FIVE-YEAR OPERATING AND FINANCIAL REVIEW

Statement of comprehensive income – group (R000)

	2017	2016	2015	2014	2013
Sales revenue	6 865 185	6 097 070	6 035 535	5 339 397	4 420 977
Cost of sales	6 251 200	5 713 722	5 439 722	5 277 915	3 813 301
Operating costs	5 676 017	5 007 233	4 342 571	3 536 002	2 826 094
Concentrates purchased	404 093	350 514	602 395	918 605	657 540
Refining and other costs	120 633	133 186	199 470	267 117	161 591
Depreciation and write-offs	452 584	403 545	339 949	445 875	234 690
Change in metal inventories	(402 127)	(180 756)	(44 663)	110 316	(66 614)
Operating profit	613 985	383 348	595 813	61 482	607 676
Share of (losses)/earnings from associate	4 870	(32 253)	28 769	3 464	13 783
Investment revenue	167 306	265 258	72 043	59 963	33 434
Finance charges	(71 185)	(39 634)	(145 170)	(176 124)	(17 946)
Net sundry income/(expenditure)	(104 211)	88 806	(1 319 014)	97 011	60 108
Profit/(loss) before preference share dividends	610 765	665 525	(767 559)	45 796	697 055
Amortisation of liquidity fees paid on preference shares	(16 390)	(18 088)	–	–	–
Preference shares	(1 017 396)	(918 806)	(100 767)	–	–
Loss on derecognition of preference share liability	(901)	–	–	–	–
(Loss)/profit before tax	(423 922)	(271 369)	(868 326)	45 796	697 055
Taxation	(212 021)	(236 894)	(165 619)	(26 199)	(169 054)
(Loss)/profit for the year	(635 943)	(508 263)	(1 033 945)	19 597	528 001
Other comprehensive income
Share of other comprehensive income from associate	–	19 822	(4 482)	(1 327)	(4 145)
Total comprehensive income for the year	(635 943)	(488 441)	(1 038 427)	18 270	523 856
Headline (loss)/earnings	(636 371)	(492 837)	(794 963)	8 601	522 182
Normalised headline earnings	398 316	444 057	422 681	–	–

Statement of financial position – group (R000)

	2017	2016	2015	2014	2013
Non-current assets	15 483 553	14 110 084	13 367 048	12 745 424	12 622 989
Property, plant and equipment including mining properties and mineral resources	14 658 602	13 468 087	12 701 830	11 940 390	11 931 051
Investment in associate	167 214	192 164	275 847	496 509	495 498
Other non-current assets	657 737	449 833	389 371	308 525	196 440
Current assets	4 103 337	4 867 779	5 784 288	1 995 572	1 734 675
Inventories	1 729 102	1 330 270	1 126 550	1 076 853	878 530
Trade and other receivables	548 997	375 204	498 854	244 672	547 920
Cash and cash equivalents	1 786 865	3 105 080	4 138 189	666 174	298 580
Receiver of revenue	38 373	57 225	20 695	7 873	9 645
Non-current assets held for sale	49 222	–	–	–	–
Total assets	19 636 112	18 977 863	19 151 336	14 740 996	14 357 664
Shareholders' equity	8 092 041	8 727 984	9 216 425	11 391 872	10 815 635
Non-current liabilities	9 929 685	9 072 179	7 310 753	2 157 462	1 997 826
Deferred tax	585 883	590 637	521 452	502 097	476 053
Domestic medium term notes	421 081	419 287	–	1 370 000	1 250 000
Preference share liability	8 279 825	7 429 549	6 492 655	–	–
Other non-current liabilities and provisions	642 896	632 706	296 646	285 365	271 773
Current liabilities	1 614 386	1 177 700	2 624 158	1 191 662	1 544 203
Total equity and liabilities	19 636 112	18 977 863	19 151 336	14 740 996	14 357 664

Statement of cash flows – group (R000)

	2017	2016	2015	2014	2013
Operating cash flow	981 497	839 081	340 950	885 379	542 200
Cash generated from operations	1 055 139	951 650	745 187	693 774	915 317
Interest received	167 306	265 258	72 043	52 583	29 290
Transaction fees paid	(8 594)	–	–	–	–
Movement in land and township development	2 812	(41 341)	–	–	–
Change in working capital	(182 388)	(162 131)	(221 248)	270 414	(281 104)
Tax paid	(52 778)	(175 355)	(255 032)	(131 392)	(139 303)
Investing cash flow	(1 990 754)	(1 126 793)	(1 101 462)	(765 945)	(1 703 238)
Financing cash flow	(250 130)	(745 397)	4 232 645	248 042	1 372 638
Dividends paid	–	–	(3 908)	(11 066)	(21 747)
Issue of preference share liability	–	–	4 599 426	–	–
Acquisition of non-controlling interest	–	–	(50 000)	(10 000)	–
Proceeds from issue of shares	–	–	–	579 033	2 007
Finance charges	(29 694)	(39 634)	(145 170)	(176 124)	(123 703)
Revolving credit facilities utilised	–	–	–	(250 000)	250 000
Domestic medium term notes (repaid)/issued	–	(950 713)	–	120 000	1 250 000
Acquisition of Zambezi preference shares	(208 672)	–	–	–	–
Liquidity fees paid	–	–	(163 903)	–	–
Other financing cash flows	(11 764)	244 950	(3 800)	(3 801)	16 081
Net cash flow	(1 259 387)	(1 033 109)	3 472 133	367 476	193 600
Net foreign exchange difference on cash and
cash equivalents	(58 828)	–	–	–	–
Cash and cash equivalents at beginning of year	3 105 080	4 138 189	666 056	298 580	104 980
Cash and cash equivalents at end of year	1 786 865	3 105 080	4 138 189	666 056	298 580

