Interim Results - Part 1
Anglo American PLC
04 August 2005
News Release
4 August 2005
Anglo American reports record interim headline earnings for 2005, up 43%
• Record interim results - headline earnings up 43% to $1.8 billion
• Interim dividend rebased to 28 US cents per share, up 47%
• Record performances from Base and Ferrous Metals; higher contributions
from Platinum and Coal, reflecting stronger prices and volumes
• Cost savings and efficiency improvements exceed target at $303
million, up 22%
• Ongoing asset optimisation: disposals with an enterprise value of $1.2
billion completed
• Strong cash generation: EBITDA up 25% at $4.2 billion
• 5 major new projects approved totalling $1.2 billion; $5.1 billion
expansion programme on track
• AngloGold Ashanti achieves SA mining rights conversion
HIGHLIGHTS FOR THE SIX MONTHS ENDED 6 months 6 months %
30 JUNE 2005 ended ended
30.06.05 30.06.04 change
IFRS IFRS
US$ million, except per share amounts
Group revenue including associates(1) 17,145 15,299 12.1%
Operating profit including associates before special items(2) 2,975 2,325 28.0%
Profit for the financial period attributable to equity 1,838 2,226 (17.4)%
shareholders(3)
Headline earnings for the period(4) 1,784 1,248 42.9%
Net operating assets 36,621 36,919 (0.8)%
EBITDA(5) 4,249 3,400 25.0%
Net cash inflows from operating activities 2,931 2,135 37.3%
Basic earnings per share (US$):
Profit for the period attributable to equity shareholders 1.27 1.56 (18.6)%
Headline earnings for the financial period 1.24 0.87 42.5%
(1) Includes the Group's share of associates' turnover of $2,635 million (June 2004: $2,953 million). See
note 4 to the financial information.
(2) Includes share of associates' operating profit (before share of associates' tax and finance charges).
See note 4 to the financial information.
(3) The decrease in profit attributable to equity shareholders to $1,838 million is due to a reduction in
net profit on disposals compared with the prior period.
(4) See note 8 to the financial information for basis of calculation of headline earnings.
(5) EBITDA is operating profit before special items plus depreciation and amortisation of subsidiaries
and joint ventures and share of EBITDA of associates. EBITDA is reconciled to cash inflows from
operations in note 16 to the financial information.
First half results - overview
Headline earnings increased to $1.24 per share, up 43% over the first half of
2004 - a record interim level. Operating profit(1) for the half year was $2,975
million, with strong contributions from Base Metals and Ferrous Metals. Kumba
and Highveld Steel in particular benefited from higher prices and improved
volumes. There were also significant increases in contributions from Coal and
Platinum. Industrial Minerals recorded higher earnings reflecting a full
contribution in the first half from the new Buxton cement plant. Diamonds and
Gold were once again affected by the ongoing firmness of the South African
currency: the contribution from Diamonds, before exchange gains on preference
shares, was lower than for the prior period, while AngloGold Ashanti's results
were in line with the first half of 2004. Paper and Packaging recorded lower
earnings in tough market conditions.
The significant growth in operating profit in the first half reflects the
ongoing favourable trading environment for many of the Group's commodities, as
well as the progress made over the past few years in improving the operating
efficiency of Anglo American's assets, growing the asset base and leveraging
procurement spend. Prices for platinum, gold, diamonds, coal, and base and
ferrous metals remained healthy on the back of robust growth in China and the
US, coupled with limited growth in productive capacity. The Group's strong cash
generation provides it with the flexibility to continue with its significant
organic growth profile as well as to pursue its disciplined acquisition process
in creating a balanced portfolio of high quality natural resource assets.
Over the past three years, Anglo American's focus on improving the operating
efficiency of its assets and the management of the procurement and supply chain
has delivered cost savings in excess of $1.2 billion, across all of its business
units. In the first half, further cost savings and efficiency improvements of
$303 million were attained, an increase of 22% over the prior period.
These cost savings helped contain the cumulative effect of the significant
increases in energy, steel and other consumable prices, treatment and refining
charges and labour costs at many of the Group's mining operations. Anglo
American will maintain its cost savings and efficiency programmes in the second
half.
Cash generation (EBITDA) also benefited from the strong operational results,
reaching $4.2 billion, up 25% from last year's interim level.
Interim dividend
In line with the Group's progressive dividend policy and reflecting the strong
first half increase in earnings, the interim dividend has been rebased to 28 US
cents per share from 19 US cents per share, an increase of 47%. The level of the
total dividend will, as always, be considered on the basis of the full year's
results.
