IMP 201902280006A
Consolidated interim results (reviewed) for the six months ended 31 December 2018
Impala Platinum Holdings Limited
(Incorporated in the Republic of South Africa)
Registration number: 1957/001979/06
Share codes:
JSE: IMP
ADRs: IMPUY
ISIN: ZAE000083648
ISIN: ZAE000247458
Consolidated interim results (reviewed) for the six months ended 31 December 2018
Our vision, mission and values
Our vision
To be the worlds' best PGM producer, sustainably delivering superior value to all our stakeholders.
Our mission
To mine, process, refine and market high-quality PGM products safely, efficiently and at the best possible cost
from a competitive asset portfolio through team work and innovation.
Our values
We respect, care and deliver.
Forward looking and cautionary statement
Certain statements contained in this disclosure, other than the statements of historical fact, contain forward looking
statements regarding Implats' operations, economic performance or financial condition, including, without limitation,
those concerning the economic outlook for the platinum industry, expectations regarding metal prices, production, cash
costs and other operating results, growth prospects and the outlook of Implats' operations, including the completion and
commencement of commercial operations of certain of Implats' exploration and production projects, its liquidity and
capital resources and expenditure and the outcome and consequences of any pending litigation, regulatory approvals and/or
legislative frameworks currently in the process of amendment, or any enforcement proceedings. Although Implats believes
that the expectations reflected in such forward looking statements are reasonable, no assurance can be given that such
expectations will prove to be correct. Accordingly, results may differ materially from those set out in the forward looking
statements as a result of, among other factors, changes in economic and market conditions, success of business and
operating initiatives, changes in the regulatory environment and other government actions, fluctuations in metal prices,
levels of global demand and exchange rates and business and operational risk management. For a discussion on such factors,
refer to the risk management section of the Company's integrated annual report. Implats is not obliged to update publicly
or release any revisions to these forward looking statements to reflect events or circumstances after the dates of the
integrated annual report or to reflect the occurrence of unanticipated events.
Disclaimer: This entire disclosure and all subsequent written or oral forward looking statements attributable to Implats
or any person acting on its behalf are qualified by caution. Recipients hereof are advised this disclosure is prepared for
general information purposes and not intended to constitute a recommendation to buy or offer to sell shares or securities
in Implats or any other entity. Sections of this disclosure are not defined and assured under IFRS, but included to assist
in demonstrating Implats' underlying financial performance. Implats recommends that you address any doubts in this regard
with an authorised independent financial adviser, stockbroker, tax adviser, accountant or suitably qualified professional.
February 2019
Johannesburg
Sponsor to Implats
Nedbank Corporate and Investment Banking
Key features for the year
Impala Platinum Holdings Limited (Implats) is one of the world's foremost producers of platinum and associated
platinum group metals (PGMs). Implats is structured around six mining operations and Impala Refinery Services,
a toll-refining business. Our operations are located on the Bushveld Complex in South Africa and the Great Dyke
in Zimbabwe, the two most significant PGM-bearing ore bodies in the world.
Key features for the six months
Safety
- Significant improvement in safety performance
- Record low FIFR for the Group
- FIFR lowest among our peers in CY2018
Financial
- Strong positive cash flows across the Group - net debt reduced from R3.8bn to R976m
- Gross profit of R3.2bn from R556m
- Headline earnings of 310cps from a loss of 21cps
- Group liquidity headroom improves by R4.2bn to R10.4bn
Operational
- Mine-to-market platinum in concentrate production sustained at 678koz
- Gross refined PGM production up 11% to 1.59Moz including refined platinum production of 800koz and
palladium of 464koz
- Group cash costs adjusted for stock changes flat at R22 715/Pt oz
Market
- The market for palladium and rhodium continues to tighten
- The platinum market remains challenged in the near term
- PGM dollar revenue per platinum ounce sold up 10% to US$2 124/Pt oz
- Rand revenue per platinum ounce sold was 16% higher and averaged R30 118/Pt oz
Group performance
Six months Six months
to 31 December to 31 December %
Operating statistics 2018 2017 change
Gross refined platinum production
Platinum (000oz) 799.8 726.7 10.1
Palladium (000oz) 464.1 406.0 14.3
Rhodium (000oz) 106.2 98.8 7.5
Nickel (tonnes) 8 074 7 907 2.1
IRS metal returned (toll refined)
Platinum (000oz) 0.7 115.7 (99.4)
Palladium (000oz) 1.6 55.0 (97.1)
Rhodium (000oz) - 19.4 (100.0)
Nickel (tonnes) 1 749 1 765 (0.9)
Sales volumes
Platinum (000oz) 773.4 648.8 19.2
Palladium (000oz) 485.5 369.7 31.3
Rhodium (000oz) 104.2 100.3 3.9
Nickel (tonnes) 5 949 6 283 (5.3)
Prices achieved
Platinum (US$/oz) 829 940 (11.8)
Palladium (US$/oz) 1 035 930 11.3
Rhodium (US$/oz) 2 395 1 156 107.2
Nickel (US$/t) 13 399 10 334 29.7
Consolidated statistics
Average rate achieved (R/US$) 14.18 13.42 5.7
Closing rate for the period (R/US$) 14.38 12.38 16.2
Revenue per platinum ounce sold (US$/oz) 2 124 1 935 9.8
(R/oz) 30 118 25 968 16.0
Tonnes milled ex-mine (000t) 10 235 9 944 2.9
PGM refined production (000oz) 1 589 1 434 10.8
Capital expenditure (Rm) 1 707 1 904 10.3
Group unit cost per platinum ounce (US$/oz) 1 502 2 076 27.6
(R/oz) 21 298 27 818 23.4
Group unit cost per platinum ounce stock adjusted (US$/oz) 1 602 1 707 6.2
(R/oz) 22 715 22 866 0.7
Additional statistical information is available on the Company's website at www.implats.co.za
Commentary
Introduction
The Implats Group has delivered a strong safety and operational performance for the half-year ended 31 December 2018.
Good progress was made on implementing key outcomes of the Impala Rustenburg strategic review. The performance,
together with a higher PGM rand basket price, which was boosted by significant increases in palladium, rhodium and
nickel, and further aided by a weaker US$ exchange rate, resulted in a significantly improved Group financial
performance.
This was characterised by positive cash flow contributions from all Group operations, yielding a headline profit of
R2.23 billion compared to losses of some R150 million in the previous comparable period. Consequently, Group cash
balances increased significantly to R6.36 billion, reducing net debt (before leases) from R5.33 billion at the start
of the reporting period to R976 million by financial half-year-end.
Regrettably, Implats mourns the loss of an employee through a work-related incident during the period under review.
The board and management are encouraged, however, by the significant improvement in safety performance achieved in the
reporting period, with improvements in lost time injuries and a record low fatal injury frequency rate (FIFR) for the
Group.
Tonnes milled from managed operations (Impala Rustenburg, Zimplats and Marula) increased 2.9% to 10.24 million tonnes.
Together with contributions from our joint ventures (JVs) at Mimosa and Two Rivers, this sustained mine-to-market
platinum production in concentrate at 678 000 ounces (H1 FY2018: 678 000 ounces). Gross platinum in concentrate reduced
by 10.7% to 775 000 ounces, largely due to a large once-off toll-refining contract concluded in the prior comparable period.
Gross refined platinum production for the six months improved by 10.1% to 799 800 ounces (H1 FY2018: 726 700 ounces) as
processing availability increased following scheduled maintenance, which resulted in the build in inventory in the previous
comparable period.
Sales volumes for platinum and palladium increased by 19.2% and 31.3% respectively, as sales in the comparable period
were impacted by both scheduled furnace maintenance and the required return of metal to the tolling customer. Improved
sales volumes, together with higher received rand basket pricing saw revenue improve by R6.24 billion to R23.52 billion
(H1 FY2018: R17.28 billion). Despite a 21% increase in cost of sales to R20.29 billion for the period (H1 FY2018:
R16.72 billion), this was in line with increased production and sales volumes and the impact of stronger pricing on the
cost of metals purchased in concentrate at IRS. As a result, gross profit improved by R2.68 billion to R3.23 billion and
headline earnings per share rose to 310 cents versus the 21 cent loss in the comparable six months.
Group safety review
The safety and health of our employees remains our most critical priority.
Regrettably, one employee at Impala Rustenburg 16 Shaft suffered fatal injuries in September 2018. The Implats board
and management team express their sincere condolences to Mr Semoko Mokhethi's families and friends, and will continue
to provide support to the Mokhethi family.
Notwithstanding this tragic incident, the Group has effected a step change in safety performance, which was maintained
during the reporting period. Fatal injuries reduced from six in the prior comparable six-month period, to one in the
period under review. The recent incident followed a seven-month continuous fatality-free work period, which was an
all-time record for the Group. The improvement also resulted in the organisation recording the lowest fatal injury
frequency rate (FIFR) of our peer group for the 2018 calendar year.
Many individual business units across the Group continue to deliver exceptional safety performances, setting a number
of new records. Currently, 11 of 15 Group operations have achieved 'millionaire' or 'multi-millionaire' status in terms
of fatality-free shifts (units which have operated more than a million shifts without a fatality). The FIFR of 0.019
per million man hours worked is an all-time low for the Group, and the lost-time injury frequency rate (LTIFR) has also
improved 14.8% over the six months to 5.12 per million man hours worked.
We believe collaboration with our key stakeholders will continue to drive further improvements in safety through
awareness, education, and by implementing appropriate systems and best practice.
Group operational review
The Group achieved encouraging period-on-period operational improvements in key areas over the past six months.
Tonnes milled from managed operations (Impala Rustenburg, Zimplats and Marula) increased 2.9% to 10.24 million tonnes
(H1 FY2018: 9.94 million tonnes), which together with contributions from our JVs at Mimosa and Two Rivers sustained
mine-to-market platinum production in concentrate at 678 000 ounces. Notwithstanding, gross platinum in concentrate
production reduced by 10.7% to 775 000 ounces, principally as a result of a 49.1% reduction in third-party receipts,
in line with market guidance, and as a result of a large once-off toll-refining contract concluded in the prior
comparable period.
Gross refined platinum production for the six months improved by 10.1% to 799 800 ounces, compared to 726 700 last
year assisted by the drawdown of some processing inventory during the period, compared to a build-up following scheduled
furnace maintenance in the comparable period a year ago. Group operating costs were well controlled during the reporting
period with unit costs per tonne milled to concentrate flat at R1 049 per tonne, and unit costs per platinum ounce refined,
on a stock-adjusted basis, reducing by 0.7% to R22 715 per ounce. Unit cost per platinum ounce refined, discounting the
change in processing inventories, benefited from the increased refined metal production, and retraced by 23.4% to
R21 298 per ounce (H1 FY2018: R27 818 per ounce), as the previous comparable period was impacted by a pipeline
stock build-up.
Capital expenditure at our managed operations reduced from R1.90 billion in the previous comparable period to
R1.71 billion, in line with market guidance.
Managed operations
Impala
A vastly improved safety performance at the Impala Rustenburg operations facilitated a stable and productive operating
period. Tonnes milled increased by 5.3% to 5.97 million tonnes (H1 FY2018: 5.67 million tonnes), with higher production
from eight of the shafts, including the development shafts. These improvements more than offset the loss of production
from 4 Shaft, which closed in January 2018, lower volumes from 1 Shaft (where a planned ramp-down in production is
underway) and 11 Shaft (where poor geology impacted volumes in the period).
The PGE mill head grade deteriorated by 1.5% to 3.98g/t (6E) (H1 FY2018: 4.05g/t), and was impacted by lower grade in
the areas mined, but platinum production in concentrate increased by 2.9% to 358 000 ounces (H1 FY2018: 348 000 ounces)
as a result of the higher milled throughput. Refined platinum production increased by a significant 49.0% to 405 000
ounces (H1 FY2018: 272 000 ounces), bolstered by a release of pipeline stock during the reporting period, and as a
result of a stock build-up, which impacted refined metal volumes in the prior period.
The improved production, coupled with strict cost containment, resulted in the stock-adjusted cost per ounce remaining
flat at R23 519 per platinum ounce refined (H1 FY2018: R23 354). Capital expenditure decreased by 29.5% to R1.02 billion
(H1 FY2018: R1.44 billion), of which R207 million was spent on the two major replacement shafts, 16 and 20 Shafts.
An improved rand basket price further boosted financial performance, leading to a significant improvement in profitability
compared to the previous period, with free cash flow further augmented by a R1.06 billion forward sale of excess inventory.
Execution of the Impala Rustenburg strategic review
The Group continued to make strides towards eliminating loss-making production, which culminated in the decision to
restructure Impala Rustenburg.
The implementation of the Impala Rustenburg plan is being phased in over two years to ensure the transition occurs in
a socially responsible way. The key outcomes of the restructuring, which is expected to be concluded by the end of the
2021 financial year, include: a reduced mining 'footprint' from 11 to six operating shafts as operations cease at
end-of-life and uneconomical shafts; production reducing from 750 000 platinum ounces to 520 000 platinum ounces a
year; and a total labour complement (employees and contractors) of 27 000 from 2021.
This plan is expected to deliver a safer and more profitable Impala Rustenburg centred on assets accessing a higher
quality, long-life orebody with lower operating costs and capital intensity.
The implementation of the restructuring is governed by the overriding imperative to ensure forced job losses are
minimised through various avoidance measures. These include the transfer of employees to vacant positions at the
16 and 20 growth Shafts, natural attrition, reskilling, voluntary separation, business improvement initiatives
and exploring commercial options to exit shafts that do not fit the long-term portfolio.
