Interim Results
Anglo American PLC
05 August 2004
News Release
5 August 2004
Anglo American reports record interim results for 2004, up 52%
• Record first half headline earnings(1) of $1.3 billion, an increase of 52%
over corresponding period in 2003
• Total profit for the period up 125% to $1.7 billion
• Cash generation (EBITDA) (1) up 40% at $3.4 billion
• Interim dividend increased from 15 cents to 19 cents
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• Record Base Metals performance - headline earnings increased sevenfold to
$455 million
• Ferrous Metals, Coal and Platinum benefited from higher prices; demand for
rough diamonds remained firm. Steady performances from Industrial Minerals
and Paper and Packaging
• South African earnings negatively impacted by strong rand
• Cost and efficiency improvements resulted in total cost savings of $248
million
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• Merger of AngloGold and Ashanti completed in April
• Ongoing development of $6 billion project pipeline
• Non-core disposals of $1.3 billion, including 20% stake in Gold Fields for
$1.18 billion
• Global economic conditions remain positive for commodities
(1) See definitions beneath the financial highlights table.
HIGHLIGHTS FOR THE SIX MONTHS TO 30 JUNE 2004 6 months 6 months Change
ended ended
US$ million except per share amounts 30.06.04 30.06.03
Turnover including share of joint ventures and associates 15,235 12,076 26%
Total operating profit for the period 2,248 1,534 47%
Total operating profit before operating exceptional items 2,248 1,546 45%
Profit for the period 1,709 760 125%
Profit for the period before exceptional items 1,200 762 57%
Headline earnings for the period (1) 1,304 856 52%
Net operating assets (2) 34,486 24,012 44%
EBITDA (3) 3,433 2,444 40%
Net cash inflow from operating activities 2,075 1,286 61%
Capital expenditure 1,397 1,172 19%
Earnings per share (US$):
Profit for the period 1.20 0.54 122%
Profit for the period before exceptional items 0.84 0.54 56%
Headline earnings for the period 0.91 0.61 49%
Dividend for the period (US cents per share) 19 15 27%
(1) Headline earnings is defined as profit for the period (after tax and minority interests), adjusted to
remove the impact of exceptional items and add back goodwill amortisation. In both cases, the adjustment
includes the impact of associated tax and minority interest. See note 5 to the financial information for
basis of calculation of headline earnings.
(2) See note 2 to the financial information for definition of net operating assets.
(3) EBITDA is operating profit before exceptional items, depreciation and amortisation. EBITDA is
reconciled to net cash inflow from operating activities before the cash flow statement.
Tony Trahar, Chief Executive, said:
"Anglo American achieved record first half headline earnings of $1.3 billion, up
52% on the corresponding period in 2003. Base Metals and Ferrous Metals reported
record results due to higher metals prices and production volumes and also the
impact of recent acquisitions, in particular Minera Sur Andes and Kumba. Higher
profits were also recorded by Coal and Platinum. The demand for rough diamonds
remained firm. Our South African operations continued to operate in a
challenging environment as the South African rand strengthened further against
the US dollar, rising 17% over the prior period - this impacted our gold and
platinum operations in particular. Anglo American's cash generation (EBITDA)
increased 40% to $3.4 billion, an increase of $1 billion over the prior period.
We continued to make significant progress on cost savings and efficiency
improvements across the Group. For the first six months, we achieved $248
million in total cost savings and will clearly exceed our target of $250 million
for 2004.
The Group's major expansions in South America resulted in over 40% of headline
earnings coming from the Americas. South Africa accounted for 29% of headline
earnings with Europe contributing 15%.
Significant developments were made in our $6 billion project pipeline, one of
the largest organic growth programmes in the resources industry. Construction of
the $654 million Collahuasi Rosario Project in Chile was completed some five
weeks ahead of schedule and under budget and the project is coming on stream in
a favourable copper price environment. In the UK, Anglo Industrial Minerals' new
cement plant at Buxton commenced operation in March and is ramping up to full
capacity. The Skorpion zinc mine in Namibia continued to ramp up production and
is on target to achieve full production in December 2004.
The merger of AngloGold and Ashanti Goldfields of Ghana, which was completed in
April this year, has created the world's second largest gold mining company in
terms of production. Good progress is being made with the integration of the two
companies and an organic growth pipeline of seven approved projects should add
some 14 million ounces to the company's production profile.
We believe that current global economic conditions will continue to remain
positive for commodities. The GDP growth trends for both the US and Japan and
the ongoing industrialisation of China, while perhaps not at the recent
remarkable rate of growth, as well as Russia and India, are likely to increase
demand for the Group's key commodities. European economic growth, however,
remains of concern, with likely adverse impact on our paper and packaging
operations as well as some of our industrial minerals assets. The ever higher
level of the South African rand over the past two months will - if maintained -
adversely affect the performance of our South African assets in the absence of
any material commodity price increases. Overall, however, our balanced
geographic and asset base contributes a unique mix which, with the ongoing focus
on cost efficiencies, strong cash generation and a $6 billion project pipeline,
should continue to underpin our performance in the years ahead."
First half results - overview
The past six months fell into two distinct periods. The first quarter saw a
number of metal prices reaching record or near-record highs as China's growing
need for commodities impacted international markets. The economic turnaround in
the US and Japan added to this positive momentum, which resulted in record
levels of speculative activity in a number of metals. The second quarter on the
other hand was dominated by fears of rising US interest rates and a potential
downturn in the Chinese economy as their government announced the introduction
of measures designed to reduce inflationary pressures.
Financials
Anglo American's overall performance for the first half reflected these market
conditions. The Group delivered record first half headline earnings of $1.3
billion, an increase of 52% on last year's interim performance. Our Base Metals
business posted record headline earnings, a sevenfold increase to $455 million,
and was the largest contributor to the Group as higher copper, nickel and zinc
prices and the contribution by the Minera Sur Andes operation enhanced
performance. Ferrous Metals also benefited from stronger prices and the
contribution from Kumba, while thermal and coking coal prices reached record
levels and the platinum price remained strong.
However, Anglo American's South African operations were adversely affected by
the rand/dollar exchange rate which averaged R6.67, a 17% strengthening over the
prior period. While the Group's mining businesses in general turned in strong
performances, its Industrial Minerals and Paper and Packaging businesses endured
tougher market conditions as competitive UK aggregates markets and weak European
pricing for uncoated woodfree paper products affected performance. Demand for
rough diamonds remained firm.
Total profit for the period increased 125% to $1.7 billion.
Cost Savings
The ongoing focus on reducing costs and driving efficiencies across all business
units resulted in total cost savings of $248 million for the first half of 2004.
Clearly the Group's targeted full year cost savings of $250 million will be
exceeded.
Strategy
Anglo American's strategy is to achieve real growth and added value for its
shareholders across the cycle through acquisitions, brownfields and greenfields
projects and by continuously improving the operating efficiency of existing
assets. The Group aims to achieve world class performance in all areas of its
business, to provide a safe and healthy environment for employees and to
demonstrate commitment to sustainable development.
Disposals
During the period a number of significant non-core disposals were made amounting
to $1.3 billion. In January, Anglo American disposed of its remaining stake in
FirstRand Limited for $47 million. In March, the Group announced the sale of its
20% stake in Gold Fields Limited to Norilsk Nickel for $1.18 billion, realising
a gain of $464 million. Anglo American has also agreed, subject to certain
conditions, to sell its 18% stake in Western Areas Limited to a black
empowerment consortium, realising value for these shares whilst introducing a
new broad-based black empowerment consortium to the South African mining
industry.
Organic Growth
The first half was an active one in terms of the ongoing development of the
Group's $6 billion project pipeline.
The commissioning of the $654 million Collahuasi Rosario Project commenced in
late April, some five weeks ahead of schedule and under budget. The project,
first announced in October 2002, will enable Collahuasi to maintain production
of copper in concentrate at a long-term average rate of 400,000 tonnes per annum
and is coming on stream in a favourable copper price environment. In Namibia,
the Skorpion zinc mine remains on target to achieve full production by the end
of 2004.
In May, Anglo American announced that it had entered into a Memorandum of
Understanding with BHP Billiton to investigate a proposed expansion of adjacent
coal resources in the Western Complex, South Africa. Should the proposed
expansion prove viable, the establishment of the Western Complex would be an
important development for the South African coal industry.
In the UK, Anglo Industrial Minerals' new cement plant at Buxton commenced
operation in March and is ramping up to full capacity. The total project cost
came in below budget. In China, development is proceeding at Yang Quarry, 140 km
from Shanghai and the closest reserve to China's commercial capital of
top-quality asphalt aggregates. The quarry expects to be fully operational in
the final quarter of the year.
The $604 million paper and pulp expansion and upgrade programmes at Ruzomberok
in Slovakia and Mondi's mills in South Africa are on track and within budget.
Anglo Platinum's $2 billion expansion programme is proceeding in accordance with
the revised build-up profile announced in December 2003, to produce
approximately 2.9 million ounces of refined platinum in 2006. The review of
costs and work processes is making good progress and cost savings will start
being realised in the second half of the year. The viability of expansion
projects will continue to be reviewed on a regular basis, particularly with
regard to the strength of the South African rand.
After a lengthy permitting process, the Group's associate De Beers has received
approval of its environmental impact assessment for the proposed Snap Lake
diamond mine in Canada's Northwest Territories. Subject to final approval being
granted by the De Beers board in November 2004, first production is envisaged in
2007.
On iron ore, it is anticipated that final Kumba board approval to proceed with
the Hope Downs project in Western Australia will be sought before the end of the
year, once outstanding contractual issues have been resolved. Anglo American is
also working with Kumba to investigate the 10 million tonnes per annum expansion
of Kumba's Sishen iron ore mine in South Africa and to facilitate meaningful and
sustainable black economic empowerment in Kumba.
Acquisitions
The merger of AngloGold and Ashanti Goldfields of Ghana was completed in April
this year, creating the world's second largest gold mining company in terms of
production. As a result of the merger, Anglo American's holding in AngloGold
Ashanti was diluted to 47%, which has been subsequently rebuilt to 51%. On 1
July 2004, AngloGold Ashanti announced that it had agreed to pay $32 million for
a 29.9% interest in Trans-Siberian Gold plc, which is developing three
significant gold deposits in Russia.
