Interim Results
Anglo American PLC
10 September 2002
News Release
10 September 2002
Anglo American plc reports a solid first half performance despite difficult
market conditions
• Headline earnings per share up 9% to US 60 cents.
• Headline earnings reflect improved geographic diversity: South Africa
54%, Rest of world 46%.
• Good performances from gold, base metals, coal, diamonds, forest
products, industrial minerals and ferrous metals, more than offsetting
sharply lower earnings from platinum.
• Strong improvement in the Base Metals division - headline earnings of
$37 million compared with a loss of $30 million in the first half of
2001.
• Contribution from Diamonds up by 16% on better than expected sales.
• Further cost savings and efficiency improvements of $133 million
achieved.
• Strong cash generation: EBITDA(1) interest cover of 15.5 times; EBITDA
(1) return on total capital 24%.
• $1.9 billion of acquisitions.
• Interim dividend maintained at 15 US cents per share.
HIGHLIGHTS FOR THE SIX MONTHS TO 30 JUNE 2002 6 months 6 months ended Change
ended 30.06.01
US$ million except per share amounts 30.06.02 Restated (2)
Group turnover & share of turnover of joint ventures & associates 9,567 9,807 (2)%
Total operating profit for the period 1,581 1,694 (7)%
Profit for the period 767 2,640 (71)%
Profit for the period before exceptional items 762 765 (0.4)%
Headline earnings for the period (3) 840 847 (0.8)%
Earnings per share (US$):
Headline earnings for the period 0.60 0.55 9 %
Profit for the period 0.54 1.72 (69)%
Profit for the period before exceptional items 0.54 0.50 8 %
Dividend for the period (US cents per share) 15 15 -
(1) Annualised.
(2) The profit and loss account for the six months ended 30 June 2001 has been
restated to reflect the implementation of Financial Reporting Standard (FRS) 19,
"Deferred Tax".
(3) See note 7 for basis of calculation of headline earnings.
Tony Trahar, Chief Executive, said:
"The first half of 2002 has been another challenging period for Anglo American.
However, despite continuing unfavourable economic conditions and weak commodity
markets, our first half results demonstrate a very solid performance. Improved
earnings were recorded for the majority of our businesses reflecting the ongoing
emphasis on reducing costs and improving efficiencies.
We have made further progress in implementing our strategy of adding value for
shareholders by:
- seeking growth in our natural resource businesses, both organically
and through acquisitions
- maintaining our product diversity and broadening our geographic
spread.
The leaked draft Mining Charter has done great damage to investor confidence in
South Africa. This damage can only be repaired when a final Charter and the
related Money Bill are publicly available. The imperative is to achieve black
economic empowerment in a way that enhances rather than undermines investment
sentiment towards the mining sector, which has always been a major vehicle for
international capital inflows into South Africa. With political wisdom it is
clearly possible to create a mining industry in South Africa that benefits all,
proudly reflects the South African people and continues to be internationally
competitive.
The settlement reached between Anglo Platinum and the Department of Minerals and
Energy concerning that company's six applications for mining authorisations
indicates that the imperatives of industry security, stability and growth and
black economic empowerment can be reconciled.
The outlook for most of our commodities is heavily dependent on global economic
growth. With the United States, Europe and Japan continuing to show signs of low
economic growth, the consensus outlook for global GDP growth this year is little
changed from the relatively depressed level of 2001. The recent significant
declines in equity markets have raised some concerns that the wealth effect of
these declines may affect consumer confidence, thereby impacting growth. On the
back of these uncertainties we remain cautious about the outlook for commodity
prices, although our product and geographic diversity, coupled with our
continuing cost and efficiency improvement programme, will continue to underpin
our performance going forward."
First Half Results - Overview
It is pleasing to report that headline earnings per share for the first half of
2002 increased by 9% to 60 US cents. The marginal decline of $7 million in
headline earnings to $840 million was more than offset by the cancellation of
some 163 million shares in June 2001 as part of the De Beers transaction. Six of
the Group's operating businesses and associates, including gold, base metals,
diamonds, forest products, industrial minerals and ferrous metals, reported
increased headline earnings during the first half - a strong performance that
compensated for lower earnings from platinum and coal.
Once again, the Group's performance reflects the benefits of its product
diversity and the successful integration of its recent acquisitions, with 46% of
headline earnings being derived from non-South African operations, compared with
26% in the first half of 2001. Over the past six months $1.9 billion of
acquisitions have been completed, of which 49% were in South Africa and 51%
outside South Africa. This further reflects the progress that Anglo American has
made in its strategy to pursue global diversification.
First Half Developments
Good progress has been made with the restructuring of the Base Metals division,
focusing on long-life, low-cost operations. A major development in this regard
was the agreement to acquire the Disputada copper operation in Chile, from Exxon
Mobil Corporation. Finalisation of the acquisition is subject to the
approval of the Chilean government and agreement with the state owned mining
company, ENAMI, which it is hoped will be obtained shortly. The acquisition of
Disputada will consolidate Anglo American's position as a significant, low-cost
copper producer.
In January, Anglo American announced its withdrawal from the Konkola Copper
Mines (KCM) operations in Zambia, based on KCM's high production costs and
inability to raise non-recourse external finance for the Konkola Deep Mining
Project. The final terms of the withdrawal from KCM will result in Anglo
American making available an additional amount of $34 million over and above the
$353 million already provided, which will help to secure the future of KCM as a
going concern, in accordance with the objectives of the Zambian government.
In May, Anglo American announced the sale of its 43% stake in Tati Nickel and
18% interest in BCL in Botswana to LionOre Mining International Limited for $76
million and the sale of its 50% interest in the Salobo copper deposit in Brazil
to CVRD for $51 million.
In February, Anglo Coal, as part of a consortium with BHP Billiton and Glencore,
acquired the remaining 50% interest in Cerrejon Zona Norte from Exxon Mobil
Corporation. The consortium is now the largest producer of thermal coal in
Colombia. In April, joint venture plans with Mitsui Coal were announced to
expand the Moura mine and to develop the Dawson Valley projects in Australia.
In Ferrous Metals, the acquisition of a 20.1% stake in Kumba and a 34.9% stake
in Avmin for a total of $365 million formed the basis of a broader strategic
objective of securing a meaningful interest in the iron ore sector in South
Africa. Discussions are now underway with a number of parties, including the
government and black economic empowerment groupings, with a view to unlocking
the potential of this resource in the Northern Cape. The South African
Competition Commission has recommended to the Competition Tribunal that the
proposed acquisition be approved.
Scaw Metals acquired Moly-Cop, the grinding media businesses of GS Industries of
the United States, for $105 million in May. Scaw Metals is now a leader in the
production of grinding media worldwide.
In March, as part of Anglo Forest Products' stated objective of growing its
position in the corrugated packaging market, the division successfully completed
the joint acquisition, with Spanish group Saica, of the French paper and
packaging company, La Rochette. Subsequent to this transaction the businesses of
La Rochette have been divided between Mondi and Saica, which will result in the
division retaining ownership of significant corrugated packaging businesses in
France and the United Kingdom. In addition, the division acquired a further
68.5% interest in the Syktyvkar Forest Enterprise business for a cash
consideration of $252 million. Syktyvkar is a low-cost Russian producer of A4
copy paper and supplies an important component of Mondi's product mix in
European markets.
Anglo Industrial Minerals, through Tarmac, agreed to acquire the aggregates and
ready-mixed concrete assets of the Mavike Group in Spain for a cash
consideration of $55 million. The acquisition, which was announced in May,
establishes Tarmac as the largest ready-mixed concrete supplier on the Spanish
Mediterranean coast and consolidates its position as the leading supplier in the
Madrid region.
During the period, through market purchases, the Group increased its stake in
Anglo Platinum to 63.8% and in Gold Fields Limited to 20%.
