Interim Results

RNS Number:7243H
Metorex Ld
20 February 2003


Metorex Limited
   Registration number 1934/005478/06
   Incorporated in the Republic of South Africa
   Listed on the JSE Securities Exchange South Africa and London Stock Exchange
   JSE alpha MTX   ISIN ZAE000022745
   Issuer code MEMTX

www.metorexgroup.com
("the Group")

* The ETC Division acquired from Avgold Limited
* Chibuluma South equity partner imminent
* Headline earnings per share increased 94%
* Debt to equity ratio improves from 39% to 31%
* Interim dividend of 4 cents per share declared


Consolidated interim results for the period ended 31 December 2002
Consolidated income statement

                                               Six months        Six months
                                         31 December 2002  31 December 2001
                                                Unaudited         Unaudited
                                                     R000              R000

Revenue - Mineral sales
   Copper                                         161 773           152 616
   Zinc                                            48 278            50 566
   Coal                                            92 834            61 859
   Fluorspar                                       50 978            52 566
   Gold                                            49 105            43 522
   Antimony                                        49 330            16 216
   Cobalt                                           5 855             9 005
   Other                                            4 153             2 995
Gross revenue                                     462 306           389 345
Realisation costs                                  60 605            64 398
On-mine revenue                                   401 701           324 947
Cost of production                                347 239           291 140
  - cash costs                                    326 883           281 482
  - stock movement                                    474            (4 913)
  - depreciation                                   19 882            14 571
Mining profit                                      54 462            33 807
Impairment - Chibuluma assets                           -          (112 368)
Other expenses                                      3 010             4 803
Income before finance costs                        51 452           (83 364)
Net finance costs                                   7 005             1 380
Income before taxation                             44 447           (84 744)
Taxation                                           13 879            12 091
Income after taxation                              30 568           (96 835)
Income attributable to outside shareholders         1 822             3 687
Income/(loss) attributable to ordinary
shareholders                                       28 746          (100 522)
Earnings per share (cents)                          20,68            (83,21)
Headline earnings per share (cents)                 22,00             11,32
Dividend per share (cents)                           10,0              12,0
Proposed dividend per share (cents)                   4,0                 -
Income attributable to ordinary shareholders       28 746          (100 522)
Impairment provision                                    -           112 368
Goodwill amortisation                               1 830             1 830
Headline earnings                                  30 576            13 676
Weighted average shares in issue (000's)          138 985           120 805
Number of shares in issue at end of
period (000's)                                    139 019           120 805


   Statement of change in equity
                                               Six months        Six months
                                         31 December 2002  31 December 2001
                                                Unaudited         Unaudited
                                                     R000              R000

Shareholders' equity at start of period           391 116           355 428
Shares issued                                         121               203
Hedging and translation reserve                   (22 442)           10 711
Net income/(loss) for the period                   28 746          (100 522)
Dividends distributed                             (13 898)          (14 497)

                                                  383 643           251 323

Consolidated balance sheet
                                         31 December 2002      30 June 2002
                                                Unaudited           Audited
                                                     R000              R000
ASSETS
Non-current assets
Property, plant and equipment                     222 159           239 346
Mineral rights                                    205 202           240 665
Goodwill                                           23 803            25 633
Investments                                           891               891
Deferred tax asset                                    706             8 031
                                                  452 761           514 566

Current assets
Inventories                                        64 923            70 858
Trade and other receivables                       115 930           110 809
Derivative instruments                              1 323                 -
Taxation prepaid                                    5 432             6 314
Bank balances and cash                             55 090           104 622
                                                  242 698           292 603
Total assets                                      695 459           807 169

EQUITY AND LIABILITIES
Capital and reserves
Share capital and premium                         383 204           383 083
Hedging and translation reserve                   (11 518)           10 924
Retained income                                   140 023           125 175
Reverse acquisition reserve                      (128 066)         (128 066)
                                                  383 643           391 116
Minority interest                                  16 512            16 490

Non-current liabilities
Long-term liabilities - Interest bearing           67 280            84 907
Long-term provisions                               46 060            48 434
Deferred tax liabilities                           43 457            71 283
                                                  156 797           204 624

