Normandy Mining Limited : Financial Report For The Twelve Months Ended 30 June 1999.ADELAIDE Adelaide, empress consort of Holy Roman Emperor Otto I Adelaide (ăd`əlād) or Adelheid (ä`dĕlhīt), c. , South Australia--(BUSINESS WIRE)--Aug. 23, 1999-- Normandy Normandy (nôr`məndē), Fr. Normandie (nôrmäNdē`), region and former province, NW France, bordering on the English Channel. Mining Limited (TSE See Tokyo Stock Exchange. TSE 1. See Tokyo Stock Exchange (TSE). 2. See Toronto Stock Exchange (TSE). :NDY NDY Not Dead Yet NDY Not Done Yet .) (ME:NDY.) "Corporate initiatives and prudent Balance Sheet management delivered $103.8 million profit after tax and abnormals. The Board has declared a final dividend of 3.5 cents per share Cents per share The amount of a mutual fund's dividend or capital gains distributions that a shareholder will receive for each share owned. for a record full year distribution of $102.6 million."
Australian Dollar Values
are used in this report other than where specified.
For convenience, some key financial figures have been
translated at A$1.00 = US$0.6607
Enquiries concerning this report may be directed to:
C G Jackson, Executive General Manager - Corporate
100 Hutt Street, Adelaide 5000
South Australia, Australia
Tel: +61 8 8303 1703 Facsimile: +61 8 8303 1994
--------------------------------------------------------
This report and previous reports available at web site:
http://www.normandy.com.au
--------------------------------------------------------
Overview
--------------------------------------------------------
PROFIT
- After tax and abnormals, $103.8 million ($118.8M),
down 13 percent. After tax and before abnormals,
$101.7 million.
- Total operating contribution, $464.9 million ($559.3M)
- Return on capital employed, 10.3 percent
FINAL DIVIDEND
- 3.5 cents per share maintained, 50 percent franked
- $60.1 million distribution, payable 14 September 1999
- Total dividend for the year 6.0 cents per share,
a record distribution to shareholders of $102.6 million
($99.8M)
BALANCE SHEET
- Net cash $439.9 million, debt $994.0 million
- Net debt to net debt and equity, 28 percent
- Unrealised value of hedge book, $452.0 million
--------------------------------------------------------------
GOLD
- Operating contribution $385.8 million, down 13 percent
- Consolidated sales 1.48 million ounces (1.51Moz)
Cash margin $261 per ounce ($293/oz)
- Record annual production from eight mines, improved
contribution from Mt Leyshon, Pajingo and Martha
--------------------------------------------------------------
NON-GOLD
- Industrial Minerals operating contribution, $24.6 million
($35.2M)
- Zinc (Golden Grove) operating contribution, $27.0 million
($29.3M)
Payable zinc sales, 212 million pounds (148Mlb)
Realised zinc price, US46.1 cents per pound (US53.4c/lb)
--------------------------------------------------------------
Financial and production statistics for the twelve months to 30 June June: see month. 1998 bracketed in italics italics npl → italique m italics npl → Kursivschrift f . All financial figures in this report are quoted in Australian dollars Noun 1. Australian dollar - the basic unit of money in Australia and Nauru dollar - the basic monetary unit in many countries; equal to 100 cents unless specified otherwise. Chairman's review The profit of $103.8 million (after tax and abnormals), third highest in the Company's history, is acceptable in the current commodity price environment but unsatisfactory on a return-on-capital-employed basis. However, continuing financial strength is demonstrated by a record dividend declaration of $102.6 million, our fourteenth consecutive year of dividends. Cash on the balance sheet increased to $449 million at year end, with a further $700 million available in undrawn un·draw tr.v. un·drew , un·drawn , un·draw·ing, un·draws To draw to one side, as a curtain. Adj. 1. undrawn - not represented in a drawing undelineated - not represented accurately or precisely credit lines. Operating contribution remained strong at $465 million, despite divestments (Ariab, Lero, French kaolin kaolin (kā`əlĭn): see china clay. ) and cessation cessation Vox populi The stopping of a thing. See Smoking cessation. of operations at Woodcutters, Gecko gecko (gĕk`ō), small or medium-sized lizard of the family Gekkonidae. The more than 300 species are distributed throughout the warm regions of the world, mostly in the Old World. Despite folklore to the contrary, their bite is not poisonous. and Warrego. In our most active year, asset sales further reduced net debt to net debt plus equity (even after financing capital and investments aggregating $689 million) to 28 percent. This is regarded as conservative as the audited value of the current gold hedge book ($452 million) is not a balance sheet item. Corporate Initiatives The profit result and accounts include the outcomes of corporate initiatives which continue the strategy of business rationalisation Noun 1. rationalisation - (psychiatry) a defense mechanism by