METMAR LIMITED Incorporated in the Republic of South Africa (Registration number 1998/007269/06) Share code: MML ISIN code: ZAE000078747 ( Metmar or the Company or the Group ) interim financial results for the six months ended Highlights Core trading business profitable in challenging market environment Sefateng Chrome project issued with Mining Right Long-term chrome off-take agreement signed with Sefateng Chrome Shipment of manganese sinter from Kalagadi tolling commences Turnover up 11% Operating expenses down 4% Financial performance (See also divisional performance report hereunder) Description Unit of measurement August August % increase/ (decrease) Volumes Tonnes 336 350 321 197 5 Revenue R m 1 035,4 933,0 11 Gross margin % 5,0 7,1 (30) Trading margin (non-ifrs)^ % 5,1 7,9 (35) Operating expenses (excluding impairments) R m (60,8) (63,3) (4) EBITDA R m 11,1 29,9 (63) Net impairments and fair value adjustments R m (6,6) 7,5 (188) Attributable loss per share Cents (11,4) (17,4) (34) Headline loss per share Cents (22,5) (11,0) 105 Closing net cash balance R m 14,2 85,4 (83) Total assets R m 1 386,2 1 597,3 (13) Net asset value R m 410,5 600,2 (32) ^Trading margin is calculated as gross margin less contract expenses (including contract finance costs and realised gain/loss on forex) that are not cost of sales per IFRS. Owing to commencement of sale of manganese sinter, turnover increased by 11%. A general decline in commodity prices such as manganese and iron ore, which in the last 12 months have declined by 23% and 25% respectively, led to margin contraction. A gross margin of 5% was achieved, which is 30% below the same period last year. This equates to a R15,2 million decline in gross profit in absolute terms. Trading margin of 5,1% is lower than the 7,9% achieved in the previous period due to the aforementioned drop in key commodity prices. Operating expenses declined by 4% to R60,8 million reflecting an effective cost containment strategy critical in the midst of weak commodity prices. EBITDA of R11,1 million is 63% down from the previous period as a result of low gross margins. Fair value adjustments relate to mark-to-market losses of R23,0 million arising from Alphamin Resources share price decline from 39 CAD cents to 21 CAD cents and Afarak Group share price decline from 37 EUR cents to 31 EUR cents. The investment in Afarak Group is non-core and its disposal is in progress. An impairment reversal amounting to R29,6 million was implemented following the award of the mining right to Sefateng Chrome. The recently signed off-take agreement will be valued at financial year end. Finance costs of R40,8 million, 6% up from the previous period, are expected to reduce in the second half as manganese sinter sales become more regular. As a result of the above, the attributable loss for the period decreased by 34% to R30,4 million, while headline loss increased to R60,1 million. Divisional performance and prospects The Group comprises two reportable segments which are trading and investments. interim financial results for the six months ended 1
Trading The trading activities are further subdivided into Core trading and Kalagadi tolling project. Key area Unit of measurement August August % (decrease)/ increase Core trading Revenue R m 839,5 917,1 (8) Gross margin % 4,7 6,3 (25) EBITDA R m 21,1 33,7 (37) Profit/(loss) before discontinued operations R m 11,1 (1,9) 684 Discontinued operations R m (22,0) 100 Kalagadi tolling project Revenue R m 182,6 100 Gross margin % 3,7 100 EBITDA R m 3,1 100 Loss after tax R m (13,0) (100) Core trading Core trading revenue decreased by 8% to R839,5 million. Volumes (excluding sinter) were 23% down on the prior year mainly due to volume decreases in zinc, chrome and manganese ore. Tin, coal, and iron ore volumes increased compared to the prior period. Gross margins of 4,7% were 25% down as a result of unfavourable product mix and reduced prices in commodities such as iron ore. Although EBITDA was down 37%, profit before discontinued operations was R11,1 million compared to a loss of R1,9 million in the previous year. Tolling project The Kalagadi tolling project made a loss of R13,0 million mainly due to high interest charges arising from