In terms of future acquisitions, Anglo American remains cautious about
valuations in the mining sector at this point in the cycle, although the Group
continues to examine opportunities in the areas of paper and packaging and
industrial minerals, where asset values appear more realistic.
In April, Anglo American acquired the remaining 30% minority interest in
Frantschach AG for a total consideration of €320 million. Frantschach is now a
wholly owned subsidiary of Anglo American. The acquisitions of Copamex (renamed
Mondimex) and Bauernfeind were completed in the first quarter of 2004 and are
performing according to expectations, having bolstered Mondi's position in the
North American and central European markets respectively.
In central Europe, the acquisition of the Bilfinger Berger building materials
business in December 2003 has brought with it a long term reserve position in
hardstone aggregates in Germany and the Czech Republic.
Finance
In July, Anglo American announced the refinancing of its existing debt
facilities with a new $2.5 billion revolving multi-currency dual tranche
facility. The new facility, which will replace Anglo American's two existing
loan facilities, improves the terms and conditions of the existing facilities
and extends the maturity date to 2009.
In April, the credit rating agency Standard and Poor's affirmed the Group's A-
long-term credit rating.
Anglo American has been advised that it will be reclassified from MSCI's
emerging market index to its UK index from 30 November this year. Anglo American
believes this to be the proper area of classification.
Safety, Health and Environment
It is encouraging to report that both lost-time injury frequency and fatal
injury frequency rates continued to improve. The former is down by 16% and the
latter 11% compared with the first half of 2003.
Anglo American's corporate global leadership role in tackling HIV/AIDS continues
to make good progress. Voluntary counselling and testing (VCT) take-up is
increasing at Anglo American's operations in southern Africa. VCT is a key
factor in managing the Company's southern African operations in a sustainable
manner. In the great majority of cases, those who are HIV-positive and are
following an anti-retroviral drug treatment regimen are leading productive
lives, both at home and in the workplace.
In recognition of its pioneering role in managing the HIV/AIDS epidemic, Anglo
American received the Award for Leadership in the Global Business Coalition HIV/
AIDS Business Excellence Awards during a ceremony held in Berlin in April
presided over by German Chancellor Gerhard Schroder and World Bank President
James Wolfensohn.
Black Economic Empowerment (BEE)
Paper and Packaging's Mondi South Africa business has now completed its
integrated newsprint transaction with BEE group, MCI Resources, which owns a 42%
equity stake in the R1.1 billion enterprise. A similar transaction for Mondi
South Africa's integrated packaging business is being pursued.
Anglo Platinum continues to explore ways to extend broad-based empowerment at
mine level. The 50:50 Bafokeng-Rasimone Platinum Mine joint venture with the
Royal Bafokeng Nation became fully operational on 1 March 2004.
The Group continues to make good progress with its black procurement initiatives
which have resulted in excess of $2 billion of procurement to date. Regarding
new order mineral rights in South Africa, the Group is working towards
submitting applications over a number of licence areas.
Dividend
For some years the board has adopted a dividend policy of maintaining the
interim dividend at 15 cents per share. To reduce the disparity between the size
of the interim and final dividends, the board has decided to increase the
interim dividend by 27% to 19 cents per share and intends to maintain it at that
level for the foreseeable future. The significant increase in the interim
dividend should not be taken as indicative of a similar rate of increase for the
total dividend. The level of the total dividend will, as always, be recommended
on the basis of the full year results and in light of the board's intention to
maintain a progressive dividend policy.
Outlook
Anglo American believes that current global economic conditions will continue to
remain positive for commodities. The GDP growth trends for both the US and Japan
and the ongoing industrialisation of China, while perhaps not at the recent
remarkable rate of growth, as well as Russia and India, are likely to increase
demand for the Group's key commodities. European economic growth, however,
remains of concern, with likely adverse impact on Anglo American's paper and
packaging operations as well as some of its industrial minerals assets. The ever
higher level of the South African rand over the past two months will - if
maintained - adversely affect the performance of the Group's South African
assets in the absence of any material commodity price increases. Overall,
however, the Group's balanced geographic and asset base contributes a unique mix
which, with the ongoing focus on cost efficiencies, strong cash generation and a
$6 billion project pipeline, should continue to underpin performance in the
years ahead.
For further information:
Anglo American - London
Investor Relations Media Relations
Nick von Schirnding Kate Aindow
Tel: +44 207 698 8540 Tel: +44 207 698 8619
Anglo American - Johannesburg
Investor Relations Media Relations
Anne Dunn Marion Dixon
Tel: +27 11 638 4730 Tel: +27 11 638 3001
Notes to Editors:
Anglo American plc with its subsidiaries, joint ventures and associates is a
global leader in the mining and natural resource sectors. It has significant and
focused interests in gold, platinum, diamonds, coal, base metals, ferrous metals
and industries, industrial minerals and paper and packaging as well as financial
and technical strength. The Group is geographically diverse, with operations in
Africa, Europe, South and North America, Australia and Asia.
(www.angloamerican.co.uk)
Note: Throughout this press release '$' denotes United States dollars and '
cents' refers to United States cents and headline earnings is as defined in note
5 in the financial information. EBITDA is defined in the EBITDA reconciliation
before the cash flow in the financial information.
FINANCIAL REVIEW OF GROUP RESULTS
Headline earnings per share increased to $0.91 per share, up 49% over the first
half of 2003. Headline earnings for the half year totalled $1,304 million,
resulting from a particularly strong contribution from Base Metals and a
significant increase from Ferrous Metals and Industries. Coal, Platinum, Paper
and Packaging and Industrial Minerals also increased contributions. AngloGold
Ashanti recorded lower earnings due mainly to the impact of the stronger rand.
Headline earnings 6 months 6 months
30 June 30 June
$ million 2004 2003
Profit for the financial period 1,709 760
Operating exceptional items - 12
Exceptional finance charge - 13
Non-operating exceptional items (535) (18)
Tax on exceptionals 30 (7)
Goodwill amortisation 112 98
Related minority interests (12) (2)
Headline earnings 1,304 856
Headline earnings per share ($) 0.91 0.61
Profit for the period increased by 125% to $1,709 million compared with $760
million in the first half of 2003. This was principally due to strong
operational results and significant profits on the sale of the Group's non-core
interests, including Gold Fields Limited.
Summary profit and loss account 6 months 6 months
30 June 30 June
$ million 2004 2003
Total operating profit before exceptional items 2,248 1,546
Exceptional operating items - (12)
Total operating profit 2,248 1,534
Non-operating exceptional items 535 18
Profit before interest 2,783 1,552
Net interest payable (191) (179)
Profit before tax 2,592 1,373
Tax (686) (439)
Profit after tax 1,906 934
Minority interests (197) (174)
Profit for the financial period 1,709 760
Earnings per share ($) 1.20 0.54
The Group's results are influenced by a variety of currencies owing to the
geographic diversity of the Group. The South African rand in particular
strengthened considerably against the US dollar during the period with an
average exchange rate of R6.67 compared with R8.03 in the first half of 2003.
Currency movements adversely impacted headline earnings by $216 million. This
was more than offset by the positive impact of increased prices amounting to
$866 million.
Exceptional items
Non-operating exceptional gains amounted to $535 million. These included $464
million for the profit on sale of the Group's holding in Gold Fields Limited.
Interest
The net interest charge increased from $179 million in the first half of 2003 to
$191 million. The increase reflects the increase in net debt from $6,989 million
at 30 June 2003 to $8,730 million as at 30 June 2004.
Taxation
The effective rate of taxation before exceptional items was 32%. This was an
increase from the effective rate of 29% in the year ended 31 December 2003, due
to a number of one-off tax benefits arising in 2003 and a change in the mix of
earnings contributed by the Group's businesses.
Balance sheet
Total shareholders' funds were $22,531 million compared with $19,772(1) million
as at 31 December 2003. The increase was primarily due to retained earnings and
the appreciation of the rand against the dollar.
Net debt was $8,730 million, an increase of $97 million from 31 December 2003.
Net debt at 30 June 2004 comprised $11,162 million of debt, offset by $2,432
million of cash and current asset investments. Net debt to total capital as at
30 June 2004 was 24.6%, compared with 27.1%(1) at 31 December 2003.
Cash flow
Net cash inflow from operations was $2,075 million compared with $1,286 million
in the first half of 2003. EBITDA was $3,433 million, up significantly from
$2,444 million in the first half of 2003. Depreciation and amortisation
increased by $280 million to $988 million.
Acquisition expenditure accounted for an outflow of $953 million. The Group has
increased its interest in Anglo Platinum to 74.9% and purchased further shares
in AngloGold Ashanti to restore its holding to 51%.
Proceeds from disposals excluding sale of other investments totalled $1,233
million, with proceeds on the sale of Gold Fields Limited accounting for $1,180
million.
Purchases of tangible fixed assets amounted to $1,397 million, an increase of
$225 million from the first half of 2003. The major components of expansion were
in Platinum and Paper and Packaging.
Dividends
An interim dividend of 19 US cents per share to be paid on 21 September 2004 has
been declared.
(1) Restated for UITF (Urgent Issues Task Force) abstract 38. See Note 1 to the
financial information.
OPERATIONS REVIEW
Base Metals
$ million 6 months ended 6 months ended
30.06.04 30.06.03
Total operating profit 565 98
Copper 435 106
Nickel, Niobium, Mineral Sands 117 47
Zinc 28 (44)
Other (15) (11)
Headline earnings 455 60
EBITDA 718 235
Net operating assets 4,284 3,933
Capital expenditure 127 155
Share of Group headline earnings (%) 35% 7%
Share of Group net operating assets (%) 12% 16%
Base Metals' operating profit rose from $98 million to a record $565 million on
the back of materially higher average base metal prices, partially offset by
adverse exchange rate movements.
The copper division generated an operating profit of $435 million (2003: $106
million), of which Minera Sur Andes accounted for $222 million. Copper
production rose to 363,900 tonnes (2003: 350,000 tonnes), largely as a result of
higher production at Los Bronces. An amount of $34 million was paid to
ExxonMobil Corporation in terms of the Disputada contingent price participation
agreement.
