RNS Number:0282P
Metorex Ld
26 August 2003


Metorex Limited

Registration number 1934/005478/06

Incorporated in the Republic of South Africa

Listed on the JSE Securities Exchange South Africa and London Stock Exchange

Share code MTX

ISIN code ZAE000022745

Issuer code MEMTX

www.metorexgroup.com

("the Group")

Reviewed consolidated results for the financial year ended 30 June 2003

New Gold acquisition exceeds expectations

Coal performance excellent

Fluorspar quality improves to world standards

Rand strength impacts negatively on earnings

Chib South and Middelburg Townlands developments progressing

Consolidated income statement
                                                                               Year ended                     Year ended
                                                                             30 June 2003                   30 June 2002
                                                                               (Reviewed)                      (Audited)
                                                                                     R000                           R000
Revenue
Mineral sales
Copper                                                                            290 092                        340 441
Zinc                                                                               83 492                        105 774
Coal                                                                              179 236                        122 928
Fluorspar                                                                          93 730                        119 746
Gold                                                                              105 703                         80 291
Antimony                                                                          121 484                         71 772
Cobalt                                                                              5 986                         15 558
Other                                                                               6 594                          6 441
Gross revenue                                                                     886 317                        862 951
Realisation costs                                                                 150 709                        170 524
On-mine revenue                                                                   735 608                        692 427
Cost of production                                                                653 120                        553 619
Depreciation                                                                       40 934                         30 397
Mining profit                                                                      41 554                        108 411
Foreign exchange (losses)/gains                                                   (5 948)                          3 066
Other income                                                                        3 890                          6 024
Income before exceptional items
and finance costs                                                                  39 496                        117 501
Finance income                                                                      4 692                          5 539
Finance costs                                                                    (18 926)                       (12 010)
Income before exceptional items                                                    25 262                        111 030
Exceptional items                                                                       -                      (132 702)
Income/(Loss) before taxation                                                      25 262                       (21 672)
Taxation - normal and STC                                                           6 820                         25 257
Taxation - deferred                                                                 5 630                       (31 943)
Income/(Loss) after taxation                                                       12 812                       (14 986)
Income attributable to outside
Shareholders                                                                        2 459                          8 088
Income/(Loss) attributable to
ordinary shareholders                                                              10 353                       (23 074)
Earnings per share (cents)                                                            7,4                         (18,6)
Headline earnings per share
(cents)                                                                               9,1                           72,8
Diluted earnings per
share (cents)                                                                         7,4                         (18,6)
Diluted headline earnings
per share (cents)                                                                     9,1                           72,8
Dividend per share (cents)                                                           14,0                           12,0
Earnings per share and headline
earnings per share are
calculated using the following:
Income attributable to ordinary
Shareholders                                                                       10 353                       (23 074)
Exceptional items net of tax                                                            -                        112 368
Exceptional items                                                                       -                        132 702
Tax effect on exceptional items                                                         -                       (20 334)
Goodwill amortisation                                                               3 662                          3 662
Profit on sale of assets                                                          (1 704)                        (3 720)
Tax effect on sale of assets                                                          511                          1 116
Headline earnings (R000's)                                                         12 822                         90 352
Weighted average number of
shares in issue (000's)                                                           140 498                        124 140
Number of shares in issue at
year end (000's)                                                                  175 019                        138 970

Consolidated balance sheet
                                                                             30 June 2003                   30 June 2002
                                                                               (Reviewed)                      (Audited)
                                                                                     R000                           R000
ASSETS
Non-current assets
Property, plant and equipment                                                     499 952                        239 346
Mineral rights                                                                    218 288                        240 665
Goodwill                                                                           21 971                         25 633
Investments                                                                           891                            891
Rehabilitation trust funds                                                         41 063                         21 636
Deferred tax asset                                                                      -                          8 030
                                                                                  782 165                        536 201
Current assets
Inventories                                                                        53 074                         70 858
Trade and other receivables                                                       109 072                        110 809
Derivative instruments                                                                840                              -
Taxation prepaid                                                                    9 550                          6 314
Bank balances and cash                                                             23 498                         82 986
                                                                                  196 034                        270 967
Total assets                                                                      978 199                        807 169