financing inventory. Manganese commodity prices decreased significantly over the period resulting in lower profit margins than forecast. After solving numerous commissioning issues, the sinter plant is now stable and we expect higher production to drive increased sales volumes in the second half, as well as decreasing inventory levels and finance charges. Investments Description Unit of measurement August August % decrease Operating expenses R m (13,6) (32,3) (58) Net finance charges R m (6,1) (8,2) (26) Investments revenue was negative in the current year following the reversal of intercompany sales and profits with Metmar Trading. Operating expenses are down 58% to R13,6 million and this trend is expected to continue into the second half. Net finance costs have decreased by 26% and are expected to further decrease as coke breeze is consumed in the sinter tolling project. Over the past two years various investments were impaired, and where uncertainties existed, non-core investments were identified and transferred to non-current assets held for sale. Our investment portfolio is now streamlined to withstand market fluctuations. The five core investments are: Kalagadi Manganese (effective 4,6% interest Manganese) Sefateng Chrome Mine (effective 19,9% interest Chrome) Alphamin Resources (3,5% interest Tin) FPT Minerals (26% interest Container handling facility) Steelpoort Chrome Mines (51% interest Chrome) Core investments gained traction during the period. The signing of a long-term off-take agreement for chrome following the award of a Mining Right to Sefateng Chrome will result in significant additional volumes going forward. The off-take will require minimal cash investment from Metmar Trading to commence mining, as well as providing stability to future trading volumes. FPT Minerals, a 26% held investment in a container handling facility located in Maputo, completed its commissioning in January and material from Sefateng Chrome will fully utilise its current capacity of 30 000 tonnes per month. 2 interim financial results for the six months ended
The Kalagadi Manganese sinter plant began production during the period. Commissioning issues have been addressed and the plant is now running at a production level to match improving outbound logistics. Production volumes are expected to be higher in the second half as the technical team fine tunes the production process. Alphamin Resources declared further drilling results which firmed up its resource status. An updated resource statement is expected in the second half of the financial year. Steelpoort Chrome is currently completing an application for a water use licence which will be submitted in the second half of the financial year. Upon award of this licence, Steelpoort Chrome will commence mining under its existing mining right and deliver chrome to Metmar as per the signed off-take agreement. The process of disposing non-core assets gained momentum during the period. Most of the property, plant and equipment previously disclosed as non-current assets held for sale were successfully disposed of during the period. All other non-core investments are held at minimal investment balances, pending sale or conversion to cash-generating assets. The appointment of Mr Rob Still as Chairman of the Company has further strengthened the board and enabled the removal of acting positions. Metmar Trading China has been in operation since January allowing further upward integration for the Company. Its effectiveness is already benefiting the business through agents fees cost savings, increased access and interaction with customers and quick turnaround times. Our strategy over the last year has been and still is to refocus on Core trading activities. We will continue to take further steps to clarify and expand our strategic intent as part of improving accountability and ownership. The key areas of focus going forward are: Core trading Kalagadi tolling project Sefateng Chrome off-take Core investments including chrome, manganese, tin and container handling facility We believe the business is appropriately resourced and structured to deliver on our strategy. The departure of Mr Michael Golding comes after fulfilling his intentions of successfully