Collahuasi's $654 million Rosario project was commissioned in May, ahead of
schedule and under budget. Mill throughput rates are already exceeding the
110,000 tonnes per day design capacity. Following significant exploration
success the $80 million El Soldado life extension project, which will extend the
mine life from 7 years to 20 years, was approved.
Operating profits for the nickel, niobium and mineral sands division totalled
$117 million (2003: $47 million), buoyed by higher nickel, pig iron and zircon
prices. Nickel and niobium production was in line with 2003. The operations
suffered higher electricity and fuel oil costs, as well as more general cost
pressures at Loma de Niquel, which continued to face challenging conditions as a
result of exchange controls and an artificially low official exchange rate. At
Namakwa, production from the mineral separation plant recommenced in January
following the major fire in October 2003. The recovery plan was largely
completed by 30 June 2004.
During the half year, the Group's 25% interest in Nkomati was sold for a
consideration of $37 million and the $67 million Codemin expansion project,
which will increase annual nickel production by some 4,000 tonnes, was approved.
Zinc division's operating profit increased to $28 million (2003: loss of $44
million), with favourable metal prices outweighing the adverse impact of
exchange-rate movements and other non-controllable cost increases. Total zinc
production for the first half was 203,200 tonnes (2003: 159,500 tonnes), mainly
on account of the ramp-up of output from Skorpion, which averaged 85% of design
capacity in the second quarter and remains on target to achieve full production
by the end of 2004.
The $276 million 777 project at Hudson Bay, completed ahead of time and under
budget, is operating at design capacity.
The outlook for base metal prices remains positive, with deficits forecast in
copper, nickel and zinc, but price volatility is expected to remain high.
Paper and Packaging
$ million 6 months ended 6 months ended
30.06.04 30.06.03
Total operating profit 320 357
Europe 250 260
South Africa 70 97
Headline earnings 226 205(1)
EBITDA 532 523
Net operating assets 5,887 4,374
Capital expenditure 409 233
Share of Group headline earnings (%) 17% 24%(1)
Share of Group net operating assets (%) 17% 18%
Operating profit for Paper and Packaging fell by 10% from $357 million to $320
million.
Mondi Europe's operating profit of $250 million was down 4%. The single most
significant factor contributing to this decrease has been the 9% price erosion
in office papers since July 2003. The adverse market factors were partially
compensated by incremental volumes, sustained focus on profit improvement
initiatives and the benefits accruing from acquisitions.
The European packaging businesses achieved results in line with the first half
of 2003. After a weak start, demand has improved, supporting paper price
increases in both sack and corrugated paper grades. The recent improvement in
the US market has relieved pressure from lower priced imported paper into
Europe. In the converting section, slow economic growth has impacted volume
expansion and placed further pressure on margins. The acquisition of Bauernfeind
has strengthened Mondi's European market position and further balanced the
integrated packaging paper supply. Progress is being made in enhancing the
group's North American market position from the newly acquired Mondimex's
Mexican base. Both Bauernfeind and Mondimex are performing ahead of expectation.
Performance slipped in the business papers sector due to ongoing price pressure.
European demand has grown modestly, with dollar-denominated imported tonnage and
a decline in export volumes eroding prices. Pulp prices have strengthened, with
market prices up $45 per tonne creating further margin squeeze. The start-up
curve on the Neusiedler Ruzomberok PM18 rebuild has been promising and the
rebuild of the Ruzomberok pulp mill is progressing well.
Mondi South Africa achieved an operating profit of $70 million, a satisfactory
result under difficult trading conditions. The strong rand exchange rate reduced
export margins and also placed pressure on domestic pricing. Commercial shuts at
packaging mills and the commissioning of the first phase of the Richards Bay 720
project in March reduced production, but higher efficiencies at other mills and
cost reductions helped offset some of the negative impact.
A restructuring of the South African operations, which is near completion, will
result in the integration of the European and South African uncoated woodfree
businesses. This should realise significant operational and marketing benefits.
Following the acquisition of the remaining 30% minority interest in Frantschach,
all of the non-South African packaging operations will be consolidated into one
structure.
Although pricing sentiment in Europe is improving, if dollar weakness persists a
difficult second half is anticipated.
(1) Headline earnings for Paper and Packaging have been adjusted for the 6
months ended 30 June 2003 as net interest for wholly owned operations in Paper
and Packaging is now accounted for centrally within Corporate Activities. Net
interest for wholly owned operations in Paper and Packaging was $52 million and
$27 million for the six months ended 30 June 2004 and 30 June 2003 respectively.
Headline earnings on the former basis would therefore have been $174 million and
$178 million for the six months ended 30 June 2004 and 30 June 2003
respectively. See note 5 to the financial information.
Diamonds
$ million 6 months ended 6 months ended
30.06.04 30.06.03
Total operating profit 350 378
Headline earnings 217 248
EBITDA 395 411
Group's share of De Beers' net assets (1) 2,704 2,513
Share of Group headline earnings (%) 17% 29%
Attributable operating profit from De Beers was $350 million (2003: $378
million). Diamond stocks reduced by nearly $400 million and operating cash flow
generated was $870 million. This enabled
De Beers to further reduce net interest-bearing debt from $1.76 billion at 31
December 2003 to $1.17 billion at 30 June 2004 and to reduce net gearing from
29% to 21%.
There was consistent demand for rough diamonds throughout the period and sales
by The Diamond Trading Company (DTC), the marketing arm of De Beers, totalled
$2.98 billion, 2.2% higher than the equivalent period in 2003. The DTC raised
its rough diamond prices on two occasions during the six months. The cumulative
effect of those increases, and those previously announced in 2003, meant that
the DTC's average rough prices were 14% higher than for the first half of 2003.
De Beers' older and more marginal mines in South Africa continue to struggle in
the current environment, and every effort is being made to seek further
efficiencies and cost reductions.
Debswana Diamond Company has lodged an application for the renewal of its
Jwaneng mining licence for a further period of 25 years. The current Jwaneng
licence expired on 31 July 2004 but the lease will be extended until agreement
is reached between the Government of Botswana and De Beers.
De Beers announced in July that it had reached a settlement with the United
States Department of Justice for the resolution of a long-standing case against
De Beers in respect of industrial diamonds. In terms of the settlement, De Beers
agreed to pay a fine of $10 million.
Global diamond jewellery sales in the first half of 2004 are anticipated to be
7% to 8% higher than for the same period last year, which was affected by the
war in Iraq and the SARS virus. The trade is optimistic that the strong consumer
demand will continue through the second half and expectations are that retail
sales for the year as a whole will be comfortably ahead of 2003.
(1) De Beers is an associate of the Group. The Group's share of De Beers' net
assets is disclosed. The figures for share of Group net operating assets shown
for other businesses relate to the Group subsidiaries only.
Ferrous Metals and Industries
$ million 6 months ended 6 months ended
30.06.04 30.06.03
Ferrous Metals and Industries operating profit 387 104
Kumba 96 6
Highveld Steel 67 4
Scaw Metals 45 35
Samancor Group 89 27
Tongaat-Hulett 28 23
Boart Longyear 26 9
Terra 41 (3)
Other (5) 3
Headline earnings 207 41
EBITDA 563 204
Net operating assets 4,971 2,038
Capital expenditure 144 59
Share of Group headline earnings (%) 16% 5%
Share of Group net operating assets (%) 14% 8%
Ferrous Metals and Industries' operating profit increased by 272% to $387
million. This was largely attributable to improved prices for iron ore, steel,
manganese, ferrochrome and vanadium. Kumba's contribution was $96 million
(attributable 66.6%) compared with $6 million in 2003 (attributable 20.1%).
Kumba's performance reflected increased commodity prices, higher sales volumes,
solid operational performances and margin improvement initiatives, in part
offset by the strong rand. Its iron ore operations benefited from an average 19%
annual rise in dollar-denominated prices effective 1 April 2004.
Scaw Metals' operating profit was $45 million (2003: $35 million). Higher
volumes and increased selling prices flowing from relatively strong domestic and
export demand in certain product lines were offset in part by input cost
increases in steel making raw materials, particularly scrap.
The attributable share of Samancor's operating profit amounted to $89 million
(2003: $27 million). Samancor's manganese operations benefited from improved
market conditions, resulting in stronger ore and alloy prices as well as higher
sales volumes. The chrome operations likewise benefited from higher volumes and
prices.
Highveld Steel and Vanadium recorded a strong interim operating profit of $67
million (2003: $4 million). This was largely a result of higher prices and
volumes, as well as an improved operating performance.
Boart Longyear's operating profit was $26 million (2003: $9 million). The
Product and Contracting divisions' profits in the Americas and Asia Pacific
regions more than doubled, due to greatly increased drilling activity, while
those in sub-Saharan Africa were boosted by higher sales of rock drills and
capital equipment. The European drilling products operations performed poorly
and are the subject of continued management focus.
Terra turned around an operating loss of $3 million in the first half of 2003 to
generate an attributable operating profit of $41 million. This performance
reflected higher nitrogen selling prices, lower natural gas costs and an
attributable $6 million flowing from a successful insurance claim arising from
prior litigation.
Tongaat-Hulett's operating profit was $28 million (2003: $23 million). The sugar
division's profitability was negatively influenced by lower world sugar prices
and reduced South African production, while the aluminium division performed
satisfactorily, with strong growth recorded in its rolled products division.
Coal
$ million 6 months 6 months
ended ended
30.06.04 30.06.03
Total operating profit 196 172
South Africa 89 69
Australia 26 74
South America 81 29
Headline earnings 147 107
EBITDA 286 256
Net operating assets 2,103 1,904
Capital expenditure 64 74
Share of Group headline earnings (%) 11% 13%
Share of Group net operating assets (%) 6% 8%
Anglo Coal's operating profit was $196 million, 14% higher than for the first
half of 2003, mainly as a result of higher export prices.
Thermal coal price increases have been driven mainly by constraints on Chinese
thermal coal availability for export and continued inefficiencies in the
logistics chain elsewhere. Metallurgical coal prices reflect general steel
sector demand and particularly Chinese demand for raw materials.