By the end of January 2019, the own employee headcount at Impala Rustenburg decreased by approximately 1 500 people -
with forced retrenchments affecting only 110 employees. A disposal and outsourcing process has been initiated on 1 Shaft
through solicitation of expressions of interest and is expected to conclude in June 2019.
A multitude of stakeholder engagements were undertaken during the reporting period, all of which were constructive.
We continue to engage with the union, government and community leadership to safeguard employment opportunities as far
as possible through the restructuring process.
Impala Refining Services (irs)
IRS once again contributed significantly to the Group's bottom line, despite higher concentrate receipts in the
previous comparable period. Platinum receipts from mine-to-market operations (Zimplats, Marula, Two Rivers and Mimosa)
remained essentially flat at 313 900 ounces (H1 FY2018: 318 300 ounces), while third-party receipts decreased 49.1% to
96 800 ounces, due to the once-off toll treatment of third-party material in the previous interim period.
Refined platinum production was 13.2% lower at 395 000 ounces (H1 FY2018: 455 000 ounces).
Zimplats
Zimplats sustained its operational performance for the period under review and achieved a safety milestone of
9.75 million fatality-free shifts, working for over five and a half years without a fatal incident.
Tonnes milled of 3.31 million tonnes was consistent with the prior period, (H1 FY2018: 3.33 million tonnes), with all
mining units delivering to plan. Notwithstanding a marginally lower PGE head grade of 3.48g/t (H1 FY2018: 3.49g/t),
platinum in matte production was sustained at 135 400 ounces (H1 FY2018: 136 200 ounces).
Unit costs decreased by 3.2% in dollar terms to US$1 293 per platinum ounce in matte (H1 FY2018: US$1 336 per platinum
ounce in matte), on strong cost controls and sustained volumes.
Capital expenditure increased 43.8% to US$46 million, mainly to fund the redevelopment of the Bimha Mine, which has
returned to full production, and additional spend on the development of Mupani Mine (the replacement for Ngwarati
and Rukodzi mines), which remains ahead of schedule.
The current political and economic challenges in the country are being monitored closely with the intention of
minimising any impact on the operations, employees, and their ability to operate at a sustained profit margin.
Implats supports and shares Zimbabwe's aspirations to grow and diversify its PGM industry and continues to actively
engage with the government of Zimbabwe regarding its plans.
Marula
Marula continues to deliver an improved operational performance after business restructuring and ongoing efforts to
sustain operational continuity.
Tonnes milled increased by 1.5% to 955 000 tonnes (H1 FY2018: 941 000 tonnes), while the PGE head grade improved
marginally to 4.37g/t (H1 FY2018: 4.36 g/t). Consequently, platinum in concentrate production improved to 44 900
ounces (H1 FY2018: 43 200 ounces).
Unit costs increased below inflation to R25 657 per platinum ounce in concentrate (H1 FY2018: R24 954 per platinum
ounce), while capital expenditure was well below budget at some R33 million (H1 FY2018: R29 million) with spend
expected to accelerate in the second half of FY2019 on the planned tailings storage expansion.
The benefit of a stable and improved operational performance, good cost controls and an improved basket price
allowed Marula to deliver a strong cash contribution to the Group during the reporting period.
Non-managed operations
Mimosa
Mimosa sustained a strong production performance in line with its design capacity.
Tonnes milled were maintained at 1.41 million tonnes. The PGE head grade declined marginally to 3.83g/t
(H1 FY2018: 3.85 g/t) due to planned mining in lower-grade areas, which resulted in platinum in concentrate
dipping slightly to 61 700 ounces (H1 FY2018: 63 000 ounces).
Inflationary pressures and slightly lower production volumes saw unit costs rise 7.0% to US$ 1 582 per platinum
ounce in concentrate (H1 FY2018: US$ 1 479). Capital expenditure increased 25.0% to US$25 million to fund
scheduled fleet replacement and development into the Mtshingwe block to sustain mining flexibility.
Mimosa continues to consult with the government of Zimbabwe on a range of important investment and regulatory
considerations and remains confident that mutually beneficial outcomes can be secured.
Two Rivers
Two Rivers' mill grade continued to be impacted by mining low-grade split-reef areas. However, production and
mill grade was also impacted during the review period by community disruptions. This necessitated a draw-down
of ore stockpiles to ensure continued plant operations and resulted in slower milling rates and lower-grade feed.
Tonnes milled during the first half decreased 2.7% to 1.67 million tonnes (H1 FY2018: 1.71 million tonnes).
The treatment of lower-grade stockpiled material as a result of community disruptions and mining in split-reef
areas resulted in a 4.6% drop in the PGE head grade to 3.53g/t (H1 FY2018: 3.70 g/t). Consequently, platinum in
concentrate production declined 9.4% to 75 600 ounces (H1 FY2018: 83 400 ounces).
Lower volumes impacted unit costs, which increased 12.0% to R16 455 per platinum ounce in concentrate
(H1 FY2018: R14 688).
Due to limited flexibility, lower-grade mining is expected to persist for the next two to three years, with an
alternative mining cut being trialled in the worst affected area to maintain platinum production, while development
into higher grade future mining areas continues.
Key projects
Due to their important future contribution to sustain profitability at Impala Rustenburg, progress on the 16 and 20
Shaft replacement projects remains critical. During the strategic review, the capital programmes for these shafts
were revised and optimised. This has resulted in the earlier forecast completion dates and a reduction in estimated
cost to complete 20 Shaft.
16 Shaft
During the period under review, the impact of a fatality in August 2018 saw the 16 Shaft project fall marginally
behind the revised capital plan due to slower than planned progress on the C ore pass rehabilitation programme,
which remains critically important to reach full production. Notwithstanding, mining flexibility has improved,
production levels have been restored and raise lines were holed on target. This provides reasonable assurance
that enough panels will be established to accommodate the planned increase in production crews scheduled over
the rest of the financial year.
20 Shaft
The 20 Shaft ramp-up is still being hampered by geological complexities. No further teams will be mobilised
to 20 Shaft during the remainder of the year, while recently improved development is converted into mineable
face length. Additional technical and management resources have been mobilised to the shaft to oversee the
planned ore ramp up programme.
Progress on the capital build programme is better than planned as the completion of the monorail, electrical/
instrumentation installation and settler are well ahead of schedule. The full capital infrastructure installation
is expected to be completed during the second half of the financial year. Rehabilitation of some of the level
ore passes require imminent attention, but are not included in the current capital plan.
Mupani Mine
The development of Mupani Mine (the replacement for Ngwarati and Rukodzi mines) is running well, targeting ore contact
three months ahead of schedule by August 2019, and full production in August 2025. A total of US$51 million had been
spent as at 31 December 2018 against planned expenditure of US$53 million and a total project budget of US$264 million.
The project was 22% complete at the end of the reporting period.
Waterberg project
As reported previously, Implats purchased a 15% participation in the Waterberg project for US$30 million and is now
actively participating with the other JV partners in a definitive feasibility study (DFS). All geological information
from the exploration phase is now available in a resource model and the team is completing the mine design and
scheduling.
The JV has applied for a mining right while power and water resources are being secured. All the work done on the study
to date has confirmed our confidence in the project and supported the rationale for the investment. The DFS study will
be SAMREC and NI43-101 compliant and is expected to be complete before calendar year-end, after which Implats has the
option to increase the 15% stake to 50.01%, alternatively maintain or sell the current 15% interest, or enter into a
concentrate offtake agreement only.
Mineral Resources and Mineral Reserves
There has been no material change to the technical assumptions, assessment criteria, and information relating to the
Group's Mineral Resource and Mineral Reserve estimates, as disclosed in the integrated report for the financial year
ended 30 June 2018. The revised Implats Mineral Resource and Mineral Reserve statement, as at 30 June 2019, will
provide the detailed updated estimates.
Financial review
Revenue at R23.52 billion was R6.24 billion or 36.1% higher than the comparative six months as a result of:
- Sales volumes resulted in an increase of 17.5% or R3.02 billion as a result of the release of material locked-up
during the comparable period due to the scheduled No 5 furnace rebuild
- Overall, the improvement in dollar metal prices increased revenue by 11.5% or R2.00 billion. The increase in
dollar metal prices was due to higher rhodium, palladium, ruthenium, nickel and iridium prices, partially offset
by a lower platinum price. Dollar revenue per platinum ounce sold was 9.8% higher at US$2 124 (H1 FY2018: US$1 935)
- The average exchange rate achieved of R14.18 was 5.7% weaker than the R13.42 achieved for the comparable period
increasing revenue by R1.23 billion
The resultant rand revenue per platinum ounce increased by 16.0% to R30 118 from R25 968.
Cost of sales at R20.29 billion increased by R3.57 billion from the comparable six months. The main contributors to
this increase were:
- A R2.70 billion lower credit to cost of sales arising from the movement in inventory in the comparative period,
costs of R2.90 billion were deferred into inventory on the balance sheet as a result of the significant stock
build-up following the scheduled rebuild of the No 5 furnace at Impala Rustenburg. In the current period, the
increase in inventory only resulted in a R202 million credit to cost of sales
- An increase of R503 million in the cost of IRS metal purchases due primarily to higher rand metal prices
As a result of the above, the Group generated gross profit for the period of R3.23 billion compared to R556 million
gross profit in the previous period. The gross profit for the comparable period was restated and reduced by
R177 million following the change in classification of certain items to cost of sales. This change in classification
has been discussed in note 16 in the interim financial statements.
The R3.35 billion profit before tax was an improvement from the comparable period's pre-tax profit of R193 million,
due primarily to the increase in gross profit of R2.70 billion, an increase in other income of R519 million, a
decrease in other expenses of R417 million, all of which were partially offset by an increase in foreign exchange
losses of R414 million.
Other income increased due to the refund of customs' duties penalties to Zimplats of R136 million, receipt of export
incentives by Zimplats which were R342 million higher in the current period, and proceeds of R150 million in respect
of the interim payments on the insurance claim on the No 5 furnace in Rustenburg. Other expenses decreased mainly due
to a reallocation of fair-value adjustments on purchased metal which had been hedged and included in cost of sales in
the current period, and which were reflected as a loss of R296 million in other expenses in the comparable period.
The R414 million increase in foreign exchange losses, was due mainly to the impact of the weaker rand on the
conversion of the US$ bond and the revaluation of certain foreign currency balances.
The increased tax charge of R895 million (H1 FY2018: R357 million) was largely due to the improved profitability of
the operations, partially offset by lower tax charges from Zimplats following the conversion from a Special Mining
Lease (SML) to two Mining Leases (ML). Despite the higher statutory tax rate, the additional profits tax associated
with the SML is no longer payable under the ML.
Basic earnings were up to R2.31 billion from a loss of R163 million in the comparable period. The major adjustments
in headline earnings for the year compared to the previous six months was an after-tax profit on the sale of property
plant and equipment of R35 million and the after-tax impact of R43 million relating to the asset damage portion of
the insurance claim on No 5 furnace.
Net cash from operating activities increased by R7.16 billion, from a cash outflow of R1.14 billion during the
comparable period to a cash inflow of R6.02 billion. The improved cash flow was due to improved earnings for the
current period, and the R1.12 billion impact of positive working capital movements which comprised a decrease in
inventories of R264 million (H1 FY2018: outflow of R2.96 billion) and an increase in net movement of payables and
receivables to R1.38 billion, which included the receipt of R1.06 billion from a forward sale of excess metal
inventory in the current period.
During the past six months, metal inventories increased by R151 million from June 2018 and by R628 million since
December 2017.
The R151 million increase in inventory since June 2018 is due to the following movements:
- Increase in inventory of R1.31 billion largely due to the higher rand cost of metals purchased, particularly
palladium and rhodium, by Impala's IRS business
- Increase of R389 million (H1 FY2018: R431 million) due to changes in engineering estimates
- A R272 million increase in metal inventories arising from a change in estimate following the reclassification of
nickel from a by-product to a main product and consequently, adopting a different cost allocation method among
the main products, as discussed in note 7 of the interim financial results
- All of which were largely offset by lower stock quantities in the pipeline, which resulted in a reduction in the
value of inventory by R1.47 billion
Capital expenditure, amounted to R1.71 billion (H1 FY2018: R1.90 billion), of which R207 million (H1 FY2018:
R345 million) was spent on 16 and 20 Shafts and R151 million and R183 million spent on Bimha and Mupani
respectively.
Cash and cash equivalents the end of the period under review amounted to R6.36 billion after repayment of
R1.86 billion (H1 FY2018: R341 million) of borrowings. Net debt excluding finance leases of R1.19 billion,
after taking into consideration the Cross Currency Interest Rate Swap asset of R213 million, amounted to
R976 million at 31 December 2018 (June 2018: R5.33 billion).
The balance sheet remains strong with unutilised revolving credit facilities of R4.00 billion, available until
7 June 2021. Therefore, at 31 December 2018, the group had liquidity headroom of R10.36 billion, comprising cash
of R6.36 billion (30 June 2018: R3.71 billion) and undrawn banking facilities of R4.00 billion (30 June 2018:
R2.49 billion), compared to the R6.20 billion available at the end of June 2018.
In addition, at 31 December 2018, R941 million was available on the metal prepayment facility. Therefore, the
Group has access to sufficient liquidity and flexibility to address upcoming debt maturities, as well as to fund
the ongoing needs of the business.
