in the event of
sustained heavy rainfall. The aim of the campaign is to ensure some
100 000 ROM material on stockpile that will allow the plants to
operate at full capacity for 10 days in the event that the pits
can't be accessed due to rain. At the time of writing this report,
some 40 000 ROM tonnes are on the stockpile.
With production levels improving and an anthracite market that
is showing reasonable demand at prices better than during the
previous six months, Petmin expects production from Somkhele to
increase significantly in the six months ending 30 June 2013.
North-Atlantic Iron Corporation (NAIC)
Petmin will provide feedback on the positive progress made at
the North Atlantic Iron Corporation pig iron project when it
publishes its interim results on 4 March 2013.
The financial information on which this trading statement is
based has not been reviewed, audited nor reported on by Petmin's
external auditors.
Enquiries:
Petmin
Bradley Doig
+27 11 706 1644 (office)
+27 82 459 7818 (mobile)
Media
Jonathon Rees +27 76 185 1827
Jonathon@proofafrica.co.za
Sponsor and Corporate Advisor (JSE)
River Group
Andrew Lianos +27 834 408 365
Nominated Adviser and Broker (AIM)
Macquarie Capital (Europe) Limited
Steve Baldwin +44 20 3037 2362
Nicholas Harland +44 20 3037 2369
River Group
Johannesburg
15 February 2013
This information is provided by RNS
The company news service from the London Stock Exchange
END
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