In April, as part of a repositioning of its treasury portfolio, Anglo American
placed a five year convertible bond of $1.1 billion at an interest rate of 3 3/8
% per annum, one of the largest convertible bonds to date in the United Kingdom.
The proceeds were used to pay down more expensive existing debt.
HIV/AIDS
The provision of anti-retroviral therapy (ART) for HIV/AIDS has been the subject
of intense discussion and research at Anglo American over the last 18 months. In
August, it was announced that operating companies would be encouraged to enhance
their HIV/AIDS wellness programmes by making ART available at company expense to
HIV positive employees who do not have an ART benefit through a medical aid
scheme and who have progressed to a stage of HIV infection where ART is
clinically indicated. Operations will continue to promote their substantial
education and prevention programmes, keeping Anglo American in the forefront of
advanced HIV/AIDS programmes for its employees.
South Africa's Minerals and Petroleum Bill
The leaked draft Mining Charter has done great damage to investor confidence in
South Africa. This damage can only be repaired when a final Charter and the
related Money Bill are publicly available. The imperative is to achieve black
economic empowerment in a way that enhances rather than undermines investment
sentiment towards the mining sector, which has always been a major vehicle for
international capital inflows into South Africa. With political wisdom it is
clearly possible to create a mining industry in South Africa that benefits all,
proudly reflects the South African people and continues to be internationally
competitive.
The settlement reached between Anglo Platinum and the Department of Minerals and
Energy concerning that company's six applications for mining authorisations
indicates that the imperatives of industry security, stability and growth and
black economic empowerment can be reconciled.
Black Economic Empowerment
Since 1994, Anglo American in South Africa has concluded a number of empowerment
transactions with a market value of some R10 billion, equivalent at current
exchange rates to $964 million, with Historically Disadvantaged South Africans
(HDSAs). In addition, Anglo Platinum is currently in the process of entering
into further major empowerment transactions, on a commercial basis, which will
unlock significant value for HDSAs. Moreover, during 2001, Group companies
transacted R1.3 billion of procurement, equivalent at current exchange rates to
$120 million, with HDSA companies, an increase of 23% over the prior year.
Excluding fuel and electricity, HDSA-owned businesses represented 20% of the
Group's total procurement spend in South Africa.
Dividend
An unchanged interim dividend of 15 US cents has been declared. As highlighted
in the 2001 final results announcement, consideration of any increase in the
total dividend for the year will be assessed at the time of the recommendation
of the final dividend for the year.
Outlook
The outlook for most of the Group's commodities is heavily dependent on global
economic growth. With the United States, Europe and Japan continuing to show
signs of low economic growth, the consensus outlook for global GDP growth this
year is little changed from the relatively depressed level of 2001. The recent
significant declines in equity markets have raised some concerns that the wealth
effect of these declines may affect consumer confidence, thereby impacting
growth. On the back of these uncertainties Anglo American remains cautious about
the outlook for commodity prices, although its product and geographic diversity,
coupled with its continuing cost and efficiency improvement programme, will
continue to underpin performance going forward.
For further information:
Anglo American - London
Investor Relations Media Relations
Nick von Schirnding Kate Aindow
Tel: +44 207 698 8540 Tel: +44 207 698 8619
Anglo American - Johannesburg
Investor Relations Media Relations
Anne Dunn Marion Dixon
Tel: +27 11 638 4730 Tel: +27 11 638 3001
Notes to Editors:
Anglo American plc is one of the world's largest mining and natural resource
groups. With its subsidiaries, joint ventures and associates, it is a global
leader in gold, platinum group metals and diamonds, with significant interests
in coal, base and ferrous metals, industrial minerals and forest products. The
Group is geographically diverse, with operations in Africa, Europe, South and
North America and Australia. (www.angloamerican.co.uk)
OPERATIONS REVIEW
Highlights
Headline earnings per share for the six months to 30 June 2002 were $0.60 per
share, an increase of 9% from the prior year. The increase reflects the good
performance of many of the Group's businesses as well as the cancellation of 10%
of the Company's shares in issue in June 2001 as part of the De Beers
transaction. Gold, base metals, diamonds, forest products, industrial minerals
and ferrous metals performed well. The Group's product and geographic diversity,
with 46% of headline earnings being derived from outside of South Africa,
compared with 26% in the first half of 2001, demonstrated its benefits during a
period of difficult market conditions.
In 2002, the Group adopted Financial Reporting Standard 19 'Deferred Tax' (FRS
19), which requires deferred tax to be provided on all timing differences
arising from the different treatment of items for accounting and taxation
purposes that result in an obligation to pay more tax, or a right to pay less
tax, at a future date. Adoption of FRS 19 required a restatement of the 2001
accounts, resulting in an increase in deferred tax provisions of $933 million as
at 31 December 2001, with a resulting prior year adjustment of $570 million,
after accounting for minority interests. The prior year adjustment is taken as a
write-off to reserves. The restatement of the 2001 profit and loss account
resulted in a decrease in headline earnings of $37 million for the six months to
30 June 2001 and $89 million for the year to 31 December 2001. The adoption of
FRS 19 decreased first half headline earnings for 2002 by $69 million.
Profit for the financial period was $767 million compared with $2,640 million in
the prior year. The lower profit in the current year reflects the significant
exceptional gains in 2001 owing to the De Beers transaction and the exchange of
part of the Group's interest in FirstRand Limited for interests in Billiton Plc
and Gold Fields Limited. Excluding exceptional items, earnings per share were
$0.54 for the six months to June 2002 compared with $0.50 per share in the prior
year.
Platinum
Anglo Platinum's operating profit of $389 million was $365 million lower than in
the first half of 2001, primarily owing to lower platinum group metals (PGM)
prices.
The average realised price for platinum of $513 per ounce was $87 per ounce
lower than for the first half of 2001. Palladium and rhodium prices per ounce
realised were less than half those achieved a year earlier at $371 per ounce
(2001: $784 per ounce) and $946 per ounce (2001: $1,976 per ounce),
respectively.
Despite these significant decreases, current PGM prices are at levels which
continue to yield substantial operating margins for Anglo Platinum, and which
enjoy consumer support.
Refined platinum production (including attributable Northam Platinum output) of
1,064,500 ounces was 4.5% higher, reflecting the increased output from new
projects.
The Bafokeng-Rasimone mine has continued to build up ore reserves and
production, albeit more slowly than anticipated, while ongoing optimisation at
both Amandelbult and Lebowa mines yielded additional ounces from their UG2
expansions commissioned in 2000. Rustenburg mine's new Waterval UG2 project
commenced milling ore in February.
Recent market demand reviews confirm a significant growth opportunity for Anglo
Platinum, and the company remains committed to the expansion programme to
produce 3.5 million ounces of refined platinum per annum from 2006. However, any
delays in the processing of mining licence applications may affect the timeous
achievement of this target.
The new converting process project at Rustenburg has entered its commissioning
phase, and the new Modikwa (formerly Maandagshoek) mine in North West Province
commenced milling ore in July.
Anglo Platinum continues to support the process of black economic empowerment
(BEE) and is proud of the very significant contribution it has made by
facilitating the purchase of 22.5% of Northam Platinum by Mvelaphanda Platinum,
and by entering into a 50:50 joint venture with a consortium led by African
Rainbow Minerals in respect of the Modikwa project.
Anglo Platinum's commitment to fostering further BEE in projects has been
reaffirmed by the conclusion of the joint venture with the Royal Bafokeng Nation
in respect of the Bafokeng-Rasimone mine and the Styldrift Project, as well as
the agreement reached with the South African government regarding BEE
participation on portions of the Eastern Limb expansion projects.