Given the volatility in the local and global economy, as well as the continued implementation of the Rustenburg
review, the board has resolved not to declare an interim dividend for the six months to 31 December 2018.
Market review (calendar years unless otherwise stated)
The platinum market recorded a surplus of 580 000 ounces during 2018, with the palladium market experiencing a
fundamental deficit of 270 000 ounces. Expectations for palladium demand continue to be revised upwards as
tightening emission standards result in increasing and sustained fundamental deficits.
While the near term for platinum remains uncertain, strong industrial demand, coupled with the introduction of
heavy-duty legislation in both India and China and growth from the nascent fuel cell sector, indicate a tightening
market in the medium term.
Platinum ended 2018 at US$788 per ounce, 15% weaker than the opening LBMA trade price, and on average traded at
US$880 per ounce over the year, 7% lower than the previous year (2017: US$948 per ounce). Investor sentiment was
weak, with rising short speculative positioning and ETF outflows. The rand softened, as did the gold price, adding
further negative price pressure. Western European diesel market share continued to fall and Chinese jewellery
demand was also lower. Industrial demand was robust, however, and debate on the likely reintroduction of platinum
into gasoline autocatalysts gained momentum.
In contrast, palladium ended the year at US$1 270 per ounce, 19% higher than the opening LBMA trade price, and on
average traded at US$1 031 per ounce over the year, 19% higher than the previous year (2017: US$870 per ounce).
Exchange traded funds (ETFs) continued to release metal to the market as the implications of tighter Chinese
legislation increased demand from a rising European gasoline market share and the advent of 'real driving' testing
regimes all combined to support demand, sentiment and pricing for palladium.
The rhodium price increased by US$745 per ounce in 2018 closing the year at US$2 460 per ounce and registering a
gain of 43% over the year. The metal traded at US$2 219 per ounce, double the average price of the year before
(2017: US$1 109 per ounce). Tightening nitrogen oxide (NOx) standards have driven a step-change in anticipated
rhodium requirements in China, while palladium's price strengthened and relative 'value in use' was also supportive
of steady, but persistent rhodium price gains.
Automotive
2018 was a mixed year for the automotive industry. Geopolitical uncertainties, including the potential impact of
Brexit and US-China trade tensions, have led to a cautious view on prospects for volume growth in 2019. Global
light-duty vehicle sales are estimated to have reached 94.8 million units in 2018, down 0.5% from 2017, with the
Chinese market contracting by 3.1% and Western European sales slipping 0.7%. Modest growth was recorded in both
the US and Japanese markets with sales volumes increasing by 0.6% and 0.8% respectively.
Western European light-duty vehicle sales of 14.2 million units were marginally lower in 2018, with a particularly
weak fourth quarter (8% lower than in the fourth quarter of 2017) weighing on annual metrics. Sales in the United
Kingdom fell 6.8% during 2018 and offset the impact of growth in France and Spain and reasonably stable volumes in
Germany. The introduction of the new emissions-testing regime disrupted the availability of new vehicles and the
outlook for diesel continued to weigh on consumer sentiment and fleet sales. Gasoline market share of 57% (2017: 50%)
increased at the expense of diesel, which experienced a further decline in market share to 36% in 2018 (2017: 44%).
While headline battery electric vehicle growth figures were impressive, rising 48% from 2017, at c. 201 000 units,
these 'catalyst free' vehicles comprised 1.3% of the sales mix and we expect the carbon dioxide (CO2) average of the
Western European fleet to have increased for the second consecutive year as a result.
Chinese light-duty vehicle sales fell 3.1% year-on-year in 2018 to 27.7 million units. However, the impact on PGM
demand was more than offset by the impact of higher loadings to meet tightening emissions standards with the
nationwide implementation of 'China 5' for both gasoline and diesel vehicles. Japanese sales grew for a second
consecutive year, rising 0.8% to 5.2 million units.
As fabricators and OEMs finalise catalyst formulations to meet upcoming legislation changes in China, Europe and
India, expectations for loadings have increased resulting in tighter forecast markets for both palladium and rhodium.
Availability of supply and price differentials between the three major PGMs has highlighted the need to reconsider
the mix of metals used to meet expected gasoline derived demand.
We expect research and development efforts to increase in pace and assume switching of platinum for palladium in both
diesel and gasoline catalysts to become an imperative in the medium term.
Jewellery
Demand for platinum from the jewellery sector was mixed, with continued, albeit slowing weakness in the key Chinese
market, where changing consumer tastes and the resultant shrinking in sales of generic products have yet to be
compensated by growth in sales of higher-margin branded collections. In India, a recovery in demand following the
impact of demonetisation and the jewellers strike is likely to have led to growth in the mid-teens, while the US
market has also enjoyed strong growth due to opportunities created by healthy consumer confidence, competitive
metal prices and several initiatives spearheaded by the Platinum Guild International (PGI).
In Japan, platinum remains the 'white metal of choice', however, total sales have been impacted by the current fashion
dominance of yellow gold and a modest retreat in sales is expected. Overall, both platinum jewellery retail sales and
net metal demanded by manufacturers is expected to have recorded modest declines in 2018.
Industrial, physical, ETF and paper
Industrial demand for PGMs continues to be robust, with platinum benefiting from growth in estimates for non-road
mobile machinery, the nascent fuel cell industry and continued demand from the chemical and electrical sectors.
Platinum is also likely to benefit at the margin from changes in alloys used in the glass industry, where rhodium
is being thrifted as the price is driven higher by increased automotive demand.
While physical investment in small platinum bars and coins saw positive growth in 2018, the impact of this was largely
offset by redemptions from ETF funds, which continued to return platinum, palladium and rhodium to the market during
the year.
Platinum ETFs contracted by 260 000 ounces, driven by lower prices and a rotation by South African investors into
equities, while palladium ETFs liquidated some 565 000 ounces as record prices prompted profit taking and high lease
rates created opportunities in the lending market. Low residual palladium ETF stocks are now considered entirely
insufficient to meet expected market deficits.
Paper markets (NYMEX/TOCOM) for platinum and palladium charted different courses in 2018. While gross open interest
in platinum remained elevated, the market was net-short for the first time in 15 years. In palladium, open interest
contracted substantially as forward hedging activities declined on rising prices and the market remained in
backwardation - a situation in which the spot or cash price of a commodity is higher than the forward price.
At year-end, net paper length in platinum had declined by 373 000 ounces, to 1.24 million ounces as long positions
were trimmed. In palladium, a reduction of 1.18 million ounces saw closing net length of 1.4 million ounces as long
positions were cut by 1.2 million ounces.
Fundamentals
The market fundamentals for palladium and rhodium strengthened in 2018 and are expected to remain robust in 2019 and
beyond as emerging markets apply stricter legislation and the impact of real-world driving test regimes is felt on
auto demand. Conversely platinum continues to face near-term challenges including the residual level of light-duty
diesel market share and the re-basing of the Chinese jewellery market.
In the medium term, an increasing focus on the need to add platinum to gasoline autocatalyst formulations, together
with expected demand growth from impending heavy-duty diesel legislation in China and India, offer opportunities for
meaningful structural growth.
We expect the platinum market to remain in surplus in 2019 before tightening thereafter. Fundamental deficits in
palladium are expected to persist and expand, while increasing rhodium use should drive a narrowing of the market
balance.
Prospects and outlook
The headwinds facing the South African PGM industry are expected to remain largely unchanged in 2019: rand volatility,
wage negotiations, national elections, along with the operational and financial crisis at Eskom are all well-recognised
challenges for the domestic producers. While the near-term outlook for platinum remains suppressed, the medium-term
outlook has improved. The current strength in both palladium and rhodium fundamentals are expected to persist for the
foreseeable future.
Robust iridium and ruthenium pricing, due to growing industrial demand, has also resulted in pricing tailwinds. The
Group believes we are in a combined 3E PGM deficit and, more recently, industry discussions and debates have shifted
from the need for supply rationalisation to potential areas of growth.
As such, we expect dollar metal prices to remain well supported for palladium, rhodium and the minor metals, while
the near-term outlook for platinum remains more muted. Despite an improved market outlook, we remain committed to our
long-term strategic intent to favour value over volume. We will therefore proceed with the steps outlined in our strategic
review, premised on producing safely, productively and profitably from our key assets, while taking account of the changes
in our operating environment.
The full-year refined production for the Group is maintained and is estimated at 1.5 to 1.6 million platinum ounces.
Given the scheduled refurbishment of furnaces at Impala Rustenburg and Zimplats later in this financial year, limited
inventory is expected to be released through the refinery during the second half of FY2019, with the remainder to be
released across the group during FY2020.
The Group's operating cost is expected to be between R23 900 and R24 800 per platinum ounce on a stock-adjusted basis
for the full financial year, with Group capital expenditure forecast at R4.1 billion to R4.3 billion.
Full-year production estimates for the operational entities are as follows:
- Impala Rustenburg 650 000 to 690 000 platinum ounces in concentrate
- Zimplats 270 000 to 280 000 platinum ounces in concentrate
- Two Rivers 160 000 to 170 000 platinum ounces in concentrate
- Mimosa 115 000 to 125 000 platinum ounces in concentrate
- Marula 80 000 to 90 000 platinum ounces in concentrate
- IRS (third party) 170 000 to 180 000 platinum ounces in concentrate
The financial information on which this outlook is based has not been reviewed and reported on by Implats' external
auditors.
Approval of the interim financial statements
The directors of the Company are responsible for the maintenance of adequate accounting records and the preparation
of the interim financial statements and related information in a manner that fairly presents the state of the affairs
of the Company. These interim financial statements are prepared in accordance with International Financial Reporting
Standard, IAS 34 Interim Financial Reporting and incorporate full and responsible disclosure in line with the
accounting policies of the Group which are supported by prudent judgements and estimates.
The interim financial statements have been prepared under the supervision of the chief financial officer,
Ms M Kerber, CA(SA).
The directors are also responsible for the maintenance of effective systems of internal control which are based on
established organisational structure and procedures. These systems are designed to provide reasonable assurance as
to the reliability of the financial statements, and to prevent and detect material misstatement and loss.
The interim financial statements have been prepared on a going-concern basis as the directors believe that the Company
and the Group will continue to be in operation in the foreseeable future.
The interim financial statements as set out below have been approved by the board of directors and are signed
on their behalf by:
Dr MSV Gantsho NJ Muller
Chairman Chief executive officer
Johannesburg
28 February 2019
Independent auditor's review report on interim financial statements
To the shareholders of Impala Platinum Holdings Limited
We have reviewed the condensed consolidated interim financial statements of Impala Platinum Holdings Limited
in the accompanying interim report, which comprise the consolidated statement of financial position as at
31 December 2018 and the related consolidated statements of profit or loss and other comprehensive income,
changes in equity and cash flows for the six months then ended, and selected explanatory notes.
Directors' responsibility for the interim financial statements
The directors are responsible for the preparation and presentation of these interim financial statements in accordance
with the International Financial Reporting Standard, (IAS) 34 Interim Financial Reporting, the SAICA Financial
Reporting Guides as issued by the Accounting Practices Committee and Financial Pronouncements as issued by the Financial
Reporting Standards Council and the requirements of the Companies Act of South Africa, and for such internal control as
the directors determine is necessary to enable the preparation of interim financial statements that are free from material
misstatement, whether due to fraud or error.
Auditor's responsibility
Our responsibility is to express a conclusion on these interim financial statements. We conducted our review in
accordance with International Standard on Review Engagements 2410, Review of Interim Financial Information Performed by
the Independent Auditor of the Entity. ISRE 2410 requires us to conclude whether anything has come to our attention that
causes us to believe that the interim financial statements are not prepared in all material respects in accordance with
the applicable financial reporting framework. This standard also requires us to comply with relevant ethical requirements.
A review of interim financial statements in accordance with ISRE 2410 is a limited assurance engagement. We perform
procedures, primarily consisting of making enquiries of management and others within the entity, as appropriate, and
applying analytical procedures, and evaluate the evidence obtained.
The procedures in a review are substantially less than and differ in nature from those performed in an audit conducted
in accordance with International Standards on Auditing. Accordingly, we do not express an audit opinion on these
interim financial statements.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe that the accompanying condensed
consolidated interim financial statements of Impala Platinum Holdings Limited for the six months ended 31 December 2018
are not prepared, in all material respects, in accordance with the International Financial Reporting Standard, (IAS) 34
Interim Financial Reporting, the SAICA Financial Reporting Guides as issued by the Accounting Practices Committee and
Financial Pronouncements as issued by the Financial Reporting Standards Council and the requirements of the Companies
Act of South Africa.
PricewaterhouseCoopers Inc.
