PETMIN, an anthracite and silica producer, reported a maiden dividend yesterday after a strong set of results boosted cash flows and further positioned the company for growth.
Petmin has a R120m project to double anthracite output to 1,1- million saleable tons from the first quarter of 2012, making it the largest South African anthracite producer ahead of Zululand Anthracite Collieries, Petmin chairman Ian Cockerill said yesterday.
The plan is to sell about 600000 tons of that offshore and the remainder to domestic clients such as the ferrochrome industry, Mr Cockerill said. Petmin has the rights to a 600000-ton export allocation at the dry bulk terminal at Richards Bay.
Petmin paid a 6c-per-share dividend for the year to end-June . It recorded a 43% increase in net cash flow from operations to R321m. Revenue came down to R489m from R789m a year earlier, after a difficult first half of the year. Last year’s figures included the Springlake colliery, which has been sold. “The starting of dividend payments shows that Petmin is growing up and becoming a proper, fully grown-up company in which its management is confident in its capability to develop its business, pay a dividend and still grow,” Mr Cockerill said.
Petmin has an R18m, two-year exploration programme at its Somkhele anthracite mine to bolster resources and extend the life of the mine, which will be halved to 20 years with the increased output from 2012, Mr Cockerill said. Based on those drilling results and the state of the market, it will take a decision on whether to expand Somkhele’s production.
The company is scouring the market for growth projects that will meet stringent criteria and fit its strategic vision of supplying materials for infrastructure.
These would include minerals feeding the steel-making industry and metals such as copper.
“What we are looking at internally are some other things that we haven’t made public yet, which I’m excited about: more examples of the kinds of deals that Petmin has done previously where they’ve seen things for reasonable prices and turned them into something quite valuable,” Mr Cockerill said. Petmin has untapped debt facilities of about R110m, relatively low debt levels and cash of R283m, up from R91m a year earlier. It is deciding how to fund the Somkhele expansion, either using cash or incurring debt, he said.
Petmin has a 25% stake in the Veremo magnetite project, which is 75% owned by Kermas. A bankable feasibility study is under way. It could be a 1,2-million-tons-a- year pig-iron operation, with a price tag on the plant of 475m.
© 2009 Petmin Limited