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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Murchison Utd | LSE:MUU | London | Ordinary Share | AU000000FTE4 | NPV |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 2.00 | 0.00 | 00:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
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RNS Number:5667I
Murchison United NL
11 March 2003
AND ITS CONTROLLED ENTITIES
HALF YEAR FINANCIAL REPORT
31 DECEMBER 2002
MURCHISON UNITED NL
ACN 009 087 852
AND ITS CONTROLLED ENTITIES
CONTENTS
Directors' Report 3
Statement of Financial Performance 5
Statement of Financial Position 6
Statement of Cash Flows 7
Notes to the Half Year Financial Report 8
Directors' Declaration 12
Independent Review Report 13
The Directors present their report together with the consolidated financial
report for the half-year ended 31 December 2002 and the auditor's review report
thereon.
Directors
The Directors of the Company during or since the end of the half year are:
Name Period of Directorship
Mr Bruno G Camarri Director and Chairman since 1994
Chairman
Mr Paul C Atherley Director since 1993
Managing Director Appointed Managing Director 1994
Ms Stacey Apostolou Director since June 2000, Company
Executive Director Secretary since 1998
Mr David Hutchins Director since December 2000
Non-Executive Director
Review Of Operations
Renison Bell Tin Mine (Murchison 100%)
During the period 274,894 tonnes of ore was treated and 2,419 tonnes of tin was
produced at a cash cost of A$9,253. Throughout the financial period, mine
production was adversely impacted by low filling, development and drilling rates
in the Huon series stoping blocks. This resulted in overall mine grades
reporting well below the long run resource average as lower grade sources were
used to make up the tonnage shortfalls.
Mill performance was adversely affected by low availability due to a large
number of minor maintenance issues which resulted in lower throughput. This
lower availability and more frequent unscheduled production stoppages had an
adverse impact on metallurgical control and was compounded by the lower grade of
ore treated resulting in lower than average metallurgical recovery.
A major overhaul of the ageing jig circuit was completed during the financial
period with the aim of lifting recovery. This proved ineffective and subsequent
to the period end the five main jigs comprising the circuit were replaced.
Operating costs and capital expenditure were also constrained during the period.
Lower tin production resulted in unsustainably high unit costs. These are
expected to fall to more sustainable levels during the current period as tin
production increases to mine design levels.
A continued high standard of safety performance was recorded during the period
and by period end 267 days lost time injury free had been recorded resulting in
the all time lost time injury frequency rate falling to 8.3 per million man
hours worked.
An updated Environmental Management Plan was prepared and submitted during the
period in accordance with Tasmanian Government regulatory requirements. The plan
provides for the comprehensive management of all Environmental aspects of the
Renison Bell operations for the next 3 years.
Rounding Off
The Company is of a kind referred to in ASIC Class Order 98/100 dated 10 July
1998 and in accordance with that Class Order, amounts in the financial report
and the directors' report have been rounded off to the nearest one thousand
dollars, unless otherwise indicated.
Dated at Perth this 11th day of March 2003.
Signed in accordance with a resolution of the Directors.
................................... .................................
B G CAMARRI P C ATHERLEY
Chairman Managing Director
CONSOLIDATED
2002 2001
$'000 $'000
Revenue from sale of goods 18,772 19,292
Revenue from rendering of services - 176
Other revenues from ordinary activities 308 462
Total revenue 19,080 19,930
Change in inventories of finished goods and work in progress 1,136 (270)
Contractors 10,086 13,206
Consumables 4,928 5,748
Selling and realisation expenses 2,896 4,612
Insurance costs 326 216
Employee expenses 4,173 3,307
Depreciation and amortisation expenses 690 816
Borrowing costs 121 163
Royalties 253 255
Hedge book losses 6,691 1,679
Writedown of inventories - 1,002
Writedown in carrying value 14,356 -
Other expenses from ordinary activities 1,461 1,296
Loss from ordinary activities before related income tax (28,037) (12,100)
expense
Income tax relating to loss from ordinary activities - -
Loss from ordinary activities after related income tax (28,037) (12,100)
expense
Basic earnings/(loss) per share (21.70) (12.24)
Diluted earnings/(loss) per share (21.70) (11.24)
The condensed statement of financial performance is to be read in conjunction
with the notes to and forming part of the half year financial report set out on
Pages 8 to 11.