which your true motivation is concealed by explaining your actions and feelings in a way that is not threatening rationalization and simplification, and the expansion of the business in Australia Australia (ôstrāl`yə), smallest continent, between the Indian and Pacific oceans. With the island state of Tasmania to the south, the continent makes up the Commonwealth of Australia, a federal parliamentary state (2005 est. pop. , Africa and the Americas A·mer·i·cas , the See America. . Major items incorporated into the overall financial performance include: - Normandy LaSource - simplification and portfolio development; - TVX Normandy Americas acquisition; - Gold hedge book - realisation; - Non-core asset sales; - Costs associated with mine and office closures, operations restructures; and - Writedown of Boddington, Big Bell and Kalgoorlie low-grade stockpiles. Prudent Management ... The results also include appropriate accounting adjustments, reported as abnormals, which in part reflect the current lower gold price environment. Carrying value adjustments include: - Big Bell - reflecting likely closure; - Mt Charlotte early closure - previously reported due to ground movement; - Ovacik - a more conservative valuation reflecting the cost of delays to production start-up; and - Kasese - where a long term cobalt price (below the current spot) has been assumed as construction is complete and commissioning has commenced. Mine closure provisions totalling $60 million are also recorded as abnormals - principally at Big Bell, Tennant Tennant may refer to:
... and the Financial Outcome of Rationalisation These and other largely non-cash items are offset by abnormal gains on the sale of the Goldfields n. 1. A small slender woolly annual (Lasthenia chrysostoma) with very narrow opposite leaves and branches bearing solitary golden-yellow flower heads; it grows from Southwestern Oregon to Baja California and Arizona; - it is often cultivated. gas pipeline ($31.6M) and Millmerran coal ($12.0M). The Millmerran sale, of approximately 275 million tonnes of the steaming coal resource, concludes a transaction commenced in 1996. The consideration includes a cash payment, reimbursement Reimbursement Payment made to someone for out-of-pocket expenses has incurred. of expenses, a future royalty and payments based on project rate of return. Redesignation of the hedging gain on Big Bell ($147.7M) is also brought to account immediately. The remaining deferred gold hedge book gain is $434.1 million. The net effect of these outcomes is an abnormal gain after tax of $2.1 million. Outlook Recent and future capital programmes are expected to improve the performance of the core gold division, with an increasing percentage of lower cost ounces. In the next six months, expansions at Pajingo and Martha Martha, in the New Testament, friend of Jesus, sister of Mary and Lazarus of Bethany. In Christian literature, Martha has been a symbol of the active, as opposed to the contemplative, life. Feast: July 29. Martha personification of the busy housekeeper. will be complete, improved gold recoveries will be achieved at Tanami and the owner-mining fleet at Kalgoorlie will become operational. Beyond six months, development opportunities at Wandoo, Yamfo-Sefwi and Perama should continue the trend. Normandy's financial strength will allow the $85 million exploration commitment to remain undiminished. A major restructure of the division will result in more metres drilled per overhead dollar and an increased focus on reserve, around mine site and advanced projects. The hedging position of Normandy and its subsidiaries - sales contracts Sales Contract Contract between a seller and buyer for the sale of goods, services, or both. of 6.3 million ounces at an average deliverable net price after hedge fees of $547 per ounce ounce, in zoology ounce, in zoology: see leopard. ounce, unit of measurement ounce: see English units of measurement. - will continue to protect future sales revenues. The recent introduction of put options and the increasing resource inventory do, however, mean greater participation in improving gold prices. Final Dividend A final dividend of 3.5 cents per share has been declared (payable 14 September 1999), with Normandy again one of the most prompt to distribute dividends to shareholders. Robert J Champion de Crespigny Executive Chairman 23 August 1999 Profit and loss SIMPLIFIED CONSOLIDATED FINANCIAL RESULTS for the periods ended 30 June 3 months 12 months 12 months 1999 1999 1998 $M $M $M -------------------------------------------------------------- Gold (1) 74.2 385.8 442.5 Non-Gold (2) 22.2 79.1 116.8 Total operations 96.4 464.9 559.3 Amortisation Noun 1. amortisation - the reduction of the value of an asset by prorating its cost over a period of years amortization reduction, step-down, diminution, decrease - the act of decreasing or reducing something 2. and depreciation (26.5) (159.5) (190.9) Mine completion provisions and costs (4.2) (22.0) (15.0) Exploration provisions