Anglo Platinum Interim Result

Anglo American PLC 30 July 2003 News Release 30 July 2003 Anglo American plc ("Anglo American") notification: Anglo Platinum interim results 2003 Anglo American wishes to draw attention to Anglo Platinum's announcement of their results for the 6 months to 30 June 2003, attached hereto. Anglo American Platinum Corporation Limited (Incorporated in the Republic of South Africa) (Registration No. 1946/022452/06) ("Anglo Platinum") JSE Share Code: AMS ISIN: ZAE000013181 A Member of the Anglo American plc Group Interim Report for the six months ended 30 June 2003 Main features for the six months ended 30 June 2003 Earnings per share (cents)550,2 Interim dividend per share (cents)370,0 Pt production from mines+ 9,6% Cash on-mine cost per ton milled at steady-state operations* +9,4% * Includes all operations except Bafokeng-Rasimone Platinum Mine, Rustenburg UG2 Project and Modikwa Platinum Mine all which are in a production ramp-up phase. Consolidated income statement Reviewed Reviewed Audited ----------------- ------- ---------- ---------- ------- ----------- Six months Six months Year ----------------- ------- ---------- ---------- ------- ----------- ended ended ended ----------------- ------- ---------- ---------- ------- ----------- 30 June 30 June % 31 December ----------------- ------- ---------- ---------- ------- ----------- R millions Notes 2003 2002 Change 2002 ----------------- ------- ---------- ---------- ------- ----------- Gross sales 7 349,6 9 697,6 20 285,7 revenue -------- ---------- ---------- -------- ----------- ---------------- Commissions paid 203,5 433,2 733,0 ---------------- -------- ---------- ---------- -------- ----------- Net sales revenue 7 146,1 9 264,4 (23) 19 552,7 ---------------- -------- ---------- ---------- -------- ----------- Cost of sales 5 266,6 4 463,6 (18) 10 129,9 ---------------- -------- ---------- ---------- -------- ----------- Cash operating 5 087,4 3 960,6 8 883,9 costs -------- ---------- ---------- -------- ----------- ---------------- On-mine - steady 3 025,4 2 640,0 5 733,3 state operations -------- ---------- ---------- -------- ----------- ---------------- On-mine - projects 1 140,1 676,8 1 636,1 in ramp-up phase -------- ---------- ---------- -------- ----------- ---------------- Purchases of metals 126,3 - 121,9 in concentrate -------- ---------- ---------- -------- ----------- ---------------- Smelting 416,9 282,2 640,6 ---------------- -------- ---------- ---------- -------- ----------- Treatment and 378,7 361,6 752,0 refining -------- ---------- ---------- -------- ----------- ---------------- Amortisation of 4 514,7 343,8 763,8 operating assets -------- ---------- ---------- -------- ----------- ---------------- Increase in metal (665,9) (146,3) (109,1) inventories -------- ---------- ---------- -------- ----------- ---------------- Other costs 330,4 305,5 591,3 ---------------- -------- ---------- ---------- -------- ----------- Gross profit on 5 1 879,5 4 800,8 (61) 9 422,8 metal sales -------- ---------- ---------- -------- ----------- ---------------- Other net income/ 6 25,5 (494,0) (754,7) (expenditure) -------- ---------- ---------- -------- ----------- ---------------- Market development (129,4) (139,4) (266,5) and promotional -------- ---------- ---------- -------- ----------- expenditure ------------------ Operating profit 1 775,6 4 167,4 (57) 8 401,6 ------------------ -------- ---------- ---------- -------- ----------- Net interest (paid)/ (19,5) 107,4 155,7 received -------- ---------- ---------- -------- ----------- ------------------ Income from 12,8 105,6 181,6 associates -------- ---------- ---------- -------- ----------- ------------------ Profit before 1 768,9 4 380,4 (60) 8 738,9 taxation -------- ---------- ---------- -------- ----------- ------------------ Taxation 585,9 1 735,0 66 2 998,9 ------------------ -------- ---------- ---------- -------- ----------- Net profit 1 183,0 2 645,4 (55) 5 740,0 ------------------ -------- ---------- ---------- -------- ----------- Headline earnings 7 1 115,9 2 614,6 (57) 5 630,4 ------------------ -------- ---------- ---------- -------- ----------- Number of ordinary 215,1 214,7 214,9 shares in issue -------- ---------- ---------- -------- ----------- (millions) ------------------ Weighted average number of -------- ---------- ---------- -------- ----------- ------------------ ordinary shares in 215,0 214,3 214,5 issue (millions) -------- ---------- ---------- -------- ----------- ------------------ Earnings per share (cents) -------- ---------- ---------- -------- ----------- ------------------ - Basic 550,2 1 234,4 (55) 2 676,0 ------------------ -------- ---------- ---------- -------- ----------- - Headline 519,0 1 220,1 (58) 2 624,9 ------------------ -------- ---------- ---------- -------- ----------- - Diluted (basic) 549,7 1 216,8 (55) 2 671,0 ------------------ -------- ---------- ---------- -------- ----------- - Diluted (headline) 518,5 1 205,3 (57) 2 620,0 -------- ---------- ---------- -------- ----------- ------------------ Dividends per share 370,0 900,0 (66) 1 800,0 (cents) -------- ---------- ---------- -------- ----------- ------------------ - Interim 370,0* 900,0 900,0 ------------------ -------- ---------- ---------- -------- ----------- - Final - - 900,0 ------------------ -------- ---------- ---------- -------- ----------- Dividend cover 1,4 1,4 21 1,5 (headline earnings) -------- ---------- ---------- -------- ----------- ------------------ * Proposed dividend Consolidated balance sheet Reviewed Reviewed Audited --------------------- ------- ---------- ---------- ------------ as at as at as at --------------------- ------- ---------- ---------- ------------ 30 June 30 June 31 December --------------------- ------- ---------- ---------- ------------ R millions Notes 2003 2002 2002 --------------------- ------- ---------- ---------- ------------ ASSETS --------------------- -------- ---------- ---------- ------------ Non-current assets 18 760,3 12 958,3 16 192,3 --------------------- -------- ---------- ---------- ------------ Property, plant and equipment 14 355,6 8 884,0 10 503,1 --------------------- -------- ---------- ---------- ------------ Capital work-in-progress 3 718,5 3 468,4 4 941,5 --------------------- -------- ---------- ---------- ------------ Platinum Producers' 95,1 73,1 89,3 Environmental Trust -------- ---------- ---------- ------------ --------------------- Investment in associates 8 492,5 301,2 557,6 --------------------- -------- ---------- ---------- ------------ Non-current accounts 98,6 231,6 100,8 receivable -------- ---------- ---------- ------------ --------------------- Current assets 4 632,0 5 952,3 5 017,6 --------------------- -------- ---------- ---------- ------------ Inventories 3 2 537,8 1 813,6 1 819,9 --------------------- -------- ---------- ---------- ------------ Accounts receivable 1 452,7 1 800,6 1 617,7 --------------------- -------- ---------- ---------- ------------ Cash and cash equivalents 641,5 2 338,1 1 580,0 --------------------- -------- ---------- ---------- ------------ Total assets 23 392,3 18 910,6 21 209,9 --------------------- -------- ---------- ---------- ------------ EQUITY AND LIABILITIES --------------------- -------- ---------- ---------- ------------ Share capital and reserves --------------------- -------- ---------- ---------- ------------ Share capital 21,5 21,5 21,5 --------------------- -------- ---------- ---------- ------------ Share premium 767,5 1 252,5 754,0 --------------------- -------- ---------- ---------- ------------ Accumulated profits before proposed dividend -------- ---------- ---------- ------------ --------------------- and related secondary tax on 3 11 656,2 10 727,1 12 408,6 companies (STC) -------- ---------- ---------- ------------ --------------------- Accumulated profits after proposed dividend -------- ---------- ---------- ------------ --------------------- and related STC 10 760,8 8 553,3 10 232,7 --------------------- -------- ---------- ---------- ------------ Proposed ordinary dividend 795,9 1 932,3 1 934,1 --------------------- -------- ---------- ---------- ------------ STC in respect of proposed 99,5 241,5 241,8 dividend -------- ---------- ---------- ------------ --------------------- Shareholders' equity 12 445,2 12 001,1 13 184,1 --------------------- -------- ---------- ---------- ------------ Non-current liabilities 5 126,7 3 672,5 4 580,8 --------------------- -------- ---------- ---------- ------------ Deferred taxation 4 198,0 2 940,7 3 763,3 --------------------- -------- ---------- ---------- ------------ Environmental obligations 207,5 183,5 192,8 --------------------- -------- ---------- ---------- ------------ Employees' service benefit 459,4 548,3 488,3 