22 Aug 2011 07:00
Richland Resources Limited
("Richland" or "the Company") (AIM: RLD)
Interim Results for the half year ended 30 June 2011
Richland Resources Ltd, the gemstone producer and developer, today announces its interim results for the half year ended 30 June 2011.
Financial Highlights
129% increase in net profit to $1.6 million compared to $0.7 million for the 1H 2010; a 144% increase above the entire FY2010 profit of $0.6 million
Gross margin achieved 73%, up from 66% for the 1H 2010
Net current assets at 30 June 2011 of $14.2 million, including:
- Cash and cash equivalents of $1.7 million;
- Trade and other receivables (mainly proceeds of June 2011 sales) of $6.3 million; and
- Income tax receivable of $2.2 million
Operation Highlights
Average recovered tanzanite grade of 60 carats per tonne;
- Grade increase of 9% compared with 55 carats per tonne achieved in 1H 2010.
Tanzanite Experience sales 23% higher to $0.8 million in 1H 2011 compared to $0.65 million 1H 2010
Strategic Highlights
Commenced listing process of Richland Resources Ltd on the Dar es Salaam Stock Exchange, Tanzania
Commenting on the results, Chief Executive Officer, Bernard Olivier said: 'The Company has once again achieved significant growth in revenue over the period, reflective of the continued recovery of tanzanite prices. The increase in the average grade, total production and sales of tanzanite compared to the parallel period last year is testament to our commitment to the Company's margin enhancement programme and we look to continue to develop these efficiencies with a focus on innovative channels to market and sell tanzanite. Over the next 6 months we also aim to expand our coloured gemstone portfolio of mineral assets and look forward to successfully completing our due diligence and exercising the option for a new sapphire project in Australia.'
For more information please contact:
Bernard Olivier
Chief Executive Officer
+61(0) 4089 48182
Willi Boehm
Company Secretary
+61(0) 409 969 955
Nominated Advisor & Broker (AIM)
Ambrian Partners Limited
Samantha Harrison/Jen Boorer
+44 (0) 20 7634 4700
Joint Broker XCAP Securities PLC
John Grant/Jon Belliss/David Newton
+44 (0) 20 7101 7070
Threadneedle Communications
Laurence Read/Beth Harris
+44 (0) 20 7653 9855
+44 (0) 7979 955 923
Richland Resources Limited
Interim Results for the half year ended 30 June 2011
Key Statistics 1H 2011
Key statistics: | 1H 2011 | 1H 2010 | Movement |
EBIDTA profit | $3.4 m | $1.8 m | 89% |
Net profit | $1.6 m | $0.7 m | 129% |
Revenue | $10.4 m | $8.6 m | 21% |
Gross margin | 73% | 66% | 11% |
Depreciation and amortisation | ($1.3 m) | ($1.1 m) | 18% |
Operating costs | ($5.4 m) | ($4.9) | 10% |
Corporate administration and other operating costs | ($1.5 m) | ($1.6 m) | (6%) |
Mine administration | ($1.2 m) | ($1.2 m) | 0% |
Cash and cash equivalents excluding overdraft | $1.8 m | $1.8 m | 0% |
Tonnes processed | 20,813 | 18,911 | 10% |
Carats recovered | 1.25 million | 1.05 million | 19% |
Carats per tonne | 60 | 55 | 9% |
On mine cash costs per carat | $3.71 | $3.75 | (1%) |
Financial Performance
With earnings before interest, taxes, depreciation and amortisation (EBIDTA) of $3.4 million, the Company has shown a significant improvement and testimony to the success of restructuring and optimisation programmes, with full potential of exponential growth in sales and profitability in the medium term horizon. This performance has resulted in 129% increase in net profit to $1.6 million compared to the previous corresponding period profit of $0.7 million. The profit for the half year period was 144% more than the entire profit for FY2010. Basic earnings per share was up 113% to 1.36 cents per share compared to previous corresponding period, a true reflection of the return of the steady earning power of the Company.
The result for the year was heavily driven by sales growth, a result of strategic sales and marketing program mix; production optimisation; and, cost and efficiencies management in group-wide operational activities. Sales grew by 21% to $10.4 million compared to $8.6 million in the previous corresponding period, and achieved a gross margin for the period of 73% compared to 66% in 1H2010. The Tanzanite Experience retail sales also grew up 18% compared to 1H2010. Carats recovered during the period of 1.25 million carats was 19% up compared to 1.05 million carats achieved in 1H 2010. The carats recovered were achieved through a 10% increase in tonnes processed. All these factors, put together, have ultimately resulted in a positive performance during the period.