Operating profit for South African sourced coal increased by 29% to $89 million.
Sales volumes rose by 4% to 26 million tonnes, mainly on account of demand from
Eskom, which continues to purchase all coal that can be supplied by its tied
collieries. The increase in earnings was predominantly attributable to
significantly higher export prices, partially offset by underperformance in
railing coal to port, and the continued strength of the South African currency.
In Australia, operating profit fell by 65% from $74 million to $26 million. This
was mainly due to there being no production at Moranbah North mine from early
January owing to recovery activities after a fall of ground. An insurance claim
has been made in respect of the incident. Included in operating profit is an
amount of
$33 million for insurance proceeds attributable to the first half of the year.
Longwall production at Moranbah North recommenced in July. Australian
attributable saleable coal production was 9% lower at 12 million tonnes. In
addition, the Australian dollar appreciated by 17% against the US dollar over
the corresponding period, although this was partly offset by favourable exchange
rate hedges and careful cost control.
In Colombia, attributable sales tonnes increased by 14% to 4.1 million tonnes,
while operating cost reductions continue to be achieved. In Venezuela,
attributable sales tonnes at Carbones del Guasare increased by 15% to 0.8
million tonnes. Average export prices in both Colombia and Venezuela were
significantly higher than for the comparative period in 2003.
In China, Anglo Coal continues to make progress in achieving its future business
goals and has started on a drilling programme as part of the Xiwan
pre-feasibility study.
Performance in the second six months is expected to reflect both improved
production and the impact of continued high coal prices.
Platinum
$ million 6 months ended 6 months
30.06.04 ended
30.06.03
Total operating profit 320 204
Headline earnings 139 107
EBITDA 479 303
Net operating assets 6,585 4,803
Capital expenditure 292 394
Share of Group headline earnings (%) 11% 13%
Share of Group net operating assets (%) 19% 20%
Anglo Platinum's operating profit for the first half of 2004 rose by 57% to $320
million on the back of increased sales volumes and strong dollar prices realised
on metals sold.
The average realised dollar basket price of metals sold, at $1,183 per platinum
ounce, was 31.6% greater than in the first six months of 2003, with improved
platinum and nickel prices making the largest contribution. The average realised
price for platinum of $844 per ounce was $195 higher, while nickel was $5.83 per
pound compared with $3.62.
Refined platinum production rose by 26.6% to 1,158,900 ounces as a result of the
normalisation of metal flows through the process division and additional
production from new operations, which increased the volume of platinum mined and
purchased by 91,600 ounces. Equivalent refined platinum production, which
excludes the effect of pipeline movements, increased by 7.8%.
Cash operating costs per equivalent refined ounce of platinum rose to $718 due
to an increase in rand unit costs of 7.4% and the strength of the rand, which
raised costs in dollar terms. Anglo Platinum continues to target a rand unit
cash cost increase in line with South African inflation for 2004.
In May, Anglo Platinum successfully concluded a rights offer of convertible
perpetual cumulative preference shares, which raised $599 million(1). The
proceeds were used to reduce short-term borrowings. Net debt has decreased from
$1,038 million at the end of 2003 to $323 million. Capital expenditure for the
first half amounted to $292 million (2003: $394 million).
Operations at ACP Plant and Polokwane Smelter, both of which were commissioned
last year, were stable and in line with planned production build-ups. The
Western Limb Tailings Retreatment Plant was commissioned at the end of 2003 and
achieved a rapid build-up of tonnage.
Production performance was in line with expectations and refined platinum output
is on track to meet the full year target of 2.45 million ounces. Anglo Platinum
remains confident of the robustness of current and future demand for platinum
and its expansion programme is proceeding in accordance with the revised
build-up profile announced in December 2003. New investments are however
reviewed on a regular basis to assess their viability at varying prices and
exchange rates. The continuing strength of the rand against the dollar is
clearly impacting the ability of new projects to meet the company's required
hurdle rates. As a result, further delays in Anglo Platinum's extensive
expansion programme may become unavoidable.
(1) Anglo American subscribed for the rights offer investing $459 million.
Industrial Minerals
$ million 6 months ended 6 months
30.06.04 ended
30.06.03
Total operating profit 145 136
Tarmac 126 126
Copebras 19 10
Headline earnings 114 113
EBITDA 281 250
Net operating assets 4,440 3,978
Capital expenditure 127 136
Share of Group headline earnings (%) 9% 13%
Share of Group net operating assets (%) 13% 17%
Industrial Minerals' operating profit was $145 million, 7% higher than for the
first six months of 2003. Tarmac group's operating profit was flat, largely
owing to challenging market conditions in the UK, offset by the strength of
European currencies against the dollar and the impact of acquisitions made in
the second half of 2003.
In the UK, weaker demand led to lower sales volumes in most businesses and
operating profit was 3% down. In competitive market conditions price
improvements were modest, but the benefits of Tarmac's ongoing business
improvement and cost reduction programme helped to offset the lower volumes. The
results were also held back by the performance of Concrete Products owing to a
restructuring charge and costs associated with the introduction of a new IT
platform. In March, the new cement plant at Buxton commenced operation, having
been completed at a cost of £110 million, £5 million below budget. The plant is
performing in line with expectations.
Tarmac's operating profit outside the UK improved by 20%. Underlying market
conditions in the Czech Republic and Poland have strengthened following these
countries' recent accession to the EU. Owing to winter conditions, operations
throughout Central Europe typically suffer poor results during the first six
months but improve substantially in the second half. Tarmac France reported
improved profits despite continuing difficult market conditions. In Spain, the
business was impacted by a slowdown in activity as a result of a period of
uncertainty following the general election and adverse weather conditions.
In the Middle East, the economic boom in the UAE continued which resulted in a
substantial increase in operating profit. Similarly, Tarmac's operations in
Greater China reported improved results driven by the strong economic growth in
that region.
Copebras benefited from buoyant local market conditions and increased
international fertiliser prices, which, together with increased production from
the new Goias plant, allowed it to double its operating profit to $19 million.
The new plant has successfully positioned Copebras to participate further in the
expected continued growth of the fertiliser market in Brazil.
Gold
$ million 6 months ended 6 months
30.06.04 ended
30.06.03
Total operating profit 133 180
Headline earnings 66 82
EBITDA 317 323
Net operating assets 5,934 2,675
Capital expenditure 227 117
Share of Group headline earnings (%) 5% 10%
Share of Group net operating assets (%) 17% 11%
The 17% strengthening of the rand against the dollar was the main factor in
first-half operating profit decreasing to $133 million compared with $180
million in the prior period. Gold production was some 4% lower.
The second three months of 2004 saw the first material correction in the
three-year rise in the spot price of gold. Until then, the dollar spot price of
gold had risen every quarter since the beginning of 2001 (except for a slight
retracing in the second quarter of 2003). During the second quarter, the spot
price fell around $59 per ounce, from an opening high of $430 per ounce in early
April to $371 per ounce in mid-May, closing the period at $393 per ounce.
The merger of AngloGold with Ashanti Goldfields was completed on 26 April 2004.
Production from the Ashanti assets in respect of May and June 2004 has been
incorporated into the enlarged company's results for the half-year. Although
output from Ashanti's operations continues to suffer from the effects of
protracted under-capitalisation, good progress is being made with the
integration of the two companies. Measures to optimise production over the life
of the assets are currently being introduced and their impact should begin to
become apparent in the next four to six quarters.
The newly combined company has an organic growth pipeline of seven approved
projects, which should add some 14 million ounces to the company's production
profile. In July this year, AngloGold Ashanti announced the acquisition of a
29.9% stake in Trans-Siberian Gold for $32 million. This is a modest but
important step in the company's new-frontier growth strategy.
Consolidated profit and loss account
for the six months ended 30 June 2004
Before Exceptional
exceptional items
items (note 3)
6 months 6 months 6 months 6 months Year
ended ended ended ended ended
US$ million Note 30.06.04 30.06.04 30.06.04 30.06.03 31.12.03
Group turnover including share of joint
ventures and associates 2 15,235 - 15,235 12,076 24,909
Less:Share of joint ventures' turnover (496) - (496) (504) (1,060)
Share of associates' turnover (2,953) - (2,953) (2,669) (5,212)
Group turnover - subsidiaries 11,786 - 11,786 8,903 18,637
Operating costs (10,279) - (10,279) (7,979) (17,026)
Group operating profit - subsidiaries 1,507 - 1,507 924 1,611
Share of operating profit of joint ventures 167 - 167 118 247
Share of operating profit of associates 574 - 574 492 748
Total operating profit 2 2,248 - 2,248 1,534 2,606
Profit on disposal of fixed assets 3 - 535 535 18 386
Profit on ordinary activities before
interest 2,248 535 2,783 1,552 2,992
Investment income 159 - 159 93 308
Interest payable (350) - (350) (272) (627)
Profit on ordinary activities before
taxation 2,057 1,373 2,673 535 2,592
Tax on profit on ordinary activities 4 (656) (30) (686) (439) (736)
Profit on ordinary activities after
taxation 1,401 505 1,906 934 1,937
Equity minority interests (201) 4 (197) (174) (345)
Profit for the financial period 5 1,200 509 1,709 760 1,592
Equity dividends to shareholders (273) - (273) (212) (766)
Retained profit for the financial period 927 509 1,436 548 826
Headline earnings for the financial period 5 1,304 - 1,304 856 1,694
Basic earnings per share (US$):
Profit for the financial period 6 1.20 0.54 1.13
Headline earnings for the financial period 6 0.91 0.61 1.20
Diluted earnings per share (US$):
Profit for the financial period 6 1.14 0.53 1.10
Headline earnings for the financial period 6 0.87 0.60 1.17
Dividend per share (US cents) 19.0 15.0 54.0
Basic number of shares outstanding(1)
(million) 6 1,429 1,413 1,415
Diluted number of shares outstanding(1)
(million) 6 1,496 1,427 1,478
(1) Basic and diluted number of shares outstanding represent the weighted average for the period.
The impact of acquired and discontinued operations on the results for the period
is not material.