As at As at
31 December 30 June
2002 2002
Note $'000 $'000
CURRENT ASSETS
Cash assets 747 342
Receivables 13,608 1,966
Inventories 1,633 5,269
Other 981 242
Total Current Assets 16,969 7,819
NON-CURRENT ASSETS
Receivables 22 11,982
Other financial assets 25 51
Mining property 2,051 14,195
Total Non-Current Assets 2,098 26,228
Total Assets 19,067 34,047
CURRENT LIABILITIES
Payables 15,776 12,785
Interest-bearing liabilities 1,927 1,700
Provisions 532 3,079
Provision for mark to market hedge contracts 4 23,469 -
Other 1,274 1,349
Total Current Liabilities 42,978 18,913
Non-Current liabilities
Interest-bearing liabilities - 346
Provisions 5,058 4,973
Other 637 14,686
Total Non-Current Liabilities 5,695 20,005
Total Liabilities 48,673 38,918
Net Liabilities (29,606) (4,871)
EQUITY
Contributed equity 37,055 33,753
Accumulated losses (66,661) (38,624)
(29,606) (4,871)
The condensed statement of financial position is to be read in conjunction with
the notes to and forming part of the half year financial report set out on Pages
8 to 11.
CONSOLIDATED
Note 2002 2001
$'000 $'000
Cash flows from operating activities
Cash receipts in the course of operations 18,697 21,922
Cash payments in the course of operations (20,724) (25,461)
Interest received 137 412
Interest and other finance costs paid (59) (134)
Net cash used in operating activities (1,949) (3,261)
Cash flows from investing activities
Payments for property, plant and equipment (65) (39)
Proceeds from sale of assets - 97
Proceeds from repayment of security deposits 438 -
Payments for project evaluation (326) (638)
Payments for exploration and development (55) (278)
Net cash used in investing activities (8) (858)
Cash flows from financing activities
Proceeds from issue of shares 3,307 -
Transaction costs relating to issue of shares (5) -
Proceeds from borrowings - 2,765
Repayment of hire purchase & lease obligations (65) (131)
Repayment of borrowings (750) (3,345)
Net cash provided by/(used in) financing activities 2,487 (711)
Net increase / (decrease) in cash held 530 (4,830)
Cash at the beginning of the financial period 342 17,413
Transfer to deposit account - (11,500)
Effect of exchange rate changes on the balances of cash
held in foreign currencies (117) (13)
Cash at the end of the financial period 755 1,070
The condensed statement of cash flows is to be read in conjunction with the
notes to and forming part of the half year financial report set out on Pages 8
to 11.
1. BASIS OF PREPARATION OF THE HALF-YEAR FINANCIAL REPORT
The half-year financial report does not include all notes of the type
normally included within the annual financial report and therefore cannot
be expected to provide as full an understanding of the financial
performance, financial position and financing and investing activities of
the consolidated entity as the full financial report.
The half-year financial report should be read in conjunction with the
Annual Financial Report of Murchison United NL as at 30 June 2002. It is
also recommended that the half-year financial report be considered together
with any public announcements made by Murchison United NL and its
controlled entities during the half year ended 31 December 2002 in
accordance with the continuous disclosure obligations arising under the
Corporations Act 2001.
(a) Basis of accounting
The half-year financial report is a general purpose financial report,
which has been prepared in accordance with the requirements of the
Corporations Act 2001, applicable Accounting Standards including AASB
1029 " Interim Financial Reporting" and other mandatory professional
reporting requirements (Urgent Issues Group Consensus Views).
The half-year financial report has been prepared in accordance with
the historical cost convention.
For the purpose of preparing the half-year financial report, the
half year has been treated as a discrete reporting period.
(b) Accounting policies
The accounting policies adopted are consistent with those applied in
the 30 June 2002 annual financial report.