EQUITY AND LIABILITIES
Capital and reserves
Share capital and premium                                                         473 204                        383 083
Hedging and translation reserve                                                  (32 391)                         10 924
Retained income                                                                   116 069                        125 175
Equity reserve                                                                  (128 066)                      (128 066)
                                                                                  428 816                        391 116
Minority interest                                                                  16 699                         16 490
Non-current liabilities
Long-term liabilities
interest bearing                                                                  179 974                         84 907
Long-term provisions                                                               71 081                         48 434
Deferred tax liabilities                                                           56 370                         71 283
Deferred income                                                                     1 343                              -
                                                                                  308 768                        204 624
Current liabilities
Trade and other payables                                                          124 582                        102 224
Derivative instruments                                                                  -                            380
Short-term borrowings
interest bearing                                                                   45 080                         57 734
Short-term provisions                                                              28 168                         14 517
Bank overdraft                                                                     25 554                          9 353
Taxation                                                                              532                         10 731
                                                                                  223 916                        194 939
Total equity and liabilities                                                      978 199                        807 169
Net asset value per
share (cents)                                                                         245                            281
Net tangible asset value per
share (cents)                                                                         233                            263

Statement of changes in equity
                                                                             30 June 2003                   30 June 2002
                                                                               (Reviewed)                      (Audited)
                                                                                    R 000                          R 000
Share capital                                                                      17 502                         13 897
- Balance at start of year                                                         13 897                         12 073
- Issue of new shares                                                               3 605                          1 824
Share premium                                                                     455 702                        369 186
- Balance at start of year                                                        369 186                        313 578
- Issue of new shares                                                              86 516                         56 472
- Share issue expenses                                                                  -                          (864)
Reverse acquisition reserve                                                     (128 066)                      (128 066)
Foreign exchange translation
Reserve                                                                          (33 231)                         11 304
- Balance at start of year                                                         11 304                        (4 903)
- Foreign exchange reserve                                                         15 832                       (18 309)
- Translation (loss)/gain on foreign monetary item                               (84 631)                         42 230
- Tax effect of translation
(loss)/gain on foreign
monetary item                                                                      24 264                        (7 714)
Hedging reserve                                                                       840                          (380)
- Balance at start of year                                                          (380)                              -
- Change in accounting policy                                                           -                            718
- Restated hedging reserve                                                          (380)                            718
- Fair value gains/(losses)
for the year                                                                        5 603                       (10 227)
- Foreign exchange movement                                                          (92)                              -
- Transferred to income
Statement                                                                         (4 291)                          9 129
Retained income                                                                   116 069                        125 175
- Balance at start of year                                                        125 175                        162 746
- Net income/(loss) for
the year                                                                           10 353                       (23 074)
- Dividends distributed                                                          (19 459)                       (14 497)
Total equity                                                                      428 816                        391 116

Consolidated cash flow statement
                                                                             30 June 2003                   30 June 2002
                                                                               (Reviewed)                      (Audited)
                                                                                     R000                           R000
Cash generated before working
capital changes                                                                    82 388                        145 147
Working capital changes                                                            11 828                       (62 730)
Cash generated by operations                                                       94 216                         82 417
Dividends received                                                                      -                             47
Dividends paid                                                                   (21 709)                       (20 706)
Taxation paid                                                                    (20 159)                       (33 793)
Finance costs                                                                    (14 234)                        (6 471)
Cash inflows from operating
Activities                                                                         38 114                         21 494
Cash outflows from
investing activities                                                             (39 986)                       (94 061)
Cash (outflows)/inflows from
financing activities                                                             (53 109)                         79 161
Net increase in cash and
cash equivalents                                                                 (54 981)                          6 594
Cash at beginning of year                                                          95 269                         88 186
Effect of foreign exchange
rate changes                                                                      (1 281)                            489
Cash at end of year                                                                39 007                         95 269