Consolidated profit and loss account: headline earnings analysis
for the six months ended 30 June 2004
6 months 6 months Year
ended ended ended
US$ million 30.06.04 30.06.03 31.12.03
Platinum 139 107 205
Gold 66 82 167
Diamonds 217 248 386
Coal 147 107 232
Base Metals 455 60 206
Industrial Minerals 114 113 270
Paper and Packaging(1) 226 205 425
Ferrous Metals and Industries 207 41 107
Exploration (42) (39) (83)
Corporate Activities(1) (225) (68) (221)
Headline earnings for the financial period 1,304 856 1,694
(1) The comparatives for 6 months to 30 June 2003 and year ended 31 December
2003 have been adjusted as net interest for wholly owned operations in Paper
and Packaging is now accounted for centrally within Corporate Activities
(see note 5).
Consolidated balance sheet
as at 30 June 2004
As at As at As at
US$ million 30.06.04 30.06.03 31.12.03
(as restated)(1) (as restated)(1)
Fixed assets
Intangible assets 2,600 2,269 2,267
Tangible assets 28,227 18,977 24,379
Investments in joint ventures: 1,371 1,594 1,630
Share of gross assets 1,987 2,384 2,483
Share of gross liabilities (616) (790) (853)
Investments in associates 4,217 4,601 4,804
Other investments 844 1,237 772
37,259 28,678 33,852
Current assets
Stocks 2,986 2,224 2,744
Debtors 5,225 3,785 4,383
Current asset investments 1,393 926 1,032
Cash at bank and in hand 1,039 1,196 1,094
10,643 8,131 9,253
Liabilities due within one year
Short term borrowings (3,196) (3,442) (4,094)
Other current liabilities (5,585) (4,218) (5,224)
Net current assets/(liabilities) 1,862 471 (65)
Total assets less current liabilities 39,121 29,149 33,787
Liabilities due after one year
Long term borrowings: (7,966) (5,669) (6,665)
Convertible debt(2) (2,087) (1,086) (1,088)
Other long term liabilities (5,879) (4,583) (5,577)
Provisions for liabilities and charges (4,464) (3,276) (3,954)
Equity minority interests (4,001) (2,454) (3,396)
Non equity minority interests (159) - -
Net assets 22,531 17,750 19,772
Capital and reserves
Share capital and premium 2,355 1,965 2,022
Reserves 1,176 1,352 1,176
Profit and loss account 19,000 14,433 16,574
Total shareholders' funds (equity) 22,531 17,750 19,772
(1) The Group has adopted Urgent Issues Task Force (UITF) abstract 38
'Accounting for ESOP Trusts'. As required by this abstract,own
shares held by employee trusts have been reclassified from other
investments and are now recorded as a reduction in shareholders'
funds. See note 1.
(2) Includes $997 million (30 June 2003: nil, 31 December 2003: nil) of
convertible debt issued by listed subsidiaries.
The interim financial information was approved by the board of directors on 4
August 2004.
Consolidated statement of total recognised gains and losses
for the six months ended 30 June 2004
6 months 6 months Year
ended ended ended
US$ million 30.06.04 30.06.03 31.12.03
Profit for the financial period 1,709 760 1,592
Joint ventures 127 94 190
Associates 346 285 479
Unrealised profit on deemed disposal of AngloGold 410 - -
Unrealised gain arising on exchange of business - - 13
Currency translation differences on foreign currency net investments 563 1,579 3,282
Related tax credit/(charge) 17 (31) (59)
Total recognised gains for the financial period 2,699 2,308 4,828
Prior year adjustment (622)
Total recognised gains since last annual report 2,077
Combined statement of movement in shareholders' funds and movement in reserves
for the six months ended 30 June 2004
Issued Share Profit
share premium Merger Other and loss
US$ million capital account reserve reserves account(1) Total
At 31 December as previously reported 738 1,284 460 716 17,196 20,394
Prior year adjustment(2) - - - - (622) (622)
At 1 January 2004(2) 738 1,284 460 716 16,574 19,772
Profit for the financial period - - - - 1,709 1,709
Dividends proposed - - - - (273) (273)
Shares issued 8 325 - - - 333
Unrealised profit on deemed disposal of
AngloGold(3)
- - - - 410 410
Currency translation differences - - - - 563 563
Related tax credit - - - - 17 17
At 30 June 2004 746 1,609 460 716 19,000 22,531
(1) Certain of the Group's subsidiaries operate in South Africa, where
significant exchange control restrictions on distributions limit
the Group's access to distributable profits and cash balances.
(2) The Group has adopted UITF 38 'Accounting for ESOP Trusts'. As required by
this abstract, own shares held by employee trusts have been reclassified
from other investments and are now recorded as a reduction in shareholders'
funds. This change has been accounted for as a prior year adjustment and
prior year numbers have been changed accordingly. The impact of adopting
this policy is to reduce net assets and shareholders' funds by
$622 million at 1 January 2004 (30 June 2003: $626 million; 1 January
2003: $630 million). See note 1.
(3) AngloGold merged with Ashanti Goldfields Company Limited on 26 March 2004.
As a result of this transaction, the Group's shareholding decreased from
55.8% to 47.2%, and the Group has therefore had to account for a deemed
disposal in accordance with FRS 2 "Accounting for subsidiary undertakings".
The holding was subsequently increased again to 51% through purchase of
additional shares.
Reconciliation from EBITDA to net cash inflow from operating activities
6 months 6 months Year
ended ended ended
US$ million 30.06.04 30.06.03 31.12.03
EBITDA 3,433 2,444 4,785
Less:
Share of operating profit of joint ventures (167) (118) (247)
Share of operating profit of associates (574) (492) (748)
Amortisation of goodwill in joint ventures and associat es (25) (23) (50)
Underlying depreciation and amortisation in joint ventures
and associates (172) (167) (380)
Increase in stocks (54) (246) (302)
Increase in debtors (439) (222) (246)
Increase in creditors 26 93 348
Increase in provisions 56 20 38
Other items (9) (3) (14)
Net cash inflow from operating activities 2,075 1,286 3,184
EBITDA is operating profit before exceptional items, depreciation and
amortisation.
Consolidated cash flow statement
for the six months ended 30 June 2004
6 months 6 months Year
ended ended ended
US$ million Note 30.06.04 30.06.03 31.12.03
Net cash inflow from operating activities 9 2,075 1,286 3,184
Dividends from joint ventures and associates 147 203 426
Returns on investments and servicing of finance
Interest received and other financial income 137 97 201
Interest paid (292) (186) (452)
Dividends received from other fixed asset investments 15 14 42
Dividends paid to minority shareholders (139) (228) (349)
Net cash outflow from returns on investments and
servicing of finance (279) (303) (558)
Taxation
UK corporation tax (6) (2) (6)
Overseas tax (240) (411) (701)
Net cash outflow from taxation (246) (413) (707)
Capital expenditure and financial investment
Payments for tangible fixed assets (1,397) (1,172) (3,025)
Proceeds from the sale of tangible fixed assets 56 40 117
Payments for other investments(1) (3) (53) (46)
Proceeds from the sale of other investments(1) 82 74 617
Net cash outflow for capital expenditure and
financial investment (1,262) (1,111) (2,337)
Acquisitions and disposals
Acquisition of subsidiaries(2)(3) (953) (386) (1,469)
Disposal of subsidiaries 16 2 3
Investment in joint ventures (1) - (1)
Sale of interests in joint ventures 37 - -
Repayment of loans and capital from joint ventures 41 - -
Investment in associates(3) (1) (191) (78)
Sale of interests in associates 1,180 219 219
Repayment of loans and capital from associates 220 20 41
Net cash inflow/(outflow) from acquisitions and
disposals 539 (336) (1,285)
Equity dividends paid to Anglo American shareholders (547) (511) (741)
Cash inflow/(outflow) before management of liquid resources
and financing 427 (1,185) (2,018)
Management of liquid resources (344) 251 182
Financing (138) 977 1,785
(Decrease)/increase in cash in the period 10 (55) 43 (51)
(1) Comprises disposal and acquisition of other investments classified as
fixed assets.
(2) Net of cash acquired within subsidiaries of $82 million. (6 months ended
30 June 2003: $1 million, year ended 31 December 2003: $214 million.)
(3) All amounts paid in year ended 31 December 2003 in respect of the
acquisition of Kumba are included within acquisition of subsidiaries.
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 2003
with the addition of UITF abstract 38 'Accounting for ESOP Trusts', which has
been adopted for the first time this period. As required by this abstract, own
shares held by employee trusts have been reclassified from other investments and
are now recorded as a reduction in shareholders' funds. This change has been
accounted for as a prior year adjustment and previously reported figures have
been restated accordingly. The impact of adopting this policy is to reduce net
assets and shareholders' funds by $622 million at 1 January 2004
(30 June 2003: $626 million; 1 January 2003: $630 million).
The financial information for the year ended 31 December 2003 has been derived
from the Group's statutory accounts for that period as filed with the Registrar
of Companies. The auditors' report on the statutory accounts for the year ended
31 December 2003 was unqualified and did not contain statements under section
237(2) of the Companies Act 1985 (regarding adequacy of accounting records and
returns) or under section 237(3) (regarding provision of necessary information
and explanations). The financial information in respect of the six months ended
30 June 2004 is unaudited but has been reviewed by the auditors and their report
is set out on page 33. The interim financial information does not constitute
statutory accounts as defined under section 240 of the Companies Act 1985.
