摘要:This paper applied various valuation models to evaluate Lonmin’s financial performance in the year 2007. Based on the main calculations, Based on the calculations, the companys value of share price was $31.77. However, the market value of the share price for Lonmin was $38.25 (30/09/07).
Annual Report Analysis for Lonmin Plc
1. Introduction
This report aims to analyse the annual performance of Lonmin Plc in this financial year, especially to evaluate the company’s balance sheet, income statement and cash flow statement recorded in the latest annual report (2007). Additionally, the report will focus on conducting a deep analysis of this companys five year financial performance by calculating some key financial figures to analyze the financial reviews of Lonmin’ Annual Report.
2. Critical Evaluation of Performance as Detailed in Most Recent Annual Reports
2.1 An Overview of the Business Performance based upon the 5 Year Review
During the past few years, Lonmin has experienced a significant increase in the amount of revenues, which stood at $1,941 million and increased by 149.17 per cent compared with the financial year of 2003 ($779 million), especially, in comparing with the figure in the prior year (2006: $1,855 million), the revenues in 2007 has witnessed an upward trend of 4.64%. It can be illustrated in the following table (Table 2.1):
Table 2.1 Five-Year Financial Performance of Lonmin Plc
2007
$m
2006
$m
2005
$m
2004
$m
2003
$m
Revenue 1,941 1,855 1,128 1,030 779
Net operating costs (1,147) (1,013) (778) (726) (481)
Operating profit 794 842 350 304 298
Financial income and expenses (net) (89) (209) (31) (14) (7)
Profit before tax 705 633 319 290 291
Income tax expense (391) (320) (139) (165) (217)
Profit for the financial period 314 313 180 125 74
Source: Investors Relations of Lonmin Plc (2008), https://www.lonmin.com/investors.aspx?pageid=11
After investing a great amount of capital in developing future business streams, especially in mineral resources and reserves, Lonmin has witnessed a growth in final dividends per share of 9.1% during the year 2007 (Lonmin Annual Report, 2007). Especially, this group highly focused on corporate sustainability and consistently took this concern as one part of the company’s cultures.
Particularly, this report aims to provide a valuation on Lonmin’s financial performance based on its Annual Report 2007, as well as an analysis on its major financial statements, the relevant ratios analysis, and the capital structures. By estimating the value of the company, it will also make appropriate references to accounting policies, board members reports and corporate governance issues as to forecast its future performance during the next few years.
2.2 An Overview of Lonmins Five-Year Business Performance
Noticeably, the company’s revenue experienced a growth rate of about 149.17 percent during the period from year 2003 to 2007, that arrived over $1,941 million at the end of 2007 (Figure 1(a)&(b)).
Figure 1 (a)
Figure 1 (b)
Source: Lonmin Annual Report 2007
The South Africa-Based Company Lonmin Plc specializes in a wide range of the supply of precious properties, including platinum production, oxidisation and corrosion resistance as well as electricity conduction (UK Yahoo
Finance, 2008). This can be one of the attributors why the company can attract so many buyers from the public stock market. In the following, this Table de
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