Segmental report - 2003
                                                                                                           Mining profit
                                                                            Revenue                   (Pre-depreciation)
                                                                                  %                                    %
Copper                                                                           33                                   17
Flourspar                                                                        11                                   21
Zinc                                                                              9                                    5
Antimony/Gold                                                                    26                                   34
Coal                                                                             20                                   23
Other                                                                             1                                    -
                                                                                100                                  100
                                                                               2003                                 2002
Exchange rate (average)                                                        9,07                                10,10
Exchange rate (year-end)                                                       7,58                                10,31


        COMMENTARY

        METOREX GOLD ACQUISITION

        The recent gold mine acquisition of BML (ETC division of Avgold) from
        Avgold, with our empowerment partner MCI Gold(Pty) Ltd, has exceeded
        initial production expectations. These production improvements combined
        with the forward sale contracts, of 177 kilograms (+/- 65% of
        production) per month at a price of R103 462 per kilogram for the
        forthcoming three years, generated profits for the two weeks of
        ownership in the financial year.

        Good progress has been made in converting BML to a Metorex style of
        management with positive feedback from the on-mine staff.

        OPERATING PERFORMANCE

        Group base metal operations experienced a difficult and frustrating
        year. While the metal prices in US Dollars were generally most welcome,
        the strengthening of the Rand/Dollar exchange rate negated these
        benefits. Production problems at Chibuluma West and O'Okiep compounded
        these financial effects to produce a disappointing contribution from the
        group's copper operations. Zinc profits were also materially affected by
        the Rand's strength although production at Maranda remained stable.

        Coal operations had a commendable year with gratifying increases in both
        sales volumes and prices.

        Fluorspar operations at Vergenoeg achieved significant progress in their
        primary objective of improving product quality. It is now clear that a
        globally competitive product can be produced, which will command
        significantly higher prices on world markets. The impact of this
        achievement during the past year has been an increase in unit production
        costs and reduction in recovery and saleable product, which together
        with the impact of the exchange rate, resulted in significantly lower
        profitability.

        Gold and antimony production at Cons Murch was lower than anticipated
        due to lower grades however, improved profit performance was forthcoming
        due to increased gold and antimony prices and Cons Murch achieved record
        profits.

        The increase in the cost of production was primarily due to increased
        production volumes and mix at Cons Murch and the coal operations, the
        inclusion of BML operating costs and a reduction in product stock
        levels. The depreciation charge increased with the commissioning of the
        O'Okiep slag plant during the year.

        FINANCIAL POSITION AND CASHFLOW

        The Group net asset value increased to R429 million with the issue of 36
        million shares for the funding of the gold acquisition.

        The current ratio decreased to 0,88 : 1 due to the consolidation of the
        BML net current liability position of R33 million on acquisition
        immediately prior to year-end. This acquisition also absorbed a portion
        of the group's cash reserves.

        Cash generated by operations increased by R12 million to R94 million for
        the year ended 30 June 2003. After dividends, tax and finance costs the
        Group cash inflow from operating activities amounted to R38 million.
        Debt repayments amounted to R53 million and capital expenditure of R30
        million was funded with cash resources. Further cash was allocated to
        the acquisition of ETC and related costs, all of which have temporarily
        reduced the Group current ratio.

        FUTURE PROSPECTS

        The Group is partially protected against a strong Rand due to the local
        sales generated by its profitable coal operations and the hedged gold
        book at Barberton Mines Limited, which provides a sustained price of
        R103,462/kg gold for 177 kg per month.

        The hedge book enables Barberton to sell total production at hedged
        prices where spot gold is at a low level.

        COPPER AND COAL EXPANSIONS APPROVED

        The opening of the Chibuluma South sulphide orebody was approved with
        the Industrial Development Corporation as equity partners in the
        project. Development of the decline shaft will commence in September
        2003 with Metorex responsible for 13% of the project funding.