Corporate administration and other operating costs reflect costs incurred in administering the company's stock exchange listing, corporate compliance, investors relations activities, financial and legal consulting and non-recurring costs associated with acquisition activity. Total operating cost was around $5.4 million, a 10% increase compared to 1H2010.
At 30 June 2011, TanzaniteOne had cash and cash equivalents of $1.7 million. As a result of significant performance in the second quarter, the Company had trade debtors in excess of $3 million receivable within six weeks after period end.
Operational Overview
In the first half of 2011, the Company achieved production totalling 1,251,352 carats from the processing of 20,813 tonnes of material at an average recovery grade of 60 carats per tonne. This strong performance represents a 19% increase in the carats produced, a 10% increase in the tonnes processed and a 9% increase in the recovery rate compared with H1 2010. During the first half of 2011 the Company also recovered a 12,100 carat tanzanite stone from the newly intersected Main Shaft fold structure.
Tsavorite
During the first half of 2011 the Company achieved its Maiden JORC compliant Inferred and Indicated Resource for its Tsavorite Project. The Company currently has a JORC complaint Inferred Resource of 7.6 to 10.4 million bank cubic metres ('bcm') or approximately 18.2 to 24.9 million tonnes and a JORC compliant Indicated Resource of 0.89 to 2.17 million bcm or approximately 2.1 to 5.2 million tonnes located within the Inferred Resource. The Company is currently constructing a larger tsavorite processing plant at its in-house engineering department located at the tanzanite mine.
Strategic Overview
The Company has entered into an option, to acquire, after a period of due diligence, ownership of an established Sapphire project (the 'Project') in Australia. The Project comprise of two mining leases covering just under 500 Ha and has previously been partially mined and has produced significant quantities of sapphire and is located in an internationally known sapphire field.
Board of Directors
The Company has also made some strategic changes and appointments to the board with Ed Nealon assuming the role of Non-executive Chairman having previously been Non-executive Deputy Chairman; and Ami Mpungwe became Non-executive Deputy Chairman. Mr Mpungwe continues to serve as Chairman of TanzaniteOne Mining Limited, the Company's primary operating subsidiary in Tanzania. The Company has also appointed Mr Farai Manyemba to the Board as Finance Director.
Dar es Salaam Stock Exchange listing
Richland has commenced preparations for a listing on the Dar es Salaam Stock Exchange ('DSE') before the end of the year. The listing on the DSE will give Tanzanians and Company employees the ability to invest in the Company's shares.
Glossary
dollar or $ United States Dollar
JORC code Australasian code for reporting of Mineral Resources and Ore Reserves
On mine cash costs On mine cash costs include operating costs, mine administration costs and royalty charges incurred at Merelani mine
tonne 1 Metric tonne (1,000kg)
Richland Resources Limited
Condensed Consolidated Statement of Comprehensive Income
For the Half Year ended 30 June 2011
(Unaudited)
1H 2011 $'000 | 1H 2010 $'000 | FY 2010 $'000 | |
Revenue | 10,388 | 8,553 | 15,940 |
Cost of sales | (2,801) | (2,950) | (5,688) |
Gross profit | 7,587 | 5,603 | 10,252 |
Gross margin % | 73% | 66% | 64% |
Corporate administration and other operating costs | (1,485) | (1,575) | (3,542) |
Mine administration | (1,158) | (1,191) | (2,088) |
Selling and distribution costs | (1,093) | (663) | (1,604) |
Royalties | (106) | (197) | (400) |
Interest income received | - | 1 | 1 |
Foreign exchange (losses)/gains | (227) | (115) | 342 |