Gold
AngloGold's operating profit for the first half of 2002 was 2% lower at $197
million. Production decreased from 3.5 million ounces to 2.8 million ounces,
mainly as a result of the sale of the Free State assets. Total cash costs
decreased from $189 per ounce to $156 per ounce as a result of the South African
rand's weakening against the dollar and the sale of the higher-cost assets.
Headline earnings increased by 27% to $100 million, mainly arising from realised
gains on non-hedge derivatives of $24 million, net of minorities and taxation.
AngloGold's own performance, its positive view of the gold market and its
willingness to manage its hedge book to take account of changing market
circumstances resulted in a significant reduction in its open hedge book
position. At the end of June, the hedge book had reduced by 4.0 million ounces
to 10.5 million ounces.
During the half-year, AngloGold used $128 million of the $158 million proceeds
received on the sale of the investment in Normandy to settle debt. The company
also received a cash payment of $164 million for the sale of the Free State
assets.
In the United States, the $195 million Cripple Creek & Victor expansion project
in Colorado is progressing on schedule and a significant portion of the leach
pad additions has been completed.
In July 2002, AngloGold announced the acquisition of additional production of
130,000 ounces per annum by doubling its stake to 92.5% in the Cerro Vanguardia
mine in Argentina for $98 million.
Diamonds
Attributable operating profit from De Beers of $242 million was 14% higher than
the prior year. Headline earnings of $166 million were 16% higher.
The diamond industry began the year in a positive mood following better than
expected Christmas season retail sales of diamond jewellery, a significant
reduction in inventory of polished diamonds held by the retail trade during 2001
and cautious optimism for recovery in the global economy in 2002. Restocking by
the retail trade in the first half of the year meant that polished demand from
the cutting centres exceeded underlying retail demand in the consumer markets.
As a result, polished stocks financed by the cutting centres reduced over the
period from about $4.1 billion to $3.4 billion. Clients of the Diamond Trading
Company (DTC), the marketing arm of De Beers, benefited from receiving
consistent assortments of rough diamonds at competitive prices, which
facilitated further investment in marketing.
During the first six months of 2002, rough diamonds were in strong demand and
sales by the DTC for the period totalled $2,842 million, 8.5% higher than for
the equivalent period in 2001. Prospects for the remainder of the year will
depend on the state of the global economy and consumer confidence, particularly
in the United States, which will determine consumer offtake and the level of
stock the trade is prepared to hold.
De Beers made further good progress with the European Commission on its Supplier
of Choice strategy and anticipates a favourable outcome during the second half
of the year.
The new five-year $4 billion trade agreement between De Beers and the Russian
diamond producer, Alrosa, was formally notified to the European Commission for
clearance in February. Both parties are committed to engaging constructively
with the Commission to address any concerns it might raise.
In February, De Beers signed Heads of Agreement with Mvelaphanda Diamonds
(Proprietary) Limited, a black empowerment company, committing both parties to a
grassroots (early stage) joint venture exploring for new world-class diamond
deposits in the northern part of South Africa. The joint venture agreement was
finalised and signed in July.
Coal
Anglo Coal's operating profit was $232 million, 27% higher than for the first
six months of 2001. Headline earnings of $142 million were 4% lower, mainly
owing to exchange losses arising from the rand's strengthening since December
2001.
Attributable sales volumes at 39.8 million tonnes reflected organic growth in
Australia and higher trade sales in South Africa, as well as contributions of
Colombian and Australian acquisitions, offset by production cuts in response to
deteriorating thermal coal market conditions. Sales prices for export thermal
coals were lower than anticipated and are expected to remain under pressure
during the second half. Export metallurgical prices exceeded expectations and
are expected to remain firm.
In South Africa, operating profit was 27% higher. Total sales revenue rose by 8%
and was accompanied by higher profits on exchange due to a weaker average
exchange rate. This increase was negatively impacted by marginally lower export
sales prices.
In Australia, despite significant operational difficulties experienced at
Dartbrook where high gas levels restricted production, operating profit
increased by 24%. Production at Moranbah has been restricted by a slower than
anticipated longwall move and ongoing strata issues. Production at the other
Australian operations met or exceeded expectations for the period.
In April, Anglo Coal Australia (ACA) entered into joint venture arrangements
with Mitsui Coal Holdings Pty Limited, a subsidiary of Mitsui and Co. Ltd of
Japan (Mitsui). Mitsui exercised its pre-emptive right in relation to Coal &
Allied's 55% interest in the Moura mine in May, and then sold a 51% interest to
ACA. In July, ACA divested its 30% interest in the German Creek mine and 49% of
its interests in the Theodore, Dawson and Taroom prospects to Mitsui. ACA also
secured entry into the pulverised coal injection (PCI) market, by acquiring a
23% interest in the Jellinbah mine. Work continues on the development of
Grasstree.
The consortium of Anglo American, BHP Billiton and Glencore completed the
acquisition of the remaining 50% of Cerrejon Zona Norte (CZN) in Colombia from
Exxon Mobil Corporation in February. CZN has been operationally merged by the
consortium with the adjoining Carbones del Cerrejon, to form a single complex,
named Cerrejon, capable of producing 22 million tonnes of coal per annum.
Production and sales forecasts for 2002 have been cut back to approximately 18
million tonnes owing to current market weakness. Carbones del Guasare in
Venezuela continues to perform satisfactorily, although the current weak thermal
market has necessitated cutbacks in production and sales.
Base Metals
Operating profit was $127 million, against a $12 million loss recorded for the
first half of 2001. The $139 million turnaround arose primarily as a result of:
operating cost reductions and volume increases ($47 million); the exceptional
reversal of the 2000 impairment against Salobo following its sale ($46 million);
the de-consolidation of Konkola Copper Mines (KCM) in Zambia ($42 million); the
transfer of Catalao in Brazil to the Base Metals division ($12 million); and
cost accounting of the investment in Anaconda Nickel in Australia ($11 million).
These improvements were partially offset by lower zinc and copper prices.
Copper operations generated operating profit of $66 million (2001: $11 million,
which included a $42 million loss at KCM) despite the average copper price being
lower by 7% at 72 US cents/lb. In Chile, Mantos Blancos and Collahuasi benefited
from good cost control and a weaker peso. Attributable copper production was
232,500 tonnes, compared with 312,700 tonnes in 2001, of which 90,500 tonnes
related to KCM.
Zinc operations reduced their operating loss to $20 million (2001: $25 million
loss), despite a 19% reduction in the average zinc price to 36 US cents/lb.
Attributable zinc production increased from 73,500 tonnes to 98,800 tonnes with
Lisheen in Ireland now operating at full capacity and higher output at Hudson
Bay in Canada.
Operating profit for the nickel operations rose to $14 million (2001: $2
million) with the commencement of commercial production at Loma de Niquel in
Venezuela in January of this year. Attributable production at 14,400 tonnes was
3,500 tonnes higher than the first half of 2001. The average nickel price was
$2.98/lb (2001: $3.00/lb).
At Namakwa Sands in South Africa, operating profit increased to $17 million
(2001: $14 million) as a result of stronger zircon sales and a weaker rand,
whilst Catalao generated operating profits of $12 million broadly in line
with the previous year.
The $454 million Skorpion zinc project in Namibia, the $110 million Black
Mountain Deeps Project in South Africa and the $276 million 777 project at
Hudson Bay all remain on schedule and on budget. The $320 million Rosario
transition project to maintain production at Collahuasi was approved and
development is now underway.
The final terms of the agreed withdrawal from KCM resulted in an additional
provision of $34 million, over and above the $353 million provided at year end
2001, in full and final settlement of all liabilities. Base Metals disposed of
its 50% interest in the Salobo project for $51 million and its 30% interest in
the Kolwezi project for $3.5 million. Base Metals also reached agreement to sell
its 43% interest in Tati Nickel and 18% interest in BCL in Botswana, for $76
million. Negotiations continue with Exxon Mobil Corporation on completing the
acquisition of Disputada in Chile.