2 Segmental information
Turnover(1) Operating profit(2) Net operating assets(3)
6 months 6 months Year 6 months 6 months Year 6 months 6 months Year
ended ended ended ended ended ended ended ended ended
US$ million 30.06.04 30.06.03 31.12.03 30.06.04 30.06.03 31.12.03 30.06.04 30.06.03 31.12.03
By business segment
Group subsidiaries
Platinum 1,446 917 2,232 314 202 428 6,585 4,803 6,119
Gold 928 829 1,718 107 132 226 5,934 2,675 3,302
Coal 828 730 1,556 112 140 260 2,103 1,904 2,152
Base Metals 1,303 781 1,720 446 41 (36) 4,284 3,933 4,087
Industrial Minerals 1,772 1,590 3,196 136 128 308 4,440 3,978 4,304
Paper and
Packaging 3,210 2,802 5,352 309 347 638 5,887 4,374 4,820
Ferrous Metals and
Industries 2,299 1,254 2,863 258 70 130 4,971 2,038 4,629
Exploration - - - (56) (50) (125) - - -
Corporate Activities - - - (119) (86) (218) 282 307 296
11,786 8,903 18,637 1,507 924 1,611 34,486 24,012 29,709
Joint ventures
Gold 123 148 312 26 48 99
Base Metals 245 162 346 127 53 114
Industrial Minerals 59 45 100 7 6 14
Paper and Packaging 52 134 274 5 10 18
Ferrous Metals and
Industries 17 15 28 2 1 2
496 504 1,060 167 118 247
Associates
Platinum 29 18 46 6 2 5
Gold 7 5 11 - - 1
Diamonds 1,647 1,559 2,967 350 378 562
Coal 212 138 295 84 32 73
Base Metals 44 30 60 (8) 4 -
Industrial Minerals 12 10 22 2 2 3
Paper and Packaging 109 1 2 6 - -
Ferrous Metals and
Industries 803 724 1,476 127 33 76
Corporate Activities 90 184 333 7 41 28
2,953 2,669 5,212 574 492 748
15,235 12,076 24,909 2,248 1,534 2,606
2 Segmental information continued
Turnover(1) Operating profit(2) Net operating assets(3)
6 months 6 months Year 6 months 6 months Year 6 months 6 months Year
ended ended ended ended ended ended ended ended ended
US$ million 30.06.04 30.06.03 31.12.03 30.06.04 30.06.03 31.12.03 30.06.04 30.06.03 31.12.03
By geographical segment
(by origin)
Group subsidiaries
South Africa 4,854 2,991 7,308 637 423 837 15,777 9,841 14,148
Rest of Africa 136 28 44 (5) 8 (4) 3,136 666 873
Europe 4,539 4,222 7,721 322 314 592 8,908 7,408 8,086
North America 422 354 708 16 (28) (279) 892 997 868
South America 1,187 757 1,675 480 140 360 3,257 3,118 3,168
Australia and Asia 648 551 1,181 57 67 105 2,516 1,982 2,566
11,786 8,903 18,637 1,507 924 1,611 34,486 24,012 29,709
Joint ventures
South Africa 2 7 17 - 3 9
Rest of Africa 123 147 312 26 48 98
Europe 106 175 372 10 15 31
North America 15 15 28 2 1 2
South America 243 156 323 127 50 105
Australia and Asia 7 4 8 2 1 2
496 504 1,060 167 118 247
Associates
South Africa 838 770 1,302 140 122 135
Rest of Africa 1,042 1,012 2,157 220 243 398
Europe 461 392 640 84 80 116
North America 288 245 504 28 (6) (4)
South America 202 130 280 70 30 61
Australia and Asia 122 120 329 32 23 42
2,953 2,669 5,212 574 492 748
15,235 12,076 24,909 2,248 1,534 2,606
(1) Turnover is measured at the fair value of consideration received or
receivable for all significant products. Where a by-product is not regarded
as significant, then revenue may be credited against the cost of sales. The
amount credited to cost of sales for the 6 months ended 30 June 2004 was
$40 million (30 June 2003: $28 million, 31 December 2003: $55 million) and
relates principally to AngloGold Ashanti who credit uranium and silver to
cost of sales in accordance with the Gold Industry Standard on production
cost.
(2) Operating profit is stated after deducting the operating exceptional
items set out on the following page, and as disclosed in note 3.
(3) Net operating assets consist of tangible ($28,227 million) and intangible
assets ($2,600 million), stocks ($2,986 million) and operating debtors
($4,167 million) less non-interest bearing current liabilities ($3,494
million).
6 months 6 months Year
ended ended ended
30.06.04 30.06.03 31.12.03
US$ million
Operating profit before operating exceptional items 2,248 1,546 2,892
Less Group subsidiaries' operating exceptional items:
Platinum - - (14)
Gold - (12) (43)
Base Metals - - (208)
Exploration - - (20)
Corporate Activities - - (1)
Operating profit after operating exceptional items 2,248 1,534 2,606
3 Exceptional items
6 months 6 months Year
ended ended ended
US$ million 30.06.04 30.06.03 31.12.03
Operating exceptional items
Impairment of Hudson Bay Mining and Smelting Co Ltd - - (208)
Impairment of Boyongan - - (20)
Impairment of Savuka - - (34)
Write-down of exploration assets - (12) (9)
Other impairments - - (15)
Total operating exceptional items - (12) (286)
Taxation - 4 22
Minority interests - 4 23
- (4) (241)
Exceptional finance charge
Share of associate's charge on early settlement of debt - (13) (13)
Total exceptional finance charge - (13) (13)
Non-operating exceptional items
Disposal of interest in Gold Fields Ltd 464 - -
Disposal of Nkomati 28 - -
Loss on redemption of De Beers' preference shares (44) - -
Disposal of interest in Li & Fung - - 163
Disposal of Anglovaal Mining Limited - (13) (13)
Disposal of interest in Avgold 25 - 51
Disposal of interest in East Africa Gold Mines - - 25
Disposal of interest in Randgold Resources - - 17
Disposal of interest in JCI - - (20)
Disposal of remaining interest in FirstRand Limited 32 - 117
Disposal of other fixed assets and investments 28 17 21
Share of associates' exceptional items 2 14 25
Profit on disposal of fixed assets 535 18 386
Total non-operating exceptional items 535 18 386
Taxation (30) 3 (9)
Minority interests 4 (6) (29)
509 15 348
Total exceptional items (net of tax and minority interests) 509 (2) 94
4 Tax on profit on ordinary activities
6 months 6 months Year
ended ended ended
US$ million 30.06.04 30.06.03 31.12.03
United Kingdom corporation tax at 30% 54 - 26
South Africa corporation tax at 30% 103 47 74
Other overseas taxation 131 140 240
Share of taxation charge of joint ventures 6 4 15
Share of taxation charge of associates 169 147 200
Current tax on exceptional items 30 (7) 9
Total current tax 493 331 564
Deferred taxation - subsidiaries 165 96 193
Deferred taxation - joint ventures 24 8 17
Deferred taxation - associates 4 4 (16)
Deferred taxation on exceptional items - - (22)
Total deferred tax 193 108 172
Total tax charge 686 439 736
5 Profit for the financial period
The table below analyses the contribution of each business segment to the
Group's headline earnings, which the directors believe to be a useful additional
measure of the Group's performance. Headline earnings is calculated in
accordance with the definition issued by the Institute of Investment Management
and Research (now Society of Investment Professionals), in Statement of
Investment Practice No. 1, 'The Definition of Headline Earnings'.
6 months ended 30.06.04
Non-
Operat- Operat- operat-
ing ing ing
profit except- except- Good-
ional ional will Profit Interest Divid- Other Net Tax Equity
US$ million items items amort- before income end finan- Interest invest- minority
isation interest income cial expense ment interests
income income Total
By business
segment
Platinum 320 - - 8 328 10 - (2) (37) (29) (101) (59) 139
Gold 133 - - 21 154 26 - 40 (37) 29 (44) (73) 66
Diamonds 350 - - 17 367 4 - - (27) (23) (122) (5) 217
Coal 196 - - 4 200 5 1 3 (2) 7 (60) - 147
Base Metals 565 - - - 565 7 - 8 (22) (7) (97) (6) 455
Industrial 145 - - 30 175 3 - (3) (6) (6) (47) (8) 114
Minerals
Paper and
Packaging 320 - - 14 334 1 3 3 (13) (6) (71) (31) 226
Ferrous
Metals and
Industries 387 - - 6 393 23 5 - (82) (54) (93) (39) 207
Exploration (56) - - - (56) - - - - - - 14 (42)
Corporate
Activities (112) - - 12 (100) 9 6 7 (124) (102) (21) (2) (225)
Headline
earnings
for the
financial
period 2,248 - - 112 2,360 88 15 56 (350) (191) (656) (209) 1,304
Headline
earnings
adjustments - - 535 (112) 423 - - - - - (30) 12 405
Profit
for the
financial
period 2,248 - 535 - 2,783 88 15 56 (350) (191) (686) (197) 1,709
6 months ended 30.06.03
Non-
Operat- Operat- operat-
ing ing ing
profit except- except- Good-
ional ional will Profit Interest Divid- Other Net Tax Equity
US$ million items items amort- before income end finan- Interest invest- minority
isation interest income cial expense ment interests
income income Total
By business
segment
Platinum 204 - - 8 212 9 - 20 (11) 18 (71) (52) 107
Gold 180 12 - 20 212 19 - 32 (19) 32 (80) (82) 82
Diamonds 378 - - 15 393 5 - - (33) (28) (112) (5) 248
Coal 172 - - 4 176 5 1 (23) (4) (21) (48) - 107
Base Metals 98 - - - 98 2 - (4) (20) (22) (14) (2) 60
Industrial 136 - - 26 162 3 1 (2) (7) (5) (38) (6) 113
Minerals
Paper and 357 - - 9 366 3 2 (11) (24) (30) (92) (39) 205
Packaging(1)
Ferrous
Metals and 104 - - 5 109 6 5 (6) (44) (39) (29) - 41
Industries
Exploration (50) - - - (50) - - (1) - (1) - 12 (39)
Corporate (45) - - 11 (34) 22 6 (1) (97) (70) 38 (2) (68)
Activities(1)
Headline
earnings
for the
financial
period 1,534 12 - 98 1,644 74 15 4 (259) (166) (446) (176) 856
Headline
earnings
adjustments - (12) 18 (98) (92) - - - (13) (13) 7 2 (96)
Profit
for the
financial
period 1,534 - 18 - 1,552 74 15 4 (272) (179) (439) (174) 760
(1) See footnote on page 29.