Operating performance

	2017	2016	2015	2014	2013
ZONDEREINDE
Merensky
Tonnes milled	814 639	815 167	795 885	803 736	958 211
Head grade – g/tonne (4E)	5.8	5.9	5.7	5.8	5.8
UG2
Tonnes milled	1 147 878	1 205 258	1 064 499	920 420	1 157 501
Head grade – g/tonne (4E)	4.2	4.2	4.3	4.3	4.2
Combined – Zondereinde
Tonnes milled	1 962 517	2 020 425	1 860 384	1 724 156	2 115 712
Head grade – g/tonne (4E)	4.8	4.9	4.9	5.0	4.9
Precious metals in concentrates produced – kg	8 714	8 795	7 950	7 331	9 041
Precious metals in concentrates purchased – kg	6 845	6 076	2 338	1 975	1 633
Precious metals sold – kg	14 108	14 071	9 636	9 827	10 704
Precious metals in concentrates produced – oz	280 172	282 765	255 595	235 693	290 675
Precious metals in concentrates purchased – oz	220 068	195 348	75 168	63 488	52 502
Precious metals sold – oz	453 581	452 393	309 801	315 941	344 128
BOOYSENDAL
Merensky
Tonnes milled	161 134	92 645	–	–	–
Head grade – g/tonne (4E)	2.0	1.9	–	–	–
UG2
Tonnes milled	2 326 460	2 072 958	1 786 375	1 517 109	–
Head grade – g/tonne (4E)	2.8	2.7	2.6	2.6	–
Combined
Tonnes milled	2 487 594	2 165 603	1 786 375	1 517 109	–
Head grade – g/tonne (4E)	2.7	2.7	2.6	2.6	–
Precious metals in concentrates produced – kg	6 200	5 017	3 809	2 882	–
Precious metals in concentrates produced – oz	199 330	161 300	122 475	92 668	–
Precious metals sold – oz*	189 115	164 579	112 829	80 476	–

* With effect from 1 June 2015, Booysendal’s metal is sold to Zondereinde at 88% of the market value.

Group sales

	2017	2016	2015	2014	2013
Group sales per metal – oz
Platinum	274 062	270 194	253 784	241 831	212 373
Palladium	131 962	134 101	124 580	117 305	100 716
Rhodium	41 742	42 632	38 430	31 007	25 281
Gold	5 815	5 466	5 837	6 275	5 757
Total – 4E	453 581	452 393	422 631	396 417	344 128
Group prices realised – USD/oz
Platinum	988	964	1 248	1 433	1 568
Palladium	731	586	799	756	683
Rhodium	803	721	1 168	1 010	1 117
Gold	1 255	1 174	1 222	1 289	1 584
Basket – 4E	900	831	1 108	1 198	1 276

Financial performance – group

	2017	2016	2015	2014	2013
Operating margin – %	8.9	6.3	9.9	1.2	13.7
Effective tax rate – %	(50.0)	(87.3)	(19.1)	57.2	24.3
Current ratio	2.5	4.1	2.2	1.7	1.1
Acid ratio	1.5	3.0	1.8	0.6	0.2
US dollar/rand exchange rate
– average	13.63	14.33	11.45	10.35	8.82
– at year end	13.06	14.71	12.16	10.61	10.01

Share performance

	2017	2016	2015	2014	2013
Weighted average number of shares in issue – 000	349 876	349 876	391 835	390 970	382 561
Number of shares at year end – 000	509 781	509 781	509 781	397 586	382 586
Treasury shares at year end – 000	159 905	159 905	159 905	–	–
Shares after adjusting for Treasury shares	349 876	349 876	349 876	–	–
Operating cash flow per share – cents	280.5	239.8	87.2	226.5	137.0
(Loss)/earnings per share – cents	(181.8)	(145.3)	(264.3)	2.4	132.0
Headline (loss)/earnings per share – cents	(181.9)	(140.9)	(202.9)	2.2	136.5
Normalised earnings – cents	78.1	87.1	82.9	–	–
Dividends per share – cents	–	–	–	–	–
Dividend cover	–	–	–	–	–
Net assets value per share – cents	1 587.4	1 712.1	1 808.0	2 865.0	2 827.0
Share price (cents)
– high	6 035	5 080	5 200	4 790	4 098
– low	3 593	1 610	3 120	3 186	2 251
– at year end	4 045	4 300	4 026	4 550	3 200
Platinum sector index at year end	18.1	24.0	26.8	46.8	37.1
Compound return over 5 years – %	11.7	0.3	(2.3)	9.0	(13.2)
Average monthly volume of shares traded – 000	19 301	21 659	23 619	14 793	20 257
Annual liquidity (%)	45.4	51.0	72.3	45.4	63.5