Industrial Minerals
Operating profit was $113 million, 51% higher than for the first six months of
2001. The performance of the Tarmac Group businesses continued to improve, with
operating profit up by over 40%. This was principally due to higher prices and
efficiency improvements, reflecting stronger market conditions as well as a
continued focus on cost reduction. This, together with an improved performance
by Copebras in Brazil, resulted in Anglo Industrial Minerals' operating profit
increase.
The first half of 2002 saw several significant developments. In January, the
acquisition of Durox, a leading producer of aircrete blocks in the United
Kingdom, from RMC was completed. RMC's concrete products business in France was
also acquired. In May, an agreement was reached to acquire the aggregates and
ready-mixed concrete assets of Mavike in Spain for $55 million. Approval has
been received from the Spanish competition authorities and completion is
expected later in the year. A number of smaller acquisitions were also made in
the south of England and Poland. In addition, the sale of Cleveland Potash was
completed in April.
In the United Kingdom, trading conditions were stronger than in the first six
months of 2001, with sales volumes up in most product areas. In particular, the
asphalt business benefited from increased activity resulting from higher
infrastructure investment and concrete block volumes showed a strong recovery.
Prices also increased and the Aggregates Levy, introduced in April, has been
passed on in full to customers. With the synergies from the acquisition of
Tarmac having been fully effected, a further cost-reduction programme is
underway and this is generating additional savings. Work continues on the new
cement plant at Buxton and the project remains on schedule for completion in
2003.
Strong trading in Spain and France, along with a first-time contribution from
the business acquired from RMC, were responsible for a 17% increase in operating
profit in continental Europe. In central Europe, results remained flat, with
difficult market conditions in Germany also affecting Poland and the Czech
Republic.
Copebras benefited from the continued increase in demand for phosphate
fertilisers in Brazil and lower costs, although prices were impacted by weaker
international market conditions. The new plant at Goias, which will
significantly increase capacity, is expected to be completed by the end of 2002.
Forest Products
The Forest Products division recorded an operating profit of $291 million,
marginally higher than in the corresponding period last year. Mondi Europe's
operating profit of $191 million was 6% higher, reflecting the sustained focus
on cost reductions and production efficiencies, which generated savings of $27
million. Mondi South Africa maintained operating profit at $100 million.
Mondi Europe continued its expansion with the completion of two further
strategic acquisitions: an additional 68.5% interest in Russian pulp and paper
group Syktyvkar Forest Enterprise and, jointly with Spanish group Saica, the
businesses of the French corrugated packaging group, La Rochette.
The La Rochette transaction will see Mondi retaining ownership of three
integrated plants and six sheet plants and strengthen its corrugated packaging
position in France and the UK. This has developed critical mass for Mondi
Packaging in France.
Packaging results improved, reflecting additional output from the recently
rebuilt paper machine No. 5 in Poland and synergy benefits arising from the
integration of the Danisco Pack UK corrugated operations. While packaging paper
prices trended lower, volumes increased. The order position in industrial
packaging improved from a weak fourth quarter in 2001.
In uncoated woodfree papers, demand from the office communication sector has
been firm and prices relatively stable. An expansion programme at SCP Ruzomberok
was approved, which will increase capacity to 430,000 tonnes by late 2003. With
Mondi Europe's acquisition of the controlling interest in Syktyvkar, Neusiedler
is now the leading producer in Europe of uncoated woodfree paper.
Market conditions in newsprint deteriorated following decreased advertising
expenditure.
In South Africa, some price recovery from the low levels at the beginning of
2002 contributed to earnings being maintained.
Bleached eucalyptus pulp prices averaged $418 per tonne for the period and the
list price had reached $480 per tonne by June.
The South African market for both graphic papers and packaging grades was
healthy. The combination of increased volumes and improved prices contributed to
higher profits in rand terms. The increase was reduced on translation by the
substantially weaker rand when compared with the prior year.
Ferrous Metals and Industries
The performance of the Ferrous Metals division improved significantly in
comparison with the first six months of 2001, with operating profit of $66
million, an increase of $32 million. This reflected solid underlying performance
and the positive impact of the acquisitions made during the first half of 2002.
World crude steel production was 3.4% higher and the steel market is now
generally perceived to be at the bottom of the cycle.
South African-based Scaw Metals' operating profit was $6 million higher at $21
million, including $2 million from Moly-Cop, the grinding media business of GS
Industries in the United States, which was acquired in the second quarter for
$105 million. Scaw's operations have a profitable mix of product, generally
driven by increased domestic consumption of rolled steel and cast steel
products.
Highveld Steel's operating profit improved materially to $14 million. This was
mainly due to improved export prices, a strong South African steel market, the
weakening of the rand against the dollar and the sale of Columbus, which made a
loss last year. Vanadium prices have improved over the past six months from
historically low levels of around $6 per kilogram for ferrovanadium to the
current level of just over $9 per kilogram.
Samancor, in which the Group holds a 40% interest, improved on the back of
higher ore and alloy sales volumes and higher alloy sales prices. Chrome
operations continued to be affected by low ferrochrome prices, which averaged 25
cents/lb against 30 cents/lb a year earlier, although losses were reduced.
Good progress was made towards the strategic objective of securing a meaningful
interest in the iron ore sector. An interest of 20.1% was acquired in Kumba,
along with 34.9% in Avmin, of which 10.5% and 9.9%, respectively, are still
subject to approval by South Africa's Competition Commission.
Boart Longyear's operating profit declined from $16 million to $10 million. The
results reflect a very slow start to 2002, with a recovery in the second
quarter, which should be sustained for the rest of the year.
Tongaat-Hulett's operating profit was $12 million lower at $43 million. Sugar
performed satisfactorily and strong performances were recorded by African
Products and Hulett Aluminium, with the latter increasing its revenue by 20% to
a record first-half level of $138 million. This was achieved under difficult
market conditions, with levels of international demand and margins in dollar
terms being at the lowest level for many years.
The Group's 49% share of Terra's attributable operating loss of $0.7 million was
lower than for the same period last year mainly owing to lower natural gas costs
and higher sales volumes.
Dividend
Anglo American will pay an unchanged interim dividend of 15 US cents per share
on 11 October 2002 to shareholders on the register at the close of business on
20 September 2002.
Cash flow
Cash flow from operations was $1,381 million compared with $1,506 million during
the prior period. This inflow was after a $290 million increase in working
capital (2001: $419 million). On an annualised basis, interest cover remains
well covered by EBITDA at 15.5 times.
Acquisition expenditure accounted for an outflow of $1,869 million during the
period. The principal acquisitions were Mondi Europe's additional 68.5% interest
in Syktyvkar and the joint acquisition of La Rochette, Anglo Coal's
participation in the purchase of the remaining 50% in Cerrejon Zona Norte,
Ferrous Metals' acquisition of a 9.6% stake in Kumba, a 25% stake in Avmin and a
100% interest in Moly-Cop as well as increased stakes in Anglo Platinum and Gold
Fields.
Purchases of tangible fixed assets amounted to $850 million, an increase of $78
million from 2001. The major components of expansion were in Base Metals, Anglo
Platinum, and Industrial Minerals.
Tax payments were $567 million compared with $347 million in the prior year.
Balance sheet
As at 30 June 2002, shareholders' funds were $14,410 million compared with
$12,856 million at 31 December 2001, due mainly to changes in exchange rates
contributing $992 million and retained profit of $556 million. The increase in
the value of the South African rand by 13% since 31 December had a significant
impact on the Group's reserves.
Net debt was $4,216 million, an increase of $2,198 million from the prior year.
The increase principally reflects the acquisitions during the period.
Net debt comprises $6,681 million of debt, offset by $2,465 million of cash and
short-term investments.
Net debt to total capital at 30 June 2002 was 20.4% compared with 12.2% at 31
December 2001.