trimming, restructuring and streamlining the Investments business, which we believe is now better positioned to deliver on its objectives by the remaining investments team. Directorate Our non-executive Chairman, Mr Rob Still, was appointed by the board on 1 May. Luigi Matteucci stepped down as an acting chairman of the Company and reverted back to his role as chairman of the audit and risk committee. Subsequent to the period end Adv KD Moroka tendered her resignation as an independent non-executive director of the company, as well as a member of the audit and risk committee of the board. This follows her decision to scale down on her commitments, board positions and business activities. The board and the management of Metmar are grateful for her contribution and take this opportunity to wish her all the best in her future endeavours. Subsequent events There are no major events subsequent to the period end that warrant being reported on. Outlook Declining growth rates in China reflect a subdued commodity market. Chinese buyers have been opportunistic as commodity prices have weakened during the period. Many mines and commodity trading companies are not sustainable at these reduced commodity prices and hence natural attrition has prevailed which provides opportunities for the Company. Going forward we intend to continue ramping up and exploiting signed off-take agreements, deliver profits from the sinter tolling agreement, reduce costs and seek diversified profitable opportunities. interim financial results for the six months ended 3
Condensed consolidated statements of financial position Note at at at ASSETS Non-current assets Property, plant and equipment 83 069 33 213 82 463 Goodwill and other intangible assets 48 222 102 207 48 222 Investment in associates 3 60 897 89 750 32 316 Other long-term financial assets 4 213 395 211 409 230 521 Deferred tax 12 461 18 864 23 238 418 044 455 443 416 760 Current assets Inventories 536 859 501 536 547 832 Other short-term financial assets 4 44 132 28 436 Current tax receivable 2 558 2 314 Trade and other receivables 361 630 474 395 512 541 Cash and cash equivalents 6 38 036 85 664 53 275 936 525 1 108 285 1 144 398 Non-current assets classified as held for sale 4 31 611 33 550 9 180 Total assets 1 386 180 1 597 278 1 570 338 EQUITY AND LIABILITIES Capital and reserves 410 518 600 159 442 349 Non-current liabilities Borrowings 1 626 13 413 2 759 Other liabilities 2 930 Deferred tax liabilities 26 206 32 958 26 206 27 832 49 301 28 965 Current liabilities Trade and other payables 5 915 205 941 208 1 086 672 Current tax liabilities 2 406 5 947 Bank overdraft 6 23 790 211 6 941 401 941 419 1 092 625 Non-current liabilities classified as held for sale 6 429 6 399 6 399 Total liabilities 975 662 997 119 1 127 989 Total equity and liabilities 1 386 180 1 597 278 1 570 338 Net asset value per share (cents) 153,58 224,52 165,48 Net tangible asset value per share (cents) 135,54 186,28 147,44 Number of shares in issue 267 306 552 267 306 552 267 306 552 4 interim financial results for the six months ended
Condensed consolidated statements of comprehensive income Note Continuing operations Revenue 1 035 430 933 015 2 097 435 Cost of sales (984 139) (866 518) (1 962 293) Gross profit 51 291 66 497 135 142 Other income 7 13 968 12 574 20 748 Operating expenses 8 (60 830) (63 333) (121 673) Operating profit 4 429 15 738 34 217 Finance income 8 593 11 819 13 417 Impairment reversals/(losses) 29 634 (4 171) (155 372) Fair value adjustments (23 032) (3 319) 18 606 Loss from equity accounted investment (1 053) (6 379) (12 245) Finance costs 9 (40 769) (38 583) (64 337) Loss before taxation (22 198) (24 895) (165 714) Taxation 10 (8 518) (1 908) 4 936 Loss for the period from continuing operations (30 716) (26 803) (160 778) Discontinued operations Loss before taxation (22 528) (20 348) Taxation 1 244 (1 651) Loss for the period from discontinued operations 2 (21 284) (21 999) Total Loss before taxation (22 198) (47 423) (186 062) Taxation (8 518) (664) 3 285 Loss for the period (30 716) (48 087) (182 777) Other comprehensive (loss)/income: (1 656) 3 696 (25 423) Revaluations of investments and deferred tax on financial assets (31 932) Movement