and write-offs (20.6) (75.6) (81.3) Financing - net 5.2 (17.0) (17.2) Corporate costs, administration and other (3) (17.7) (40.6) (75.5) Share of associated company associated company associate n → Partnerfirma f associated company n → società collegata profits - net (4) 3.3 2.2 0.0 Profit before abnormals and tax 35.9 152.4 179.4 Abnormal items - net (5) (39.6) (39.6) (40.0) Profit before tax and outside equity interests (3.7) 112.8 139.4 Income tax benefit/(expense) 36.4 8.7 (31.8) Outside equity interests (6.2) (17.7) 11.2 Profit after tax and outside equity interests 26.5 103.8 118.8 ------------------------------------------------------------- (1) Consolidated Operations Kalgoorlie Operations 22.8 103.0 128.9 Boddington 3.1 25.7 33.2 Big Bell Consolidated (1.3) 30.0 36.1 Kaltails 6.7 21.0 23.9 Tanami Operations (i) 8.9 48.9 73.2 Tennant Creek Operations 3.7 19.5 31.5 Mt Leyshon (i) 19.2 87.5 71.4 Pajingo Operations 7.1 23.2 18.2 Martha 4.0 19.8 19.0 Ity 0.0 7.2 7.1 (2) Industrial Minerals 6.0 24.6 35.2 Golden Grove
Discontinued dis·con·tin·ue v. dis·con·tin·ued, dis·con·tin·u·ing, dis·con·tin·ues v.tr. 1. To stop doing or providing (something); end or abandon: businesses (ii) 1.9 27.5 52.3 (3) Corporate administration (Australia) (11.9) (44.8) (47.7) (Overseas) (7.6) (20.7) (18.3) Other income/(expenses) 1.8 24.9 (9.5) (4) Yandal Operations (iii) 3.7 0.8 - QMC QMC abbr. quartermaster corps (iv) - 0.0 - NIML NIML Not in My Lifetime NIML Never in My Life NIML Non-Indigenous Minority Language Australia (v) 0.5 3.3 - BRGM BRGM Bureau de Recherches Géologiques et Minières (France) Perou / Mine Or (0.9) (1.9) - (5) Abnormals include writedown writedown A reduction in the value of an asset carried on a firm's financial statements. For example, the firm's accountants, believing the inventory is overvalued, may decide to take a writedown by reducing inventory valuation. in asset carrying values Carrying Value Also know as "book value," it is a company's total assets minus intangible assets and liabilities, such as debt. Notes: This is different than market value, as it can be higher or lower depending on the circumstances. ($139.2M), mine closure ($60.0M), doubtful debts ($21.0M) and diminution Taking away; reduction; lessening; incompleteness. The term diminution is used in law to signify that a record submitted by an inferior court to a superior court for review is not complete or not fully certified. in carrying value of investments ($10.7M), offset by gains on sale of non-current assets ($43.6M) and redesignation of hedging ($147.7M). (i) Contributions from Normandy Mt Leyshon Limited and Normandy NFM NFM Nebraska Furniture Mart NFM Network File Management NFM Network Fault Management NFM No Further Message NFM Near Field Monitor NFM National Firearms Museum (Fairfax, Virginia) NFM NATOPS Flight Manual NFM Northern Fowl Mite Limited (Tanami Operations) have been consolidated at 100 percent, with the minority interest deducted de·duct v. de·duct·ed, de·duct·ing, de·ducts v.tr. 1. To take away (a quantity) from another; subtract. 2. To derive by deduction; deduce. v.intr. as outside equity interest. (ii) Comprises Woodcutters, Gecko and Goldfields Pipeline part year contributions, and a 14 percent decline in zinc zinc, metallic chemical element; symbol Zn; at. no. 30; at. wt. 65.38; m.p. 419.58°C;; b.p. 907°C;; sp. gr. 7.133 at 25°C;; valence +2. Zinc is a lustrous bluish-white metal. It is found in Group 12 of the periodic table. and copper prices and orderly orderly /or·der·ly/ (or´der-le) an attendant in a hospital who works under the direction of a nurse. or·der·ly n. An attendant in a hospital. wind down costs. 1998 - Also includes Ariab, Lero and French kaolin. (iii)Adjusted for dissimilar accounting policies and amortisation charges. Includes Great Central Mines write down of the Australian Australian pertaining to or originating in Australia. Australian bat lyssavirus disease see Australian bat lyssavirus disease. Australian cattle dog a medium-sized, compact working dog used for control of cattle. Resources investment. (iv) 36.9 percent interest. Results are six months to 31 December 1998 as audited results to 30 June 1999 are not available. (v) 50 percent interest (includes Australian Magnesium magnesium (măgnē`zēəm, –zhəm), metallic chemical element; symbol Mg; at. no. 12; at. wt. 24.305; m.p. about 648.8°C;; b.p. about 1,090°C;; sp. gr. 1.738 at 20°C;; valence +2. investment). The gold contribution on a consolidated basis (not including Yandal Operations) was the second highest on record. Key features include: - record production from eight mines, offset by equipment failures at Kalgoorlie Operations and Big Bell, and low grade stockpile writedowns at Boddington and Big Bell resulting in an overall total cash cost increase to $335 per ounce ($320 per ounce); and - gold sales of 1.48 million ounces (1.51Moz) at a lower realised gold price of $596 per ounce ($613 per ounce) leading to a $32 per ounce decline in margin to $261 per ounce. The non-gold contribution reflects: - a lower industrial minerals contribution due to a lower zinc price and restricted supplies of scrap feed affecting Larvik, a lower magnetite contribution, a consequence of coal industry strikes, and $3.2 million after tax reclassified to "Share of Associates Net Profit"; - Golden Grove contribution marginally lower despite a much lower zinc price, with improved throughput and costs delivering a strong June quarter; and - discontinued operations. Exploration expense declined with the lower, more focused expenditures. In line with conservative accounting practices, loans to the majority of non-Australian exploration activities and all costs in the Americas were expensed. Administration expenses include restructure and Year 2000 costs. Abnormal items - a loss of $39.6 million before tax - include asset writedowns, mine closure, bad debt and investment provisions offset by redesignation of hedge gains and non core asset sales. The tax expense on operating profit Operating profit (or loss) Revenue from a firm's regular activities less costs and expenses and before income deductions. operating profit See operating income. pre-abnormals at 22 percent reflects the treatment of the hedge book realisation. The benefit of tax losses not previously recognised results in a gain after abnormals.
Statement of cash flows
CONSOLIDATED CASH FLOWS
for the twelve months ended 30 June 1999 1998
$M $M
--------------------------------------------------------------
Operating activities
Net cash inflow from mining operations 366.9 643.6
Expenditure on mining property
and plant (260.8) (283.4)
Exploration expenditure (110.1) (102.0)
Proceeds from sale of mining assets 16.0 4.5
Net operating cash flow 12.0 262.7
Investing, financing and other activities
Net payments for investments. (457.6) (163.6)
Net realisation of hedge book 659.9 -
Net (repayments of)/proceeds
from borrowings (17.2) 322.3
Net loans to other entities (18.6) (258.2)
Net interest paid (26.4) (16.2)
Administration and other costs (33.6) (54.8)
Proceeds from issue of shares and options 0.1 21.7
Dividends paid (60.0) (58.4)
Income tax paid (34.9) (45.1)
Cash received/(paid) on
disposal/(acquisition) of businesses 152.6 -
Net investing, financing
and other activities cash flow 164.3 (252.3)
Net increase/(decrease) in cash held 176.3 10.4
Cash at beginning of period 256.1 229.0
Exchange rate effect on cash held in foreign
currencies at beginning of period 7.5 16.7
Cash at end of period (1) 439.9 256.1
--------------------------------------------------------------
(1) Net of overdraft - $8.8 million ($0.8M).
Cash flows from mining activities, before capital and exploration expenditures, totalled $366.9 million. The decrease reflects lower gold contributions (principally the impact of the hedge book restructure) and lower metals contributions. Capital expenditure on mining property and plant includes construction and development at the Kasese cobalt Cobalt, town, Canada Cobalt (kō`bôlt), town (1991 pop. 1,470), E Ont., Canada, NE of Sudbury, near Lake Timiskaming. Once a center for cobalt and silver mining, the area is now economically depressed. project ($105.9M), Callie underground ($15.8M), Martha mine ($17.3M), Golden Grove expansion ($14.2M), Hedges property ($6.7M) and various feasibility studies The analysis of a problem to determine if it can be solved effectively. The operational (will it work?), economical (costs and benefits) and technical (can it be built?) aspects are part of the study. Results of the study determine whether the solution should be implemented. . Cash payments for investments ($457.6M) principally reflects acquisition of interests in TVX TVx Target Vertex TVX Transmission Valid Timer (FDDI) TVX Valid Transmission Normandy Americas and TVX Gold ($321.6M), and the restructure of Normandy LaSource. Net proceeds Net Proceeds The amount received after all costs are deducted from the sale of a piece of property or security. Notes: In the case of an investor selling a security, net proceeds represent the proceeds from the sale minus any trading costs (i.e. commissions). received on sale and acquisition of businesses represents sale of the gas pipeline and Millmerran coal ($164.3M), offset by the acquisition of additional equity in the Yamfo-Sefwi project. Net repayments of borrowings of $17.2 million comprises the repayment of the Chase facility ($546M), offset by the USD USD In currencies, this is the abbreviation for the U.S. Dollar. Notes: The currency market, also known as the Foreign Exchange market, is the largest financial market in the world, with a daily average volume of over US $1 trillion. notes ($403.2M) and Kasese project financing Project financing A form of asset-based financing in which a firm finances a discrete set of assets on a stand-alone basis. ($74.4M). Dividends of $60.0 million were paid, comprising the 1998 final dividend and the 1999 interim dividend of Normandy Group companies to outside shareholders.