The Group's reserves include the impact of the cancellation, on 11 June 2001, of
163,212,568 ordinary shares of $0.50 each as part of the De Beers transaction.
Consolidated profit and loss account
for the six months ended 30 June 2002
6 months 6 months Year
ended ended ended
Note 30.06.02 30.06.01 31.12.01
US$ million Restated(1) Restated(1)
Group and share of turnover of joint ventures and associates 2 9,567 9,807 19,282
Less: Joint ventures' turnover (499) (475) (1,109)
Associates' turnover (2,148) (1,719) (3,387)
Group turnover - subsidiaries 6,920 7,613 14,786
Operating costs (5,756) (6,288) (12,638)
Group operating profit - subsidiaries 1,164 1,325 2,148
Share of operating profit of joint ventures 98 106 178
Share of operating profit of associates 319 263 459
Total operating profit 2 1,581 1,694 2,785
Profit on disposal of fixed assets 4 29 1,931 2,148
Loss on termination of operations 4 (34) - -
Profit on ordinary activities before interest 1,576 3,625 4,933
Investment income 181 411 799
Interest payable (234) (351) (669)
Profit on ordinary activities before taxation 1,523 3,685 5,063
Tax on profit on ordinary activities 6 (508) (697) (1,394)
Profit on ordinary activities after taxation 1,015 2,988 3,669
Equity minority interests (248) (348) (584)
Profit for the financial period 767 2,640 3,085
Equity dividends to shareholders - paid and proposed (211) (211) (690)
Retained profit for the financial period 556 2,429 2,395
Headline earnings for the financial period 3 840 847 1,681
Basic earnings per share (US$)
Profit for the financial period 7 0.54 1.72 2.09
Headline earnings for the financial period 7 0.60 0.55 1.14
Dividend per share (US cents) 15.0 15.0 49.0
(1) The profit and loss account for the six months ended 30 June 2001 and
for the year ended 31 December 2001 has been restated to reflect the
implementation of Financial Reporting Standard (FRS) 19, "Deferred Tax" as
disclosed in note 1.
All amounts included above relate to continuing operations.
Consolidated balance sheet
as at 30 June 2002
As at As at As at
30.06.02 30.06.01 31.12.01
US$ million Restated(1) Restated(1)
Fixed assets
Intangible assets 2,096 2,384 2,100
Tangible assets 12,767 11,447 10,770
Investments in joint ventures and associates 5,151 4,918 3,996
Other investments 1,693 1,660 1,527
21,707 20,409 18,393
Net current assets
Stocks 1,469 1,627 1,383
Debtors 3,416 3,323 2,835
Current asset investments 1,234 3,226 2,003
Cash at bank and in hand 1,231 964 915
7,350 9,140 7,136
Short term borrowings (2,431) (2,658) (2,301)
Other current liabilities (3,661) (3,615) (3,936)
Net current assets 1,258 2,867 899
Total assets less current liabilities 22,965 23,276 19,292
Long term liabilities (4,250) (3,299) (2,635)
Provisions for liabilities and charges (2,291) (2,649) (2,194)
Equity minority interests (2,014) (2,085) (1,607)
Net assets 14,410 15,243 12,856
Capital and reserves
Share capital and premium 1,943 1,937 1,937
Reserves 1,352 1,352 1,352
Profit and loss account 11,115 11,954 9,567
Total shareholders' funds (equity) 14,410 15,243 12,856
(1) Restated for the adoption of FRS 19 - see note 1.
The interim financial information was approved by the board of directors on 9
September 2002.
Consolidated statement of total recognised gains and losses
for the six months ended 30 June 2002
6 months 6 months Year
ended ended ended
30.06.02 30.06.01 31.12.01
US$ million Restated(1) Restated(1)
Profit for the financial period 767 2,640 3,085
Currency translation differences on foreign currency net investments 992 (638) (2,986)
Total recognised gains for the financial period 1,759 2,002 99
Prior year adjustment (see note 1) (570)
Total recognised gains since last annual report 1,189
(1) Restated for the adoption of FRS 19 - see note 1.
Combined statement of movement in shareholders' funds and movement in reserves
for the six months ended 30 June 2002
Issued Profit
share Share Merger Other and loss
US$ million capital premium reserves reserves account Total
At 1 January 2002 as previously reported 734 1,203 636 716 10,137 13,426
Prior year adjustment (see note 1) - - - - (570) (570)
At 1 January 2002 restated 734 1,203 636 716 9,567 12,856
Profit for the financial period - - - - 767 767
Dividends proposed - - - - (211) (211)
Shares issued - 6 - - - 6
Currency translation differences - - - - 992 992
Balance at 30 June 2002 734 1,209 636 716 11,115 14,410
Consolidated cash flow statement
for the six months ended 30 June 2002
6 months 6 months Year
ended ended ended
US$ million Note 30.06.02 30.06.01 31.12.01
Net cash inflow from operating activities 8 1,381 1,506 3,539
Expenditure relating to fundamental reorganisation - (20) (23)
Dividends from joint ventures and associates 115 223 258
Returns on investments and servicing of finance
Interest received and other financial income 175 144 419
Interest paid (141) (254) (430)
Dividends received from fixed asset investments 21 41 74
Dividends paid to minority shareholders (207) (281) (454)
Net cash outflow from returns on investments and (152) (350) (391)
servicing of finance
Taxes paid (567) (347) (637)
Capital expenditure and financial investment
Payments for fixed assets 9 (850) (772) (1,787)
Proceeds from the sale of fixed assets 272 199 263
Exit funding for Konkola Copper Mines (KCM) (95) - -
Payments for other investments(1) (210) (79) (96)
Proceeds from the sale of other investments(1) 190 1,019 1,174
Net cash (outflow)/inflow for capital expenditure and (693) 367 (446)
financial investment
Acquisitions and disposals
Acquisition of subsidiaries (1,024) (154) (718)
Disposal of subsidiaries 33 135 135
Investment in associates (505) (189) (223)
Sale of interests in associates and joint ventures 51 1,148 1,527
Investment in proportionally consolidated joint arrangements (164) (51) (51)
Investment in joint ventures (28) (22) (76)
Net cash (outflow)/inflow from acquisitions and (1,637) 867 594
disposals
Equity dividends paid to Anglo American shareholders (517) (509) (714)
Cash (outflow)/inflow before use of liquid resources and (2,070) 1,737 2,180
financing
Management of liquid resources(2) 848 (977) (287)
Financing 1,448 (795) (1,667)
Increase/(decrease) in cash in the period 10 226 (35) 226
(1) Disposal and acquisition of other financial assets included in fixed
assets.
(2) Cash flows in respect of current asset investments.
Notes to financial information
1 Accounting policies
The financial information has been prepared in accordance with generally
accepted accounting principles in the UK. The accounting policies applied in
preparing the financial information are consistent with those adopted and
disclosed in the Group's statutory accounts for the year ended 31 December 2001,
except for the implementation of Financial Reporting Standard (FRS) 19, "
Deferred Tax", as set out below. The financial information for the year ended 31
December 2001 has been derived from the Group's statutory accounts for that
period as filed with the Registrar of Companies, restated where appropriate for
the impact of FRS 19. The auditors' report on the statutory accounts for the
year ended 31 December 2001 was unqualified and did not contain statements under
section 237(2) of the Companies Act 1985 (regarding adequacy of accounting
records and returns) or under section 237(3) (regarding provision of necessary
information and explanations). The interim financial information does not
constitute statutory accounts as defined under section 240 of the Companies Act
1985.
With effect from 1 January 2002 the Group adopted FRS 19 "Deferred Tax". Under
FRS 19 deferred taxation is provided in full on all timing differences that
result in an obligation at the balance sheet date to pay more tax, or a right to
pay less tax, at a future date, subject to the recoverability of deferred tax
assets. Deferred tax assets and liabilities are not discounted.