5 Profit for the financial period continued
Year ended 31.12.03
Non-
Operat- Operat- operat-
ing ing ing
profit except- except- Good-
ional ional will Profit Interest Divid- Other Net Tax Equity
US$ million items items amort- before income end finan- Interest invest- minority
isation interest income cial expense ment interests
income income Total
By business
segment
Platinum 433 14 - 17 464 14 - 21 (47) (12) (152) (95) 205
Gold 326 43 - 41 410 42 - 51 (44) 49 (122) (170) 167
Diamonds 562 - - 32 594 10 - - (59) (49) (153) (6) 386
Coal 333 - - 8 341 13 2 (31) (7) (23) (86) - 232
Base Metals 78 208 - 1 287 6 - (12) (38) (44) (32) (5) 206
Industrial
Minerals 325 - - 53 378 7 1 (4) (15) (11) (81) (16) 270
Paper and
Packaging(1) 656 - - 18 674 6 5 31 (48) (6) (172) (71) 425
Ferrous
Metals and
Industries 208 - - 13 221 58 11 (8) (154) (93) (20) (1) 107
Exploration (125) 20 - - (105) - - 1 - 1 - 21 (83)
Corporate
Activities(1)(190) 1 - 20 (169) 44 17 23 (202) (118) 69 (3) (221)
Headline
earnings
for the
financial
year 2,606 286 - 203 3,095 200 36 72 (614) (306) (749) (346) 1,694
Headline
earnings
adjustments - (286) 386 (203) (103) - - - (13) (13) 13 1 (102)
Profit for
the
financial
year 2,606 - 386 - 2,992 200 36 72 (627) (319) (736) (345) 1,592
(1) Headline earnings for Paper and Packaging and Corporate Activities have
been adjusted for the 6 months ended 30 June 2003 and year ended 31 December
2003, as net interest for the wholly owned operations in Paper and Packaging
is now accounted for centrally within Corporate Activities. Net interest
payable for the wholly owned operations in Paper and Packaging was
$52 million for the 6 months ended 30 June 2004 (6 months ended 30 June
2003: $27 million, year ended 31 December 2003: $57 million). On the former
basis headline earnings for Paper and Packaging would have been $174 million
for 6 months ended 30 June 2004 (6 months ended 30 June 2003: $178 million,
year ended 31 December 2003: $368 million).
6 Earnings per share
6 months 6 months Year
ended ended ended
30.06.04 30.06.03 31.12.03
Basic number of ordinary shares outstanding (million)(1) 1,429 1,413 1,415
Potentially dilutive ordinary shares (million) 67 14 63
Diluted number of ordinary shares outstanding (million)(1) 1,496 1,427 1,478
Profit for the financial period:
Basic earnings per share (US$)(2) 1.20 0.54 1.13
Diluted earnings per share (US$)(3) 1.14 0.53 1.10
Headline earnings for the financial period(4):
Basic earnings per share (US$) 0.91 0.61 1.20
Diluted earnings per share (US$) 0.87 0.60 1.17
(1) Basic and diluted number of shares outstanding represent the weighted
average for the period.
(2) Basic earnings per share is calculated by dividing the profit for the
year attributable to ordinary shareholders by the weighted average
number of ordinary shares in issue during the period. The average number
of shares in issue excludes the shares held by the employee benefit trust.
(3) Diluted earnings per share is calculated by adjusting the weighted average
number of ordinary shares in issue on the assumption of conversion of all
potentially dilutive ordinary shares.
(4) Basic and diluted earnings per share are also shown based on headline
earnings, which the directors believe to be a useful additional measure of
the Group's performance.
Earnings (US$ million) Basic earnings per share (US$)
6 months 6 months Year 6 months 6 months Year
ended ended ended ended ended ended
30.06.04 30.06.03 31.12.03 30.06.04 30.06.03 31.12.03
Profit for the financial period 1,709 760 1,592 1.20 0.54 1.13
Operating exceptional items - 12 286 - 0.01 0.20
Exceptional finance charge - 13 13 - 0.01 0.01
Non-operating exceptional items (535) (18) (386) (0.38) (0.01) (0.27)
Amortisation of goodwill:
Subsidiaries 87 75 153 0.06 0.05 0.11
Joint ventures and associates 25 23 50 0.02 0.02 0.04
Related tax 30 (7) (13) 0.02 (0.01) (0.01)
Related minority interest (12) (2) (1) (0.01) - (0.01)
Headline earnings for the
financial period 1,304 856 1,694 0.91 0.61 1.20
7 Exploration expenditure
6 months 6 months Year
ended ended ended
US$ million 30.06.04 30.06.03 31.12.03
Platinum 11 11 11
Gold 19 18 36
Base Metals 18 20 50
Impairment of Boyongan - - 20
Other 8 3 8
56 52 125
8 Capital expenditure
6 months 6 months Year
ended ended ended
US$ million 30.06.04 30.06.03 31.12.03
Platinum 292 394 1,004
Gold 227 117 339
Coal 64 74 207
Base Metals 127 155 352
Industrial Minerals 127 136 316
Paper and Packaging 409 233 601
Ferrous Metals and Industries 144 59 195
Other 7 4 11
1,397 1,172 3,025
9 Reconciliation of Group operating profit to net cash flow
from operating activities
6 months 6 months Year
ended ended ended
US$ million 30.06.04 30.06.03 31.12.03
Group operating profit - subsidiaries 1,507 924 1,611
Exceptional operating charges (all non cash items) - 12 286
Group operating profit before exceptionals 1,507 936 1,897
Depreciation and amortisation charges 988 708 1,463
Increase in stocks (54) (246) (302)
Increase in debtors (439) (222) (246)
Increase in creditors 26 93 348
Increase in provisions 56 20 38
Other items (9) (3) (14)
Net cash inflow from operating activities 2,075 1,286 3,184
10 Reconciliation of net cash flow to movement in net debt
6 months 6 months Year
ended ended ended
US$ million 30.06.04 30.06.03 31.12.03
(Decrease)/increase in cash in the period (55) 43 (51)
Cash inflow/(outflow) from debt financing 314 (1,038) (1,406)
Cash inflow/(outflow) from management of liquid resources 344 (251) (182)
Change in net debt arising from cash flows 603 (1,246) (1,639)
Loans and current asset investments acquired with subsidiaries (543) (70) (746)
Loans and current asset investments disposed with subsidiaries - 3 5
Exchange adjustments (157) (98) (675)
Movement in net debt (97) (1,411) (3,055)
Net debt at start of the period (8,633) (5,578) (5,578)
Net debt at end of the period (8,730) (6,989) (8,633)
11 Movement in net debt
Other
Acquisitions non-cash
As at excluding cash movements Exchange As at
31.12.03 movements 30.06.04
Cash flow
US$ million
Cash at bank and in hand 1,094 (55) - - - 1,039
Debt due after one year (6,665) (1,176) (268) 275 (132) (7,966)
Debt due within one year (4,094) 1,490 (275) (275) (42) (3,196)
(10,759) 314 (543) - (174) (11,162)
Current asset investments 1,032 344 - - 17 1,393
Total (8,633) 603 (543) - (157) (8,730)
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 2004 which comprises the consolidated profit and
loss account, consolidated profit and loss account: headline earnings analysis,
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.
This report is made solely to the company in accordance with Bulletin 1999/4
issued by the Auditing Practices Board. Our work has been undertaken so that we
might state to the company those matters we are required to state to them in an
independent review report and for no other purpose. To the fullest extent
permitted by law, we do not accept or assume responsibility to anyone other than
the company, for our review work, for this report, or for the conclusions we
have formed.
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 2004.
Deloitte & Touche LLP
Chartered Accountants
London
United Kingdom
4 August 2004
Production statistics
6 months 6 months Year
ended ended ended
30.06.04 30.06.03 31.12.03
Anglo Platinum (troy ounces)
Platinum 1,182,700 933,300 2,356,100
Palladium 634,900 479,200 1,213,700
Rhodium 109,300 100,200 237,400
Nickel (tonnes) 11,300 10,300 22,500
AngloGold Ashanti (gold in troy ounces)
South Africa 1,529,000 1,612,000 3,281,000
North and South America 393,000 513,000 922,000
Australia and Asia 184,000 226,000 432,000
Rest of the World 619,000 485,000 981,000
2,725,000 2,836,000 5,616,000
Gold Fields (gold in troy ounces)
Gold 207,000 441,800 870,500
Anglo Coal (tonnes)
South Africa
Eskom 15,995,300 14,911,000 31,301,000
Trade 9,945,300 10,008,000 20,435,700
Australia 11,994,800 13,120,000 26,125,400
South America 4,891,700 4,294,000 8,728,400
42,827,100 42,333,000 86,590,500
Anglo Base Metals
Copper (tonnes)
Collahuasi 84,300 90,400 173,700
Mantos Blancos 75,400 71,600 147,100
Minera Sur Andes 150,800 131,300 278,300
Black Mountain and Hudson Bay 43,200 46,200 87,800
Other 10,200 10,500 21,900
363,900 350,000 708,800
Nickel (tonnes)
Loma de Niquel 8,500 8,200 17,200
Codemin 3,100 3,200 6,400
Other 100 600 1,300
11,700 12,000 24,900
Zinc (tonnes)
Hudson Bay 52,700 60,200 117,900
Black Mountain 13,300 12,100 25,900
Skorpion(1) 56,700 6,700 47,400
Lisheen(2) 80,500 80,500 169,300
203,200 159,500 360,500
Lead (tonnes)
Black Mountain 16,800 22,500 39,600
Lisheen(2) 9,500 10,500 20,800
26,300 33,000 60,400
Production statistics continued
6 months 6 months Year
ended ended ended
30.06.04 30.06.03 31.12.03
Anglo Base Metals (continued)
Mineral sands (tonnes)
Slag tapped 81,800 73,800 165,800
Pig iron 48,200 38,900 91,100
Zircon 58,700 53,200 93,300
Rutile 10,800 11,500 20,400
Niobium (tonnes)
Catalao 1,700 1,700 3,300
Anglo Industrial Minerals (tonnes)
Aggregates 33,225,000 32,192,000 67,158,100
Lime products 503,611 443,000 893,800
Concrete (m3) 4,167,000 4,038,100 7,874,600
Sodium tripolyphosphate 55,927 37,400 88,800
Phosphates 563,180 407,400 1,040,300
Anglo Paper and Packaging (tonnes)
South Africa
Pulp 18,400 65,000 109,810
Graphic papers 298,700 272,700 507,270
Packaging papers 297,100 319,800 590,740
Corrugated board (000 m2) 155,200 144,300 297,780
Wood chips (green metric tonnes) 1,149,200 1,152,600 2,122,470
Mining timber 74,100 77,600 158,640
Europe
Pulp 100,080 86,300 181,860
Graphic papers 939,290 833,160 1,648,280
Packaging papers 946,400 848,400 1,790,600
Corrugated board (000 m2) 1,028,200 762,300 1,384,900
Paper sacks (m units) 2,030 1,596 3,267
Anglo Ferrous Metals and Industries (tonnes)
Iron ore(3) 15,212,000 2,914,500 7,837,468
Rolled products 565,338 545,179 930,378
Grinding media (Moly-Cop) 194,793 188,772 388,886
Manganese ore (mtu m) 53 37 76
Manganese alloys 173,960 169,800 288,176
Chrome alloys 255,358 212,184 446,859
Continuous cast blocks 456,971 456,557 877,405
Vanadium slag 32,516 37,065 69,814
Sugar 392,510 399,326 1,066,902
Aluminium 79,600 82,700 146,729
The figures above and on the previous page include the entire output of
consolidated entities and the Group's share of joint ventures and associates
where applicable.