Current liabilities
Trade and other payables                           71 247           102 224
Derivative instruments                                  -               380
Short-term borrowings - Interest bearing           38 498            57 734
Short-term provisions                              14 520            14 517
Bank overdraft                                     12 149             9 353
Taxation                                            2 093            10 731
                                                  138 507           194 939

Total equity and liabilities                      695 459           807 169
Net asset value per share (cents)                     276               281
Net tangible asset value per share (cents)            259               263


   Consolidated cash flow statement
                                               Six months        Six months
                                         31 December 2002  31 December 2001
                                                Unaudited         Unaudited
                                                     R000              R000

Cash generated before working capital charges      73 164            45 405
Working capital charges                           (36 222)          (32 179)
Cash generated by operations                       36 942            13 226
Taxation paid                                     (16 587)          (19 136)
Dividends paid                                    (15 698)          (17 497)
Finance costs                                      (7 005)           (1 380)
Cash outflow from operating activities             (2 348)          (24 787)
Cash outflow from investing activities            (14 899)          (48 791)
Cash (outflow)/inflow from financing activities   (34 268)           22 692
Net decrease in cash and cash equivalents         (51 515)          (50 886)
Net cash balance at beginning of period            95 269            88 186
Effect of foreign exchange rate changes              (813)                -
Cash at end of period                              42 941            37 300


   COMMENTARY

   RESULTS OF OPERATIONS

The Group increased its headline earnings per share by 94% to 22 cents for the
six months ended 31 December 2002. The improved results are mainly attributable
to an increase of 19% in Group revenue to R462 million. The antimony and coal
operations performed exceptionally with increased sales volumes and unit prices
achieved. Increased coal production led to an increase of 15% in coal sales
volumes which, coupled with an average price increase of 30% to R125 per ton,
improved Group revenue by R31 million. The spike in the antimony price to an
average of $17 per mtu for the current period and a 12% improvement in volumes
contributed to an increase in revenue of R33 million. Overall commodity prices
improved year on year and a higher average Rand/US Dollar exchange rate
prevailed.

   The increase of 16% in cash costs was due primarily to increased antimony and
coal production and the exchange rate effect on US Dollar denominated costs. The
performance for the quarter ended 31 December 2002 was hampered by plant
throughput problems at Chibuluma with lower copper production output and sales.
The strength of the Rand/US Dollar exchange rate in the quarter to 31 December
2002 had a material impact on earnings.

   The 36% increase in depreciation is mainly the result of the commissioning of
the O'Okiep Slag Plant and the Chibuluma West incline shaft.

   The Group debt to equity ratio improved to 30,7% (30 June 2002: 38,9%) at 31
December 2002.  The improvement is the result of significant debt repayments
during the period totalling R34,3 million, which mainly related to the Chibuluma
debt.

   The Group's earnings are sensitive to sustained strength in the Rand/US
Dollar exchange rate.  However, recent improvements in gold and base metal
prices, if sustained, will ameliorate the impact.

   ACQUISITION OF AVGOLD LIMITED'S ETC DIVISION

   On 14 February 2003, Metorex Limited (54%), Millennium Consolidated
Investments Limited (26%) and Crew Development Corporation (20%) entered into an
agreement, through a dormant company Barberton Mines Limited, to acquire from
Avgold Limited its ETC Division, which agreement is subject to certain
conditions precedent.

   The details of the transaction were set out in an announcement dated 17
February 2003.

   Pro forma financial effects of the ETC acquisition

   Set out below are the unaudited pro forma financial effects of the ETC
acquisition based on the unaudited financial information of Metorex and the ETC
Division, excluding ETC's share of Avgold's hedging losses, for the six months
ended 31 December 2002.

                               Unaudited before      Pro forma after
                            the ETC acquisition  the ETC acquisition  Change
                                         (cents)              (cents)    (%)

Earnings per share                         20,7                 22,8     10
Headline earnings per share                22,0                 23,9      9
Net asset value per share                 276,0                280,2      2
Net tangible asset value per share        258,8                266,2      3

   Notes:

1. The earnings per share, headline earnings per share, net asset value per
share and net tangible asset value per share figures in the "Unaudited before
the ETC acquisition" column have been extracted from the unaudited financial
information of Metorex for the period ended 31 December 2002.

