Financial review. We experienced strong growth from our financial services and industrial assets

Transcription

1 Financial review We experienced strong growth from our financial services and industrial assets RBH has redeemed some of its debt ahead of schedule in 213, resulting in a drop in gearing from 25% in 212 to 24% in 213. The poor performance of our mining investments resulted in the overall gross RBH portfolio delivering an IRR of 2.9% for 213, despite very strong operational and share price performances from our non-mining assets. An 11% weaker platinum price (to which RBH s portfolio is heavily exposed) was just one of the drivers of the poor performance from the mining portfolio (-18% for the year). Adding to the global challenges facing the mining portfolio were some operational, geological and political issues, with rand weakness providing some respite. As articulated in the platinum challenges and opportunities section on page 18, there is a combination of factors that most affect the mining portfolio, including ongoing labour unrest. Dividend income declined by 11% during the year, driven by lower dividends from Implats. The RMB Holdings and RMI Holdings dividends were used to service debt. No dividends were paid to RBNDT (212: R192 million). 36 Integrated Review 213

2 Operations Dividends received and paid (R million) 1,8 1,6 1,4 1,2 1, ,638 1, Dividends received Dividends paid Gross asset value (R million) 4, 35, 3, 25, 2, 15, 1, 5, 8,827 22,357 29,292 19,993 27, ,15 34,96 39, Net asset value (R million) 35, 3, 25, 2, 15, 1, 8,827 22,115 28,749 17,798 25,478 29,732 24,79 29,567 3,312 5, Cumulative total return performance (R million) RBH ALSI (Based to 1) Portfolio value The capital value of RBH s gross assets was flat at R39 billion. Large declines in our mining asset values were offset by strong growth from our financial services and industrial assets. By way of example, RMB Holdings and RMI Holdings combined (+28%), Attacq (formerly Atterbury Investment Holdings) (+68%), and Metair (+22%) helped to offset the poor performance from our mining assets (-18%). RBH disinvested from Astrapak, MB Technologies and Pasco during 213, and applied the proceeds towards retirement of debt and further investments in Attacq, M-Tech Industrial and MOGS. Due to debt repayments and gross asset values remaining flat, the net asset value increased to R3 billion. 37

3 Financial review continued Relative cumulative total return performance The RBH gross asset portfolio delivered a 2.9% IRR for 213, which was below the ALSI s 21.4% total return due to RBH s high exposure to underperforming mining companies. Due to our exposure in platinum mining shares for historical reasons, RBH underperformed the ALSI in 28, 211, 212 and 213. Nevertheless, the company outperformed the ALSI on a cumulative basis, despite the ALSI s bull run (even including the financial crisis) and RBH s overweight position in underperforming platinum shares. RBH s IRR on gross assets over the past eight years was 18.8% p.a., compared with the ALSI s 15.7% compound annual total return per annum for the same period. Sectoral split by value The R7.8 billion investment in financial services during 211 transformed the portfolio from being one dominated by resources Gross asset value by sector (%) Mining 41.2 Financial services 41.2 Industrials 1.9 Mining, oil and gas services 3.8 Infrastructure 11.7 Other <1 shares, to being more diversified. The non-mining investments, together with the underperformance of mining investments, have caused the mining exposure to decline from 81% in 21 to 41% in 213. RBH asset portfolio as at 31 December 213 The value of gross assets (flat year-on-year) was boosted by small investments, the strong performance of our financial services and certain industrial investments, but offset by the underperformance of the mining investments and certain disinvestments during the year. RBH s gross assets IRR versus ALSI and Resources Index (RESI) total return RBH % (gross assets) JSE ALSI JSE RESI IRR: IRR: Integrated Review 213

4 Operations Attacq is a leading South African capital growth fund in the real estate sector. 39

5 Financial review continued RBH Asset Portfolio as at 31 December 213 R million 213 % change Market value of listed investments 34,847 1 Impala Platinum 1, Royal Bafokeng Platinum 5,526 3 Merafe Resources RMB Holdings 1, RMI Holdings 6, Attacq Limited 1,42 96 Metair Astrapak Directors' valuation of unlisted investments 4,85-4 Vodacom SA 3,261 4 Fraser Alexander MOGS Other Gross asset value 39,697 Less: liabilities 9, RMB Holdings 4, RMI Holdings 2, Vodacom SA 1, Corporate debt MB Tech - Zurich Insurance Company of South Africa Net asset value 3,312 3 nm = not meaningful 4 Integrated Review 213

6 Operations 212 % change 211 % change 21 % change 29 34, , , ,176 13,938 13, , ,872 5, , , , , ,8 8, ,781 nm 4, ,986 nm nm ,37-5 5, , ,532 3, ,55 1 2,31 1 2,15 1, , , , ,463 39, , , ,78 9, , , ,23 4, ,141 nm 2, ,727 nm 1, ,775 1,77 1, nm 1, nm 496 nm 29,567 2% 24,79 29,732 17% 25,478 41