Condensed group income statement | Group statement of comprehensive income | Condensed group statement of financial position
Reconciliation of headline earnings | Condensed group statement of cash flows | Group statement of changes in equity | Comments
Notes to the reviewed financial statements | Unaudited physical information (‘000 tonnes) | Downloads
Comments
Operating results | Earnings | Cash flow | Safety health and enviroment
Reported segment results | Operations | Capital expenditure and project pipeline
Conversion of mining rights | Changes to the board | Outlook | Interim dividend
 

OPERATING RESULTS

Comments are based on a comparison of the group’s reviewed financial results and unaudited physical information for the six-month periods ended 30 June 2009 and 2008 respectively. The earnings reported for the six-month period to 30 June 2009 includes results from Namakwa Sands and the 26% interest in Black Mountain Mining (Pty) Limited (Black Mountain) which were acquired on 1 October 2008 and 1 November 2008 respectively.

The coal business reported a 10% increase in net operating profit to R1 032 million due to higher sales volumes to Eskom and the export market, offset by lower international steam coal prices, lower local non-Eskom sales volumes, and higher production costs. The base metals business delivered significantly lower operating results in line with zinc prices 42% lower than the corresponding period in 2008. The mineral sands business reported a consolidated net operating loss as the loss at KZN Sands, primarily from lower demand, more than offset the profitable contributions from Namakwa Sands and Australia Sands.

Revenue increased by 23% to R7 111 million while net operating profit increased by R147 million to R953 million, notwithstanding lower profits in the base metals business and a further, albeit lower, consolidated loss in the mineral sands business. Although the consolidated operating results show an improvement when compared with the previous year, the group was adversely affected by the vagaries of the current global economic downturn.

A weaker average exchange rate of R9,40 to the US dollar was realised on revenue compared to R7,54 for the corresponding period in 2008, however, the timing of the volatility of the local currency to the US dollar on repatriation of foreign currency proceeds, led to lower realised currency gains than anticipated. Unrealised foreign currency losses on the revaluation of monetary items in foreign currency resulted from the relative strength of the local currency on 30 June 2009. The weaker Australian dollar to the US dollar, from an average of US 93 cents in the six-month period to 30 June 2008 to US 71 cents in the period under review, together with favourable hedging of US dollar receivables, impacted positively on the financial results of the mineral sands operation in Australia.