Transcript FY 2014 results presentation

Metmar Results Presentation
Welcome to the results presentation
of the Metmar Limited financial year end results
for the period ended on 28 February 2014
05 / 06 May 2014
Programme of events
•
•
•
•
•
•
Snapshot of the results
Metmar Trading
Metmar Investments & Resources
Looking forward
Questions to the panel
Further conversation
Snapshot of the results
David Ellwood CEO of Metmar Limited
Sizwe Nkosi CFO of Metmar Limited
Company Highlights
Board and leadership
strengthened through the
appointment of seasoned
industry professionals
Increased revenue as a
result of product
diversification, focused
trading strategy and a
weakening exchange rate
Good progress made on
Core Investments
Core Trading business
prospered despite
challenging trading
conditions
Aggressive write-down of
investment portfolio
following completion of
review process
Financial Highlights
STRATEGIC REFOCUS ON CORE TRADING STARTING TO BEAR FRUIT
5% increase in traded
volumes to 731,429
tonnes
38% growth in turnover to
R2.1 billion
Operating costs reduced
by 23% to R126.2 million
(2013: R162.9 million)
EBITDA from Core
Trading grows to R82
million (2013: R1.3
million)
Cash generated from
operations increased to
R41.9 million (2013:
R78.2 million utilised)
42% reduction in
headline loss,
notwithstanding
aggressive write-down of
investment portfolio
Metmar Trading
David Ellwood Metmar Trading
Metmar Trading performance
Key Area
2014
2013
% change
R’m
R’m
2 052.6
1 503.4
37%
Gross Margin
5.9%
4.6%
28%
EBITDA
82.0
1.3
6184%
Profit/(Loss) after Tax
50.3
(28.9)
274%
(22.0)
17.9
(223%)
(15.5)
0
-
Core Trading
Revenue
Discontinued Operations
(Loss)/Profit after Tax
Kalagadi Tolling Project
Loss after Tax
Metmar Trading - Core Trading
CORE TRADING RETURNS TO PROFIT driven by product
diversification, focused trading strategy and better cost control
• Core Trading revenue increased to R2.1 billion (2013:
R1.50 billion)
• EBITDA increased significantly to R82.0 million
(2013: R1.3 million)
• Profit after tax of R50.3 million (2013: loss after tax of
R28.9 million)
Metmar Trading - Discontinued Operations
WAG SOLD IN MANAGEMENT BUYOUT generating R53.7
million in cash
• WAG operating profit of R3.7 million (four months
trading)
• Capital profit on sale of WAG was R19.2 million
• Goodwill and intangibles of R36.9 million and R10.2
million respectively
• Loss after tax of R22.0 million (2013: profit after tax of
R17.9 million)
Metmar Trading - Kalagadi Tolling Project
FIRST BULK SHIPMENT OF 44,000 TONNES SOLD and vessel
sailed from Saldanha in early April
• Delays in sinter plant commissioning now largely
overcome
• Production of almost 90,000 tonnes in March 2014
alone
• Loss after tax of R15.5 million (2013: N/A) owing to
high finance costs associated with delayed start up
Metmar Investments & Resources (“MIR”)
Michael Golding COO of Metmar Investments & Resources
MIR performance
Description
% change
2014
2013
R’m
R’m
Revenue
234.0
43.5
438%
Gross Margin
25.0%
(8.8%)
384%
49.6
(27.8)
278%
(140.2)
(94.1)
(49%)
EBITDA/(LBITDA)
Loss after Tax
MIR performance
AGGRESSIVE WRITE DOWN OF INVESTMENT PORTFOLIO following
completion of portfolio review
• MIR revenue increased significantly to R234.0 million
(2013: R43.5 million) due to sales of coke breeze,
alumina slag, recycled plastic products and carbon
products
• Impairment of investments and non-current assets held
for sale amounted to R145.5 million (2013: R36.6 million)
• Loss after tax of R140.2 million (2013: R94.1 million)
MIR performance
• Breakdown of MIR revenue by contribution:
• Carbon products (including coke)
• Alumina slag
• Recycled plastic products
• Breakdown of MIR impairments:
• Impairments as per Income Statement
• Less: Inventory impairment
• Impairments relating to investments
– 63%
– 19%
– 18%
– R145.5 million
– R18.1 million
– R127.4 million
Looking forward
David Ellwood CEO of Metmar Limited
CEO outlook
Recently released Chinese GDP growth figures forecast a slower growth rate for the Chinese
economy. With uncertain growth prospects for other significant economies, the financial year
ahead is likely to continue to be challenging for commodity market participants.
Metmar has however been working on a number of projects / initiatives which are expected to
start contributing to the groups revenue and returns in the near future. These include:
Appointment of
Rob Still as
Chairman
New orders for a
wide spectrum of
commodities,
e.g. Iron ore,
Steel scrap
Trading of sintered
manganese in
terms of the tolling
agreement and
Kalagadi’s own
operation
Sefateng mining
right expected
to be granted in
H2 2014
Cost
management
and efficiency
initiatives
Improve working
capital
management
(new treasury
system) and
expand trade
and other
finance facilities
Changed
incentive
arrangements to
foster greater
employee drive
towards
profitability
Questions to the panel
David Ellwood CEO Metmar Limited and Metmar Trading
Michael Golding COO Metmar Investments & Resources
Sizwe Nkosi CFO Metmar Limited
Sean Naylor IRO Metmar Limited
Thank you