Director: CS Masondo
Registered Auditor
28 February 2019
Consolidated statement of financial position
As at As at As at
31 December 2018 31 December 2017 30 June 2018
(Rm) Notes (Reviewed) (Reviewed) (Audited)
Assets
Non-current assets
Property, plant and equipment 5 36 664 47 043 36 045
Exploration and evaluation assets - 385 -
Investment property 90 90 90
Investment in equity-accounted entities 6 4 557 3 797 4 317
Deferred tax 3 607 373 4 757
Financial assets at fair value through
other comprehensive income* 260 - -
Available-for-sale financial assets* - 192 198
Other financial assets 373 149 175
45 551 52 029 45 582
Current assets
Inventories 7 11 988 11 147 11 745
Trade and other receivables 2 799 3 277 3 513
Current tax receivable 902 721 896
Other financial assets 3 2 3
Prepayments 679 846 724
Cash and cash equivalents 6 355 4 208 3 705
22 726 20 201 20 586
Total assets 68 277 72 230 66 168
Equity and liabilities
Equity
Share capital 20 430 20 451 20 491
Retained earnings 14 608 22 819 12 302
Foreign currency translation reserve 4 932 3 125 4 324
Other components of equity 157 91 96
Equity attributable to owners of the Company 40 127 46 486 37 213
Non-controlling interest 2 487 2 331 2 380
Total equity 42 614 48 817 39 593
Liabilities
Non-current liabilities
Provisions for environmental rehabilitation 1 228 1 124 1 225
Deferred tax 5 450 3 830 5 485
Borrowings 8 7 505 7 610 7 925
Other financial liabilities 345 676 50
Sundry liabilities 274 305 285
14 802 13 545 14 970
Current liabilities
Trade and other payables 8 608 7 234 8 086
Current tax payable 903 1 112 992
Borrowings 8 1 313 1 418 2 427
Other financial liabilities 5 73 69
Sundry liabilities 32 31 31
10 861 9 868 11 605
Total liabilities 25 663 23 413 26 575
Total equity and liabilities 68 277 72 230 66 168
* Available-for-sale financial assets were reclassified to financial assets at fair value through other
comprehensive income following the adoption of IFRS 9 Financial Instruments, which has become effective.
Refer to note 15 for the impact of the adoption IFRS 9.
The notes below are an integral part of these condensed interim financial statements.
Consolidated statement of profit or loss and other comprehensive income
Year ended
Six months ended Six months ended 30 June 2018
31 December 2018 31 December 2017 (Restated
(Rm) Notes (Reviewed) (Restated reviewed)* audited)*
Revenue 9 23 521 17 280 35 854
Cost of sales* 10 (20 289) (16 724) (34 717)
Gross profit 3 232 556 1 137
Impairment - (30) (13 629)
Finance income 116 201 350
Finance cost (533) (535) (1 051)
Net foreign exchange (losses)/gains (165) 249 (662)
Other income* 894 375 1 584
Other expenses* (394) (811) (1 154)
Share of profit of equity-
accounted entities 203 188 383
Profit/(loss) before tax 3 353 193 (13 042)
Income tax (expense)/income (895) (357) 2 249
Profit/(loss) for the period 2 458 (164) (10 793)
Other comprehensive income/(loss),
comprising items that may be
reclassified subsequently
to profit or loss:
Available-for-sale financial assets - 13 19
- Deferred tax thereon - (2) (3)
Share of other comprehensive income
of equity-accounted entities 111 (106) 108
- Deferred tax thereon (11) 11 (11)
Exchange differences on translating
foreign operations 688 (710) 650
- Deferred tax thereon (90) 92 (84)
Other comprehensive income/(loss),
comprising items that will not be
reclassified subsequently to
profit or loss:
Financial assets at fair value through
other comprehensive income (32) - -
- Deferred tax thereon (1) - -
Actuarial loss on post-employment
medical benefit - - (1)
- Deferred tax thereon - - -
Total comprehensive income/(loss) 3 123 (866) (10 115)
Profit/(loss) attributable to:
Owners of the Company 2 306 (163) (10 679)
Non-controlling interest 152 (1) (114)
2 458 (164) (10 793)
Total comprehensive income/(loss)
attributable to:
Owners of the Company 2 881 (772) (10 070)
Non-controlling interest 242 (94) (45)
3 123 (866) (10 115)
Earnings per share (cents):
- Basic 321 (23) (1 486)
- Diluted 309 (23) (1 486)
For headline earnings per share refer note 12.
* The reviewed 31 December 2017 interim results and the audited 30 June 2018 annual financial results were restated
as a result of changes in classification of certain expense items in the prior year. Refer note 10 and note 16.
The notes below are an integral part of these condensed interim financial statements.
Consolidated statement of changes in equity
Ordinary Share Share-based Total share Retained
(Rm) shares premium payments capital earnings
Balance at 30 June 2018 (Audited) 18 17 986 2 487 20 491 12 302
Adjustment on initial application of IFRS 9 - - - - -
Adjusted balance at 1 January 2018 18 17 986 2 487 20 491 12 302
Shares purchased - long-term incentive plan - (101) - (101) -
Share-based compensation expense - - 40 40 -
Total comprehensive income/(loss) - - - - 2 306
Profit for the year - - - - 2 306
Other comprehensive income/(loss) - - - - -
Dividends - - - - -
Balance at 31 December 2018 (Reviewed) 18 17 885 2 527 20 430 14 608
Balance at 30 June 2017 (Audited) 18 17 614 2 368 20 000 22 982
Bond conversion option - 450 - 450 -
Shares purchased - long-term incentive plan - (71) - (71) -
Share-based compensation expense - - 72 72 -
Total comprehensive (loss)/income - - - - (163)
Loss for the year - - - - (163)
Other comprehensive (loss)/income - - - - -
Balance at 31 December 2017 (Reviewed) 18 17 993 2 440 20 451 22 819
Balance at 30 June 2017 (Audited) 18 17 614 2 368 20 000 22 982
Bond conversion option - 450 - 450 -
Shares purchased - long-term incentive plan - (78) - (78) -
Share-based compensation expense - - 119 119 -
Total comprehensive (loss)/income - - - - (10 680)
Loss for the year - - - - (10 679)
Other comprehensive (loss)/income - - - - (1)
Dividends - - - - -
Balance at 30 June 2018 (Audited) 18 17 986 2 487 20 491 12 302
The table above excludes the treasury shares.
Consolidated statement of changes in equity (continued)
Foreign Attributable to:
currency Other Owners Non-
translation components of the controlling Total
(Rm) reserve of equity Company interest equity
Balance at 30 June 2018 (Audited) 4 324 96 37 213 2 380 39 593
Adjustment on initial application of IFRS 9 - 94 94 - 94
Adjusted balance at 1 January 2018 4 324 190 37 307 2 380 39 687
Shares purchased - Long-term Incentive Plan - - (101) - (101)
Share-based compensation expense - - 40 - 40
Total comprehensive income/(loss) 608 (33) 2 881 242 3 123
Profit for the year - - 2 306 152 2 458
Other comprehensive income/(loss) 608 (33) 575 90 665
Dividends - - - (135) (135)
Balance at 31 December 2018 (Reviewed) 4 932 157 40 127 2 487 42 614
Balance at 30 June 2017 (Audited) 3 745 80 46 807 2 425 49 232
Bond conversion option - - 450 - 450
Shares purchased - Long-term Incentive Plan - - (71) - (71)
Share-based compensation expense - - 72 - 72
Total comprehensive (loss)/income (620) 11 (772) (94) (866)
Loss for the year - - (163) (1) (164)
Other comprehensive (loss)/income (620) 11 (609) (93) (702)
Balance at 31 December 2017 (Reviewed) 3 125 91 46 486 2 331 48 817
Balance at 30 June 2017 (Audited) 3 745 80 46 807 2 425 49 232
Bond conversion option - - 450 - 450
Shares purchased - Long-term Incentive Plan - - (78) - (78)
Share-based compensation expense - - 119 - 119
Total comprehensive (loss)/income 579 16 (10 085) (30) (10 115)
Loss for the year - - (10 679) (114) (10 793)
Other comprehensive (loss)/income 579 16 594 84 678
Dividends - - - (15) (15)
Balance at 30 June 2018 (Audited) 4 324 96 37 213 2 380 39 593
The table above excludes the treasury shares.
The notes below are an integral part of these condensed interim financial statements.
Consolidated statement of cash flows
Six months ended Six months ended Year ended
31 December 2018 31 December 2017 30 June 2018
(Rm) Notes (Reviewed) (Reviewed) (Audited)
Cash flows from operating activities
Cash generated from/(utilised
by) operations 11 6 703 (249) 2 364
Exploration cost (1) (2) (4)
Finance cost (520) (521) (1 025)
Income tax paid (160) (366) (1 336)
Net cash from/(used in) operating
activities 6 022 (1 138) (1)
Cash flows from investing activities
Purchase of property, plant and equipment (1 727) (1 903) (4 667)
Proceeds from sale of property,
plant and equipment 55 13 26
Purchase of investment property - (1) (1)
Purchase of interest in associate
- Waterberg - (408) (408)
Waterberg shareholder funding (11) - (17)
Interest received from held-to-
maturity financial assets - 3 3
Loans granted (1) - -
Finance income 168 240 182
Dividends received 130 61 253
Net cash used in investing activities (1 386) (1 995) (4 629)
Cash flows from financing activities
Shares purchased - Long-term Incentive Plan (101) (71) (78)
Repayments of borrowings (1 855) (341) (999)
Proceeds from borrowings net of
transaction costs - - 1 500
Dividends paid to non-controlling interest (135) - (15)
Net cash (used in)/from financing activities (2 091) (412) 408
Net increase/(decrease) in cash and
cash equivalents 2 545 (3 545) (4 222)
Cash and cash equivalents at
beginning of period 3 705 7 839 7 839
Effect of exchange rate changes on cash and
cash equivalents held in foreign currencies 105 (86) 88
Cash and cash equivalents at end of period 6 355 4 208 3 705
The notes below are an integral part of these condensed interim financial statements.
Notes to the financial information for the six months ended 31 December 2018
1. General information
Impala Platinum Holdings Limited ("Implats", "the Company" or "the Group") is one of the world's foremost
producers of platinum and associated platinum group metals (PGMs). Implats is currently structured around
five main operations with a total of 20 underground shafts. The mining operations are located on the
Bushveld Complex in South Africa and the Great Dyke in Zimbabwe, the two most significant PGM-bearing
ore bodies in the world.
The Company has its listing on the securities exchange operated by JSE Limited in South Africa, the Frankfurt
Stock Exchange (2022 US$ convertible bonds) and a level 1 American Depositary Receipt programme in the United
States of America.
On 1 July 2018 Impala Platinum and Impala Refining Services (IRS), subsidiaries of the Group, entered into a
sale of business agreement in terms of which IRS becomes a division of Impala and Impala acquired the metal
purchase and toll refining operations of IRS as a going concern, utilising the group roll-over relief
provisions of sections 45 and 47 of the Income Tax Act No. 58 of 1962.
This transaction had no financial impact on the Group's consolidated financial statements.
The condensed consolidated interim financial information was approved for issue on 28 February 2019 by the
board of directors.
2. Basis of preparation
The condensed consolidated interim financial statements have been prepared in accordance with International
Financial Reporting Standard (IFRS), IAS 34 Interim Financial Reporting, the SAICA Financial Reporting Guides
as issued by the Accounting Practices Committee and Financial Pronouncements as issued by the Financial
Reporting Standards Council, requirements of the Companies Act, 71 of 2008, and the Listings Requirements
of the JSE Limited.
The condensed consolidated interim financial statements should be read in conjunction with the annual
consolidated financial statements for the year ended 30 June 2018, which have been prepared in accordance
with IFRS, and the commentary included in the interim results.
The condensed consolidated interim financial statements have been prepared under the historical cost convention
except for certain financial assets, financial liabilities and derivative financial instruments which are
measured at fair value and some equity and liabilities for share-based payment arrangements which are measured
using a binomial option model.
The condensed consolidated interim financial information is presented in South African rand, which is the
Company's functional currency.
The following US dollar exchange rates were used when preparing these condensed consolidated interim
financial statements:
- Closing rate: R14.38 (December 2017: R12.38) (June 2018: R13.73)
- Average rate: R14.18 (December 2017: R13.40) (June 2018: R12.85)
Taxes on income in the interim periods are accrued using the tax rate that would be applicable to expected
total annual earnings.
3. Accounting policies
The principal accounting policies used by the Group are consistent with those of the previous year, except for
changes due to the adoption of new or revised IFRSs, for which the first time disclosure is more comprehensive
than would otherwise be done on interim and includes the once-off transition impact. Further, the transition
impact and accounting policies have been disclosed in the relevant notes.
The following standards became effective on 1 January 2018 and were adopted by the Group on 1 July 2018:
- IFRS 15 - Revenue from Contracts with Customers, refer note 9;
- IFRS 9 - Financial Instruments, refer note 15.
4. Segment information
The Group distinguishes its segments between the mining operations (Mining), processing and refining
(Impala Refining Services), chrome processing (Impala Chrome) and "all other segments".
Management has defined the operating segments based on the business activities and management structure
within the Group.
Capital expenditure comprises additions to property, plant and equipment (note 5).
The reportable segments' measure of profit or loss is profit after tax. This is reconciled to the
consolidated profit after tax.
Impala mining segment's two largest sales customers amounted to 11% and 9% of total revenue
(December 2017: 13% and 8%) (June 2018: 11% and 8%).
Six months ended Six months ended Year ended
31 December 2018 31 December 2017 30 June 2018
(Reviewed) (Reviewed) (Audited)
Profit/(loss) Profit/(loss) Profit/(loss)
(Rm) Revenue after tax Revenue after tax Revenue after tax
Mining
- Impala 10 783 1 055 6 685 (1 060) 13 255 (12 332)
- Zimplats 4 139 991 3 834 277 7 485 40
- Marula 1 511 116 1 242 (39) 2 357 (30)
Impala Refining Services 12 601 967 10 657 719 22 044 1 210
Impala Chrome 151 24 60 (2) 226 47
All other segments - (322) - (22) - (117)
Inter-segment revenue (5 664) - (5 198) - (9 513) -
Total segmental revenue/profit/(loss)
after tax 23 521 2 831 17 280 (127) 35 854 (11 182)
Reconciliation:
Share of profit of equity
accounted entities 203 188 383
Unrealised profit in stock
consolidation adjustment (347) (274) (211)
IRS preproduction (reversed)/
realised on Group (259) 43 217
Net realisable value adjustment
made on consolidation 30 6 -
Total consolidated profit/(loss)
after tax 2 458 (164) (10 793)
Six months ended Six months ended Year ended
31 December 2018 31 December 2017 30 June 2018
(Reviewed) (Reviewed) (Audited)
Capital Total Capital Total Capital Total
(Rm) expenditure assets expenditure assets expenditure assets
Mining
- Impala 1 017 23 205 1 442 37 688 2 766 29 936
- Zimplats 657 21 566 432 17 973 1 739 20 612
- Marula 32 3 562 29 3 668 101 3 796
Impala Refining Services - 17 346 - 7 562 - 8 334
Impala Chrome - 152 - 153 - 150
All other segments - 33 861 - 34 379 - 34 778
Total 1 706 99 692 1 903 101 423 4 606 97 606
Intercompany accounts eliminated (34 779) (32 168) (34 869)
Investment in equity-
accounted entities 4 557 3 797 4 317
Unrealised profit in stock,
NRV and other adjustments
to inventory (1 193) (822) (886)
Total consolidated assets 68 277 72 230 66 168
Disaggregation of revenue by category, per segment:
Six months ended 31 December 2018 (Reviewed)
Inter-
Impala segment
(Rm) Impala Zimplats Marula IRS Chrome revenue Total
Revenue from:
Platinum 4 548 1 383 451 4 541 - (1 834) 9 089
Palladium 3 123 1 438 591 4 018 - (2 029) 7 141
Rhodium 1 837 353 286 1 688 - (639) 3 525
Nickel 237 354 18 891 - (372) 1 128
Other metals 1 038 611 165 1 225 151 (788) 2 402
Treatment income - - - 238 - (2) 236
Revenue 10 783 4 139 1 511 12 601 151 (5 664) 23 521
Six months ended 31 December 2017 (Reviewed)
Inter-
Impala segment
(Rm) Impala Zimplats Marula IRS Chrome revenue Total
Revenue from:
Platinum 3 382 1 499 470 4 781 - (1 911) 8 221
Palladium 1 747 1 379 530 3 221 - (2 258) 4 619
Rhodium 784 231 172 727 - (346) 1 568
Nickel 260 319 15 666 - (389) 871
Other metals 512 406 55 806 60 (261) 1 578
Treatment income - - - 456 - (33) 423
Revenue 6 685 3 834 1 242 10 657 60 (5 198) 17 280
Year ended 30 June 2018 (Audited)
Revenue from:
Platinum 6 730 2 870 864 9 500 - (3 537) 16 427
Palladium 3 194 2 575 957 6 778 - (3 858) 9 646
Rhodium 1 814 552 386 1 854 - (843) 3 763
Nickel 506 685 31 1 441 - (800) 1 863
Other metals 1 011 803 119 1 719 226 (441) 3 437
Treatment income - - - 752 - (34) 718
Revenue 13 255 7 485 2 357 22 044 226 (9 513) 35 854
5. Property, plant and equipment
Six months ended Six months ended Year ended
31 December 2018 31 December 2017 30 June 2018
(Rm) (Reviewed) (Reviewed) (Audited)
Opening net book amount 36 045 47 798 47 798
Additions 1 706 1 903 4 606
Interest capitalised 21 - 61
Disposals (6) (5) (26)
Depreciation (1 800) (1 927) (3 838)
Impairment - (30) (13 244)
Rehabilitation adjustment (18) 4 (34)
Exchange adjustment on translation 716 (700) 722
Closing net book amount 36 664 47 043 36 045
Capital commitments
Commitments contracted for 1 703 1 685 1 703
Approved expenditure not yet contracted 7 143 7 946 8 071
8 846 9 631 9 774
Less than one year 4 326 4 669 4 017
Between one and five years 4 520 4 962 5 757
8 846 9 631 9 774
This expenditure will be funded from internal cash flows and, if necessary, from borrowings.
6. Investment in equity-accounted entities
Six months ended Six months ended Year ended
31 December 2018 31 December 2017 30 June 2018
(Rm) (Reviewed) (Reviewed) (Audited)
Summary- Balances
Joint venture
Mimosa 2 367 1 931 2 268
Associates
Two Rivers 1 641 1 361 1 528
Makgomo Chrome 101 69 78
Friedshelf 38 28 33
Waterberg 410 408 410
Total investment in equity accounted entities 4 557 3 797 4 317
Summary movement
Beginning of the period 4 317 3 316 3 316
Addition - Waterberg - 408 408
Shareholder funding - Waterberg 11 - 17
Share of profit 248 240 473
Share of other comprehensive income 111 (106) 108
Gain - Two Rivers change of interest - - 248
Dividends received (130) (61) (253)
End of the period 4 557 3 797 4 317
Share of equity-accounted entities is
made up as follows:
Share of profit 248 240 473
Movement in unrealised profit in stock (45) (52) (90)
Total share of profit of equity-accounted entities 203 188 383
7. Inventories
Six months ended Six months ended Year ended
31 December 2018 31 December 2017 30 June 2018
(Rm) (Reviewed) (Reviewed) (Audited)
Mined metal
Refined metal 931 708 1 381
In-process metal 5 377 4 526 4 585
Purchased metal#
Refined metal 1 497 1 269 776
In-process metal 3 208 3 882 4 120
Total metal inventories 11 013 10 385 10 862
Stores and materials inventories 975 762 883
11 988 11 147 11 745
# Refer note 15 : During the current year, the fair value exposure on purchased metal and resultant stock has been
designated as a hedged item on adoption of IFRS 9 and is included in the calculation of the cost of inventories.
The fair value exposure relates to adjustments made to commodity prices and US$ exchange rates from the date of
delivery until the final pricing date as per the relevant contract.
The net realisable value (NRV) adjustment included in inventory at the end of December 2018 comprised R39 million
(December 2017: R82 million) (June 2018: R250 million) for refined mined metal and R180 million (December 2017:
R1 124 million) (June 2018: R1 268 million) for in-process metal.
Included in refined metal is ruthenium on lease to third parties of 45 000 (December 2017: 40 000)
(June 2018: 45 000) ounces.
Purchased metal consists of IRS inventory. Inventory includes 50 000 ounces of platinum and 35 000 ounces of
palladium, which were forward sold and which will be delivered to the counterparty on 29 March, 30 April
and 31 May 2019.
Change in engineering estimate
Changes in engineering estimates of metal contained in-process resulted in a R389 million (December 2017:
R431 million) (June 2018: R435 million) (pre-tax) increase of in-process metal.
Change in accounting estimate
Due to the increase in the value of nickel, relative to total revenue for the Group, management has changed
the classification of nickel from a by-product to a main product with effect from 1 July 2018. In terms of
IFRS by-products, by nature, should be immaterial. Total by-product revenue, including nickel, would be in
excess of 10% of total revenue and therefore, should no longer be considered immaterial and a by-product.
Following the reclassification of nickel as a main-product, the metal inventory cost allocation methodology
was re-assessed and amended to allocate production costs, net of by-product revenue, based on relative sales
value. In the previous years, production costs, net of by-product revenue was allocated on the basis of
ounces. However, given that nickel is measured in tonnes, a different basis of cost allocation was required.
This change in cost allocation methodology resulted in an overall increase in inventory value of R272 million.
8. Borrowings
Six months ended Six months ended Year ended
31 December 2018 31 December 2017 30 June 2018
(Rm) (Reviewed) (Reviewed) (Audited)
Standard Bank Limited - BEE partners Marula 887 887 887
Standard Bank Limited - Zimplats term loan 898 1 053 1 167
Convertible bonds - ZAR (2018) - 308 -
Convertible bonds - US$ (2018) - 364 -
Convertible bonds - ZAR (2022) 2 697 2 571 2 631
Convertible bonds - US$ (2022) 3 062 2 524 2 858
Revolving credit facility - - 1 510
Finance leases 1 274 1 321 1 299
8 818 9 028 10 352
Current 1 313 1 418 2 427
Non-current 7 505 7 610 7 925
Beginning of the period 10 352 9 461 9 461
Proceeds - - 1 500
Interest accrued 465 455 928
Interest repayments (332) (334) (689)
Capital repayments (1 855) (341) (999)
Exchange adjustment 188 (213) 151
End of the period 8 818 9 028 10 352
Committed facilities
South African banks 4 000 4 000 4 000
Foreign banks 489 421 466
4 489 4 421 4 466
All of the facilities remain undrawn. Of these facilities, R4.0 billion expires on 30 June 2021.
9. Revenue
Six months ended Six months ended Year ended
31 December 2018 31 December 2017 30 June 2018
(Rm) (Reviewed) (Reviewed) (Audited)
Disaggregation of of revenue by category
Sales of goods
Precious metals
Platinum 9 089 8 221 16 427
Palladium 7 141 4 619 9 646
Rhodium 3 525 1 568 3 763
Ruthenium 501 138 477
Iridium 667 410 798
Gold 657 576 1 148
Silver 15 11 22
21 595 15 543 32 281
Base metals
Nickel 1 128 871 1 863
Copper 259 268 537
Cobalt 50 33 86
Chrome 253 142 369
1 690 1 314 2 855
Revenue from services
Toll refining 236 423 718
23 521 17 280 35 854
Note 4 contains additional disclosure of revenue per operating segment
9.1 Adoption of IFRS 15 - Revenue from Contracts with Customers (Transition)
This standard replaces IAS 18, Revenue.
In accordance with the transition provisions in IFRS 15, the new rules were adopted retrospectively, to open,
unfulfilled customer contracts on 1 July 2017, and the effect of the adoption reflected in current year opening
retained earnings. The financial impact of the application of the revenue recognition adjustments to opening
retained earnings was Rnil.
The Group's accounting policy has been revised to align with IFRS 15, and additional disclosures have been
introduced, particularly on the disaggregation of revenue as per this note.
9.2 Revenue (Accounting policy)
Sales revenue
The Group generates revenue from the mining, concentrating, refining and the sale of platinum group metals (PGMs)
and associated base metal. Revenue is measured based on the consideration specified in the customer contract.
The Group recognises revenue on inventory sold to a customer on delivery to the contractually agreed upon
delivery point. This is the point at which the performance obligation is satisfied and a receivable is
recognised as the consideration is unconditional and only the passage of time is required before payment
is due. No element of financing is present due to the short term nature of Group contracts and credit
terms are consistent with market practice. The total sales consideration in the sales contract is allocated
to each product based on the contractually agreed-upon metal prices. Metal sales prices are determined based
on observable spot prices when revenue is recognised.
Toll income
The Group derives toll income revenue from processing and refining of metal concentrate and matte. Income is
recognised when the refined metals have been produced, are contractually due to be returned to the customer and
have passed through the value creating stages of production. Total income is measured at the transaction price
agreed under the contract.
Due to the nature of the Group's revenue streams and contractual terms with customers, no significant judgement
in respect of accounting for contracts with customers was necessary.
10. Cost of sales
Six months ended Year ended
Six months ended 31 December 2017 30 June 2018
31 December 2018 (Restated (Restated
(Rm) (Reviewed) reviewed)* audited)*
Production costs
On-mine operations 8 850 8 706 16 392
Processing operations 2 766 2 734 5 340
Refining and selling 800 741 1 522
Depreciation of operating assets 1 800 1 927 3 838
Other costs
Metals purchased 5 399 4 896 9 651
Corporate costs 433 347 710
Royalty expense* 305 179 350
Change in metal inventories (202) (2 900) (3 404)
Chrome operation - cost of sales 99 64 146
Other 39 30 172
20 289 16 724 34 717
* Royalty expense, previously presented separately in the "Consolidated statement of profit or loss and other
comprehensive income" and the movement in the rehabilitation provision previously presented in "other operating
expenses" were reclassified to cost of of sales. These items have been reclassified due to their nature, which
is directly related to cost of production. Refer note 16.
11. Cash generated from/(utilised by) operations
Six months ended Six months ended Year ended
31 December 2018 31 December 2017 30 June 2018
(Rm) (Reviewed) (Reviewed) (Audited)
Profit/(loss) before tax 3 353 193 (13 042)
Adjustments for:
Depreciation 1 800 1 927 3 838
Finance cost 533 535 1 051
Impairment - 30 13 629
Other* (99) (272) (777)
5 587 2 413 4 699
Changes in working capital:
Inventory* (264) (2 958) (3 521)
Receivables/payables 1 380 296 1 186
Cash generated from/(utilised by) operations 6 703 (249) 2 364
* Non-cash adjustments relating to inventory of R506 million (December 2017) and R726 million (June 2018), previously
included in "other", were moved to inventory.