        A plant for the new Middelburg Townlands coal project was purchased and
        will be modified for production to commence in early 2004 producing low
        phosphorus coal.

        FINAL DIVIDEND APPROVED

        A final dividend of 3 cents per share has been approved for declaration
        giving a total dividend for the financial year of 7 cents per share
        (2002: 10 cents per share). This exceeds the policy of 20 - 30% of
        earnings but recognises the cash earnings of the group.

        CAPITAL EXPENDITURE AND COMMITMENTS

        Group capital expenditure, excluding the acquisition of ETC, totalled
        R30 million (2002: R99 million), which mainly related to the smelter
        refurbishment at O'Okiep and machinery upgrades at the coal operations.

        Contracted capital commitments at 30 June 2003 amount to R1 million
        (2002: R1 million), whilst uncontracted commitments amount to R7 million
        (2002: R5 million).

        Operating lease commitments, which fall due within one year amount to R3
        million (2002: R2 million), whilst commitments of R5 million (2002: R2
        million) fall due in years two to five.

        SHARES ISSUED

        On 13 June 2003, Metorex issued 36 million shares at a price of 250
        cents per share as part of the BML acquisition.

        AUDIT REVIEW

        Deloitte & Touche, the company's auditors, have reviewed the financial
        results. A copy of their unqualified reviewed report is available for
        inspection at the company's registered office.

        ACCOUNTING POLICIES

        The financial statements have been prepared on the historical cost
        basis, except for certain financial instruments and the assets and
        liabilities acquired with a business, which are stated at fair value and
        in accordance with International Financial Reporting Standards
        applicable to Interim Financial Reporting. The accounting policies are
        consistent with those adopted in the previous year.

        SAFETY

        The Group safety record for the year was marred by four fatal accidents.
        Two occurred at Wakefield and one each at Maranda and Consolidated
        Murchison.

        The Group strives to conduct it's activities with due regard to the
        safety and health of its employees.

        A.S. MALONE

        Chairman

        C.D.S NEEDHAM

        Financial Director

        DECLARATION OF DIVIDEND

        Notice is hereby given that a final dividend referenced 006 of 3 (three)
        cents per share has been declared in respect of the year ended 30 June
        2003. The dividend, which is declared in the currency of the Republic of
        South Africa, will be paid on 29 September 2003.

        The last day to trade in the company's shares for purposes of
        entitlement to the dividend is Thursday, 18 September 2003. The shares
        will commence trading ex-dividend on Friday, 19 September 2003 and the
        record date is Friday, 26 September 2003. Share certificates may not be
        dematerialised or rematerialised from Friday, 19 September 2003 to
        Friday, 26 September 2003, both days inclusive.

        By order of the board

        26 August 2003

        Secretaries

        Moore Stephens MWM

        7 West Street

        Houghton, 2198

        Transfer secretaries

        Computershare Limited

        70 Marshall Street

        Johannesburg, 2001

        Contact details for Metorex Limited and Corporate Advisers

        Metorex Limited

        Postal: PO Box 2814 Saxonwold 2132 South Africa

        Telephone: (+27 11) 880-3155

        Facsimile: (+27 11) 880-3322

        website: www.metorexgroup.com

        e-mail info@metorexgroup.com

        Registrars: South African and United Kingdom

        Computershare Limited

        PO Box 1053 Johannesburg 2000

        South Africa Telephone: (+27 11) 370-5000

        Capita Group plc The Registry 34 Beckenham Road

        Beckenham Kent BR 34 TU England

        Telephone: (+44 208) 639-2486

        Fax: (+44 208) 639-2279

        Company Secretaries:

        Moore Stephens MWM PO Box 1574 Houghton, 2041

        Telephone (+27 11) 728-7240

        Auditors: Deloitte & Touche Private Bag X6 Gallo Manor, 2052 RSA

        Telephone: (+27 011) 806-5000



                      This information is provided by RNS
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