(1) Skorpion commenced commercial production in May 2004.
(2) Lisheen's production to June 2003 represents 100% share following the
restructuring in February 2003.
(3) Kumba Resources was accounted for as an associate undertaking from 7
February 2003 until 5 December 2003, when it became a subsidiary
undertaking. Kumba's total production for 6 months ended 30 June 2003 and year
ended 31 December 2003 amounted to 14,753,000 and 29,593,000
respectively.
Exchange rate and commodity prices
US dollar exchange rates 6 months 6 months Year
ended ended ended
30.06.04 30.06.03 31.12.03
Average spot prices for the period
South African rand 6.67 8.03 7.55
Sterling 0.55 0.62 0.61
Euro 0.81 0.90 0.88
Australian dollar 1.35 1.62 1.53
Period end spot prices
South African rand 6.23 7.48 6.67
Sterling 0.55 0.61 0.56
Euro 0.82 0.87 0.79
Australian dollar 1.44 1.49 1.33
Commodity prices 6 months 6 months Year
Average market prices for the period ended ended ended
30.06.04 30.06.03 31.12.03
Gold - US$/oz 401 349 363
Platinum - US$/oz 850 654 692
Palladium - US$/oz 248 207 201
Rhodium - US$/oz 696 557 530
Copper - US cents/lb 125 75 81
Nickel - US cents/lb 619 379 437
Zinc - US cents/lb 48 35 38
Lead - US cents/lb 38 21 23
European eucalyptus pulp price (CIF) - US$/tonne 525 480 500
Reconciliation of subsidiaries' and associate's profits to those included in the
consolidated financial statements
For the 6 months ended 30 June 2004
Note only key reported lines are reconciled
US$ million
6 months
AngloGold Ashanti Limited ended
30.06.04
IAS adjusted headline earnings (published) (1) 111
Exploration (excluding joint ventures) 19
130
Amortisation on bond discount 5
Depreciation on assets revalued on acquisition (5)
Minority interest (64)
UK GAAP contribution to headline earnings 66
(1) Before unrealised non-hedge derivatives and fair value losses on interest
rate swaps.
US$ million
6 months
Anglo American Platinum Corporation Limited ended
30.06.04
IAS net profit (published) 217
Secondary Tax on companies adjustment (9)
Net movement on unrealised profit on forward exchange contracts (9)
Exploration 11
Profit on assets exchanged not recognised for UK GAAP (10)
Net exceptional items 22
Weighted average exchange impact 3
Other 4
229
Minority interest (58)
Depreciation on assets revalued on acquisition (32)
UK GAAP contribution to headline earnings 139
US$ million
6 months
DB Investments SA ended
30.06.04
Reconciliation of headline earnings Total Ordinary Preference
shares shares(3)
DBI headline earnings - IAS (100%) 424 - -
GAAP adjustments(1) (14) - -
DBI headline earnings - UK GAAP (100%) 410 357 53
AA plc's 45% ordinary share interest 161 161 -
Additional 3.65% ordinary share interest(2) 13 13 -
AA plc's portion of the preference shares(3) 43 - 43
AA plc headline earnings 217 174 43
(1) The GAAP adjustments include -US$31 million relating to the mark-to-market
of interest rate hedging contracts referred to in Dbsa's 2003 year end press
release. Whereas in Dbsa's earnings, the full amount of US$70 million was
charged against earnings in 2003, under UK GAAP US$31 million is charged against
earnings in the first six months of 2004, being the portion that was realised in
the period.
(2) As a result of De Beers' partial interest in Debswana Diamond Company
(Proprietary) Limited (one of the shareholders in DBI), AA plc accounts for an
additional 3.65% of DBI's post-tax earnings attributable to ordinary shares.
(3) AA plc grosses up its preference share income to the operating profit level
and accounts for its preference share interest in operating profit, exceptional
items, investment income and net interest, tax and minorities, in the same way
as it accounts for its ordinary share interest in these balances. This
treatment is in accordance with FRS9, paragraph 33, which indicates that where
preference shares are an integral part of the investor's long-term interest, it
is appropriate to include the preference share interest with the ordinary share
interest in determining the investor's overall share of an associate's results.
The headline earnings attributable to AA plc's US$35 million preference share
income are arrived at by adjusting for a proportion of exceptional items
(-US$1 million) and goodwill amortisation (+US$9 million) in the same way as the
ordinary share interest is calculated.
Summary by business segment
Headline earnings/ Operating profit/
(loss) (loss)
6 months 6 months 6 months 6 months
ended ended ended ended
30.06.04 30.06.03 30.06.04 30.06.03
US$ million
Platinum 139 107 320 204
Gold 66 82 133 180
Diamonds 217 248 350 378
Coal 147 107 196 172
South Africa 65 37 89 69
Australia 24 50 26 74
South America 58 20 81 29
Base Metals 455 60 565 98
Copper 361 82 435 106
Nickel, Niobium, Mineral Sands 81 33 117 47
Zinc 26 (46) 28 (44)
Other (13) (9) (15) (11)
Industrial Minerals 114 113 145 136
Europe 107 111 126 126
Brazil 7 2 19 10
Paper and Packaging 226 205(1) 320 357
Europe 170 135 250 260
South Africa 56 70 70 97
Ferrous Metals and Industries 207 41 387 104
Kumba 32 1 96 6
Highveld Steel 37 3 67 4
Scaw Metals 33 28 45 35
Samancor Group 67 9 89 27
Boart Longyear 17 6 26 9
Tongaat-Hulett 6 (3) 28 23
Terra 17 (9) 41 (3)
Other (2) 6 (5) 3
Exploration (42) (39) (56) (50)
Corporate (225) (68)(1) (112) (45)
Gold Fields 6 29 7 41
Other (231) (97) (119) (86)
1,304 856 2,248 1,534
(1) Headline earnings for Paper and Packaging and Corporate Activities have
been adjusted for the 6 months ended 30 June 2003 as net interest
for the wholly owned operations in Paper and Packaging is now accounted for
centrally in Corporate Activities. Net interest payable for the wholly
owned operations in Paper and Packaging was $52 million and $27 million
for the six months ended 30 June 2004 and 30 June 2003 respectively.
On the former basis, headline earnings for the 6 months ended 30 June
2004 and 6 months ended 30 June 2003 would have been $174 million and $178
million respectively.
ANGLO AMERICAN plc
(Incorporated in England and Wales - Registered number 3564138)
('the Company')
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 2004 will be payable as follows:
Amount (United States currency) 19 cents per ordinary share (see notes 1 and 2)
Currency conversion date Monday 2 August 2004
Last day to trade on the JSE Securities Exchange Friday 13 August 2004
South Africa ('JSE') to qualify for the dividend
Ex-dividend on the JSE from the commencement of trading on Monday 16 August 2004
Ex-dividend on the London Stock Exchange from the commencement of Wednesday 18 August 2004
trading on
Record date (applicable to both the United Kingdom principal Friday 20 August 2004
register and South African branch register)
Last date for receipt of Dividend Reinvestment Plan ('DRIP')
Mandate Forms by Computershare or Central Securities Depositary Tuesday 31 August 2004
Participants ('CSDPs')
Dividend warrants posted Monday 20 September 2004
Payment date of dividend Tuesday 21 September 2004
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 with an address
in a country in the European Union which has adopted the euro, will be paid
in euros. Such shareholders may, however, elect to be paid their dividends
in US dollars provided the UK Registrar receives such election by Friday
20 August 2004. Shareholders with an address elsewhere (except in South
Africa) will be paid in US dollars. The equivalent of the dividend in
sterling will be 10.3702 pence per ordinary share based on an exchange rate
of US$1= £0.5458. The equivalent of the dividend in euros will be 15.7244
euro cents per ordinary share based on an exchange rate of US$1 = € 0.8276.
2 Shareholders on the South African branch register will be paid in South
African rand at R1.1801 per ordinary share based on an exchange rate of
US$1 = R6.2108.
3 Dematerialisation and rematerialisation of registered share certificates in
South Africa will not be effected by CSDPs during the period Monday 16
August 2004 to Friday 20 August 2004 (both days inclusive).
4 Share certificates/Crest notifications are expected to be mailed and CSDP
investor accounts credited/updated on Tuesday 5 October 2004 in respect of
shares acquired in terms of the DRIP, subject to the acquisition of shares on
the open market.
5 Copies of the terms and conditions of the DRIP are available from the
Company's Registrar or the Registrar's Agent.
By order of the Board
N Jordan
Secretary
4 August 2004
Registered office UK Registrar Registrar's Agent (South Africa)
20 Carlton House Terrace Computershare Investor Services PLC Computershare Investor Services 2004
London P.O. Box 82 (Pty) Ltd
SW1Y 5AN The Pavilions 70 Marshall Street
England Bridgwater Road Johannesburg 2001
Bristol BS99 7NH South Africa
England
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