obligations -------- ---------- ---------- ------------ --------------------- Obligations due under finance 261,8 - 136,4 leases -------- ---------- ---------- ------------ --------------------- Current liabilities 5 820,4 3 237,0 3 445,0 --------------------- -------- ---------- ---------- ------------ Accounts payable 1 853,9 1 350,9 1 893,7 --------------------- -------- ---------- ---------- ------------ Taxation 3 413,3 1 886,1 1 551,3 --------------------- -------- ---------- ---------- ------------ Interest-bearing borrowings 9 3 553,2 - - --------------------- -------- ---------- ---------- ------------ Total equity and liabilities 23 392,3 18 910,6 21 209,9 --------------------- -------- ---------- ---------- ------------ Group statement of changes in shareholders' equity Share Share Accumulated ------------------- --------- ---------- ------------ ----------- R millions capital premium profits Total ------------------- --------- ---------- ------------ ----------- Balance as at 31 December 2001 - --------- ---------- ------------ ----------- ------------------- previously reported (audited) 21,4 1 203,6 11 296,6 12 521,6 --------- ---------- ------------ ----------- ------------------- Change in accounting policy with respect --------- ---------- ------------ ----------- ------------------- to recognising metals in concentrate as --------- ---------- ------------ ----------- ------------------- inventory on the balance sheet 215,4 215,4 (Note 3) --------- ---------- ------------ ----------- ------------------- Gross 322,1 322,1 ------------------- --------- ---------- ------------ ----------- Taxation (106,7) (106,7) ------------------- --------- ---------- ------------ ----------- Balance as at 31 December 2001 --------- ---------- ------------ ----------- ------------------- - restated (reviewed) 21,4 1 203,6 11 512,0 12 737,0 ------------------- --------- ---------- ------------ ----------- Net profit 2 645,4 2 645,4 ------------------- --------- ---------- ------------ ----------- Dividends paid in cash (3 430,3) (3 430,3) ------------------- --------- ---------- ------------ ----------- Share capital issued 0,1 48,9 49,0 ------------------- --------- ---------- ------------ ----------- Balance as at 30 June 2002 ------------------- --------- ---------- ------------ ----------- - restated (reviewed) 21,5 1 252,5 10 727,1 12 001,1 ------------------- --------- ---------- ------------ ----------- Net profit 3 094,6 3 094,6 ------------------- --------- ---------- ------------ ----------- Dividends paid in cash (1 932,6) (1 932,6) ------------------- --------- ---------- ------------ ----------- Share capital issued - * 25,9 25,9 ------------------- --------- ---------- ------------ ----------- Repurchase of ordinary - (524,4) 519,5 (4,9) shares --------- ---------- ------------ ----------- ------------------- Cost of shares sold by wholly 0,2 491,8 492,0 owned subsidiary to parent --------- ---------- ------------ ----------- company ------------------- Unrealised after-tax Group 27,7 27,7 profit on disposal of holding --------- ---------- ------------ ----------- company shares to parent company ------------------- Shares repurchased by parent (0,2) (524,4) (524,6) company from wholly-owned --------- ---------- ------------ ----------- subsidiary (cancelled) ------------------- Balance as at 31 December 2002 --------- ---------- ------------ ----------- ------------------- - restated (reviewed) 21,5 754,0 12 408,6 13 184,1 ------------------- --------- ---------- ------------ ----------- Net profit 1 183,0 1 183,0 ------------------- --------- ---------- ------------ ----------- Dividends paid in cash (1 935,4) (1 935,4) ------------------- --------- ---------- ------------ ----------- Share capital issued - * 13,5 13,5 ------------------- --------- ---------- ------------ ----------- Balance as at 30 June 2003 21,5 767,5 11 656,2 12 445,2 (reviewed) --------- ---------- ------------ ----------- ------------------- * Less than R50 000. Consolidated cash flow statement Reviewed Reviewed Audited ------------------------- ----------- ----------- ------------ Six months Six months Year ------------------------- ----------- ----------- ------------ ended ended ended ------------------------- ----------- ----------- ------------ 30 June 30 June 31 December ------------------------- ----------- ----------- ------------ R millions 2003 2002 2002 ------------------------- ----------- ----------- ------------ CASH FLOWS FROM OPERATING ACTIVITIES ------------------------- ----------- ----------- ------------ Cash receipts from customers 7 187,1 9 234,4 20 004,9 ------------------------- ----------- ----------- ------------ Cash paid to suppliers and employees (5 550,8) (5 057,7) (10 399,6) ------------------------- ----------- ----------- ------------ Cash from operations 1 636,3 4 176,7 9 605,3 ------------------------- ----------- ----------- ------------ Interest expensed (79,8) (19,8) (35,4) ------------------------- ----------- ----------- ------------ Taxation paid (1 277,3) (2 551,3) (3 304,1) ------------------------- ----------- ----------- ------------ Net cash from operating activities 279,2 1 605,6 6 265,8 ------------------------- ----------- ----------- ------------ CASH FLOWS USED IN INVESTING ACTIVITIES ----------- ----------- ------------ ------------------------- Purchase of property, plant and (3 053,9) (2 477,4) (5 994,1) equipment ----------- ----------- ------------ ------------------------- To maintain operations (1 482,7) (630,5) (2 140,9) ------------------------- ----------- ----------- ------------ To expand operations (1 519,8) (1 846,9) (3 853,2) ------------------------- ----------- ----------- ------------ Interest capitalised (51,4) - - ------------------------- ----------- ----------- ------------ Proceeds from sale of property, plant, equipment ----------- ----------- ------------ ------------------------- and mineral rights 76,3 632,3 778,4 ------------------------- ----------- ----------- ------------ Investment in associates (1,4) (0,3) (300,3) ------------------------- ----------- ----------- ------------ Interest received 72,4 135,8 203,1 ------------------------- ----------- ----------- ------------ Capital reduction by Northam Platinum 10,3 - 39,0 Limited ----------- ----------- ------------ ------------------------- Dividends received 47,3 37,0 89,7 ------------------------- ----------- ----------- ------------ Net cash used in investing activities (2 849,0) (1 672,6) (5 184,2) ------------------------- ----------- ----------- ------------ CASH FLOWS FROM/ (USED IN) FINANCING ACTIVITIES ----------- ----------- ------------ ------------------------- Proceeds from the issue of share - * 0,1 0,1 capital ----------- ----------- ------------ ------------------------- Increase in share premium 13,5 48,9 74,8 ------------------------- ----------- ----------- ------------ Proceeds from current borrowings 3 553,2 - - ------------------------- ----------- ----------- ------------ Dividends paid (1 935,4) (3 430,3) (5 362,9) ------------------------- ----------- ----------- ------------ Net cash from/(used in) financing 1 631,3 (3 381,3) (5 288,0) activities ----------- ----------- ------------ ------------------------- Net decrease in cash and cash (938,5) (3 448,3) (4 206,4) equivalents ----------- ----------- ------------ ------------------------- Cash and cash equivalents at beginning 1 580,0 5 786,4 5 786,4 of year ----------- ----------- ------------ ------------------------- Cash and cash equivalents at end of 641,5 2 338,1 1 580,0 period/year ----------- ----------- ------------ ------------------------- * Less than R 50 000. A non cash transaction in the form of a finance lease for housing was concluded. During the period assets of R125,4 million (December 2002: R136,4 million) were acquired in terms of this transaction. Notes to the interim report 1. This interim report complies with International Accounting Standard 34 - Interim Financial Reporting and South African Statement of Generally Accepted Accounting Practice, AC127, with the same title, and with Schedule 4 of the South African Companies Act. 2. The interim report has been prepared using accounting policies that comply with South African Statements of Generally Accepted Accounting Practice and International Financial Reporting Standards. Except for the change in accounting policy described below, the policies are consistent with those applied in the financial statements for the year ended 31 December 2002. 