Presenter: Mining group Petmin today reported a 120% rise in headline earnings per share for the six months to end December. Revenue increased 92% to R147-million while profit after tax rose by 147%. On the line we’re joined by Bradley Doig, he’s the Chief Operating Officer at Petmin Limited. Good to have you on the programme, Bradley. What can you say has contributed to this set of numbers?
Bradley Doig: I think as everybody knows, the commodity sector has been very buoyant, so good pricing for our product range especially on the export market. Good volume increases at Somkhele and good performance out of SamQuartz and excellent cost management. Those are basically the three tenants on which we base the business.
Presenter: We know that the power crisis has had a negative impact on your production. How did you perform in terms of production?
Bradley Doig: On the power crisis negative impact was very minor. We’re not a huge consumer of electricity like the gold mines, so we have relatively small consumption. And what we’ve done is, we’ve put in counter measures with generators. So we don’t see in the medium term, a major impact on our production.
Presenter: Lets talk about the increase in resources price. Did this boost your earnings?
Bradley Doig: Yes. But as you know, the commodities, especially the coal sector has been really buoyant over the last three or four months as well and we expect that trend to continue going forward and we have a new pricing regime which will kick in towards the end of this year, for our products and hopefully we can realise additional growth there.
Presenter: Some of the questions raised by some mines was the fact that, if you look at for example, the period six months, the rand has been slightly firmer against the dollar. How did it help?
Bradley Doig: You know, when we brought Somkhele into production we took a relatively conservative view being a new project, so we took out a hedge on our exports, about 400 000 tons of our export sales for the year on a current account basis, sort of between R7 and R9 plus-minus which gives us enough exposure to the weakening rand if it does weaken, but also sets the base appropriately you know, to the areas where we budgeted. So we’re comfortable with that kind of approach.
Presenter: At R9 to the dollar – isn’t it a little bit high?
Bradley Doig: I don’t know. That was at the rate that the bank gave us, so we’re quite comfortable with that.
Presenter: How is your listing on the London Stock Exchange, Alternative Investment doing?
Bradley Doig: Its been very good the last six months. We’ve got more liquidity going there and we’ve had some interest from some major institutional shareholders who have taken positions in the London market and its a great platform for us for further growth as well.
Presenter: Your focus for the next six months?
Bradley Doig: Buoyant. We expect a solid performance going forward until our June year-end.
© 2008 Petmin Limited