2. The earnings per share and headline earnings per share figures in the "Pro
forma after the ETC acquisition" column have been calculated:

- on the basis that the ETC acquisition was implemented with effect from 1 July
2002;

- on the basis that interest of 14,6% pre-tax was incurred by Barberton Mines on
the R150 million interest-bearing debt;

- on the basis that Metorex has foregone interest of 10% pre-tax on the R30
million cash contribution;

- on the basis that no interest was incurred on the shareholder's loans from
Metorex and Crew;

- on the assumption that Metorex issued 30 million new ordinary shares;

- on the basis that the life of the ETC mine is 10 years; and

- without taking into account any potential transaction costs in relation to the
ETC acquisition.

3. The net asset value per share and net tangible asset value per share figures
in the "Pro forma after the ETC acquisition" column have been calculated on the
basis that the ETC acquisition was implemented with effect from 31 December
2002.

4. Shareholders are advised that they no longer need to act with caution when
trading in Metorex securities.

   CHIBULUMA SOUTH EQUITY PARTNER

   Chibuluma Mines Plc is finalising a shareholder agreement with the Industrial
Development Corporation ("IDC") whereby the IDC will acquire a 35% interest in
the development of the Chibuluma South operations. The Chibuluma South
operations will be separately housed in a company (Newco) to which Chibuluma
Mines Plc will sell the relevant infrastructure and mining assets. Newco will
also receive cash contributions of $8,3 million and $1,3 million respectively
from the IDC and Chibuluma Mines Plc.

Development of the Chibuluma South orebody is expected to commence during the
second half of this calendar year and should continue for 12 - 15 months before
production commences.

   FUTURE PROSPECTS

   The Group continues to pursue quality acquisitions which would add value to
its shareholders. This process involves various discussions with potential
empowerment partners, which will add to the existing partnerships with
Millennium Consolidated Investments and Umnotho weSizwe.

   CAPITAL EXPENDITURE AND COMMITMENTS

   Group capital expenditure for the period totalled R14,9 million (2001: R48,8
million), which mainly related to the upgrading of equipment at Wakefield and
Chibuluma, expenditure on the Middelburg coal project, final plant improvements
at Vergenoeg, components for a smelter upgrade at O'Okiep and expenditure on the
Beta shaft at Consolidated Murchison.

Contracted capital commitments at 31 December 2002 amount to R11,4 million (30
June 2002: R1 million), whilst uncontracted commitments amount to R4,2 million
(30 June 2002: R5 million).

Operating lease commitments, which fall due within one year amount to R2,7
million (30 June 2002: R2,3 million), whilst commitments of R4,7 million (30
June 2002: R2,4 million) fall due in years two to five.

   ACCOUNTING POLICIES

   The interim results have been prepared on the historical cost basis in
accordance with International Accounting Standards. The accounting policies are
consistent with those adopted in the financial year ended 30 June 2002. Where
necessary comparative figures have been adjusted to conform with changes in
presentation in the current year.

   SAFETY

   The Group's operations produced commendable safety statistics and thanks are
extended to all staff for their contribution to this record. Management is
firmly committed to the elimination of all risks that threaten the health and
safety of employees.

   DECLARATION OF DIVIDEND

   Notice is hereby given that an interim dividend referenced No. 006 of 4
(four) cents per share has been declared in respect of the period ended 31
December 2002. The dividend, which is declared in the currency of the Republic
of South Africa, will be paid on 17 March 2003.

The last day to trade in the company's shares for purposes of entitlement is
Friday, 7 March 2003. The shares will commence trading ex-dividend on Monday, 10
March 2003 and the record date is Friday, 14 March 2003. Share certificates may
not be dematerialised or rematerialised between Monday, 10 March 2003 and
Friday, 14 March 2003, both days inclusive.

A S MALONE                           C D S NEEDHAM
Chairman                             Financial Director
   By order of the board
   19 February 2003
Secretaries:                         Transfer Secretaries:
Meyer Wilson Marsh Inc               Computershare Investor Services Limited
7 West Street                        70 Marshall Street
Houghton                             Johannesburg
2198                                 2000


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