12. Headline earnings
Headline earnings attributable to equity holders of the Company arises from operations as follows:
Six months ended Six months ended Period ended
31 December 2018 31 December 2017 30 June 2018
(Rm) (Reviewed) (Reviewed) (Audited)
Profit/(loss) attributable to owners of the Company 2 306 (163) (10 679)
Remeasurement adjustments:
- Profit on disposal of property, plant and equipment (49) (8) -
- Impairment - 30 13 629
- Gain on change in interest - Two Rivers - - (248)
- Insurance compensation (60) - -
- Total non-controlling interest effects
of adjustments - (4) (159)
- Total tax effects of adjustments 31 (5) (3 771)
Headline earnings 2 228 (150) (1 228)
Adjusted for:
Interest on potential dilutive ZAR convertible
bonds (after tax at 28%) 122 - -
Headline earnings used in the calculation of
diluted earnings per share 2 350 (150) (1 228)
Weighted average number of ordinary shares
in issue (million) 718.54 718.54 718.54
Dilutive potential ordinary shares relating to 2.11 2.76 3.57
Long-term Incentive Plan
Dilutive potential ordinary shares relating to 64.99 - -
ZAR convertible bonds
Weighted average number of diluted
ordinary shares (million) 785.64 721.30 722.11
Headline earnings per share (cents)
Basic 310 (21) (171)
Diluted 299 (21) (171)
13. Contingent liabilities and guarantees
As at the end of December 2018, the Group had contingent liabilities in respect of guarantees. No material liabilities
are expected to arise from other matters in the ordinary course of business. Guarantees of R105 million (December 2017:
R114 million) (June 2018: R109 million) have been issued to Friedshelf by the Group. Guarantees of R1 477 million
(December 2017: R1 396 million) (June 2018: R1 477 million) have been issued by third parties and financial institutions
on behalf of the Group consisting mainly of guarantees to the Department of Mineral Resources in respect of future
environmental rehabilitation amounting to R1 355 million (December 2017: R1 277 million) (June 2018: R1 355 million).
At 31 December 2018, the Group had certain unresolved tax matters. SARS has issued additional assessments relating to
the matters covering the 2013 year of assessment. The Group is in the process of preparing an objection to this assessment
after consultation with external tax and legal advisors. The Group believes that no provision is required at this stage.
14. Related party transactions
- The Group entered into PGM purchase transactions of R1 763 million (December 2017: R1 831 million)
(June 2018: R3 749 million) with Two Rivers, an associate company, resulting in a payable of R1 286 million
(December 2017: R1 041 million) (June 2018: R1 145 million). It received refining fees to the value of
R17 million (December 2017: R17 million) (June 2018: R33 million).
- The Group previously entered into sale and leaseback transactions with Friedshelf, an associate company. At the end
of the period, R1 175 million (December 2017: R1 206 million) (June 2018: R1 192 million) was outstanding in
terms of the lease liability. During the period, interest of R61 million (December 2017: R63 million)
(June 2018: R125 million) was charged and a R78 million (December 2017: R72 million) (June 2018: R148 million)
repayment was made. The finance leases have an effective interest rate of 10.2%.
- The Group entered into PGM purchase transactions of R 1 708 million (December 2017: R1 561 million) (June 2018:
R3 372 million) with Mimosa, a joint venture, resulting in a payable of R1 091 million (December 2017: R920 million)
(June 2018: R965 million). It also has advances receivable of R806 million (December 2017: R776 million) (June 2018:
R765 million) that yielded interest of R8 million (December 2017: R4 million) (June 2018: R11 million). The Group
received refining fees of R157 million (December 2017: R146 million) (June 2018: R285 million).
- Key management compensation (fixed and variable) was R47 million (December 2017: R31 million) (June 2018: R67 million).
15. Financial instruments
Six months ended Six months ended Period ended
31 December 2018 31 December 2017 30 June 2018
(Rm) (Reviewed) (Reviewed) (Audited)
Financial assets - carrying amount
Financial assets at amortised cost 8 690 6 478 6 368
Trade and other receivables 2 172 2 118 2 506
Cash and cash equivalents 6 355 4 208 3 705
Other financial assets 163 152 157
Financial assets at fair value through 213 - 21
profit or loss#2
Available-for-sale financial assets1 - 192 198
Financial assets at fair value through 260 - -
other comprehensive income1
9 163 6 670 6 587
Financial liabilities - carrying amount
Financial liabilities at amortised cost 12 546 14 815 16 967
Borrowings 8 818 9 028 10 352
Other financial liabilities 44 73 69
Trade payables 3 675 5 703 6 535
Other payables 9 11 11
Financial liabilities at fair value through profit
and loss2 3 813 676 50
Trade payables - metal purchases 3 507 - -
Other financial liabilities 306 676 50
16 359 15 491 17 017
# Financial assets at fair value through profit or loss are included as other financial assets on the statement of
financial position
1 Level 1 of the fair value hierarchy - Quoted prices in active markets for the same instrument
2 Level 2 of the fair value hierarchy - Significant inputs are based on observable market data with the rand-dollar
exchange rate of R14.38/US$ and metal prices being the the most significant. These instruments are valued on a
discounted cash-flow basis.
The carrying amounts of financial assets and liabilities approximate their fair values with the exception of the
US$ convertible bond (carrying amount R3 062 million) which has a fair value of approximately R2 714 million, and
the ZAR convertible bond (carrying amount R2 697 million) which has a fair value of approximately R2 407 million.
These fair values are categorised within Level 3 of the fair value hierarchy. A discounted cash-flow valuation
technique was used, using a 12% discount rate on the US$ Convertible bond and 16.4% discount rate on the
ZAR Convertible bond.
Cash and cash equivalents include Zimbabwean bond notes of $88 million (R1 265 million). Bond notes were disclosed
as part of cash and cash equivalents since it conforms to this definition. At the reporting date bond notes were
pegged at a 1:1 value compared to the US$ and all of the bond notes will be utilised to settle current obligations
in the form of statutory payments, local taxes and other local creditors. Subsequent to the reporting period, the
central bank of Zimbabwe established an interbank foreign-exchange market in which the bond notes will be denominated
as electronic money known as RTGS dollars, and will be traded at a floating exchange rate.
15.1 Fair value hedge accounting
Market risk
The Group's activities expose it to a variety of financial risks, including foreign currency exposure, and commodity
price risk. The Group's overall risk management programme focuses on the unpredictability of financial markets and
seeks to minimise potentially adverse effects on the Group's financial performance. The Group, from time to time,
uses derivative financial instruments to hedge certain risk exposures.
In the current year, management adopted a hedging strategy and accounting policy to manage the fair value risk
(commodity price and foreign currency exchange risk) to which purchased metal, the hedged instrument, is exposed.
The financial instrument used to hedge this risk is trade payables, related to metal purchases, measured at fair
value through profit or loss. The fair value movements on this financial liability have been designated to hedge
the price and foreign currency exchange risk on purchased metal inventory.
To the extent that the hedging relationship is effective, that is, when the fair value gains and losses on both
the hedged item and hedged instrument are offset against each other, the gains and losses on trade payables
(R121 million loss) and purchased metal inventory (R121 million gain) respectively are recognised in profit
or loss in other income and expenses. Due to the high correlation between the fair value movements in trade
payables and inventory, no source of hedge ineffectiveness is expected to affect this hedging relationship
during its term.
15.2 Adoption of IFRS 9 - Financial Instruments (Transition)
This standard replaces IAS 39 - Financial Instruments.
The adoption of IFRS 9 Financial Instruments from 1 July 2018 resulted in changes in accounting policies and
resulted in an adjustment to opening "other reserves". The adjustment of R94 million is as result of the
valuation of the equity investment in Rand Mutual Assurance (RMA) which was previously measured at cost (Rnil)
in accordance with IAS 39 and has now been measured at fair value through other comprehensive income. The Group
has not restated comparatives on transition because the Group was not able to meet the requirement in the
standard to do so without the use of hindsight. IFRS 9 adoption has impacted both the classification and
impairment requirements of financial assets. The Group now classifies former loans and receivables and held-
to-maturity financial assets as measured at amortised cost. Derivative financial instruments and availabe-for-
sale financial assets have now been classified as measured at fair value through profit and loss (FVTPL) and
fair value through other comprehensive income (FVOCI) respectively.
The following table indicates the reclassifications and adjustments recognised for each individual line item
as per the statement of financial position as at 1 July 2018:
IAS 39 classifications IFRS 9 classifications
Fair
value
Fair through
Balance value other
at Re- through compre- Balance
30 June classifi- Amortised profit hensive at 1 July
2018 cation cost and loss income* 2018
Financial assets
Available-for-sale financial assets* 198 (198) - - 292 292
Other financial assets 178 (178) 157 21 - 178
Derivative financial asset# 21 (21) - 21 - 21
Held-to-maturity financial asset@ 73 (73) 73 - - 73
Loans carried at amortised cost@ 84 (84) 84 - - 84
Trade and other receivables@ 2 506 (2 506) 2 506 - - 2 506
Cash and cash equivalents 3 705 (3 705) 3 705 - - 3 705
Total financial assets 6 587 (6 587) 6 368 21 292 6 681
# Continues to be measured subsequently at fair value through profit or loss.
@ Continues to be measured subsequently at amortised cost.
* Includes R94 million investment in equity instrument (RMA) that was previously measured at Rnil
The reclassification detailed in the table on the previous page was informed by the following Implats business
models and financial asset characteristics:
Reclassify equity instruments previously classified as available-for-sale to FVOCI
The Group elected to present changes in the fair value of all its equity investments previously classified as
available-for-sale in other comprehensive income. The cumulative fair value gains and losses on these instruments
were not reclassified and will continue to be recognised in "other reserves" in equity. These gains and losses on
these investments will not be reclassified to profit or loss upon derecognition.
Reclassification to amortised cost
Held-to-maturity financial assets and loans and receivables (including cash and cash equivalents) carried at
amortised cost were reclassified to financial assets at amortised cost. The Group intends to hold the assets
to maturity, to collect contractual cash flows that consists solely of payments of principal and interest
on the outstanding amount.
Impairment of financial assets
The Group has five types of financial assets that are subject to IFRS 9's new expected credit loss model (ECL):
- Trade receivables for sales of inventory and tolling refining services;
- Other receivables, which consist mainly of employee receivables;
- Interest-free housing loans to employees;
- Debt investments carried at amortised cost, and
- Cash and cash equivalents.
The Group was required to revise its impairment methodology under IFRS 9 for each of these classes of assets.
The group applies the IFRS 9 simplified approach to measuring expected credit losses which uses a lifetime
expected loss allowance for all trade receivables.
The expected credit loss model was applied to the outstanding trade receivable balances at 1 July 2018 which
resulted in a negligible amount of impairment. All trade receivable balances have been recovered in full for
the past 5 years.
The 12 month expected credit loss model has been applied to the following financial assets as credit risk is
considered to be low:
- Housing loans
- Employee receivables;
- Debt instruments held at a financial institution.
- Cash and cash equivalents.
Employee housing loans consist of housing loans advanced to Implats employees in terms of Implats housing
scheme. These loans are secured by a second bond over residential properties. An impairment rate of 0.5% was
applied to housing loans. This impairment assumption is based on historical default rates on the overdue loans,
employees showing signs of financial distress and expected changes in macro economic circumstances that could
affect employees.
Employee receivables consist of short term advance. These receivables are generally recovered within 30 day
and due to their short term nature are consider to have a low credit risk.
Debt investments at amortised cost are considered to have low credit risk and are mostly held with investment
grade entities and the loss assessments was therefore limited to 12 months expected losses.
The Group's cash and cash equivalents are also subject to the impairment requirements of IFRS 9. The Group's
cash is held at investment grade financial institutions, which are considered to have a low credit risk and
the expected credit losses was immaterial.
The outcome of the 12 month expected credit loss model assessments on the above financial assets was immaterial
at 1 July 2018, therefore no adjustment was made to opening retained earnings.
At 31 December 2018 the expected credit loss was reassessed and no provisions were required.
Financial liabilities
All non-derivative financial liabilities will continue to be measured at amortised cost with the exception of
metal purchase trade payables. On adoption of IFRS 9, the Group elected to classify and measure trade payables
relating to metal purchases at fair value through profit or loss. Derivative financial liabilities will also
continue to be measured at fair value through profit or loss.
15.3 Financial Instruments (Accounting policy)
Financial assets and financial liabilities are recognised when a Group entity becomes a
party to the contract. Financial assets and financial liabilities are initially measured at fair value.
Transaction costs directly attributable to the acquisition or issue of financial assets and financial
liabilities other than financial assets and financial liabilities at fair value through profit or loss are
added to, or deducted from the fair value of the financial assets or financial liabilities, as appropriate,
on initial recognition. Transaction costs directly attributable to the acquisition of financial assets and
financial liabilities at fair value through profit or loss are recognised immediately in profit or loss.
15.3.1 Financial assets
Classification
The Group classifies its financial assets in the following categories on the basis of both the Group's business
model for managing the financial assets and the contractual cash flow characteristics of the financial assets:
- financial assets at fair value through profit or loss,
- financial assets at amortised cost and
- financial assets at fair value through other comprehensive income.
Purchases and sales of investments are recognised on the trade date, being the date on which the Group commits
to purchase or sell the asset. A financial asset is derecognised when the contractual rights to the cash flows
from the financial asset expire, or when the Group transfers the contractual rights to receive the cash flows
of the financial asset, or retains the contractual rights to receive the cash flows of the financial asset, but
assumes a contractual obligation to pay the cash flows to one or more recipients.
15.3.1.1 Debt instruments
Subsequent measurement of debt instruments depends on the Group's business model for managing the asset and
the cash flow characteristics of the asset. There is currently only one measurement category to which the
Group classifies its debt instruments:
Financial asset measured at amortised cost
Assets that are held for collecting contractual cash flows where those cash flows are comprised solely of
payments of principal and interest are measured at amortised cost. Interest income from these financial
assets is included in finance income on the effective interest rate method. Any gain or loss arising on
derecognition is recognised directly in profit or loss and presented in other gains/(losses), together with
foreign exchange gains and losses. Impairment losses are presented separately in the statement of profit or
loss. These assets are included in current assets, except for those with maturities greater than 12 months
after the reporting date which are classified as non-current assets.