in foreign currency reserves (1 656) 3 696 6 509 Total comprehensive loss for the period (32 372) (44 391) (208 200) Loss attributable to: Owners of the parent (30 418) (46 625) (162 729) Non-controlling interests (298) (1 462) (20 048) (30 716) (48 087) (182 777) Total comprehensive loss attributable to: Owners of the parent (32 074) (42 929) (182 777) Non-controlling interests (298) (1 462) (25 423) (32 372) (44 391) (208 200) Loss per share: Basic and diluted (cents) (11,4) (17,4) (60,9) Headline (cents) 11 (22,5) (11,0) (17,6) Weighted average number of shares 267 306 552 267 306 552 267 306 552 interim financial results for the six months ended 5
Condensed consolidated statements of changes in equity Share capital and premium Foreign currency translation reserve Revaluation reserve Acquisition of shares in subsidiary Shareholders loans Retained earnings Noncontrolling interests Balance at 1 March 160 004 1 191 22 055 (27 547) 72 885 463 912 (48 098) 644 402 Total comprehensive loss for the period 3 696 (46 625) (1 462) (44 391) Increase in shareholders loans 148 148 Balance at 160 004 4 887 22 055 (27 547) 73 033 417 287 (49 560) 600 159 Total comprehensive loss for the period 316 (24 059) (116 104) (23 962) (163 809) Transfer of reserves into equity 78 396 (78 396) Realisation of capital gain on investment 5 999 5 999 Movement in shareholders loans in subsidiaries (6 192) 6 192 Balance at 160 004 5 203 76 392 (33 739) 79 032 222 787 (67 330) 442 349 Total comprehensive loss for the period (1 656) (30 418) (298) (32 372) Increase in shareholders loans 541 541 Balance at 160 004 3 547 76 392 (33 739) 79 573 192 369 (67 628) 410 518 Total equity Condensed consolidated statements of cash flows Note Net cash used in operating activities Cash (used in)/generated from operations 12 (4 934) (11 434) 41 883 Net finance costs (32 176) (26 764) (50 920) Taxation (paid)/received (1 188) 445 (10 373) Cash flows of held-for-sale/discontinued operation 5 763 Net cash used in operating activities (38 298) (37 753) (13 647) Net cash (used in)/generated from investing activities Net expenditure on property, plant and equipment (133) (1 086) 6 821 Net movement in financial assets (3 809) Business combinations (1 327) Sale of businesses 13 66 537 66 537 Purchase of derivative financial instruments (6 078) Investment in associates (6 334) (19 581) Net cash (used in)/generated from investing activities (133) 17 555 46 372 Net cash used in financing activities Net movement in financial liabilities (885) (48 839) Net movement in borrowings (1 133) (6 081) (5 937) Increase in shareholder loans 541 Net cash used in financing activities (592) (6 966) (54 776) Total cash movement for the period (39 023) 10 589 (22 051) Cash/(overdraft) at the beginning of the period 53 269 (19 742) (19 742) Overdraft cancelled following discontinued operation 13 94 606 94 606 Cash from business combination 456 Cash and cash equivalents at the end of the period 6 14 246 85 453 53 269 6 interim financial results for the six months ended
Notes to the unaudited interim financial statements 1. Basis of preparation The unaudited consolidated interim financial results have been prepared in accordance with, and containing the information required by IAS 34 Interim Financial Reporting, International Financial Reporting Standards (IFRS), the SAICA Financial Reporting Guides as issued by the Accounting Practices Committee and Financial Reporting Pronouncements as issued by the Financial Reporting Standards Council the South African Companies Act, as amended, and the JSE Listings Requirements. Except for the new standards adopted below, all accounting policies applied by the Group in the preparation of these condensed consolidated interim financial statements are consistent with those applied by the Group in its consolidated financial statements for the year ended. The Group has adopted the following new standards: Amendment to IFRS 2 Share-Based Payments Amendment to IFRS 3 Business Combinations Amendment to IFRS 8 Operating Segments Amendment to IFRS 13 Fair Value Measurements Amendments to IAS 16 Property, Plant and Equipment Amendments to IAS 19 Employee Benefits Amendments to IAS 24 Related Party Disclosures Amendments to IAS 38 Intangible Assets Amendments to IAS 40 Investment Properties There was no material impact on the interim financial statements identified based on management s assessment of these standards. 