(c) Financial Position and Financing Arrangements
For the half year ended 31 December 2002, the consolidated entity
recorded an operating loss of $28,037,000 (2001: $12,100,000) and had
a working capital deficiency of $26,009,000. At balance date, the net
fair value of financial instruments recognised in the Condensed
Statement of Financial Position was a liability of $23.4 million which
is classified as Current Liabilities - Other. The consolidated entity
holds $12.3 million in support of these financial instruments, which
is classified as a Current Receivable in the Condensed Statement of
Financial Position. Both of these amounts are included in the working
capital position referred to above.
As described in note 6, subsequent to the end of the financial period
the Australian dollar appreciated against the US dollar which resulted
in the net fair value of financial instruments reducing from $23.4
million to $12.3m. This reduction in the liability enabled the close
out of the foreign exchange hedge contracts with Westpac Banking
Corporation, which if it had occurred at 31 December 2002 would have
resulted in a $11.1 million improvement in the working capital
position of the consolidated entity. The monies held on deposit by
the consolidated entity with Westpac, and disclosed as a Current
Receivable in the Statement of Financial Position as at 31 December
2002, were applied in settlement of the transaction.
(c) Financial Position and Financing Arrangements (continued)
The half-year consolidated financial report has been prepared on the
going concern basis, which contemplates continuity of business
activities and realisation of assets and settlement of liabilities in
the ordinary course of business. The directors believe this to be
appropriate for the following reasons:
* Subsequent to 31 December 2002, the foreign exchange contracts
with Westpac Banking Corporation were closed out.
* The consolidated entity has adopted a mine operating plan based
on the current Australian dollar tin price for the Renison Bell
operation that seeks to maximise the operating cash flows over
the next 18 months and which the Directors believe will meet all
present obligations and commitments associated with the ongoing
conduct of the business operations of the consolidated entity.
The consolidated entity continues to receive the support of all
major stakeholders in the implementation of this plan.
* In the event that the Directors consider it necessary to raise
additional capital, the Directors reasonably believe that the
consolidated entity has the capacity to attract such funding
having regard for its demonstrated history of raising equity
funds and arranging debt finance. The Directors have commenced
preliminary discussions in this regard.
However, should there be a material adverse change in certain of
these factors, including the Australian dollar tin price and the
support from major stakeholders , the Company may be in a
position such that it is not be able to continue as a going
concern and may be required to realise assets and extinguish
liabilities other than in the normal course of business and at
amounts different to those stated in the financial report.
2. SEGMENT REPORTING
The consolidated entity operates in one business segment, being the mining
industry and within one geographical segment, being Australia.
3. RECONCILIATION OF CASH
For the purposes of the Condensed Statement of Cash Flows, cash includes
cash on hand and at bank and bank term deposits. Cash as at the end of
the financial period as shown in the Condensed Statement of Cash Flows,
is reconciled to the related items in the condensed statement of financial
performance of as follows:
2002 2001
$'000 $'000
Cash 747 675
Receivables - Current 8 395
755 1,070
4. FOREIGN EXCHANGE RISK
The consolidated entity enters into forward foreign exchange contracts to
hedge certain anticipated sales denominated in US dollars.
As at the end of the financial period the consolidated entity had a
total of US$82.5 million in outstanding foreign currency hedging facilities
with Westpac Banking Corporation. The mark to market value of these
contracts as shown below has been brought to account in the financial
statements and is shown in the condensed statement of financial performance
as Current Liabilities - Other:
Hedge Realised/Unrealised
Contract Gain/(Loss) on Hedge
Value Contracts brought to
account
US$ A$
Total outstanding at 31 December 2002 82,500,000 (23,468,913)
Refer Note 6.
5. CONTINGENT ASSETS AND LIABILITIES
Since the last annual reporting date, there has been no change in
any contingent liabilities or contingent assets.
6. EVENTS SUBSEQUENT TO BALANCE DATE
At the end of the financial period, the consolidated entity had outstanding
foreign currency hedging facilities with Westpac Banking Corporation for
US$82.5 million at a rate of A$/US$ 0.6705. As disclosed in Note 4, the
out of the money position of these contracts has been brought to account at
31 December 2002 based on the spot rate at that date. This has resulted in
the consolidated entity providing for the loss of $23.4 million, being the
out of the money position.
