SILICA and anthracite miner Petmin planned to continue making acquisitions of companies that met its investment criteria, it said yesterday. From a cash shell three years ago, Petmin has become a company with revenue of R176,7m in the year to June after buying silica producer SamQuarz in financial 2005 and anthracite-producer Springlake Holdings last year. SamQuarz made a full 12-month contribution in the past year against nine months in 2005, while Springlake made a contribution for seven months.
Headline earnings rose 54% to 4,98c a share compared with the same period last year but basic earnings a share fell 2% because of the issue of 83- million new shares to fund the development of the Somkhele anthracite project in KwaZulu-Natal, an opportunity that arose with the acquisition of Springlake.
No dividend was declared because funding was needed for Somkhele and to expand the SamQuarz silica operation in Mpumalanga, management said.
SamQuarz accounts for about a third of local silica production. The mineral is used in metallurgical and glass production.The company performed well in the past year and exceeded its targets, management said. Springlake has experienced underground and operational difficulties which were identified at the time Petmin undertook its due diligence investigation. The performance has been disappointing but remedial steps were being taken which management said would deliver a significant turnaround in the next 12 months. These steps included revising the underground plan, introducing a new remuneration policy with a performance-based component and appointing a new contractor for the open-pit operation.
Petmin planned to commission the Somkhele Project so that it becomes a significant contributor to earnings by December this year, it said.
© 2009 Petmin Limited