2. Discontinued operations Revenue 176 952 182 268 Expenses (171 588) (176 877) Profit before taxation 5 364 5 391 Taxation (1 668) (1 651) Profit for the period from discontinued operations (before impairments) 3 696 3 740 Profit on sale of discontinued operation 19 170 19 170 Impairment of goodwill and intangible assets (net of tax) (44 150) (44 909) Loss for the period from discontinued operations (after impairments) (21 284) (21 999) 3. Investment in associates Sefateng Chrome Mine Proprietary Limited 28 799 61 851 61 851 Kivu Resources Limited (Registered in Mauritius) 32 810 26 476 FPT Mineral Terminal Limitada (Registered in Mozambique) 3 517 1 468 1 468 32 316 96 129 89 795 Loss from associate Sefateng Chrome Mine Proprietary Limited (667) (29) (1 435) Loss from associate Kivu Resources Limited (5 015) (8 052) Loss from associate FPT Mineral Terminal Limitada (386) (1 335) (2 758) 31 263 89 750 77 550 Loans to associate Sefateng Chrome Mine Proprietary Limited 3 157 Loans to associate Kivu Resources Limited 11 617 Loans to associate FPT Mineral Terminal Limitada 4 807 31 263 89 750 97 131 Reversal of impairment/(impairment) of associate Sefateng Chrome Mine 29 634 (34 774) Impairment of associate Kivu Resources Limited (30 041) 60 897 89 750 32 316 interim financial results for the six months ended 7
Notes to the unaudited interim financial statements continued 4. Other financial assets and non-current assets classified as held for sale Other long-term financial assets Kalahari Resources Proprietary Limited 192 900 166 000 192 900 SA Metals Equity Proprietary Limited 28 500 Zimbabwe Alloys Chrome (Private) Limited 16 909 Alphamin Resources Corp (Canada) 20 495 37 621 10 013 121 shares of CAD$0,21 each 213 395 211 409 230 521 Other short-term financial assets Alphamin Resources Corp (Canada) 17 308 9 884 606 shares of CAD$0,18 each Afarak Group OYJ (Finland) (previously Ruukki Group Plc (Finland)) 26 824 28 436 5 211 916 listed shares of EUR0,38 each 44 132 28 436 Investment in Alphamin Resources Corporation options and shares as well as Afarak Group Plc shares are level 1 fair value measurements since their fair value is determined from quoted prices in the active Toronto Stock Exchange and Helsinki Stock Exchange markets respectively. Other financial assets are classified as level 3 fair value measurements since its fair value determination is not based on observable market data. Discounted cash flow valuation methods were used to determine fair value. An independent valuation was performed at year end for level 3 fair value measurements. No independent valuation of level 3 transactions was undertaken at the two interim reporting periods and the next independent valuation will be undertaken for the financial year ending 2015. All financial assets are carried at fair value. Non-current assets classified as held for sale Property, plant and equipment 7 600 100 Pering Base Metals Proprietary Limited 1 000 25 870 1 000 SA Metals Equity Proprietary Limited 8 000 8 000 Intangible assets 80 80 80 Afarak Group OYJ (Finland) (previously Ruukki Group Plc (Finland)) 22 531 5 211 916 listed shares of EUR0,31 each 31 611 33 550 9 180 The Company owns 20% of Pering Base Metals which owns a lead and zinc mining project. This project is not operational and seeks injection of funding to purchase capital equipment and resume mining. The Company will not participate in further fund raising and is divesting from the project in line with its strategy to refocus on core trading activities. The Company owns 20% of SA Metals Equity Proprietary Limited which runs a project to develop a pig iron recovery operation. This project is up for disposal in line with our strategy to refocus on core trading activities and divest from projects which are unlikely to be cash generative within the next 12 months. Afarak Group OYJ is non-core to the Company s activities and is in the process of being disposed in the Helsinki Stock Exchange. 8 interim financial results for the six months ended