3. Change in accounting policy The Group is increasingly entering into agreements to purchase significant quantities of concentrate from joint venture partners. When such material is on hand at the end of a reporting period, it is recognised as inventory on the Group's balance sheet. To ensure that the accounting treatment of 'purchased' and 'produced' concentrate is congruent, the Group has changed its accounting policy to recognise its own production of metals in concentrate within inventory. This change in accounting policy results in improved matching of costs with revenue. This change in accounting policy resulted in a net credit to accumulated profits at 1 January 2002 of R 215,4 million, after tax of R 106,7 million. Opening retained earnings, inventory and taxation have been restated, however, no restatement of the six months ended 30 June 2002 and the year ended 31 December 2002 was done as the change in accounting policy is not material to those results. Gross Taxation Net ------------------------------ --------- ----------- --------- Rm Rm Rm ------------------------------ --------- ----------- --------- Effect of the change in accounting policy with --------- ----------- --------- ------------------------------ respect to recognising purchased and ------------------------------ --------- ----------- --------- produced concentrate inventory: ------------------------------ --------- ----------- --------- Opening retained earnings 322,1 (106,7) 215,4 ------------------------------ --------- ----------- --------- Earnings for the six months ended 30 June 447,1 (148,0) 299,1 2003 --------- ----------- --------- ------------------------------ Reviewed Reviewed Audited --------------------- ------------ ------------ ------------- Six months Six months Year --------------------- ------------ ------------ ------------- ended ended ended --------------------- ------------ ------------ ------------- 30 June 30 June 31 December --------------------- ------------ ------------ ------------- 2003 2002 2002 --------------------- ------------ ------------ ------------- Rm Rm Rm --------------------- ------------ ------------ ------------- 4. Amortisation and depreciation of property, ------------ ------------ ------------- --------------------- plant and equipment 524,4 365,9 797,2 --------------------- ------------ ------------ ------------- Amortisation of operating assets 514,7 343,8 763,8 --------------------- ------------ ------------ ------------- Mining 427,1 287,9 646,1 --------------------- ------------ ------------ ------------- Smelting 48,3 25,8 57,0 --------------------- ------------ ------------ ------------- Treatment and refining 37,8 28,8 57,9 --------------------- ------------ ------------ ------------- Decommissioning asset 1,5 1,3 2,8 --------------------- ------------ ------------ ------------- Depreciation - non-mining assets --------------------- ------------ ------------ ------------- (included in Other costs) 9,7 22,1 33,4 --------------------- ------------ ------------ ------------- 5. Gross profit on metal sales - Segmental information Purchases of ------------------------ ----------- ------------- ----------- metals in ------------------------ ----------- ------------- ----------- R millions Mined concentrate Total ------------------------ ----------- ------------- ----------- Six months ended 30 June 2003 (reviewed) ----------- ------------- ----------- ------------------------ Gross sales revenue 7 210,4 139,2 7 349,6 ------------------------ ----------- ------------- ----------- Commissions paid 199,5 4,0 203,5 ------------------------ ----------- ------------- ----------- Net sales revenue 7 010,9 135,2 7 146,1 ------------------------ ----------- ------------- ----------- Cost of sales 5 166,3 100,3 5 266,6 ------------------------ ----------- ------------- ----------- Cash operating costs 4 942,8 144,6 5 087,4 ------------------------ ----------- ------------- ----------- On-mine - steady state operations 3 025,4 - 3 025,4 ------------------------ ----------- ------------- ----------- On-mine - projects in ramp-up phase 1 140,1 - 1 140,1 ------------------------ ----------- ------------- ----------- Purchases of metals in concentrate - 126,3 126,3 ------------------------ ----------- ------------- ----------- Smelting 405,0 11,9 416,9 ------------------------ ----------- ------------- ----------- Treatment and refining 372,3 6,4 378,7 ------------------------ ----------- ------------- ----------- Amortisation of operating assets 512,6 2,1 514,7 ------------------------ ----------- ------------- ----------- Increase in metal inventories (612,9) (53,0) (665,9) ------------------------ ----------- ------------- ----------- Other costs 323,8 6,6 330,4 ------------------------ ----------- ------------- ----------- 1 844,6 34,9 1 879,5 ------------------------ ----------- ------------- ----------- Year ended 31 December 2002 (audited) ------------------------ ----------- ------------- ----------- Gross sales revenue 20 194,4 91,3 20 285,7 ------------------------ ----------- ------------- ----------- Commissions paid 723,3 9,7 733,0 ------------------------ ----------- ------------- ----------- Net sales revenue 19 471,1 81,6 19 552,7 ------------------------ ----------- ------------- ----------- Cost of sales 10 049,2 80,7 10 129,9 ------------------------ ----------- ------------- ----------- Cash operating costs 8 753,2 130,7 8 883,9 ------------------------ ----------- ------------- ----------- On-mine - steady state operations 5 733,3 - 5 733,3 ------------------------ ----------- ------------- ----------- On-mine - projects in ramp-up phase 1 636,1 - 1 636,1 ------------------------ ----------- ------------- ----------- Purchases of metals in concentrate - 121,9 121,9 ------------------------ ----------- ------------- ----------- Smelting 633,6 7,0 640,6 ------------------------ ----------- ------------- ----------- Treatment and refining 750,2 1,8 752,0 ------------------------ ----------- ------------- ----------- Amortisation of operating assets 762,8 1,0 763,8 ------------------------ ----------- ------------- ----------- Increase in metal inventories (55,4) (53,7) (109,1) ------------------------ ----------- ------------- ----------- Other costs 588,6 2,7 591,3 ------------------------ ----------- ------------- ----------- 9 421,9 0,9 9 422,8 ------------------------ ----------- ------------- ----------- The Group commenced purchases of metals in concentrate from the 3rd quarter of 2002 and therefore no comparative figures are presented for the six months ended 30 June 2002. Reviewed Reviewed Audited ---------------------- ------------ ------------ ------------- Six months Six months Year ---------------------- ------------ ------------ ------------- ended ended ended ---------------------- ------------ ------------ ------------- 30 June 30 June 31 December ---------------------- ------------ ------------ ------------- R millions 2003 2002 2002 ---------------------- ------------ ------------ ------------- 6. Other net income/(expenditure) ---------------------- ------------ ------------ ------------- Other net income/(expenditure) consists of the following principal ------------ ------------ ------------- categories: ---------------------- Net realised and unrealised foreign ---------------------- ------------ ------------ ------------- exchange losses (198,2) (551,4) (879,1) ---------------------- ------------ ------------ ------------- Profit on disposal of mineral 64,6 25,0 98,0 rights ------------ ------------ ------------- ---------------------- Profit on commodity contracts 156,3 - - ---------------------- ------------ ------------ ------------- Other 2,8 32,4 26,4 ---------------------- ------------ ------------ ------------- 25,5 (494,0) (754,7) ---------------------- ------------ ------------ ------------- 7. Reconciliation between net profit and headline earnings ---------------------- ----------------- ---------- ---------- Net profit 1 183,0 2 645,4 5 740,0 ---------------------- ----------------- ---------- ---------- Adjustments: ---------------------- ----------------- ---------- ---------- Profit on disposal of mineral (64,6) (25,0) (98,0) rights ----------------- ---------- ---------- ---------------------- Net negative goodwill amortisation (2,5) (5,8) (11,6) ---------------------- ----------------- ---------- ---------- Headline earnings 1 115,9 2 614,6 5 630,4 ---------------------- ----------------- ---------- ---------- 8. Investment in associates 492,5 301,2 557,6 ---------------------------- ----------- ---------- ---------- Unlisted investment in associate Carrying 267,8 - 298,3 amount ----------- ---------- ---------- ---------------------------- Directors' valuation - R267,8m (Dec 02 - R298,3m) ----------- ---------- ---------- ---------------------------- Listed investment in associate ---------------------------- ----------- ---------- ---------- Carrying amount 224,7 301,2 259,3 ---------------------------- ----------- ---------- ---------- Market value R643,4m (Jun 02 - ---------------------------- ----------- ---------- ---------- R874,2m; Dec 02 - R972,8m) ---------------------------- ----------- ---------- ---------- 9. Borrowing facilities ---------------------------- ----------- ---------- ---------- The Group has the following borrowing ---------------------------- ----------- ---------- ---------- facilities: ---------------------------- ----------- ---------- ---------- Reviewable annually by lenders at ---------------------------- ----------- ---------- ---------- various dates during 2003 and 2004 4 900,0 2 735,0 2 735,0 ---------------------------- ----------- ---------- ---------- Amount utilised: floating rate (3 553,2) - - ---------------------------- ----------- ---------- ---------- Available undrawn borrowing facilities 1 346,8 2 735,0 2 735,0 ---------------------------- ----------- ---------- ---------- Facilities under negotiation: ---------------------------- ----------- ---------- ---------- Short term 1 000,0 ---------------------------- ----------- ---------- ---------- Long term 2 000,0 ---------------------------- ----------- ---------- ---------- 3 000,0 ---------------------------- ----------- ---------- ---------- 10. Borrowing powers The borrowing powers in terms of the articles of association of the holding company and its subsidiaries are unlimited. Reviewed Reviewed Audited --------------------- ------------ ------------ ------------- Six months Six months Year --------------------- ------------ ------------ ------------- ended ended ended --------------------- ------------ ------------ ------------- 30 June 30 June 31 December --------------------- ------------ ------------ ------------- R millions 2003 2002 2002 --------------------- ------------ ------------ ------------- 11. Commitments --------------------- ------------ ------------ ------------- Mining property, plant and equipment ------------ ------------ ------------- --------------------- Contracted for 2 776,8 1 532,3 2 094,3 --------------------- ------------ ------------ ------------- Not yet contracted for 12 548,3 10 262,9 14 850,6 --------------------- ------------ ------------ ------------- Authorised by the directors 15 325,1 11 795,2 16 944,9 --------------------- ------------ ------------ ------------- Allocated for: --------------------- ------------ ------------ ------------- Expansion of capacity 8 689,3 8 560,6 13 913,9 --------------------- ------------ ------------ ------------- - for remainder of the year/within 2 334,7 2 309,3 5 013,9 one year ------------ ------------ ------------- --------------------- - within two to five years 6 354,6 6 251,3 8 900,0 --------------------- ------------ ------------ ------------- Maintenance of capacity 6 635,8 3 234,6 3 031,0 --------------------- ------------ ------------ ------------- - for remainder of the year/within 1 686,9 946,4 1 570,1 one year ------------ ------------ ------------- --------------------- - within two to five years 4 948,9 2 288,2 1 460,9 --------------------- ------------ ------------ ------------- Other --------------------- ------------ ------------ ------------- Operating lease rentals - premises 440,1 45,1 38,1 --------------------- ------------ ------------ ------------- - for remainder of the year/within 7,9 7,1 15,2 one year ------------ ------------ ------------- --------------------- - within two to five years 59,9 38,0 22,9 --------------------- ------------ ------------ ------------- - thereafter 372,3 - - --------------------- ------------ ------------ ------------- Information Technology Service 112,2 179,6 139,4 Providers ------------ ------------ ------------- --------------------- - for remainder of the year/within 15,7 26,0 42,9 one year ------------ ------------ ------------- --------------------- - within two to five years 96,5 153,6 96,5 --------------------- ------------ ------------ ------------- Commitments will be funded from future cash flows from operations after payment of dividends, borrowings and any other funding strategy embarked on by the Group. 12. Contingent liabilities Letters of comfort have been issued to financial institutions to cover certain banking facilities. There are no encumbrances of Group assets, other than the houses held under finance leases by the Group. The Group provided guarantees in favour of Changing Tides 166 (Proprietary) Limited, a wholly-owned subsidiary of Group 5 Construction Limited (Group 5). The guarantee provides security for lease payments to Group 5 by the Anglo Platinum Housing Trust (APHT). The probability of any obligation arising under this guarantee is considered remote. The Group provided a guarantee in favour of BoE Merchant Bank Limited (BoE) for financing provided by BoE to Salene Mining (Proprietary) Limited (Salene). The Group provided the guarantee to enable Salene to put mining infrastructure in place. The guarantee is valid until 1 July 2006 or if earlier, on repayment by Salene of the loan. Salene will sell all ore production from the mine to the Group. The facility granted by BoE to Salene is for a maximum amount of R120 million. In the event that BoE calls up the guarantee, the Group holds bonds over sufficient assets of Salene to make good any obligations that may be incurred. It is unlikely that the Group will incur obligations under this guarantee. 13. Comparative figures Comparative figures have been restated as explained in note 3. Where appropriate, comparative figures have been reformatted to facilitate comparability. Supplementary information for convenience of users Consolidated income statement UNITED STATES DOLLAR EQUIVALENT Reviewed Reviewed Audited --------------------- ------------ ------------ ------------- Six months Six months Year --------------------- ------------ ------------ ------------- ended ended ended --------------------- ------------ ------------ ------------- 30 June 30 June 31 December --------------------- ------------ ------------ ------------- US $ millions 2003 2002 2002 --------------------- ------------ ------------ ------------- Gross sales revenue 915,1 882,8 1 936,1 --------------------- ------------ ------------ ------------- Commissions paid 25,3 39,4 70,0 --------------------- ------------ ------------ ------------- Net sales revenue 889,8 843,4 1 866,1 --------------------- ------------ ------------ ------------- Cost of sales 655,6 406,3 966,7 --------------------- ------------ ------------ ------------- Cash operating costs 633,3 360,5 847,8 --------------------- ------------ ------------ ------------- On-mine - steady state operations 376,7 240,3 547,2 --------------------- ------------ ------------ ------------- On-mine - projects in ramp-up phase 141,9 61,6 156,1 --------------------- ------------ ------------ ------------- Purchases of metals in concentrate 15,7 - 11,6 --------------------- ------------ ------------ ------------- Smelting 51,9 25,7 61,1 --------------------- ------------ ------------ ------------- Treatment and refining 47,1 32,9 71,8 --------------------- ------------ ------------ ------------- Amortisation of operating assets 64,1 31,3 72,9 --------------------- ------------ ------------ ------------- Increase in metal inventories (82,9) (13,3) (10,4) --------------------- ------------ ------------ ------------- Other costs 41,1 27,8 56,4 --------------------- ------------ ------------ ------------- Gross profit on metal sales 234,2 437,1 899,4 --------------------- ------------ ------------ ------------- Other net income/(expenditure) 3,2 (44,9) (72,0) --------------------- ------------ ------------ ------------- Market development and promotional (16,1) (12,7) (25,4) expenditure ------------ ------------ ------------- --------------------- Operating profit 221,3 379,5 802,0 --------------------- ------------ ------------ ------------- Net interest (paid)/received (2,4) 9,8 14,9 --------------------- ------------ ------------ ------------- Income from associates 1,6 9,6 17,3 --------------------- ------------ ------------ ------------- Profit before taxation 220,5 398,9 834,2 --------------------- ------------ ------------ ------------- Taxation 72,9 157,9 286,1 --------------------- ------------ ------------ ------------- Net profit 147,6 241,0 548,1 --------------------- ------------ ------------ ------------- Dividends paid in cash (241,0) (312,3) (511,8) --------------------- ------------ ------------ ------------- Exchange rate translation 204,3 143,2 398,2 adjustment ------------ ------------ ------------- --------------------- Accumulated profits at beginning of 1 446,6 962,5 962,5 year as restated ------------ ------------ ------------- --------------------- As previously stated 1 446,6 944,5 944,5 --------------------- ------------ ------------ ------------- Change in accounting policy translated at 2001 ------------ ------------ ------------- --------------------- closing rate (Note 3) - 18,0 18,0 --------------------- ------------ ------------ ------------- Repurchase of shares by holding company from ------------ ------------ ------------- --------------------- wholly owned subsidiary - - 49,6 --------------------- ------------ ------------ ------------- Accumulated profits at end of period/ 1 557,5 1 034,4 1 446,6 year ------------ ------------ ------------- --------------------- Average Rand/US$ exchange rate 8,0319 10,9855 10,4778 --------------------- ------------ ------------ ------------- Number of ordinary shares in issue 215,1 214,7 214,9 (millions) ------------ ------------ ------------- --------------------- Weighted average number of ordinary shares ------------ ------------ ------------- --------------------- in issue (millions) 215,0 214,3 214,5 --------------------- ------------ ------------ ------------- Earnings per share (cents) --------------------- ------------ ------------ ------------- - Basic 68,7 112,5 255,5 --------------------- ------------ ------------ ------------- - Headline 64,6 111,2 250,5 --------------------- ------------ ------------ ------------- - Diluted (basic) 68,4 110,8 254,9 --------------------- ------------ ------------ ------------- - Diluted (headline) 64,6 109,7 250,1 --------------------- ------------ ------------ ------------- Dividends per share (cents) 46,1 86,0 191,7 --------------------- ------------ ------------ ------------- - Interim 46,1* 86,0 86,8 --------------------- ------------ ------------ ------------- - Final - - 104,9 --------------------- ------------ ------------ ------------- Income statement items were translated at the average exchange rate for the period/year. * Proposed dividend Supplementary information for convenience of users Consolidated balance sheet UNITED STATES DOLLAR EQUIVALENT Reviewed Reviewed Audited ------------------------- ----------- ----------- ------------ as at as at as at ------------------------- ----------- ----------- ------------ 30 June 30 June 31 December ------------------------- ----------- ----------- ------------ US $ millions 2003 2002 2002 ------------------------- ----------- ----------- ------------ ASSETS ------------------------- ----------- ----------- ------------ Non-current assets 2 506,8 1 249,5 1 887,8 ------------------------- ----------- ----------- ------------ Current assets 618,9 574,1 585,0 ------------------------- ----------- ----------- ------------ Total assets 3 125,7 1 823,6 2 472,8 ------------------------- ----------- ----------- ------------ EQUITY AND LIABILITIES ------------------------- ----------- ----------- ------------ Shareholders' equity 1 663,0 1 157,3 1 537,0 ------------------------- ----------- ----------- ------------ Non-current liabilities 685,0 354,1 534,0 ------------------------- ----------- ----------- ------------ Current liabilities 777,7 312,2 401,8 ------------------------- ----------- ----------- ------------ Total equity and liabilities 3 125,7 1 823,6 2 472,8 ------------------------- ----------- ----------- ------------ Closing Rand/US$ exchange rate 7,4838 10,3705 8,5775 ------------------------- ----------- ----------- ------------ Balance sheet items were translated at the closing exchange rate. Supplementary information for convenience of users Consolidated cash flow statement UNITED STATES DOLLAR EQUIVALENT Reviewed Reviewed Audited --------------------- ------------ ------------ ------------- Six months Six months Year --------------------- ------------ ------------ ------------- ended ended ended --------------------- ------------ ------------ ------------- 30 June 30 June 31 December --------------------- ------------ ------------ ------------- US$ millions 2003 2002 2002 --------------------- ------------ ------------ ------------- Net cash from operating activities 34,9 146,2 598,1 --------------------- ------------ ------------ ------------- Net cash used in investing (354,7) (152,2) (494,7) activities ------------ ------------ ------------- --------------------- Net cash from/(used in) financing 203,1 (307,8) (504,7) activities ------------ ------------ ------------- --------------------- Net decrease in cash and cash (116,7) (313,8) (401,3) equivalents ------------ ------------ ------------- --------------------- Exchange rate translation 18,2 55,5 101,7 adjustment ------------ ------------ ------------- --------------------- Cash and cash equivalents at 184,2 483,8 483,8 beginning of year ------------ ------------ ------------- --------------------- Cash and cash equivalents at end of 85,7 225,5 184,2 period/year ------------ ------------ ------------- --------------------- Average Rand/US$ exchange rate 8,0319 10,9855 10,4778 --------------------- ------------ ------------ ------------- Cash flow items were translated at the average exchange rate for the period/ year. * Less than US$ 50 000 A non cash transaction in the form of a finance lease for housing was concluded. During the period assets of $12,0 million (December 2002: $17,0 million) were acquired in terms of this transaction. Supplementary information Consolidated statistics (Unaudited) Six months Six months Year -------------- --------------- --------- ----------- ----------- ended ended ended -------------- --------------- --------- ----------- ----------- 30 June 30 June 31 December -------------- --------------- --------- ----------- ----------- Total 2003 2002 2002 operations --------------- --------- ----------- ----------- -------------- Marketing statistics --------------- --------- ----------- ----------- -------------- Average market prices achieved --------------- --------- ----------- ----------- -------------- Platinum (US$/oz) 649 513 544 -------------- --------------- --------- ----------- ----------- Palladium (US$/oz) 202 371 329 -------------- --------------- --------- ----------- ----------- Rhodium (US$/oz) 556 946 831 -------------- --------------- --------- ----------- ----------- Nickel (US$/lb) 3,62 2,91 3,03 -------------- --------------- --------- ----------- ----------- Net sales revenue (US$) 899 819 829 per Pt ounce --------------- --------- ----------- ----------- sold -------------- Platinum (R/oz) 5 198 5 533 5 567 revenue --------------- --------- ----------- ----------- -------------- Palladium (R/oz) 1 614 4 036 3 403 revenue --------------- --------- ----------- ----------- -------------- Rhodium revenue (R/oz) 4 460 10 387 8 683 -------------- --------------- --------- ----------- ----------- Nickel revenue (R/lb) 29,46 32,02 31,92 -------------- --------------- --------- ----------- ----------- Net sales revenue (R) 7 222 8 995 8 690 per Pt ounce --------------- --------- ----------- ----------- sold -------------- Average Pt (R : $) 8,0052 10,7842 10,2422 exchange rates --------------- --------- ----------- ----------- achieved -------------- Exchange rates at (R : $) 7,4838 10,3705 8,5775 end of period --------------- --------- ----------- ----------- -------------- Profitability statistics --------------- --------- ----------- ----------- -------------- Gross sales (R) 441 669 703 revenue per ton --------------- --------- ----------- ----------- milled -------------- Gross profit (%) 25,6 49,5 46,5 margin --------------- --------- ----------- ----------- -------------- Earnings before (R millions) 2 300,7 4 633,9 9 368,4 interest, --------------- --------- ----------- ----------- taxation, depreciation and amortisation (EBITDA) -------------- Operating profit (%) 21,9 71,6 66,3 to average --------------- --------- ----------- ----------- operating assets -------------- Return on average (%) 18,5 44,2 44,3 shareholders' --------------- --------- ----------- ----------- equity -------------- Return on capital (%) 17,9 44,5 42,7 employed --------------- --------- ----------- ----------- -------------- Interest bearing (%) 30,7 - - debt to --------------- --------- ----------- ----------- shareholders' equity -------------- Analysis of operating --------------- --------- ----------- ----------- -------------- contribution by (R millions) mine --------------- --------- ----------- ----------- -------------- Rustenburg 575,1 1 419,0 2 794,2 Section --------------- --------- ----------- ----------- -------------- Union Section 195,4 630,3 1 059,3 -------------- --------------- --------- ----------- ----------- Amandelbult 1 007,8 2 060,9 3 886,2 Section --------------- --------- ----------- ----------- -------------- Potgietersrust 312,1 518,5 926,1 Platinums --------------- --------- ----------- ----------- -------------- Lebowa Platinum 88,0 238,5 450,1 Mines --------------- --------- ----------- ----------- -------------- Steady state 2 178,4 4 867,2 9 115,9 operating --------------- --------- ----------- ----------- contribution -------------- Bafokeng-Rasimone 51,2 171,8 433,9 Platinum Mine --------------- --------- ----------- ----------- -------------- Rustenburg UG2 (7,4) 67,3 451,4 Project --------------- --------- ----------- ----------- -------------- Modikwa Platinum (12,3) - 12,9 Mine --------------- --------- ----------- ----------- -------------- Consolidated operating --------------- --------- ----------- ----------- contribution -------------- - all 2 209,9 5 106,3 10 014,1 operations --------------- --------- ----------- ----------- -------------- Other costs 330,4 305,5 591,3 -------------- --------------- --------- ----------- ----------- Gross profit on 1 879,5 4 800,8 9 422,8 metal sales --------------- --------- ----------- ----------- -------------- Refined production from --------------- --------- ----------- ----------- -------------- mining operations --------------- --------- ----------- ----------- -------------- Platinum (thousands) 897,9 1 043,3 2 238,5 -------------- (oz) --------- ----------- ----------- --------------- Palladium (thousands) 456,0 515,5 1 103,1 -------------- (oz) --------- ----------- ----------- --------------- Rhodium (thousands) 94,3 82,5 210,0 -------------- (oz) --------- ----------- ----------- --------------- Gold (thousands) 51,9 60,1 106,7 -------------- (oz) --------- ----------- ----------- --------------- Nickel (thousands) 10,1 9,2 19,4 -------------- (tons) --------- ----------- ----------- --------------- Copper (thousands) 6,2 5,1 10,5 -------------- (tons) --------- ----------- ----------- --------------- PGM's (thousands) 1 622,0 1 787,5 3 920,6 -------------- (oz) --------- ----------- ----------- --------------- Refined production from --------------- --------- ----------- ----------- -------------- purchases of metals in --------------- --------- ----------- ----------- -------------- concentrate -------------- --------------- --------- ----------- ----------- Platinum (thousands) 17,2 - 12,6 -------------- (oz) --------- ----------- ----------- --------------- Palladium (thousands) 14,1 - 12,2 -------------- (oz) --------- ----------- ----------- --------------- Rhodium (thousands) 3,5 - 1,7 -------------- (oz) --------- ----------- ----------- --------------- Gold (thousands) 0,7 - 0,4 -------------- (oz) --------- ----------- ----------- --------------- Nickel (thousands) 0,1 - - -------------- (tons) --------- ----------- ----------- --------------- Copper (thousands) 0,1 - - -------------- (tons) --------- ----------- ----------- --------------- PGM's (thousands) 39,8 - 27,0 -------------- (oz) --------- ----------- ----------- --------------- Total refined production --------------- --------- ----------- ----------- -------------- Platinum (thousands) 915,1 1 043,3 2 251,1 -------------- (oz) --------- ----------- ----------- --------------- Palladium (thousands) 470,1 515,5 1 115,3 -------------- (oz) --------- ----------- ----------- --------------- Rhodium (thousands) 97,8 82,5 211,7 -------------- (oz) --------- ----------- ----------- --------------- Gold (thousands) 52,6 60,1 107,1 -------------- (oz) --------- ----------- ----------- --------------- Nickel (thousands) 10,2 9,2 19,4 -------------- (tons) --------- ----------- ----------- --------------- Copper (thousands) 6,3 5,1 10,5 -------------- (tons) --------- ----------- ----------- --------------- PGM's (thousands) 1 661,8 1 787,5 3 947,6 -------------- (oz) --------- ----------- ----------- --------------- Total (thousands) 1 173,2 1 070,8 2 276,6 concentrator (oz) --------- ----------- ----------- platinum ounces --------------- -------------- Commentary SAFETY Anglo Platinum has continued its intense focus on safety programmes and is pleased to report a further significant improvement in the lost-time injury frequency rate per 200 000 hours worked ("LTIFR") for the period under review. The LTIFR was 0,79 for the first half of 2003 compared with 1,49 for the same period in 2002. Most regrettably and notwithstanding the overall improvement in safety, 12 employees died at managed operations as a result of work related accidents. The Board and management are committed to eliminating fatalities at work and maintain focus on this objective. RESULTS SUMMARY Platinum ounces in concentrate delivered to the Process Division rose by 9,6% over the equivalent period last year and amounted to 1 173 200 ounces. The increase is attributable mainly to the added contribution from mines in the ramp up phase - Modikwa, Bafokeng-Rasimone and phases 1 and 2 of the Rustenburg UG2 project. Refined platinum production was negatively affected by a 205 000 ounce build-up of pipeline stocks in the Process Division, and amounted to 915 100 ounces for the six months to June 2003. The majority of the build-up is temporary and will be released in the second half of 2003. The average rand/US dollar exchange rate for the six months to June 2003 was 26,9% lower than it was in the same period in 2002. Had the average rand/US dollar exchange rate been the same as that for the first half of 2002, gross sales revenue would have been R2,54 billion higher than the R7,35 billion recorded. Cost of sales rose by 18,0% or R0,80 billion mainly because of increased production from ramp-up operations and inflationary cost pressures. Headline earnings declined by 57,3% to R1,12 billion. Headline earnings per share decreased by 57,5% to 519 cents per share. Dividend cover has been maintained at 1,4 in line with last year, and accordingly a dividend of 370 cents per share has been declared. OPERATIONS Mining operations The first six months of 2003 saw a pleasing increase in total production, with an additional 102 400 platinum ounces in concentrate delivered to the smelters. Total production was slightly below plan because of shortfalls at the Waterval Mine at Rustenburg Section and at Modikwa. These shortfalls were due to limited face availability resulting from development rates falling below plan. Accelerated development plans are in place at both operations to address the backlog. Potgietersrust has successfully brought the Zwartfontein South pit into production and this has resulted in a significant improvement in the mine's head grade. The additional ounces from this source will assist in partly offsetting production shortfalls at Waterval Mine and Modikwa in the second half of 2003. The increasing shift to UG2 mining at the steady state operations resulted in lower grade and associated lower concentrating recovery. This led to a 4,7% decrease in the ratio of concentrator platinum ounces produced to tons milled. Mining costs Cash on-mine costs at steady state operations increased by 14,6% to R3,03 billion. Expressed in terms of cost per ton milled the increase was 9,4%, slightly above inflation. This was achieved in the face of a 9,8% annual wage increase, above inflation increases in steel costs and costs to equalise retirement fund contribution rates across the Group. In addition the Group raised the level of expenditure in key areas such as safety, training and health. As a result of the lower grade and recovery arising from increased UG2 production, the cash cost per platinum ounce increased by 14,5%. Cash on-mine costs at ramp-up operations increased by R463,3 million due to higher production. Process operations The smelting operations have undergone substantial change over the past six months. Three significant capital plants were commissioned and are in the process of being ramped up - the Polokwane Smelter, the ACP Converter and the slag cleaning furnace. In addition the smelter leasing arrangements with Xstrata were terminated. The combination of these activities caused a temporary stock build-up during June which resulted in material being transferred to the magnetic concentration plant at the base metal refinery too late to be processed into refined metal by the end of the reporting period. The base and precious metals refineries performed well. During June, the combination of the late release of metal from Waterval Smelter and certain technical challenges arising from the processing of different sources of matte caused a temporary build-up in process stocks. The total increase in pipeline stock was equivalent to 205 000 ounces. Approximately 20% of the increase is the expected absorption by the ACP convertor and Polokwane Smelter and the remainder is temporary and will be released over the next few months. Process costs As previously advised, the old convertors and acid plant at Waterval Smelter are continuing to operate to provide dual processing capability during the ACP Converter build-up. Together