The change in accounting policy has been accounted for by means of a prior year
adjustment, and the previously published figures at 30 June 2001 and 31 December
2001 have been restated as follows:
30 June 2001 31 December 2001
US$ million
Profit and loss account
Decrease in operating profit (1) (2)
Increase in tax on profit of ordinary activities (62) (145)
Decrease in equity minority interests 25 56
Decrease in profit for the period (38) (91)
Decrease in headline earnings (37) (89)
Balance sheet
Increase in goodwill 33 32
Decrease in investments in joint ventures (18) (18)
Decrease in investments in associates (5) (4)
Increase in debtors 27 18
Increase in deferred tax provision (1,212) (933)
Decrease in equity minority interest 445 335
Decrease in shareholders' funds (730) (570)
The impact of FRS 19 was to increase the tax charge by $93 million, and decrease
headline earnings by $69 million, for the six months to 30 June 2002.
Shareholders' funds as previously reported at 1 January 2001 decreased by $717
million, due to the adoption of FRS 19.
The Group continues to account under the transitional arrangements for FRS 17 "
Retirement Benefits". When it is clear what approach the International
Accounting Standards Board is going to adopt in revising IAS 19 "Employee
Benefits" and the extent to which FRS 17 may change as a result, the board will
decide when to adopt the standard in full.
2 Segmental information
Turnover Operating profit(1) Net operating assets(2)
6 months 6 months Year 6 months 6 months Year 6 months 6 months Year
ended ended ended ended ended ended ended ended ended
30.06.02 30.06.01 31.12.01 30.06.02 30.06.01 31.12.01 30.06.02 30.06.01 31.12.01
US$ million Restated Restated Restated Restated(3)
(3) (3) (3)
By business segment
Platinum 912 1,272 2,218 389 754 1,345 2,623 1,587 1,847
Gold 779 1,019 2,028 197 200 443 2,018 2,461 2,086
Diamonds 1,503 1,010 2,055 242 212 373 - - -
Coal 826 703 1,572 232 183 493 1,680 1,486 1,373
Base Metals 663 792 1,530 127 (12) (510) 1,939 2,239 1,977
Industrial Minerals 1,361 1,232 2,527 113 75 201 3,532 3,276 3,246
Forest Products 2,189 2,119 4,169 291 288 520 3,474 2,971 2,732
Ferrous Metals 517 654 1,285 66 34 77 361 377 220
Industries 817 1,006 1,898 52 64 114 1,006 1,269 884
Financial Services - - - - 4 2 - - -
Exploration - - - (40) (38) (101) - - -
Corporate - - - (88) (70) (172) 440 424 379
Activities
9,567 9,807 19,282 1,581 1,694 2,785 17,073 16,090 14,744
By geographical segment (by origin)
South Africa 3,285 4,117 8,140 864 1,142 2,269 6,213 6,387 5,393
Rest of Africa 1,400 949 1,959 262 130 (121) 356 376 225
Europe 3,149 2,876 5,773 210 214 371 6,388 5,658 5,601
North America 496 562 1,067 (18) 1 (40) 998 801 796
South America 672 621 1,223 189 112 177 1,380 1,457 1,362
Australia and Asia 565 682 1,120 74 95 129 1,738 1,411 1,367
9,567 9,807 19,282 1,581 1,694 2,785 17,073 16,090 14,744
(1) Operating profit is stated after deducting the following operating
exceptional items as disclosed in note 4:
6 months ended 6 months Year
30.6.02 ended ended
30.6.01 31.12.01
Restated(3)Restated(3)
US$ million
Operating profit before operating exceptional items 1,565 1,694 3,298
Group subsidiaries
Base Metals 46 - (473)
Corporate Activities (30) - (25)
Joint ventures - Base Metals - - (15)
Operating profit after operating exceptional items 1,581 1,694 2,785
(2) Net operating assets consist of tangible and intangible assets
(excluding investments in joint ventures and associates), stocks and operating
debtors less non-interest bearing current liabilities.
(3) Restated for the adoption of FRS 19 "Deferred Tax" - see note 1.
3 Profit for the period
The table below analyses the contribution of each division to the Group's
headline earnings.
Six months ended 30 June 2002 Profit
Profit Net Equity for the
before investment minority financial
US$ million interest income Tax interests period
Platinum 396 9 (143) (104) 158
Gold 215 62 (80) (97) 100
Diamonds 256 (25) (62) (3) 166
Coal 237 (29) (66) - 142
Base Metals 82 (22) (22) (1) 37
Industrial Minerals 135 2 (42) (6) 89
Forest Products 297 (36) (76) (32) 153
Ferrous Metals 67 - (20) (6) 41
Industries 53 (22) (8) (14) 9
Exploration (see note 5) (41) - - 9 (32)
Corporate Activities (50) 8 19 - (23)
Headline earnings for the financial period
(see note 7) 1,647 (53) (500) (254) 840
Headline earnings adjustment (see note 7) (71) - (8) 6 (73)
Profit for the financial period 1,576 (53) (508) (248) 767
3 Profit for the period continued
Six months ended 30 June 2001 (1) Profit
Profit Net Equity for the
before investment minority financial
US$ million interest income Tax interests period
Platinum 764 24 (272) (255) 261
Gold 226 (31) (43) (73) 79
Diamonds 212 5 (74) - 143
Coal 187 7 (46) - 148
Base Metals (11) (33) (24) 38 (30)
Industrial Minerals 99 (4) (21) (5) 69
Forest Products 296 (42) (71) (35) 148
Ferrous Metals 36 (10) (11) - 15
Industries 65 (21) (9) (18) 17
Exploration (see note 5) (38) - - 11 (27)
Corporate Activities (56) 6 9 - (41)
De Beers investments(2) 3 159 (51) (46) 65
Headline earnings for the financial period
(see note 7) 1,783 60 (613) (383) 847
Headline earnings adjustment (see note 7) 1,842 - (84) 35 1,793
Profit for the financial period 3,625 60 (697) (348) 2,640
(1) Restated for the adoption of FRS 19 "Deferred Tax" - see note 1.
(2) Represents De Beers' share of Anglo American plc earnings for the five
months to 31 May 2001.
3 Profit for the period continued
Year ended 31 December 2001 (1) Profit
Profit Net Equity for the
before investment minority financial
US$ million interest income Tax interests year
Platinum 1,361 37 (482) (438) 478
Gold 473 (47) (116) (148) 162
Diamonds 407 (35) (136) (2) 234
Coal 501 53 (167) - 387
Base Metals (21) (19) (39) 61 (18)
Industrial Minerals 243 - (69) (14) 160
Forest Products 533 (78) (123) (60) 272
Ferrous Metals 78 (9) (21) - 48
Industries 115 (25) (12) (40) 38
Financial Services 2 1 (3) - -
Exploration (see note 5) (101) (1) - 17 (85)
Corporate Activities (126) 94 (28) - (60)
De Beers investments(2) - 159 (51) (43) 65
Headline earnings for the financial year
(see note 7) 3,465 130 (1,247) (667) 1,681
Headline earnings adjustment (see note 7) 1,468 - (147) 83 1,404
Profit for the financial year 4,933 130 (1,394) (584) 3,085
(1) Restated for the adoption of FRS 19 "Deferred Tax" - see note 1.
(2) Represents De Beers' share of Anglo American plc earnings for the five
months to 31 May 2001.