Subsequent to balance date, the consolidated entity has closed out its
foreign currency hedging facilities with Westpac. The effective rate
received upon closing out these facilities was A$/US$ 0.6176. As this
rates reflects an appreciation of the A$/US$ since the end of the financial
period, the out of the money mark to market value of the hedge contracts at
close out was A$12.4 million reflecting an accounting gain of $11.1 million
based on the provision at 31 December 2002. The out of the money position
at close out was satisfied by the funds held in support of the hedging
facilities by Westpac ($12.3 million at 31 December 2002 included in
Current Assets - Receivables in the condensed statement of financial
position).
The financial effect of this transaction, had it occurred at the end of the
financial period, is as follows:
i) a reduction in the operating loss for the period by $11.1 million
reflecting the appreciation in the A$/US$ rate at the time that the
hedging facilities were closed out;
ii) a reduction in Current Assets - Receivables of $12.3 million being the
deposit held by Westpac in support of the hedging facilities which was
used to fund the mark to market position at close out;
iii) a reduction in Current Liabilities - Other of $23.4 million being the
provision for the out of the money position at the end of the
financial period; and
iv) a reduction in Net Liabilities of $11.1 million from $29.6 million to
$18.5 million.
In the opinion of the Directors of Murchison United NL:
1. the financial statements and notes set out on pages 5 to 11 are in
accordance with the Corporations Act 2001, including:
(a) giving a true and fair view of the financial position of the
consolidated entity as at 31 December 2002 and of its performance, as
represented by the results of its operations and cash flows for the
half-year ended on that date; and
(b) complying with Accounting Standard AASB 1029 "Interim Financial
Reporting" and the Corporations Regulations 2001; and
2. on the basis of the disclosure in Note 1(c), there are reasonable
grounds to believe that the company will be able to pay its debts as and
when they become due and payable.
Dated at Perth this 11th day of March 2003.
Signed in accordance with a resolution of the Directors:
................................... .................................
B G CAMARRI P C ATHERLEY
Chairman Managing Director
To the members of Murchison United NL
Scope
We have reviewed the financial report of Murchison United NL for the half-year
ended 31 December 2002, set out on pages 5 to 12, including the Directors'
Declaration. The financial report includes the consolidated financial statements
of the consolidated entity comprising Murchison United NL and the entities it
controlled at the end of the half-year or from time to time during the
half-year. The company's directors are responsible for the financial report. We
have conducted an independent review of the financial report in order to state
whether, on the basis of the procedures described, anything has come to our
attention that would indicate that the financial report is not presented fairly
in accordance with Accounting Standard AASB 1029 "Interim Financial Reporting"
and other mandatory professional reporting requirements in Australia and
statutory requirements and in order for the company to lodge the financial
report with the Australian Securities and Investments Commission.
Our review has been conducted in accordance with Australian Auditing Standards
applicable to review engagements. Our review was limited primarily to inquiries
of the consolidated entity's personnel and analytical review procedures applied
to financial data. These procedures do not provide all the evidence that would
be required in an audit, thus the level of assurance provided is less than that
given in an audit. We have not performed an audit and, accordingly, we do not
express an audit opinion.
Review Statement
As a result of our review, we have not become aware of any matter that makes us
believe that the half-year financial report of Murchison United NL is not in
accordance with:
(a) the Corporations Act 2001, including:
(i) giving a true and fair view of the consolidated entity's financial
position as at 31 December 2002 and its performance for the half-year
ended on that date; and
(ii) complying with Accounting Standard AASB 1029 "Interim Financial
Reporting", and the Corporations Regulations 2001;
(b) other mandatory professional reporting requirements in Australia.
Inherent uncertainty regarding continuation as a going concern
Without qualification to the statement expressed above, attention is drawn to
the following matter. As a result of the matters described in note 1(c), there
is significant uncertainty whether the entity will be able to continue as a
going concern and therefore whether it will realise its assets and extinguish
its liabilities in the normal course of business and at the amounts stated in
the financial report.
Ernst & Young
J P Dowling
Partner
Perth
Date: 11 March 2003
This information is provided by RNS
The company news service from the London Stock Exchange
END
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