with the commissioning of the Polokwane Smelter this resulted in an increase in cash smelting costs of R134,7 million to R416,9 million, an increase of 47,7%. Smelting capacity is now greater than the mines' short term requirements and consequently unit costs per ton smelted will remain high until increased concentrate deliveries from the expansion programme result in closer matching of capacity to actual throughput. Cash treatment and refining costs increased by 4,7%, from R361,6 million to R378,7 million. Operations costs The steady state cash operating cost per refined platinum ounce, adjusted to take into account the build-up in pipeline stocks, increased by 14,8%. FINANCIAL RESULTS Gross sales revenue decreased by R2,35 billion to R7,35 billion. The decrease was caused primarily by the stronger rand (R2,54 billion) and lower sales volumes (R0,09 billion), partly offset by an increase in US dollar revenues for metals sold (R0,28 billion). The net sales revenue per platinum ounce sold ("basket price") decreased by 19,7%, from R8 995 in the first half of 2002 to R7 222 in the first half of 2003. Cost of sales rose by R0,80 billion to R5,27 billion. Cash mining, smelting and refining costs increased by R1,00 billion to R4,96 billion as explained in the Operations commentary. Purchases of metal in concentrate amounted to R126,3 million. Amortisation of operating assets rose by R170,9 million with the addition of amortisation charges for Modikwa, the Polokwane Smelter and the ACP Converter, which were not operating in the first half of 2002. Increased ongoing capital expenditure has also contributed to a general increase in amortisation charges across the operations. The value of metals in inventory increased by R665,9 million during the six months to June 2003, primarily because of the increase in pipeline stocks. The valuation incorporated an amount of R447,1 million in respect of a change in the accounting policy for metal inventories which now includes values for all metal at the smelters, whereas previously only metal suitable for despatch to the magnetic concentration plant was included. The change, which increased earnings for the first half of 2003 by approximately R299,1 million, was necessary to account for concentrate purchases from joint venture partners and also to more properly match the cost of sales with sales revenue during a period when an appreciable change in smelter stocks occurred. Other net income in the first half of 2003 amounted to R25,5 million compared with other net expenditure of R494,0 in the first half of 2002. This primarily reflects lower foreign exchange losses resulting from a lower appreciation of the rand than in the previous period, profits realised on commodity contracts and a higher profit on the disposal of mineral rights. Net interest paid during the review period amounted to R19,5 million, compared with interest received of R107,4 million in the first half of 2002, as a result of the Group moving into a borrowed position. Interest paid is net of R51,3 million of interest on borrowings allocated to capital projects under construction. CAPITAL EXPENDITURE Capital expenditure amounted to R3,05 billion (2002: R2,48 billion). Expenditure to maintain operations increased from R0,63 billion to R1,48 billion owing to increased expenditure on projects to replace production at steady state mines, including the Rustenburg UG2 Phase 2 project. Expansion capital expenditure amounted to R1,52 billion (2002: R1,85 billion). Capital commitments at 30 June 2003 amounted to R2,78 billion (June 2002: R1,53 billion). Following a focused capital optimisation programme, the Group has revised its total capital spend for the year from R7,7 billion down to R7,0 billion. The Group will continue to ensure that, where possible, capital expenditure is deferred without adversely affecting planned production levels. NET DEBT (borrowings less cash reserves) During the six months ended 30 June 2003 the Group moved from a net cash position of R1,44 billion to a net debt position of R3,17 billion - a net outflow of R4,61 billion. Cash generated by operations amounted to R1,64 billion (2002: R4,18 billion). Payments consisted mainly of capital expenditure totalling R3,05 billion (2002: R2,48 billion), dividends of R1,94 billion (2002: R3,43 billion) and taxation of R1,28 billion (2002: R2,55 billion). Borrowings as at 30 June 2003 are made up primarily of short-term debt facilities. Discussions with external financiers and with Anglo Platinum's major shareholder, Anglo American plc with a view to structuring an appropriate financing package to meet the funding required for the company's expansion programmme in the face of reduced cash inflows, caused primarily by the sustained strength of the South African Rand are well advanced. NEW MINERALS LEGISLATION, EMPOWERMENT OF HISTORICALLY DISADVANTAGED SOUTH AFRICANS and progress on social upliftment programmes Anglo Platinum continues to work closely with the Department of Minerals and Energy and good progress is being made towards meeting the challenging ownership and attributable production requirements of the Mineral and Petroleum Resources Development Act and Broad Based Economic Empowerment Charter. In addition, the Group advises that the mining licenses applied for on the Eastern Limb have been granted. Several significant ventures with Historically Disadvantaged South African (HDSA) partners have commenced, and other agreements are being negotiated. The Group is very concerned about the impact of the Mineral and Petroleum Royalty Bill on existing operations and new projects. Representations have been made to the Department of Finance regarding matters of concern and there is ongoing interaction with government in this regard. Social upliftment programmes, the provision of anti-retroviral treatment for employees with AIDS, development of small and medium HDSA enterprises and employment equity targets are all being vigorously pursued as part of the Group's commitment to broad based economic empowerment initiatives. PROJECTS Anglo Platinum believes that the expansion programme target to produce at the rate of 3,5 million ounces of refined platinum per year by the end of 2006 remains appropriate in view of market demand fundamentals. Clearly the viability of projects needs to be evaluated in view of changing market parameters, such as the strong rand when compared to the US dollar, and this may affect project scheduling and the time taken to bring new projects on stream. Progress on the major projects is as follows: • Rustenburg UG2 Project: • Phase 1: The project consists of the 400 000 tons per month Waterval UG2 concentrator processing ore from the new Waterval Mine as well as the Brakspruit, Bleskop and Paardekraal shafts. Production has continued to build up, albeit at a slower rate than planned for 2003 because of limited face availability resulting from below plan development at the Waterval Mine. An accelerated development programme is in place to address this. The ore upgrading project will be commissioned in the second half of 2003. • Phase 2: This phase consists of two new decline shafts at Boschfontein as well UG2 production from the existing Frank and Townlands shafts. The UG2 Waterval concentrator will be expanded to process the additional 400 000 tons per month of UG2 ore that will be produced when all of the shafts are operating at capacity. Development at Frank and Townlands shafts is proceeding on plan and portal excavation at the Boschfontein East and West declines is complete. UG2 production at Frank and Townlands has commenced as planned. • Bafokeng-Rasimone: The mine has made steady progress during the first half of 2003. Grade and recovery have improved materially compared with the first half of 2002 and platinum ounces delivered to smelting operations has increased by 14,4%. • Modikwa Platinum Mine: Build-up in run of mine ore was below plan owing to limited face availability. Development rates are improving and production rates are expected to be in line with the plan by the end of the year. The concentrator continues to perform well. • Anglo Platinum Converting Process ("ACP") Project: Matte converting operations in terms of phase 1 commenced at the beginning of 2003. Commissioning has progressed in line with plan and management remains confident that the project will achieve design parameters, including the restriction of sulphur emissions to 20 tons per day by the end of 2004. In addition design work on phase 2 of the project, which includes a second convertor, is well advanced. Commissioning difficulties with reverts handling during the transition from the leased Xstrata smelter to the slag cleaning furnace caused a build-up in material that was mostly