4 Exceptional items
Operating exceptional items
6 months 6 months Year
ended ended ended
US$ million 30.06.02 30.06.01 31.12.01
Disposal of Salobo Metais SA - reversal of previous impairment 46 - -
Write-off in respect of ZCI/KCM copper mine - - (353)
Write-down of investments (30) - -
Other impairments or write-downs of assets and feasibility study costs - - (160)
Total operating exceptional items 16 - (513)
Minority interests - - 11
16 - (502)
Non-operating exceptional items
6 months 6 months Year
ended ended ended
US$ million 30.06.02 30.06.01 31.12.01
Disposal of Salobo Metais SA 5 - -
Gain arising from the exchange of the 32.2% interest in De Beers Group for - 1,089 1,089
the 45% interest in DB Investments
Gain arising from the exchange of the 15.3% in FirstRand Limited for - 637 637
interests in Gold Fields Limited (11.3%) and Billiton Plc (7.1%)
Partial disposal of interest in South African Breweries plc - 82 95
Further disposal of interest in FirstRand Limited 7 46 68
Partial disposal of interest in Standard Bank Investment Corporation - 40 44
Disposal of interest in Billiton Plc - 36 36
Partial disposal of Columbus Stainless - (123) (120)
Disposal of Elandsrand and Deelkraal gold mines - (8) (8)
Disposal of interest in Aracruz Celulose SA - - 114
Disposal of other non-core assets (2) - (36)
Partial disposal of interest in Li & Fung Limited - - 4
Share of associates' exceptional items 19 132 225
Profit on disposal of fixed assets 29 1,931 2,148
KCM exit costs (34) - -
Total non-operating exceptional items (5) 1,931 2,148
Taxation (8) (84) (147)
Minority interests 2 28 53
(11) 1,875 2,054
Total exceptional items (net of tax and minority interests) 5 1,875 1,552
5 Exploration expenditure
6 months 6 months Year
ended ended ended
US$ million 30.06.02 30.06.01 31.12.01
Platinum 7 2 13
Gold 13 12 25
Base Metals 18 19 59
Other 3 5 4
41 38 101
6 Tax on profit on ordinary activities
6 months 6 months Year
ended ended ended
30.06.02 30.06.01 31.12.01
US$ million Restated Restated
United Kingdom corporation tax at 30% - - 4
South Africa corporation tax at 30% 219 294 665
Other overseas taxation 106 106 230
Share of joint ventures' taxation 11 7 12
Share of associates' taxation 79 140 211
Deferred taxation 85 66 125
Tax on exceptional items 8 84 147
508 697 1,394
The impact of the adoption of FRS 19 on the restated tax charge for the 6 months
ended 30 June 2001 and for the year ended 31 December 2001 is disclosed in note
1.
7 Earnings per share
6 months 6 months Year
ended ended ended
30.06.02 30.06.01 31.12.01
Restated Restated
Weighted average number of ordinary shares in issue (million) 1,410 1,536 1,474
Basic earnings per share (US$):
Profit for the financial period 0.54 1.72 2.09
Headline earnings for the financial period 0.60 0.55 1.14
The decrease in the weighted average number of ordinary shares is due to the
cancellation in June 2001 of 163.2 million ordinary shares previously held by
the De Beers Group.
Basic earnings per share are calculated by dividing the profit for the period
attributable to ordinary shareholders by the weighted average number of ordinary
shares in issue during the period. The average number of shares in issue
excludes the shares held by the employee benefit trust.
Basic earnings per share for the six months ended 30 June 2001 and for the year
ended 31 December 2001 are restated for the impact of FRS 19, as disclosed in
note 1.
Earnings per share are also shown based on headline earnings, which the
directors believe to be a useful additional measure of the Group's past
performance. Headline earnings per share are calculated in accordance with the
definition in the Institute of Investment Management and Research ("IIMR")
Statement of Investment Practice No. 1, "The Definition of IIMR Headline
Earnings".
7 Earnings per share continued
Earnings (US$ million) Basic earnings per share (US$)
6 months 6 months Year 6 months 6 months Year
ended ended ended ended ended ended
30.06.02 30.06.01 31.12.01 30.06.02 30.06.01 31.12.01
Restated Restated Restated Restated
Profit for the financial period 767 2,640 3,085 0.54 1.72 2.09
Operating exceptional items (16) - 513 (0.01) - 0.35
Non-operating exceptional items 5 (1,931) (2,148) - (1.25) (1.45)
Related tax and minority interests 6 56 83 0.01 0.03 0.05
Profit before exceptional items 762 765 1,533 0.54 0.50 1.04
Amortisation of goodwill 82 89 167 0.06 0.06 0.11
Related minority interests (4) (7) (19) - (0.01) (0.01)
Headline earnings for the
financial period 840 847 1,681 0.60 0.55 1.14
8 Reconciliation of Group operating profit to net cash flow
from operating activities
6 months 6 months Year
ended ended ended
30.06.02 30.06.01 31.12.01
US$ million Restated Restated
Group operating profit - subsidiaries 1,164 1,325 2,148
Depreciation and amortisation charges 501 518 1,010
(Increase)/decrease in stocks (12) 21 1
Increase in debtors (299) (302) (274)
Increase/(decrease) in creditors 21 (138) 135
Other items 6 82 519
Net cash inflow from operating activities 1,381 1,506 3,539
9 Capital expenditure
6 months 6 months Year
ended ended ended
US$ million 30.06.02 30.06.01 31.12.01
Platinum 229 126 391
Gold 107 119 243
Coal 41 31 93
Base Metals 146 196 446
Industrial Minerals 159 101 205
Forest Products 132 150 283
Ferrous Metals 8 16 28
Industries 25 31 65
Other 3 2 33
850 772 1,787
10 Reconciliation of net cash flow to movement in net debt
6 months 6 months Year
ended ended ended
US$ million 30.06.02 30.06.01 31.12.01
(Increase)/decrease in cash in the period 226 (35) 226
Cash (inflow)/outflow from debt financing (1,593) 824 1,550
Cash (inflow)/outflow from management of liquid resources (848) 977 287
Change in net debt arising from cash flows (2,215) 1,766 2,063
Net debt of subsidiary now cost accounted 148 - -
Loans and current asset investments acquired with subsidiaries (72) (42) (52)
Loans and current asset investments disposed of with subsidiaries 1 11 11
Currency translation differences (60) 88 (450)
Movement in net debt (2,198) 1,823 1,572
Net debt at start of the period (2,018) (3,590) (3,590)
Net debt at end of the period (4,216) (1,767) (2,018)
11 Movement in net debt
Acquisitions Disposals Exchange and
excluding cash excluding other
As at and overdrafts cash and As at
31.12.01 Cash flow overdrafts adjustments (1) 30.06.02
US$ million
Cash at bank and in hand(2) 857 226 - - 128 1,211
Debt due after one year (2,635) (1,592) (62) - 39 (4,250)
Debt due within one year (2,243) (1) (17) 1 (151) (2,411)
(4,878) (1,593) (79) 1 (112) (6,661)
Current asset investments 2,003 (848) 7 - 72 1,234
(2,018) (2,215) (72) 1 88 (4,216)
(1) Other adjustments include an adjustment of $148 million to debt
after one year, in respect of KCM which is now a cost accounted investment.
(2) Net of bank overdrafts.
Independent review report to Anglo American plc
Introduction
We have been instructed by the company to review the financial information for
the six months ended 30 June 2002 which comprises the consolidated profit and
loss account, consolidated balance sheet, consolidated statement of total
recognised gains and losses, combined statement of movement in shareholders'
funds and movement in reserves, consolidated cash flow statement and the related
notes 1 to 11. We have read the other information contained in the interim
report and considered whether it contains any apparent misstatements or material
inconsistencies with the financial information.
Directors' responsibilities
The interim report, including the financial information contained therein, is
the responsibility of, and has been approved by, the directors. The directors
are responsible for preparing the interim report in accordance with the Listing
Rules of the Financial Services Authority, which require that the accounting
policies and presentation applied to the interim figures should be consistent
with those applied in preparing the preceding annual accounts except where any
changes, and the reasons for them, are disclosed.