FIVE-YEAR SUSTAINABILITY REVIEW

Zondereinde

	2017	2016	2015	2014	2013
SOCIAL PERFORMANCE
Safety
Fatal injury incidence rate (FIIR)	0.01	0.00	0.00	0.00	0.01
Lost time injury incidence rate (LTIIR)	LA 1.65	1.92	1.31	1.70	1.50
Reportable injury incidence rate (RIIR)	LA 1.13	1.11	0.94	0.86	0.83
Number of fatalities	1	0	0	0	1
Health
New cases of noise induced hearing loss (NIHL)	46	16	27	20	43
New cases of tuberculosis (TB)	46	75	111	97	70
Voluntary counselling and testing (VCT) encounters	4 571	1 876	1 250	1 049	1 088
Employment and human rights
Average number of employees (including indirect employees)	8 799	8 392	8 548	8 788	9 148
Turnover rate (%)	12	6	7	4	1
HDSAs in management (%)	LA 53	48	45	38	37
Women in mining (%)	LA 10	8	8	7	7
HDSAs at board level (%)	60	60	50	44	56
ENVIRONMENTAL PERFORMANCE
Rock mined (000t)	2 150	2 226	2 070	1 907	2 276
Ore milled (000t)	1 963	2 020	1 860	1 724	2 116
Water usage (000m3)
Potable water from external sources	2 836	2 803	2 488	2 335	2 633
Fissure water used	126	1 607	1 155	1 084	1 493
Water recycled in process	LA 27 126	27 413	25 664	25 524	25 909
% water recycled*	LA 90	86	91	89	91
Electricity consumption (MWh)
Energy from electricity purchased by shafts	512 190	498 993	489 203	470 117	485 654
Energy from electricity purchased by plant	150 552	147 792	140 882	108 600	101 732
Total electricity purchased	LA 662 742	646 785	630 085	578 717	587 386
Greenhouse gas emissions (CO2e tonnes):
Scope 1 (direct) emissions	LA 45 361	27 830	29 743	23 451	15 509
Scope 2 (indirect) emissions	LA 682 624	666 189	648 988	596 079	605 008
Scope 3 (indirect) emissions	942	798	746	580	665
Total emissions	782 927	694 817	679 477	620 110	621 183
Land use (hectares)
Land disturbed by mining-related activities	137	137	137	137	137
Land leased for farming purposes	273	273	273	273	273
Land protected for conservation	800	800	800	800	800
Total land under management (freehold)	4 450	4 439	4 439	4 439	4 439

* From F2016, figures reflect a more accurate methodology adopted by Northam to calculate recycled water.

Booysendal

	2017	2016	2015
SOCIAL PERFORMANCE
Safety
Fatal injury incidence rate (FIIR)	0.00	0.00	0.00
Lost time injury incidence rate (LTIIR)	LA 0.30	0.44	0.54
Reportable injury incidence rate (RIIR)	LA 0.20	0.32	0.41
Number of fatalities	0	0	0
Health
New cases of noise induced hearing loss (NIHL)	1	2	5
New cases of tuberculosis (TB)	10	8	4
Voluntary counselling and testing (VCT) encounters	733	319	459
Employment and human rights
Average number of employees (including indirect employees)	3 780	2 920	1 508
Turnover rate (%)	5	8	11
HDSAs in management (%)	LA 66	50	68
Women in mining (%)	LA 20	23	17
ENVIRONMENTAL PERFORMANCE
Rock mined (000t)	2 662	2 138	1 670
Ore milled (000t)	2 488	2 166	1 786
Water usage (000m3)
Potable water from external sources	620	376	569
Fissure water used	92	–	–
Borehole water used	31	–	–
Water recycled in process	LA 2 357	2 519	1 479
% water recycled*	LA 76	87	72
Electricity consumption (MWh)
Energy from electricity purchased by shafts	45 270	44 052	43 362
Energy from electricity purchased by plant	91 187	88 738	72 023
Total electricity purchased	LA 142 697	132 790	115 385
Greenhouse gas emissions (CO2e tonnes):
Scope 1 (direct) emissions	LA 6 750	7 098	6 337
Scope 2 (indirect) emissions	LA 146 977	136 773	118 847
Scope 3 (indirect) emissions	38	98	N/A
Total emissions	153 765	143 969	125 184
Land use (hectares)
Land disturbed by mining-related activities	982	771	521
Land leased for farming purposes	–	–	–
Land protected for conservation	2 714	960	960
Total land under management (freehold)	11 120	11 120	6 773

* From F2016, figures reflect a more accurate methodology adopted by Northam to calculate recycled water.