Financing costs paid | (71) | (47) | (175) |
Profit before depreciation, amortisation | 3,447 | 1,816 | 2,786 |
Depreciation and amortisation | (1,279) | (1,077) | (2,578) |
Profit before income tax | 2,168 | 739 | 208 |
Income tax (expense)/credit | (585) | (34) | 441 |
Profit after income tax | 1,583 | 705 | 649 |
Profit attributable to: | |||
Minority interest | 8 | (23) | (3) |
Owners of the parent | 1,575 | 728 | 652 |
Profit after income tax | 1,583 | 705 | 649 |
Other comprehensive income | |||
Profit for the year | 1,583 | 705 | 649 |
Foreign exchange gain/(loss) on translation of foreign operations | 44 | 175 | (367) |
Total comprehensive income for the period | 1,627 | 880 | 282 |
Attributable to: | |||
Minority interest | 8 | (23) | (3) |
Owners of the parent | 1,619 | 903 | 285 |
Total comprehensive income for the period | 1,627 | 880 | 282 |
Basic and diluted earnings per share (cents/share) | 1.36 | 0.64 | 0.57 |
Richland Resources Limited
Consolidated Statement of financial position
As at 30 June 2011
(Unaudited)
1H 2011 $'000 | 1H2010 $'000 | FY2010 $'000 | |
Non-current assets | |||
Property, plant and equipment | 22,967 | 24,916 | 23,918 |
Intangible assets | 5,585 | 5,311 | 5,627 |
Deferred income tax assets | 1,795 | 1,731 | 1,816 |
Inventory | 62 | 129 | 62 |
Total non-current assets | 30,409 | 32,087 | 31,423 |
Current assets | |||
Inventories | 6,193 | 3,941 | 5,472 |
Income tax receivable | 2,238 | 1,923 | 2,279 |
Trade and other receivables | 6,299 | 5,055 | 3,828 |
Cash and cash equivalents | 1,746 | 1,762 | 2,368 |
Total current assets | 16,476 | 12,681 | 13,947 |
Total assets | 46,885 | 44,768 | 45,370 |
Equity | |||
Issued share capital | 35 | 32 | 35 |
Share premium | 46,399 | 46,020 | 46,399 |
Share options reserve | 802 | 706 | 706 |
Foreign currency translation reserve | (1,007) | (510) | (1,051) |
Accumulated losses | (7,333) | (8,832) | (8,908) |
Total equity attributable to parent equity holders | 38,896 | 37,416 | 37,181 |
Non-controlling interest | (37) | (64) | (45) |
Total equity | 38,859 | 37,352 | 37,136 |
Non-current liabilities | |||
Borrowings | 502 | 701 | 631 |
Provision for environmental rehabilitation | 115 | 107 | 115 |
Deferred income tax liabilities | 5,143 | 5,055 | 4,583 |
Total non-current liabilities | 5,760 | 5,863 | 5,329 |
Current liabilities | |||
Bank overdraft | 618 | 986 | 958 |
Borrowings | 251 | 299 | 208 |
Trade and other payables | 1,397 | 268 | 1,739 |
Total current liabilities | 2,266 | 1,553 | 2,905 |
Total liabilities | 8,026 | 7,416 | 8,234 |
Total equity and liabilities | 46,885 | 44,768 | 45,370 |
|
|
|
|
Number of shares in issue (million) | 115.6 | 113.6 | 115.6 |
Net asset value per share (US cents) | 33.60 | 32.88 | 35.11 |
Richland Resources LtdCondensed Consolidated Statement of Cash FlowsFor the Half Year Ended 30 June 2011(Unaudited)
1H 2011 $'000 | 1H 2010 $'000 | FY 2010 $'000 | |
Cash flows from operating activities | |||
Cash generated from/(utilized in) operations | 160 | (172) | 2,174 |
Interest income received | - | 1 | 1 |
Financing cost paid | (71) | (47) | (167) |
Income tax refund/(paid) | - | 56 | (381) |
Net cash from /(to) operating activities | 89 | (162) | 1,627 |
| |||
Cash flows from investing activities | |||
Purchase of property, plant and equipment | (286) | (685) | (1,529) |
Cash utilized in investing activities | (286) | (685) | (1,529) |
| |||
Cash flows from financing activities | |||
Repayment of borrowings | (85) | - | (311) |
Cash utilized in financing activities | (85) | - | (311) |
Net decrease in cash and cash equivalents | (282) | (847) | (213) |
Movement in cash and cash equivalents | |||
At the beginning of the period/year | 1,410 | 1,623 | 1,623 |
Decrease | (282) | (847) | (213) |
At the end of the period/year | 1,128 | 776 | 1,410 |