Notes to the unaudited interim financial statements continued 5. Trade and other payables Trade and other payables 229 713 226 290 231 955 Trade finance facilities 685 492 714 918 854 717 915 205 941 208 1 086 672 6. Cash and cash equivalents Cash and cash equivalents 38 036 85 664 53 275 Less: Bank overdrafts (23 790) (211) (6) 14 246 85 453 53 269 7. Other income Includes: Profit on sale of 24 Sloane Street Properties Proprietary Limited 9 107 9 124 Rental income 3 018 Profit on foreign exchange 8 185 Gain on disposal of property, plant and equipment 107 4 Other 2 658 3 463 11 624 13 968 12 574 20 748 8. Operating expenses Consulting and professional fees 2 826 3 610 6 578 Depreciation 1 934 2 945 6 217 Employee costs 28 732 29 616 56 638 Legal fees 732 2 253 2 016 Operating lease charges 1 110 4 806 6 481 Repairs and maintenance 928 1 176 2 017 Travel and accommodation (local and overseas) 1 146 2 156 4 752 Logistics and handling fees 5 867 3 502 23 240 Loss on foreign exchange 4 758 3 059 Other 12 797 10 210 13 734 60 830 63 333 121 673 interim financial results for the six months ended 9
Notes to the unaudited interim financial statements continued 9. Finance costs Includes: Contract interest 33 517 19 944 22 978 Bank overdrafts 2 642 15 617 7 859 Financing effect on purchases and trade and other payables 4 610 3 022 33 500 40 769 38 583 64 337 10. Taxation Normal taxation 1 088 2 405 18 134 Capital gains taxation 1 271 1 269 Deferred taxation 7 430 (1 768) (24 339) 8 518 1 908 (4 936) 11. Reconciliation of headline loss Loss for the period (30 418) (46 625) (162 729) Adjustments for: Loss/(gain) on disposal of property, plant and equipment (77) 117 1 106 Gain on disposal of 24 Sloane Street Properties Proprietary Limited (7 892) (7 892) Gain on disposal on West African Group Division (19 170) (19 170) Write-off of goodwill following discontinued operation 36 906 Write-off of intangible assets (net of taxation and non-controlling interest) 32 504 Impairment of goodwill and intangibles (West African Group Division) 44 150 (Reversal)/impairment of associates (29 634) 64 815 Impairment of property, plant and equipment 3 574 Impairment of non-current assets held for sale 3 900 Headline loss (60 129) (29 420) (46 986) Headline (loss)/earnings per share (cents) (22,5) (11,0) (17,6) Weighted average number of shares in issue* 267 306 552 267 306 552 267 306 552 * Weighted average number of shares is equal to the number of shares in issue as at. 12. Cash (utilised in)/generated from operations Loss before taxation (22 198) (24 895) (165 714) Adjustments for: Non-cash items 24 305 26 (7 747) Net finance costs 32 176 26 764 50 920 Impairment (reversal)/loss (29 634) 4 171 155 372 Changes in working capital: Inventories 10 973 (169 001) (233 395) Trade and other receivables 150 911 (124 244) (144 758) Trade and other payables (171 467) 275 745 387 205 (4 934) (11 434) 41 883 10 interim financial results for the six months ended
Notes to the unaudited interim financial statements continued 13. Disposal of West African Group (division of Metmar Trading Proprietary Limited) Total net asset value 34 577 34 577 Gain on disposal of division 19 170 19 170 Consideration received 53 747 53 747 Bank overdraft facility reduced division being sold 94 606 94 606 Net increase in cash and cash equivalents 148 353 148 353 Disposal of 24 Sloane Street Properties Proprietary Limited Trade and other receivables 1 1 Property, plant and equipment 3 642 3 642 Current tax receivable 51 51 Deferred tax (20) (20) Trade and other payables (8) (8) Total net asset value 3 666 3 666 Gain on disposal of 24 Sloane Street Properties Proprietary Limited 9 124 9 124 Consideration received 12 790 12 790 Total consideration received 66 537 66 537 Write-off of goodwill and intangible assets Goodwill 36 906 36 906 Intangible assets 10 156 10 156 Total 47 062 47 062 Deferred tax on intangibles (2 912) (2 153) Net write-off of goodwill and intangibles 44 150 44 909 14. Segment report In identifying its operating segments, management generally distinguishes investment in resource-based operations from the trading activities of the Group. The following factors have been used to identify reportable segments of the Group: distinction between the investments and trading activities; investment segment includes investment in equity, property, plant and equipment; and trading segment relates to the traditional core trading activities of the Group together with the resource-based activities emanating from offtake agreements and arrangements in place as a result of investment in equity, property, plant and equipment. There has been no aggregation of the two segments identified as: investments; and trading. interim financial results for the six months ended 11
