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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 Metmar Results.

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Presentation on theme: "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 Metmar Results."— Presentation transcript:

1 Welcome to the results presentation of the Metmar Limited financial year end results for the period ended on 28 February / 06 May 2014 Metmar Results Presentation

2 Programme of events Snapshot of the results Metmar Trading Metmar Investments & Resources Looking forward Questions to the panel Further conversation

3 David Ellwood CEO of Metmar Limited Sizwe Nkosi CFO of Metmar Limited Snapshot of the results

4 Aggressive write-down of investment portfolio following completion of review process Board and leadership strengthened through the appointment of seasoned industry professionals Good progress made on Core Investments Increased revenue as a result of product diversification, focused trading strategy and a weakening exchange rate Core Trading business prospered despite challenging trading conditions Company Highlights

5 5% increase in traded volumes to 731,429 tonnes 38% growth in turnover to R2.1 billion EBITDA from Core Trading grows to R82 million (2013: R1.3 million) 42% reduction in headline loss, notwithstanding aggressive write-down of investment portfolio Cash generated from operations increased to R41.9 million (2013: R78.2 million utilised) Operating costs reduced by 23% to R126.2 million (2013: R162.9 million) Financial Highlights STRATEGIC REFOCUS ON CORE TRADING STARTING TO BEAR FRUIT

6 David Ellwood Metmar Trading Metmar Trading

7 Metmar Trading performance Key Area 2014 R’m 2013 R’m % change Core Trading Revenue % Gross Margin 5.9%4.6%28% EBITDA % Profit/(Loss) after Tax 50.3(28.9)274% Discontinued Operations (Loss)/Profit after Tax (22.0)17.9(223%) Kalagadi Tolling Project Loss after Tax (15.5)0-

8 Metmar Trading - Core Trading 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) CORE TRADING RETURNS TO PROFIT driven by product diversification, focused trading strategy and better cost control

9 Metmar Trading - Discontinued Operations 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) WAG SOLD IN MANAGEMENT BUYOUT generating R53.7 million in cash

10 Metmar Trading - Kalagadi Tolling Project 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 FIRST BULK SHIPMENT OF 44,000 TONNES SOLD and vessel sailed from Saldanha in early April

11 Michael Golding COO of Metmar Investments & Resources Metmar Investments & Resources (“MIR”)

12 MIR performance Description 2014 R’m 2013 R’m % change Revenue % Gross Margin 25.0%(8.8%)384% EBITDA/(LBITDA) 49.6(27.8)278% Loss after Tax (140.2)(94.1)(49%)

13 MIR performance 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) AGGRESSIVE WRITE DOWN OF INVESTMENT PORTFOLIO following completion of portfolio review

14 MIR performance Breakdown of MIR revenue by contribution: Carbon products (including coke) – 63% Alumina slag – 19% Recycled plastic products – 18% Breakdown of MIR impairments: Impairments as per Income Statement – R145.5 million Less: Inventory impairment – R18.1 million Impairments relating to investments – R127.4 million

15 David Ellwood CEO of Metmar Limited Looking forward

16 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: Trading of sintered manganese in terms of the tolling agreement and Kalagadi’s own operation Cost management and efficiency initiatives Appointment of Rob Still as Chairman Sefateng mining right expected to be granted in H New orders for a wide spectrum of commodities, e.g. Iron ore, Steel scrap Improve working capital management (new treasury system) and expand trade and other finance facilities Changed incentive arrangements to foster greater employee drive towards profitability

17 David Ellwood CEO Metmar Limited and Metmar Trading Michael Golding COO Metmar Investments & Resources Sizwe Nkosi CFO Metmar Limited Sean Naylor IRO Metmar Limited Questions to the panel

18 Thank you


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