Review work performed
We conducted our review in accordance with the guidance contained in Bulletin
1999/4 issued by the Auditing Practices Board for use in the United Kingdom. A
review consists principally of making enquiries of group management and applying
analytical procedures to the financial information and underlying financial
data, and based thereon, assessing whether the accounting policies and
presentation have been consistently applied unless otherwise disclosed. A
review excludes audit procedures such as tests of controls and verification of
assets, liabilities and transactions. It is substantially less in scope than an
audit performed in accordance with United Kingdom Auditing Standards and
therefore provides a lower level of assurance than an audit. Accordingly, we do
not express an audit opinion on the financial information.
Review conclusion
On the basis of our review, we are not aware of any material modifications that
should be made to the financial information as presented for the six months
ended 30 June 2002.
Deloitte & Touche
Chartered Accountants
London
United Kingdom
9 September 2002
Notice of interim dividend
Notice is hereby given that an interim dividend on the Company's ordinary share
capital in respect of the year to 31 December 2002 will be payable as follows:
Amount (United States currency) 15 US cents per ordinary share (see notes below)
Currency conversion date Thursday 5 September 2002
Last day to trade on the JSE Securities Exchange Friday 13 September 2002
Ex-dividend on JSE Securities Exchange from the commencement of
trading on Monday 16 September 2002
Ex-dividend on the LSE from the commencement of trading on Wednesday 18 September 2002
Record date on the United Kingdom and South African registers Friday 20 September 2002
Last date for receipt of Dividend Reinvestment Plan Mandate Forms by Friday 20 September 2002
Computershare or Central Securities Depository Participants in South
Africa
Dividend warrants posted Thursday 10 October 2002
Payment date of dividend Friday 11 October 2002
Notes:
1 Shareholders on the United Kingdom register of members with an address in
the United Kingdom will be paid in pounds sterling and those shareholders with
an address in European countries which have adopted the Euro will be paid in
that currency. Such shareholders may, however, elect to be paid in US dollars,
provided all such elections are received by the United Kingdom Registrar by 20
September 2002. Shareholders with addresses elsewhere (except South Africa) will
be paid in United States dollars. The equivalent of the dividend in sterling
will be 9.5460 pence per ordinary share based on an exchange rate of $1=
£0.63640. The equivalent in euros will be 15.0345 euro cents per ordinary share
based on an exchange rate of $1 = € 1.0023
2 Shareholders on the South African branch registrar will be paid in
South African rand, at R1.60275 per ordinary share based on an exchange rate of
$1 = R 10.68500
3 Dematerialisation and rematerialisation of registered share
certificates in South Africa will not be affected by CSDPs during the period 16
to 20 September 2002 (both days inclusive)
4 Copies of the Terms and Conditions of the Dividend Reinvestment Plan
are available from the Company's Registrar or the Registrar's Agent.
Production statistics
6 months 6 months Year
ended ended ended
30.06.02 30.06.01 31.12.01
Anglo Platinum (troy ounces)
Platinum 1,064,500 1,018,900 2,145,900
Palladium 526,000 487,500 1,075,900
Rhodium 84,300 95,900 204,100
Nickel (tonnes) 9,400 9,200 19,500
AngloGold (gold in troy ounces)
South Africa 1,687,000 2,358,000 4,669,700
Rest of Africa 251,000 406,000 867,800
North and South America 415,000 468,000 937,000
Australia and Asia 450,000 250,000 508,600
2,803,000 3,482,000 6,983,100
Anglo Coal (tonnes)
South Africa
Eskom 13,442,000 14,490,000 28,250,000
Trade 9,467,000 9,731,000 19,182,000
Australia 12,198,000 10,474,000 24,282,000
South America 3,297,000 2,723,000 5,829,000
38,404,000 37,418,000 77,543,000
Anglo Industrial Minerals (tonnes)
Aggregates 30,522,000 33,535,000 64,112,000
Lime products 439,000 478,000 926,000
Concrete (m3) 3,289,900 3,225,000 6,627,400
Potash - 461,000 882,000
Sodium tripolyphosphate 48,900 47,000 91,500
Phosphates 322,400 332,900 820,500
Anglo Forest Products (tonnes)
South Africa
Pulp 163,300 176,000 290,400
Graphic papers 264,300 267,700 509,800
Packaging papers 299,500 273,000 527,600
Corrugated board (000 m2) 147,200 123,600 275,000
Lumber (m2) 60,900 69,000 137,000
Wood chips 813,200 693,200 1,284,300
Mining timber 67,600 66,000 131,800
Europe
Pulp 92,700 92,600 187,800
Graphic papers 630,970 561,400 1,142,800
Packaging papers 769,200 588,300 1,202,000
Corrugated board (000 m2) 447,500 349,600 780,200
Paper sacks (000 units) 1,461,600 1,354,300 2,620,100
Brazil
Pulp - 72,500 110,000
The figures above include entire output of consolidated entities and the Group's
share of joint ventures and associates where applicable.
Production statistics continued
6 months 6 months Year
ended ended ended
30.06.02 30.06.01 13.12.01
Anglo Base Metals
Copper (tonnes)
Collahuasi 95,900 93,000 199,200
Mantos Blancos 78,600 76,300 156,800
Hudson Bay 42,700 36,000 79,600
KCM - 90,500 196,800
Other 15,300 16,900 33,100
232,500 312,700 665,500
Nickel (tonnes)
Loma de Niquel 7,500 3,600 9,700
Codemin 2,900 3,100 5,800
Tati 1,500 1,900 3,500
Other 2,500 2,300 8,600
14,400 10,900 27,600
Zinc (tonnes)
Hudson Bay 47,400 33,000 88,400
Black Mountain 13,500 13,200 24,300
Lisheen 37,900 27,300 52,900
98,800 73,500 165,600
Lead (tonnes)
Black Mountain 20,000 24,200 45,800
Lisheen 5,400 5,400 8,500
25,400 29,600 54,300
Mineral sands (tonnes)
Chloride slag 53,600 49,600 104,600
Sulphate slag 15,500 12,800 28,200
Pig iron 43,900 45,300 84,400
Zircon 58,000 54,000 114,100
Rutile 13,600 12,500 27,100
Niobium (tonnes)
Catalao 1,700 - -
Anglo Ferrous Metals (tonnes)
Chrome ore 485,000 535,600 1,012,000
Vanadium slag 36,700 35,000 73,700
Chrome alloys 145,200 154,800 289,000
Manganese ore (mtu m) 31 39 62
Manganese alloys 85,500 122,000 280,000
Steel 461,200 554,000 1,419,000
Niobium - 1,700 3,400
The figures above include entire output of consolidated entities and the Group's
share of joint ventures and associates where applicable.
Exchange rate and commodity prices
US dollar exchange rates 6 months 6 months Year
Average spot prices for the period ended ended ended
30.06.02 30.06.01 31.12.01
South African rand 10.99 7.93 8.62
Sterling 0.69 0.69 0.69
Euro 1.11 1.11 1.12
Australian dollar 1.89 1.92 1.93
Period end spot prices
South African rand 10.37 8.05 11.96
Sterling 0.65 0.71 0.69
Euro 1.01 1.18 1.12
Australian dollar 1.77 1.95 1.96
Commodity prices 6 months 6 months Year
Average market prices for the period ended ended ended
30.06.02 30.06.01 31.12.01
Gold - US$/oz 302 266 271
Platinum - US$/oz 515 599 526
Palladium - US$/oz 370 794 582
Rhodium - US$/oz 952 1,994 1,610
Copper - US cents/lb 72 78 72
Nickel - US cents/lb 298 300 270
Zinc - US cents/lb 36 44 40
Lead - US cents/lb 22 22 22
European eucalyptus pulp price (CIF) - US$/tonne 427 537 490
This information is provided by RNS
The company news service from the London Stock Exchange
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