14. Segment report continued Segmental report Group Trading Investment Adjustments and eliminations Total Trading Investment Adjustments and eliminations Total Trading Investment Adjustments and eliminations Total Segment revenues 1 022 139 (105 635) 118 926 1 035 430 917 143 113 641 (97 769) 933 015 2 059 801 234 001 (196 367) 2 097 435 Finance costs (30 086) (6 269) (4 414) (40 769) (27 487) (9 996) (1 100) (38 583) (41 149) (18 398) (4 790) (64 337) Finance income 8 386 201 6 8 593 9 973 1 838 8 11 819 10 035 3 373 9 13 417 Depreciation, amortisation and impairments of non-financial assets (368) 28 661 (593) 27 700 (1 484) (1 461) (47 062) (50 007) (1 303) (3 468) (1 446) (6 217) 1 000 071 (83 042) 113 925 1 030 954 898 145 104 022 (145 923) 856 244 2 027 384 215 508 (202 594) 2 040 298 The totals presented for the Group s operating segments reconcile to the entity s key financial results as presented: Segment revenues 1 022 139 (105 635) 118 926 1 035 430 917 143 113 641 (97 769) 933 015 2 059 801 234 001 (196 367) 2 097 435 Other income 811 2 024 11 133 13 968 17 258 4 451 (9 135) 12 574 8 212 14 318 (1 782) 20 748 1 022 950 (103 611) 130 059 1 049 398 934 401 118 092 (106 904) 945 589 2 068 013 248 319 (198 149) 2 118 183 Segment profit/ (loss) Segment operating profit/(loss) 19 085 (48 068) 33 412 4 429 14 986 14 249 (13 497) 15 738 80 737 46 172 (92 692) 34 217 Impairments 29 634 29 634 (4 171) (4 171) (7 944) (145 486) (1 942) (155 372) Fair value adjustments (18 813) (4 219) (23 032) (1 289) (1 260) (770) (3 319) 8 792 (28 918) 38 732 18 606 Finance costs (30 086) (6 269) (4 414) (40 769) (27 487) (9 996) (1 100) (38 583) (41 149) (18 398) (4 790) (64 337) Finance income 8 386 201 6 8 593 9 973 1 838 8 11 819 10 035 3 373 9 13 417 Discontinued operations (22 495) (33) (22 528) (19 833) (515) (20 348) Loss from equity accounted investment (1 053) (1 053) (6 379) (6 379) (12 245) (12 245) Total (loss)/profit before taxation (2 615) (44 368) 24 785 (22 198) (26 312) (5 719) (15 392) (47 423) 30 638 (156 017) (60 683) (186 062) Taxation 647 1 612 (10 777) (8 518) 2 426 (3 090) (664) (15 682) 15 346 5 272 4 936 (Loss)/profit for the period (1 968) (42 756) 14 008 (30 716) (23 886) (5 719) (18 482) (48 087) 14 956 (140 671) (55 411) (181 126) Segment assets 1 175 754 767 218 (556 792) 1 386 180 853 574 750 930 (7 226) 1 597 278 1 346 655 488 251 (264 568) 1 570 338 Segment liabilities 810 728 804 543 (639 609) 975 662 561 953 754 745 (319 579) 997 119 979 661 685 520 (537 192) 1 127 989 15. Corporate governance The Metmar Group complies with the Code of Good Corporate Practice and Conduct published in the King III Report on Corporate Governance. 16. Related party transactions During the period, the Company and its subsidiaries in the ordinary course of business, entered into various transactions with their associates. These transactions were subject to terms that are no less favourable than those arranged with third parties. R G Still Non-executive Chairman D J Ellwood Chief Executive Officer 28 October Directors: R Still* (Chairman), L Matteucci*, DJ Ellwood (Chief Executive Officer), TI Borman**, PP Boshoff, D Earp*, GP Lotis, D Mashile-Nkosi**, SMS Nkosi (Chief Financial Officer) * Independent non-executive ** Non-executive Company Secretary: AC Swart Sponsor: Nedbank Capital Registered office: 25 Culross Road, corner Main and Culross, Bryanston, 2191 (PO Box 98549, Sloane Park, Bryanston 2152) Transfer Secretaries: Computershare Investor Services Proprietary Limited (PO Box 61051, Marshalltown, 2107) Auditors: EY These results may be viewed on the internet on http://www.metmar.co.za 12 interim financial results for the six months ended