Merafe Resources Integrated Annual Report 2018

MERAFE RESOURCES INTEGRATED ANNUAL REPORT 2018 16 Financial capital (continued) Summarised consolidated statement of comprehensive income For the year ended 31 December 2018 31 December 2017 Audited Audited R'000 R'000 Revenue 5 606 324 5 888 945 EBITDA 1 345 940 1 665 259 Depreciation (405 548) (368 212) Net Financing income/(expense) 4 082 (19 325) Profit before taxation 944 475 1 277 722 Taxation (261 059) (363 604) Profit and total comprehensive income for the year 683 416 914 118 Basic earnings per share (cents) 27.2 36.4 Diluted earnings per share (cents) 27.2 36.4 Ordinary shares in issue 2 510 704 248 2 510 704 248 Weighted average number of shares for the year 2 510 704 248 2 510 704 248 Diluted weighted average number of shares for the year 2 510 704 248 2 510 704 248 Summarised consolidated statement of cash flow For the year ended 31 December 2018 31 December 2017 Audited Audited R'000 R'000 Profit before tax 944 475 1 277 722 Depreciation 405 548 368 212 Finance income (18 595) (8 633) Finance expense 14 512 27 958 Share-based payment expense 3 097 5 588 Share grants exercised (5 077) (11 053) Embedded derivative expense 34 570 155 852 Provisions 84 386 135 771 Effect of exchange rate fluctuations on cash held during the year 30 042 47 175 Adjusted for working capital changes (705 332) (219 666) Cash generated from operating activities 787 627 1 778 926 Interest paid (968) (21 125) Interest received 17 253 8 514 Taxation paid (325 417) (366 441) Net cash from operating activities 478 495 1 399 874 Sustaining capital expenditure (412 074) (402 973) Expansionary capital expenditure (190) (823) Net cash utilised in investing activities (412 264) (403 796) Dividends paid (425 963) (175 749) Loans repaid during the year (1 026) (364 803) Net cash utilised in financing activities (426 989) (540 552) Net (decrease)/increase in cash and cash equivalents (360 758) 455 526 Cash and cash equivalents at 1 January 671 655 263 304 Effect of foreign exchange rate changes (30 042) (47 175) Cash and cash equivalents at 31 December 280 855 671 655 PERFORMANCE Dividend Subject to meeting the solvency and liquidity requirements of the Companies Act No 71 of 2008, Merafe’s dividend policy is to declare a dividend of at least 30% of HEPS. In the event that there is excess cash, and subject to sufficient cash reserves being retained for sustaining and working capital needs, an additional dividend may be declared. To this end, a cash interim dividend of 8 cents per share (“cps”) was declared on 6 August 2018 (7 August 2017: 3 cps). On 11 March 2019, a gross cash final ordinary dividend of 6 cps (5 March 2017: 9 cps) was declared by the Company. Outlook With no major expansionary projects planned for 2019 and an ungeared balance sheet, Merafe is well positioned not only to withstand any market vagaries but to also take advantage of any growth opportunities that may arise.