15.3.1.2 Equity instruments
Implats subsequently measures all equity investments at fair value.
Financial asset measured at fair value through other comprehensive income
Where the Group's management has elected to present fair value gains and losses on equity investments in OCI,
there is no subsequent reclassification of fair value gains and losses to profit or loss following the
derecognition of the investment. Dividends from such investments continue to be recognised in profit or loss
as other income when the Group's right to receive payments is established.
15.3.1.3 Other financial assets
Financial assets measured at fair value through profit and loss
Financial assets that are not measured at amortised cost or at fair value through other comprehensive income
are classified as measured at fair value through profit and loss. These include the cross-currency interest
rate swap (CCIRS).
The cash flow received and paid in terms of the CCIRS interest rate swap is included in finance cost paid and
received in the statement of cash flows.
15.3.2 Impairment of financial assets
The expected credit losses associated with its debt instruments carried at amortised cost are assessed by the
Group on a forward looking basis. The impairment methodology applied is determined by whether there has been a
significant increase in credit risk.
For trade receivables, the Group applies the simplified approach permitted by IFRS 9, which requires expected
lifetime losses to be recognised from initial recognition of the receivables. Trade receivables are written off
when there is no reasonable expectation of recovery. Indicators that there is no reasonable expectation of
recovery, among others, include the failure of a debtor to engage in a repayment agreement with the Group.
The 12 month ECL model is applied to other receivables and financial assets at amortised cost. The expected
credit loss allowance recognised during the period is therefore limited to 12 months expected losses. These
instruments are considered to be low credit risk when they have a low risk of default and the issuer has a
strong capacity to meet its contractual cash flow obligations in the near term.
When financial assets at amortised cost (other than trade receivables) have an increase in credit risk, the
lifetime ECL model, which is the result of all possible default events over the expected life of the financial
instrument, is used to impair the asset.
The calculation of the loss allowances for financial assets are based on assumptions about risk of default
and expected loss rates. The Group applies judgement in making these assumptions and selecting the inputs to
the impairment calculation, based on the Group's historical information, existing market conditions and forward
looking estimates at the end of each reporting period.
15.3.3 Financial liabilities
All financial liabilities are subsequently measured at amortised cost, except for financial liabilities at fair
value through profit or loss. These liabilities, including derivatives that are liabilities, are subsequently
measured at fair value.
The Group has also made an irrevocable election to measure trade payables relating to metal purchases at fair
value through profit or loss. Trade payables contracts host two embedded derivatives, namely fluctuations in
PGM prices, and foreign currency exchange rates. This financial liability is used as a hedging instrument in
the fair value hedge of a recognised asset, being purchased inventory.
15.3.4 Financial instruments used for hedge accounting
The Group uses the fair value movements in metal purchase trade payables measured at fair value through profit
or loss, to manage the exposure of purchased metal inventory to fluctuations in foreign currency exchange
rates and commodity prices.
At inception of a qualifying hedging relationship, the Group documents the relationship between hedging
instrument, being trade payables, and inventory, the hedged item, as well as its risk management objective
and strategy for undertaking the hedging transaction. At hedge inception and on an on-going basis, the Group
assesses whether the instrument used in hedging transaction is expected to be, and has been, highly effective
in offsetting changes in the fair value of inventory. The fair value of the trade payable used for hedging
purposes is disclosed in this note.
The method of recognising the resulting gain or loss arising on remeasurement of the financial instrument
used for hedging is dependent on the nature of the item being hedged, which is fair value movements on
inventory. The Group has designated trade payables measured at fair value through profit or loss as a fair
value hedge of inventory. Changes in the fair value of this financial liability that are effective to the
hedging relationship are recorded in the income statement in other income and expenses, along with changes
in the fair value of inventory that are attributable to the hedged risk.
Hedge accounting is discontinued from the date when the qualifying criteria are no longer met. This is when
the commodity prices on the trade payables designated as the hedging instrument is reliably determined.
Subsequent gains and losses from foreign currency fluctuations will be recognised in other operating
income and expenses.
16. Changes in classification in the statement of profit or loss
Six months ended Year ended
31 December 2017 30 June 2018
(Reviewed) (Audited)
Prior period Prior period
classi- Reclassi- New classi- classi- Reclassi- New classi-
(Rm) fication fication fication fication fication fication
Cost of sales (16 547) (177) (16 724) (34 277) (440) (34 717)
Royalty expense* (179) 179 - (350) 350 -
Other operating income* 25 (25) - 180 (180) -
Other operating expenses* (343) 343 - (944) 944 -
Other income 352 23 375 1 404 180 1 584
Other expense (468) (343) (811) (300) (854) (1 154)
Total (17 160) - (17 160) (34 287) - (34 287)
* Royalty expense, other operating income and other operating expenses have been reallocated in the table above
to cost of sales, other income and other expense respectively.
Both the royalty expense of R179 million (June 2018: R350 million), which was previously disclosed separately
in the "Consolidated statement of profit or loss and other comprehensive income" and the movement in the
rehabilitation provision, an income of R2 million (June 2018: R90 million expense), previously included in
other operating expenses was reclassified to cost of sales.
These items were reclassified due to their nature, which is directly related to cost of production.
The residual other operating income and expense items were not directly related to cost of production
and were therefore reclassified to other income and other expenses respectively.
Impala operations (ex-mine) key statistics
December December Variance
2018 2017 %
Mining revenue (Rm) 10 783 6 685 61.3
Platinum 4 548 3 382 34.5
Palladium 3 123 1 747 78.8
Rhodium 1 837 784 134.3
Nickel 237 260 (8.8)
Chrome 114 87 31.0
Other 924 425 117.4
Cost of sales (9 372) (7 728) (21.3)
On-mine operations (6 438) (6 105) (5.5)
Processing excluding smelter (1 071) (1 085) 1.3
Smelting operations (476) (472) (0.8)
Refining and selling operations (391) (338) (15.7)
Corporate costs (119) (104) (14.4)
Share-based payments and other (26) (23) (13.0)
Royalty expense (107) (80) (33.8)
Depreciation (1 194) (1 380) 13.5
Change in metal inventories 450 1 859 (75.8)
Mining gross profit 1 411 (1 043) 235.3
Gross margin ex-mine (%) 13.1 (15.6) 184.0
EBITDA (Rm) 2 802 229 1 123.6
Sales volumes ex-mine
Platinum (000oz) 387.0 266.2 45.4
Palladium 212.3 145.6 45.8
Rhodium 54.2 50.5 7.3
Nickel (t) 1 251 1 879 (33.4)
Sales volumes metals purchased - IRS
Platinum (000oz) 386.4 382.6 1.0
Palladium 273.2 265.6 2.9
Rhodium 49.9 49.7 0.4
Nickel (tonnes) 4 679 4 651 0.6
Prices achieved ex-mine
Platinum (US$/oz) 829 940 (11.8)
Palladium (US$/oz) 1 035 896 15.5
Rhodium 2 395 1 147 108.8
Nickel (US$/t) 13 393 10 308 29.9
Exchange rate achieved ex-mine (R/US$) 14.19 13.46 5.4
Production ex-mine
Tonnes milled (000t) 5 969 5 671 5.3
UG2 milled (%) 57.1 58.2 (1.9)
Development metres (total) (metres) 43 924 50 681 (13.3)
Headgrade (5PGE+Au) (g/t) 3.98 4.05 (1.5)
Platinum refined (000oz) 405.0 271.9 49.0
Platinum stock adjusted 361.2 347.0 4.1
Palladium refined 181.1 159.8 13.3
Rhodium refined 44.2 43.0 2.8
Nickel refined (t) 1 376 2 313 (40.5)
PGM refined production (000oz) 743.5 539.8 37.7
Total cost (Rm) 8 495 8 104 (4.8)
(US$m) 599 605 1.0
Per tonne milled (R/t) 1 423 1 429 0.4
(US$/t) 100 107 6.5
Per PGM ounce refined (R/oz) 11 426 15 013 23.9
(US$/oz) 806 1 121 28.1
Per platinum ounce refined (R/oz) 20 975 29 805 29.6
(US$/oz) 1 479 2 225 33.5
Per platinum ounce stock adjusted (R/oz) 23 519 23 354 (0.7)
(US$/oz) 1 659 1 743 4.8
Net of revenue received for other metals (R/oz) 5 580 17 657 68.4
(US$/oz) 393 1 318 70.2
Capital expenditure (Rm) 1 017 1 442 29.5
(US$m) 72 108 33.3
Stay-in-business capital (Rm) 780 1 052 25.9
Replacement capital (Rm) 237 390 39.2
All-in sustaining cost (Rm) 2 142 3 263 34.4
(US$m) 151 244 38.1
Per platinum ounce sold (R/oz) 5 535 12 258 54.8
(US$/oz) 390 915 57.4
Labour including capital at period end (no) 39 009 41 914 6.9
Own employees 28 159 31 021 9.2
Contractors 10 850 10 893 0.4
Centares per panel man per month (m2/man) 21.8 22.0 (0.9)
Tonnes milled per employee costed*** (t/man/annum) 307 275 11.6
*** Average working cost employees
Marula key statistics
December December Variance
2018 2017 %
Revenue (Rm) 1 511 1 242 21.7
Platinum 451 470 (4.0)
Palladium 591 530 11.5
Rhodium 286 172 66.3
Nickel 18 15 20.0
Other 165 55 200.0
Cost of sales (1 322) (1 210) (9.3)
On-mine operations (1 016) (956) (6.3)
Processing operations (136) (122) (11.5)
Share-based payments and other 1 (2) 150.0
Royalty expense (57) (36) (58.3)
Treatment charges (2) (2) -
Depreciation (112) (92) (21.7)
Gross profit 189 32 490.6
Intercompany adjustment* (164) - -
Gross margin (%) 12.5 2.6 380.8
EBITDA (Rm) 292 71 311.3
Sales volumes in concentrate
Platinum (000oz) 45.1 43.7 3.2
Palladium 46.0 44.9 2.4
Rhodium 9.5 9.1 4.4
Nickel (t) 140 130 7.7
Prices achieved in concentrate
Platinum (US$/oz) 705 799 (11.8)
Palladium 900 861 4.5
Rhodium 2 054 1 363 50.7
Nickel (US$/t) 8 984 8 587 4.6
Exchange rate achieved (R/US$) 14.32 13.62 5.1
* The adjustment relates to sales by Marula to the Implats Group which were still in the pipeline at period end
Production
Tonnes milled (000t) 955 941 1.5
Headgrade (5PGE+Au) (g/t) 4.37 4.36 0.3
Platinum in concentrate (000oz) 44.9 43.2 3.9
Palladium in concentrate 45.8 44.4 3.2
Rhodium in concentrate 9.5 9.0 5.6
Nickel in concentrate (t) 139 129 7.8
PGM in concentrate (000oz) 117.8 113.3 4.0
Total cost (Rm) 1 152 1 078 (6.9)
(US$m) 81 80 (1.3)
Per tonne milled (R/t) 1 206 1 146 (5.2)
(US$/t) 85 86 1.2
Per PGM ounce in concentrate (R/oz) 9 779 9 515 (2.8)
(US$/oz) 690 710 2.8
Per platinum ounce in concentrate (R/oz) 25 657 24 954 (2.8)
(US$/oz) 1 809 1 862 2.8
Net of revenue received for other metals (R/oz) 2 049 7 083 71.1
(US$/oz) 144 529 72.8
Capital expenditure (Rm) 33 29 13.8
(US$m) 2 2 -
Stay-in-business capital (Rm) 31 26 19.2
Replacement capital (Rm) 2 3 33.3
All-in sustaining cost (Rm) 265 365 27.4
(US$m) 19 27 29.6
Per platinum ounce sold (R/oz) 5 876 8 352 29.6
(US$/oz) 414 623 33.5
Labour including capital at period end (no) 4 076 3 998 (1.9)
Own employees 3 254 3 280 0.8
Contractors 822 718 (14.5)
Centares per panel man per month (m2/man) 24.1 23.4 3.0
Tonnes milled per employee costed*** t/man/annum) 477 485 (1.5)
*** Average working cost employees
Zimplats key statistics
December December Variance
2018 2017 %
Revenue (Rm) 4 139 3 834 8.0
Platinum 1 383 1 499 (7.7)
Palladium 1 438 1 379 4.3
Rhodium 353 231 52.8
Nickel 354 319 11.0
Other 611 406 50.5
Cost of sales (2 757) (2 934) 6.0
On-mine operations (1 396) (1 482) 5.8
Processing excluding smelter (675) (636) (6.1)
Smelting operations (159) (130) (22.3)
Corporate costs (252) (190) (32.6)
Share-based payments and other (14) (7) (100.0)
Export incentive 417 - -
Royalty expense (140) (62) (125.8)
Treatment charges - (31) 100.0
Depreciation (491) (451) (8.9)
Change in inventories (47) 55 (185.5)
Gross profit/(loss) 1 382 900 53.6
Intercompany adjustment* (317) (327) 3.1
Gross margin (%) 33.4 23.5 42.1
EBITDA (Rm) 1 905 1 303 46.2
Sales volumes in matte
Platinum (000oz) 133.5 132.8 0.5
Palladium 110.5 110.5 -
Rhodium 11.8 11.5 2.6
Nickel (t) 2 594 2 533 2.4
Prices achieved in matte
Platinum (US$/oz) 731 842 (13.2)
Palladium 918 931 (1.4)
Rhodium 2 102 1 495 40.6
Nickel (US$/t) 9 615 9 405 2.2
Exchange rate achieved (R/US$) 14.18 13.40 5.8
* The adjustment relates to sales by Zimplats to the Implats Group which were still in the pipeline at period end
Production
Tonnes milled (000t) 3 312 3 333 (0.6)
Headgrade (5PGE+Au) (g/t) 3.48 3.49 (0.2)
Platinum in matte (000oz) 135.4 136.2 (0.6)
Palladium in matte 110.6 112.8 (2.0)
Rhodium in matte 12.1 11.8 2.5
Nickel in matte (t) 2 636 2 172 21.4
PGM in matte (000oz) 289.0 290.2 (0.4)
Total cost (Rm) 2 482 2 438 (1.8)
(US$/t) 175 182 3.8
Per tonne milled (R/t) 749 731 (2.5)
(US$/t) 53 55 3.6
Per PGM ounce in matte (R/oz) 8 588 8 401 (2.2)
(US$/oz) 606 627 3.3
Per platinum ounce in matte (R/oz) 18 331 17 900 (2.4)
(US$/oz) 1 293 1 336 3.2
Net of revenue received for other metals (R/oz) (2 024) 756 367.7
(US$/oz) (143) 56 353.0
Capital expenditure (Rm) 657 432 52.1
(US$m) 46 32 43.8
Stay-in-business capital (Rm) 467 325 43.7
(US$m) 33 24 37.5
Replacement capital (Rm) 183 99 84.8
(US$m) 13 7 85.7
Expansion capital (Rm) 7 10 30.0
(US$m) - 1 100.0
All-in sustaining cost (Rm) 159 472 66.3
(US$m) 11 35 68.6
Per platinum ounce sold (R/oz) 1 191 3 554 66.5
(US$/oz) 84 265 68.3
Labour including capital at period end (no) 6 184 5 997 (3.1)
Own employees 3 316 3 159 (5.0)
Contractors 2 868 2 838 (1.1)
Tonnes milled per employee costed*** (t/man/annum) 1 243 1 243 -
*** Average working cost employees
Mimosa key statistics
December December Variance
2018 2017 %
Revenue (Rm) 2 036 1 905 6.9
Platinum 650 731 (11.1)
Palladium 683 568 20.2
Rhodium 166 74 124.3
Nickel 271 258 5.0
Other 266 274 (2.9)
Cost of sales (1 742) (1 646) (5.8)
On-mine operations (939) (869) (8.1)
Processing operations (346) (292) (18.5)
Corporate costs (99) (87) (13.8)
Export incentive 45 - -
Royalty expense (57) (53) (7.5)
Treatment charges (155) (143) (8.4)
Depreciation (234) (233) (0.4)
Change in inventories 43 31 38.7
Gross profit 294 259 13.5
Gross margin (%) 14.4 13.6 5.9
Profit for the six months (Rm) 222 156 42.3
50% Attributable to Implats 111 78 42.3
Intercompany adjustment* (62) (11) (463.6)
Share of profit in Implats Group 49 67 (26.9)
Sales volumes in concentrate
Platinum (000oz) 56.2 57.4 (2.1)
Palladium 44.8 45.7 (2.0)
Rhodium 4.5 4.7 (4.3)
Nickel (t) 1 603 1 674 (4.2)
Prices achieved in concentrate
Platinum (US$/oz) 816 949 (14.0)
Palladium 1 074 929 15.6
Rhodium 2 577 1 160 122.2
Nickel (US$/t) 11 917 11 489 3.7
Exchange rate achieved (R/US$) 14.18 13.40 5.8
* The adjustment relates to sales by Mimosa to the Implats Group which were still in the pipeline at period end
Production
Tonnes milled (000t) 1 408 1 407 0.1
Headgrade (5PGE+Au) (g/t) 3.83 3.85 (0.5)
Platinum in concentrate (000oz) 61.7 63.0 (2.1)
Palladium in concentrate 49.0 49.7 (1.4)
Rhodium in concentrate 5.4 5.5 (1.8)
Nickel in concentrate (t) 1 791 1 835 (2.4)
PGM in concentrate (000oz) 131.8 133.7 (1.4)
Total cost (Rm) 1 384 1 248 (10.9)
(US$/t) 98 93 (4.8)
Per tonne milled (R/t) 983 887 (10.8)
(US$/t) 69.3 66.2 (4.7)
Per PGM ounce in concentrate (R/oz) 10 501 9 334 (12.5)
(US$/oz) 741 697 (6.3)
Per platinum ounce in concentrate (R/oz) 22 431 19 810 (13.2)
(US$/oz) 1 582 1 479 (7.0)
Net of revenue received for other metals (R/oz) (32) 1 175 102.7
(US$/oz) (2) 88 102.6
Capital expenditure (Rm) 349 263 32.7
(US$m) 25 20 25.0
All-in sustaining cost (Rm) 471 502 6.2
(US$m) 33 38 11.5
Per platinum ounce sold (R/oz) 8 384 8 734 4.0
(US$/oz) 591 652 9.3
Labour including capital (no) 2 310 2 323 0.6
Own employees 1 349 1 354 0.4
Contractors 961 969 0.8
Two Rivers key statistics
December December Variance
2018 2017 %
Revenue (Rm) 1 928 1 911 0.9
Platinum 739 864 (14.5)
Palladium 631 565 11.7
Rhodium 418 264 58.3
Nickel 40 41 (2.4)
Other 100 177 (43.5)
Cost of sales (1 450) (1 432) (1.3)
On-mine operations (1 035) (1 016) (1.9)
Processing operations (209) (209) -
Royalty expense (54) (46) (17.4)
Treatment charges (16) (16) -
Chrome costs (26) (26) -
Depreciation (168) (156) (7.7)
Change in inventory 58 37 56.8
Gross profit 478 479 (0.2)
Gross margin (%) 24.8 25.1 (1.2)
Profit for the six months (Rm) 334 336 (0.6)
Attributable to Implats 154 155 (0.6)
Intercompany adjustment* (16) (36) 55.6
Share of profit in Implats Group 138 119 16.0
Sales volumes in concentrate
Platinum (000oz) 75.7 82.2 (7.9)
Palladium 44.2 48.6 (9.0)
Rhodium 13.4 14.4 (7.0)
Nickel (t) 278.0 294.4 (5.6)
Prices achieved in concentrate
Platinum (US$/oz) 688 784 (12.2)
Palladium 1 006 868 15.9
Rhodium 2 207 1 369 61.2
Nickel (US$/t) 10 036 10 456 (4.0)
Exchange rate achieved (R/USUS$) 14.19 13.41 5.8
* The adjustment relates to sales from Two Rivers to the Implats Group which at year end was still in the pipeline
Note: These results have been equity accounted
Production
Tonnes milled ex-mine (000t) 1 667 1 713 (2.7)
Headgrade (5PGE+Au) (g/t) 3.53 3.70 (4.6)
Platinum in concentrate (000oz) 75.6 83.4 (9.4)
Palladium in concentrate 43.7 49.6 (11.9)
Rhodium in concentrate 13.3 14.7 (9.5)
Nickel in concentrate (t) 296 313 (5.4)
PGM in concentrate (000oz) 161.0 178.7 (9.9)
Total cost (excluding chrome) (Rm) 1 244 1 225 (1.6)
(US$/t) 88 91 3.3
Per tonne milled (R/t) 746 715 (4.3)
(US$/t) 53 53 -
Per PGM ounce in concentrate (R/oz) 7 727 6 855 (12.7)
(US$/oz) 545 512 (6.4)
Per platinum ounce in concentrate (R/oz) 16 455 14 688 (12.0)
(US$/oz) 1 160 1 096 (5.8)
Net of revenue received for other metals (R/oz) 1 071 2 446 56.2
(US$/oz) 76 183 58.6
Capital expenditure (Rm) 247 226 9.3
(US$m) 17 17 -
All-in sustaining cost (Rm) 341 455 25.1
(US$m) 24 34 29.4
Per platinum ounce sold (R/oz) 4 498 5 536 18.8
(US$/oz) 317 413 23.2
Labour including capital (no) 3 110 3 147 1.2
Own employees 2 315 2 405 3.7
Contractors 795 742 (7.1)
IRS key statistics
December December Variance
2018 2017 %
Revenue (Rm) 12 601 10 657 18.2
Platinum 4 541 4 781 (5.0)
Palladium 4 018 3 221 24.7
Rhodium 1 688 727 132.2
Nickel 891 666 33.8
Other 1 463 1 262 15.9
Cost of sales (11 773) (9 810) (20.0)
Metals purchased (11 078) (9 840) (12.6)
Smelting operations (249) (289) 13.8
Refining and selling operations (409) (403) (1.5)
Corporate costs (62) (53) (17.0)
Change in metal inventories 25 775 (96.8)
Gross profit IRS 828 847 (2.2)
Metals purchased - adjustment on
metal prices and exchange 583 (132) 541.7
Inventory - adjustment on metal
prices and exchange 24 222 (89.2)
Gross profit in Implats Group 1 435 937 53.1
Gross margin (%) 6.6 7.9 (16.5)
EBITDA (Rm) 1 327 1 020 30.1
Revenue (Rm) 12 601 10 657 18.2
Direct sales to customers 468 17 2 652.9
Sales to Impala 11 895 10 184 16.8
Toll income - external 236 423 (44.2)
Toll income - intercompany 2 33 (93.9)
Total sales volumes
Platinum (000oz) 386.4 382.6 1.0
Palladium 273.2 265.6 2.9
Rhodium 49.9 49.7 0.4
Nickel (t) 4 876 4 771 2.2
Prices achieved
Platinum (US$/oz) 829 938 (11.6)
Palladium 1 035 910 13.8
Rhodium 2 395 1 091 119.6
Nickel (US$/t) 13 393 10 463 28.0
Exchange rate achieved (R/US$) 14.18 13.33 6.4
Refined production
Platinum (000oz) 394.8 454.8 (13.2)
Palladium 283.0 246.1 15.0
Rhodium 61.9 55.8 10.9
Nickel (t) 6 699 5 594 19.8
PGM refined production (000oz) 845.5 893.8 (5.4)
Metal returned
Platinum (000oz) 0.7 115.7 (99.4)
Palladium 1.6 55.0 (97.1)
Rhodium - 19.4 (100.0)
Nickel (t) 1 749 1 765 (0.9)
Corporate information
Registered office
2 Fricker Road
Illovo, 2196
Private Bag X18
Northlands, 2116
Telephone: +27 (11) 731 9000
Telefax: +27 (11) 731 9254
Email: investor@implats.co.za
Registration number: 1957/001979/06
Share codes:
JSE: IMP
ADRs: IMPUY
ISIN: ZAE000083648
ISIN: ZAE000247458
Impala Platinum Limited and
Impala Refining Services
Head office
2 Fricker Road
Illovo, 2196
Private Bag X18
Northlands, 2116
Telephone: +27 (11) 731 9000
Telefax: +27 (11) 731 9254
Impala Platinum (Rustenburg)
PO Box 5683
Rustenburg, 0300
Telephone: +27 (14) 569 0000
Telefax: +27 (14) 569 6548
Marula Platinum
2 Fricker Road
Illovo, 2196
Private Bag X18
Northlands, 2116
Telephone: +27 (11) 731 9000
Telefax: +27 (11) 731 9254
Zimplats
1st Floor
South Block Borrowdale Office Park
Borrowdale Road
Harare, Zimbabwe
PO Box 6380
Harare
Zimbabwe
Telephone: +263 (242) 886 878/85/87
Fax: +262 (242) 886 876/7
Email: info@zimplats.com
Sponsor
Nedbank Corporate and Investment Banking
Directors
MSV Gantsho (chairman), NJ Muller (chief executive officer), M Kerber (chief financial officer),
PW Davey*, D Earp, AS Macfarlane*, FS Mufamadi, B Ngonyama, MEK Nkeli, LN Samuel,
P Speckmann, ZB Swanepoel, U Lucht
*British
Impala Platinum Japan Limited
Uchisaiwaicho Daibiru, room number 702
3-3 Uchisaiwaicho
1-Chome, Chiyoda-ku
Tokyo
Japan
Telephone: +81 (3) 3504 0712
Telefax: +81 (3) 3508 9199
Company Secretary
Tebogo Llale
Email: tebogo.llale@implats.co.za
United Kingdom secretaries
St James's Corporate Services Limited
Suite 31, Second Floor
107 Cheapside
London
EC2V 6DN
United Kingdom
Telephone: +44 (020) 7796 8644
Telefax: +44 (020) 7796 8645
Email: phil.dexter@corpserv.co.uk
Public Officer
Ben Jager
Email: ben.jager@implats.co.za
Transfer secretaries
South Africa
Computershare Investor Services (Pty) Ltd
Rosebank Towers
15 Biermann Avenue, Rosebank
PO Box 61051, Marshalltown, 2107
Telephone: +27 (11) 370 5000
Telefax: +27 (11) 688 5200
United Kingdom
Computershare Investor Services plc
The Pavilions
Bridgwater Road
Bristol
BS13 8AE
Auditors
PricewaterhouseCoopers Inc.
4 Lisbon Lane
Waterfall City
Jukskei View
Johannesburg
2090
Corporate relations
Johan Theron
Investor queries may be directed to:
Email: investor@implats.co.za
www.implats.co.za
28 February 2019
Date: 28/02/2019 07:05:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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