cleared from the smelters by the end of June 2003. • Polokwane Smelter: Throughput build-up is progressing exceptionally well. Some logistical problems were experienced with handling and storage of furnace matte. These are not considered major and will be resolved in the second half of the year. • Twickenham Platinum Mine: Access development operations and surface earthworks are well under way. Full contractor site establishment is complete. • Rustenburg Tailings Retreatment: Construction is on schedule and the plant is expected to commence commissioning in the first quarter of 2004. The following major projects were announced in the six months to June 2003: • The venture with Aquarius Platinum (SA) to jointly mine adjacent properties: Certain mining assets will be pooled and operated with both parties sharing equally in the proceeds. While Anglo Platinum will start to treat concentrate from the venture only in 2005, the Group will share in profits from the commencement of the venture in November 2003. The project is expected to require capital expenditure of R750 million in 2003 terms, and will produce 280 000 ounces of platinum at full production. • The Unki Project: Negotiations are underway for Anglo Platinum to obtain a majority shareholding in this project from Anglo American Corporation Zimbabwe Limited. The project entails the development of an 85 000 ton per month mine on Zimbabwe's Great Dyke near Gweru. At full capacity, the mine will produce concentrate containing the equivalent of 58 000 ounces of refined platinum per year. The concentrate produced by the mine will be smelted and refined by Anglo Platinum in South Africa. DIVIDEND The Board has declared an interim cash dividend of 370 cents (2002: 900 cents) per ordinary share. The Group is committed to large capital expenditures for several years in order to increase production volumes. During this period cash generated by operations may vary considerably depending on short-term metal prices and the rand/US dollar exchange rate. The declaration of cash dividends will continue to be considered by the Board in conjunction with an evaluation of current and future funding requirements, and will be adjusted to levels considered appropriate at the time of the declaration. Dividends will be paid out of cash generated from operations. PROSPECTS Production from the mines is expected to continue increasing in the second half of the year and, boosted by the release of much of the pipeline build-up will result in a significant increase in refined production in the second half of the year. However, the shortfall in mines' production in the first half of 2003 will not be recovered and there is a risk that pipeline stocks at the end of the year will still be higher than planned. As a result, it is anticipated that refined platinum production for 2003 will be in the region of 2,3 million ounces. The PGM markets over the last few months have settled into fairly stable trading ranges and these are expected to continue. Industrial demand for platinum remains firm. Jewellery demand in China is encouraging despite the current relatively high price level and has largely recovered from the setback created by the measures taken to control SARS. Palladium demand is firm and is expected to increase as destocking by autocatalyst manufacturers tapers off. In spite of this, the current price is weak and will be determined by Russian supply patterns. The announcements by some automobile companies that they are considering returning to a higher percentage use of palladium in their mix of PGMs is welcomed. Notwithstanding the planned increase in volumes, earnings for the full year ending December 2003 will be significantly lower than those for the year ended December 2002 as a result of the stronger rand/US dollar exchange rate. R Havenstein B E Davison Johannesburg (Chief Executive Officer) (Chairman)29 July 2003 Report of the independent auditors To the members of Anglo American Platinum Corporation Limited We have reviewed the accompanying summarised consolidated financial statements included in the interim report of Anglo American Platinum Corporation Limited and its subsidiaries for the six months ended 30 June 2003, set out on pages 1 to 11. This interim report is the responsibility of the Company's directors. Our responsibility is to issue a report on this interim report based on our review. Scope We conducted our review in accordance with the statement of South African Auditing Standards applicable to review engagements. This standard requires that we plan and perform the review to obtain moderate assurance that the interim financial information is free of material misstatement. A review is limited primarily to enquiries of Company personnel and analytical procedures applied to financial data and thus provides less assurance than an audit. We have not performed an audit and, accordingly, we do not express an audit opinion. Review opinion Based on our review, nothing has come to our attention that causes us to believe that the accompanying interim report is not fairly presented, in all material respects, in accordance with South African Statements of Generally Accepted Accounting Practice and International Financial Reporting Standards applicable to interim financial reporting and the Companies Act in South Africa. Deloitte & Touche Registered Accountants and Auditors Chartered Accountants (SA) Johannesburg 29 July 2003 Declaration of interim ordinary dividend (No. 101) Notice is hereby given that an interim dividend of 370 cents per ordinary share, in the currency of the Republic of South Africa, has been declared in respect of the financial year ending 31 December 2003. The dividend is payable to shareholders recorded in the books of the Company at the close of business on Friday 29 August 2003. The salient dates for the interim ordinary dividend are as follows: Salient Dates for South Africa and United Kingdom2003 Last day to trade (cum dividend)Friday, 22 August First day of trading (ex dividend)Monday, 25 August Currency conversion date (for sterling payments from London)Tuesday, 26 August Record dateFriday, 29 August Payment dateWednesday, 3 September Share certificates may not be dematerialised or re-materialised between Monday, 25 August 2003 and Friday, 29 August 2003, both days inclusive, nor may transfers take place between the South African and United Kingdom share registers during this period. On Wednesday, 3 September 2003, the dividends will be electronically transferred to the bank accounts of all certificated shareholders where this facility is available. Where electronic fund transfer is not available or desired, cheques dated 3 September 2003 will be posted on that date. Dematerialised shareholders will have their accounts at their CSDP or broker credited on 3 September 2003. Shareholders registered on the United Kindom section of the register will be paid the dividend in pounds sterling at the rate of exchange determined on Tuesday, 26 August 2003. A further announcement stating the rand/sterling conversion rate will be released through the relevant South African and United Kingdom news services on Wednesday, 27 August 2003. The dividend is payable subject to conditions which may be inspected at or obtained from the Company's Johannesburg office or from its London Secretaries. By order of the Board R A Venter Company Secretary Johannesburg 29 July 2003 Administration EXECUTIVE DIRECTORS R Havenstein (Chief Executive Officer), J A Dreyer, D T G Emmett, R G Mills, B E Ngubane, R H H van Kerckhoven (Belgian), A I Wood (British) NON-EXECUTIVE DIRECTORS B E Davison (Chairman), L Boyd, M W King, W A Nairn, A J Trahar INDEPENDENT NON-EXECUTIVE DIRECTORS T A Wixley (Deputy Chairman), C B Brayshaw, B A Khumalo, THNyasulu ALTERNATE DIRECTORS A H Calver (British), J M Halhead (British) P J V Kinver (British), R Pilkington, C B Sheppard, V P Uren Company Secretary R A Venter REGISTERED OFFICE 55 Marshall Street, Johannesburg, 2001 (P.O. Box 62179, Marshalltown, 2107) Facsimile +27 11 373-5111 Telephone +27 11 373-6111 SOUTH AFRICAN REGISTRARS Computershare Limited, (Registration No. 2000/006082/06), 70 Marshall Street, Johannesburg, 2001 (P.O. Box 61051, Marshalltown, 2107) Facsimile +27 11 836-0792/6145 Telephone +27 11 370-7700 LONDON SECRETARIES Anglo American Services (UK) Limited, 20 Carlton House Terrace, London, SW1Y 5AN, England Facsimile +44 207 698-8755 Telephone +44 207 698-8888 UNITED KINGDOM REGISTRARS Capita IRG plc, The Registry, 34 Beckernham Road Beckenham, Kent, BR3 4TU, England Facsimile +44 207 478-7717 Telephone +44 207 478-8241 This information is provided by RNS The company news service from the London Stock Exchange

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