Retained earnings
CONSOLIDATED STATEMENT
for the twelve months ended 30 June 1999 1998
$M $M
---------------------------------------------------------------
Retained earnings at beginning of period 169.3 133.4
Opening balance adjustment (1) (67.8) -
Net income 103.8 118.8
Dividends (2) (80.9) (82.9)
Retained earnings at end of period 124.4 169.3
--------------------------------------------------------------
(1) Adjustment for adoption of equity accounting for
associates under AASB 1018.
(2) Total dividends provided for $102.6 million ($99.8 million)
less over provision arising from shareholders electing to
take shares under the parent entity Share Investment Plan
$21.7 million ($16.9 million).
Balance sheet
SIMPLIFIED CONSOLIDATED BALANCE SHEET
as at 30 June 1999 1998
$M $M
--------------------------------------------------------------
Assets
Cash, bank bills and gold bullion 448.7 256.8
Receivables 426.2 396.4
Inventories 160.0 166.8
Mining property and plant 1,214.1 1,331.6
Development projects 62.1 130.4
Exploration expenditure 143.6 125.4
Investments 694.9 463.1
Other 247.7 205.8
Total assets 3,397.3 3,076.3
Liabilities
Accounts payable 154.4 137.6
Borrowings 994.0 988.7
Provisions 870.0 412.9
Other 5.8 38.9
Total liabilities 2,024.2 1,578.1
Net assets 1,373.1 1,498.2
Equity
Share capital (1) 1,130.3 334.1
Reserves 28.0 807.1
Retained profits 124.4 169.3
Outside equity interest 90.4 187.7
Total shareholders' equity 1,373.1 1,498.2
--------------------------------------------------------------
(1) Share premium reserve transferred to share capital in current year. The decrease in mining property and plant reflects the sale of the Goldfields gas pipeline and mine asset writedowns, partly offset by capital additions at Kasese. Development projects represent expenditure capitalised on Ovacik, Mastra and Perama gold projects. Investments increased following the acquisition of interests in TVX Normandy Americas ($285 million) and TVX Gold ($37 million). Borrowings comprise the US$250 million Notes issued in July 1998, the US$65 million Convertible Bond, the 500,000 ounce gold denominated Notes and external debt incurred in financing the Kasese, Ovacik and Callie projects. The increase in provisions is principally $434.1 million deferred income relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc the hedge book restructure. Also included is a $135 million provision for mine closure and provision for a $60.1 million final dividend. Investor information Stock Exchange Listings Australian Stock Exchange (Ticker Symbol NDY) Toronto Stock Exchange (Ticker Symbol NDY) Montreal Exchange (Ticker Symbol NDY) Issued Capital At 30 June 1999, issued capital was 1,717,179,710 shares There are 248,537,609 listed options exercisable at $2.50 per option until 30 April 2001. Major Shareholders Westpac Custodian Nominees 21.33 percent National Nominees 10.19 percent ANZ Nominees 8.69 percent Chase Manhattan Nominees 7.62 percent Substantial Shareholders Tiger Management Corporation 11.68 percent Maple Brown Abbott 7.52 percent ADS Depositary The Bank of New York 101 Barclay Street, New York, NY 10286 Telephone +1 212 815 2204 Facsimile +1 212 571 3050 Shareholder Enquiries Matters relating to shares held, change of address, tax file number and dividends should be directed to the Share Registry: National Shareholder Services Pty Limited 100 Hutt Street, Adelaide 5000 South Australia, Australia Telephone +61 8 8232 0003 Facsimile +61 8 8232 0072 Share Price Movement Quarter High Low September 1998 $1.47 $0.96 December 1998 $1.60 $1.31 March 1999 $1.56 $1.25 June 1999 $1.54 $0.96 Web Site http://www.normandy.com.au |
|
||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion