Results for the year

Group production increased to 1.741 million ounces of platinum from 1.704 million ounces the previous year
Revenue per platinum ounce was up by 16% in dollar terms, but only up 2% in rand terms
Revenue reduced by 3% to R25.4 billion
Group unit cost per platinum ounce, excluding sharebased compensation, rose by 11% to R10 089, due to a combination of higher costs and lower mine to market production
Gross margin declined to 32% from 37%
Headline earnings at 786 cents per share decreased by 22%
Total dividend increased to 390 cents per share – R2.3 billion returned to shareholders
Cash net of debt was R1.7 billion compared to R1.4 billion in the prior year

The financial review is intended to help the reader understand Implats' financial performance and the significant variances compared to the prior year. In addition the financial review includes a value added statement, as well as reporting on the transformation of the South African procurement base.

The financial review should be read in conjunction with our audited consolidated financial statements for the year ended 30 June 2010, presented on page 154 to 243. We use certain non-GAAP financial performance measures in our financial review, please see pages 244 to 247.

Production

The table below reflects refined platinum production.

000oz	Notes	2010	2009


Impala	1	871	950
Zimplats	2	154	97
Marula	3	68	73
Mimosa (100%)		94	79
Two Rivers (100%)		135	116
Other third party		188	184
Toll treatment		231	205
Total production		1 741	1 704

Production commentary

Gross platinum production increased by 2% to 1.741 million ounces from 1.704 million ounces in the prior year. The production is dealt with in detail in the individual operational sections on pages 70 to 95.

1.	Impala Approximately 80 000 platinum ounces were lost due to the 14 Shaft incident, the subsequent change in the mechanised layout and the strike action at the beginning of the year.
2.	Zimplats The ramping up at the Ngwarati (Portal 1) and Bimha (Portal 4) mines and the new concentrator at Ngezi resulted in additional production and stockpiled tonnes being milled, which in turn increased the platinum production.
3.	Marula The lack of build up in mill tonnage coupled with work stoppages due to the industrial action early in the year resulted in platinum ounces declining.

Statement of comprehensive income

An analysis of the abridged statement of comprehensive income, with comments on significant variances is presented below:

R million	Notes	2010	2009


Revenue	1	25 446	26 121
Cost of sales	2	(17 294)	(16 359)
Gross profit	3	8 152	9 762
Other net expenses		(929)	(1 163)
Net finance income	4	2	794
Profit before tax		7 225	9 393
Income tax expense	5	(2 431)	(3 389)
Profit for the year		4 794	6 004
Other financial data
Basic and headline earnings per share – cents	6	786	1 001
Dividend per share – cents	7	390	320

Statement of comprehensive income commentary

Basic and headline earnings decreased by 22% to R7.86 per share from R10.01.

A key feature in the decline of earnings was the increase in the share-based compensation (net of taxation) of R335 million in the current year, compared to a credit in the prior year of R648 million. This is equivalent to a movement of R1.64 per share.

Revenue
Economic conditions remained challenging; the limited recovery in the dollar metal prices was offset by the strengthening of the rand.

Revenue reduced by 3% to R25.4 billion, from R26.1 billion.

The variance can be further analysed as follows:

Sales volumes
Higher production volumes, as well as the sale of the rhodium stock built up in the prior year was offset by leases in lieu of cash advances of 58 000oz of platinum. Metal leases are reflected in inventory and not shown as a sale. Platinum sales volumes for 2010 were 1.435 million oz compared to 1.503 million oz in the previous year. Palladium rose by 21% to 945 000 oz and Rhodium by 27% to 228 000 oz. The combination of the above resulted in a positive sales volumes variance of R1.1 billion.

Higher PGM dollar price
Platinum rose by 18% to $1 433/oz; palladium by 43% to $376/oz; rhodium fell by 39% to $2 149/oz; and overall dollar prices contributed to a positive price variance of R1.8 billion.

Strengthening of the R/$ exchange rate
The average exchange rate for the year was R7.58/$, compared with R8.63/$ for 2009. This resulted in a negative exchange-rate variance of R3.6 billion.

Revenue per platinum ounce sold was higher at $2 316/oz compared to $1 995/oz in the previous year.

The rand revenue per platinum ounce sold was R17 555/oz compared to the prior year of R17 217/oz.

The higher volumes in metals sold other than platinum had a positive impact on the revenue per platinum ounce sold.

Cost of sales
Cost of sales rose by 6% to R17.3 billion from R16.4 billion in the previous year. There were several key drivers:

Wages and salaries were higher by 11% or R550 million to R5.5 billion
A share-based compensation movement of R1.0 billion. The movement in the share price, changes in the market input factors influencing the valuation, together with the amortisation of the provision, resulted in the expense in the current year. The share price increased from R170/share as at June 2009 to R180/share as at 30 June 2010. In 2009 the share price reduced from R309/share as at June 2008 to R170/share
Materials and other mining costs were 4% or R176 million higher at R4.9 billion. The increase in development at Impala and underground mining at Zimplats, was offset by consumable price decreases
Utilities were up by 41% or R328 million to R1.1 billion
The above was offset by lower cost of metals purchased (net of change in stock) of R1.2 billion

Cost per platinum ounce performance for the year
	Excluding SBP*		Including SBP*
R/oz	FY2010	FY2009	FY2010	FY2009


Impala (refined)	10 003	8 559	10 399	7 854
Zimplats (in matte)	7 614	11 740	7 614	11 740
Marula (in concentrate)	14 208	11 730	14 579	11 243
Mimosa (in concentrate)	9 018	9 454	9 018	9 454
Implats Group (refined)	10 089	9 129	10 417	8 526
* Share-based payments.

The cost per platinum ounce is dealt with in detail in the individual operational sections on pages 70 to 95.

Excluding the share-based compensation unit cost per platinum ounce rose by 11% to R10 089 due to the following:

Inflation accounted for 4% of the increase

The South African inflation was 6%, due to:

–	Wages and salaries up by 10%
–	Utilities were up 31.5%. Electricity increased by 34% in July 2009 and a further 25% from April 2010
–	Consumables were down by 5% due to a 10% decrease in steel price, 7% in explosives, 7% in fuel and the balance of consumables decreased by 2%

Deflation at the Zimbabwean operations was 6%, due to the strengthening of the rand against the dollar.

The impact of the strike and the subsequent change in the mechanised layout, the 14 Shaft incident, increased the unit costs by 5%, whereas other volume issues increased the unit costs by a further 2%.

On a normalised basis, excluding the impact of the strike, the 14 Shaft incident and the subsequent change in the mechanised layout, unit cost per platinum ounce rose by 5% to R9 592. Including the share-based expense the unit cost per platinum ounce produced deteriorated by 22% to R10 417.

3.	Gross profit The Group's margin deteriorated to 32% from 37%. This was due to higher costs and lower revenue.

Gross profit
	Gross profit		Adjusted gross profit*
(Rm)	FY2010	FY2009	FY2010	FY2009


Impala	5 222	7 586	5 368	7 606
Zimplats	1 571	(9)	1 159	397
Marula	(11)	(301)	16	181
Mimosa	495	127	421	314
Afplats	—	(1)	—	(1)
IRS	1 188	1 265	1 188	1 265
Inter-segment adjustment	(313)	1 095	—	—
Implats Group	8 152	9 762	8 152	9 762
* Includes inter-segment adjustments.

Gross profit margin
	Gross profit margin (%)		Adjusted gross profit margin* (%)
	FY2010	FY2009	FY2010	FY2009


Impala	37	50	37	50
Zimplats	51	(1)	44	26
Marula	(1)	(48)	1	16
Mimosa	48	20	44	38
IRS	11	12	11	12
Implats Group	32	37	32	37
* Includes inter-segment adjustments.

4.	Net finance income Net finance income declined by R792 million as a result of lower average cash balances and interest rates during this financial year.
5.	Income tax expense The taxation charge fell by R1.0 billion to R2.4 billion, primarily as a result of lower earnings for the year and lower STC. The effective tax rate was 33.6% (2009: 36.1%).
6.	Headline earnings The impact of the above resulted in headline earnings for the financial year decreasing by 22% to 786 cents per share, compared with 1 001 cents per share in the previous year.

Contribution to headline earnings by company
R million	FY2010	%	FY2009	%


Headline earnings
Impala	3 428	72.7	4 521	75.2
Zimplats	497	10.5	151	2.5
Marula	(104)	(2.2)	25	0.4
Mimosa	185	3.9	14	0.2
Two Rivers	95	2	41	0.7
IRS	599	12.7	1 375	22.9
Afplats	18	0.4	(112)	(1.9)
Headline earnings	4 718	100.0	6 015	100.0
Profit on disposal of assets	4		5
Loss on disposal of investment	(7)		–
Profit attributable to owners of the parent	4 715		6 020

Dividend
Despite the decrease in headline earnings by 22%, the total dividend for the year increased by 22% to 390 cents per share.

A final dividend of 270 cents per share was declared on 26 August 2010, amounting to R1.6 billion, payable in September 2010. An interim dividend of 120 cents per share (R718 million) was paid in March 2010. The total distribution to shareholders was 390 cents per share which amounted to R2.3 billion, compared to the prior period of 320 cents per share which amounted to R1.9 billion.

1 2 3