Growing the asset base
Since its primary listing in London in mid-1999, Anglo American has spent $15
billion on acquisitions and its growth profile is one of the strongest in the
industry, with $5.1 billion of approved projects and $8 billion of unapproved
projects across a range of commodities. In the first half, good progress was
made on the project pipeline, with some projects moving to full production, in
addition to a number of new projects being approved.
Kumba, 66% owned, continued to pursue a number of growth opportunities in iron
ore. In March, a major expansion project at the Sishen iron ore mine in South
Africa's Northern Cape province was announced. The $365 million Sishen Expansion
Project will increase Sishen's production from the current 28 million tonnes per
annum to 38 million tonnes per annum by 2009. Construction work has commenced
with production ramp-up planned for mid 2007.
An investment decision on the Sishen South project, with an initial production
capacity of 3 million tonnes per annum and the potential to increase to 9
million tonnes per annum, is expected in the third quarter of 2005. Work on the
feasibility study of the Faleme project in Senegal, West Africa, which has a
capacity of up to 12 million tonnes per annum, is also progressing well.
(1) including operating profit of associates and before special items
De Beers approved the development of the Snap Lake project in Canada at a cost
of $513 million. Snap Lake, located in the Northwest Territories, will be De
Beers' first mine outside of Africa and the first fully underground diamond mine
in Canada and will begin production in 2007. The $791 million Victor project in
Canada has also been approved, subject to regulatory approvals.
The $67 million Codemin 2 nickel project in Brazil, which was commissioned on
time and on budget towards the end of 2004, reached design capacity in May this
year and will take Codemin's total annual production to 10,000 tonnes of nickel.
In June, the $454 million Skorpion zinc project reached design capacity and the
$21 million expansion of the Chagres smelter will be completed in the fourth
quarter of 2005. The feasibility study on the Barro Alto nickel project in
Brazil will be completed by early 2006 and scoping studies for significant
brownfield expansions at Los Bronces and Collahuasi are in progress.
In July 2005, the $65 million Isibonelo coal mine in South Africa entered
production on track and on budget. When it reaches full production in 2006, the
mine will supply 5 million tonnes of thermal coal to Sasol Synfuels. In
Colombia, the approved expansion at Cerrejon from 22 to 28 million tonnes per
annum by 2007 is also on track and a further expansion to 32 million tonnes per
annum has recently been approved. The Grasstree project in Australia is
progressing well, with weekly development exceeding plan and installation of the
longwall on target for 2006. The $650 million Dawson project has commenced and
orders for some of the critical lead-time equipment have been placed.
China is already a significant market for many of the Group's commodities and
the Group continues to actively look for further investment opportunities within
the country. On 1 June, Anglo American committed to invest $150 million in the
Initial Public Offering of China Shenhua Energy Company Limited, the largest
coal producer in China and the fifth largest in the world. Anglo American looks
forward to a mutually beneficial strategic alliance with the company.
In South Africa, the Richards Bay pulp mill modernisation and expansion project
has been commissioned and ramp-up is ahead of budget. It is anticipated that
full production of an additional 145,000 tonnes of pulp per annum will be
achieved during 2006. The $174 million PM31 paper machine rebuild at Merebank is
on track for commissioning at the end of 2005 and will bring additional capacity
of 160,000 tonnes per annum.
Anglo Platinum, which continues to expand production in line with robust current
and future demand for platinum group metals, recently announced the $35 million
Marikana venture with Aquarius Platinum to jointly mine contiguous properties in
the Rustenburg area. The existing $138 million Kroondal venture, also with
Aquarius Platinum, commenced production from its new 250,000 tonnes per month
concentrator ahead of schedule. The $200 million 50:50 Mototolo joint venture
with Xstrata plc, announced this week, will access adjacent farms on the eastern
limb of the Bushveld complex and produce 132,000 ounces of platinum and 82,000
ounces of palladium in concentrate with first production in 2006. Anglo Platinum
is also proceeding with a $179 million project at its Lebowa mine to replace
declining reserves.
In addition to the future potential of Obuasi Deeps in Ghana and the Boddington
joint venture expansion project in Australia, AngloGold Ashanti has a $1.3
billion total capital expenditure programme currently focused on existing
operations in South Africa and Brazil. These projects, including the new Moab
mine in South Africa, will come online within the next three years and yield a
total production of around 15 million ounces of gold over the life of these
operations.
Disposals
As part of the ongoing strategy of optimising the Company's asset base, a number
of disposals have been made during the past six months. The biggest of these was
Boart Longyear, a manufacturer of mining equipment, which was agreed in June at
an enterprise value of $545 million. Together with the sale of Wendt (part of
Boart Longyear) that was announced on 31 March, the total enterprise value
achieved amounted to $635 million. The sale was completed in July.
In February 2005, Anglo American and BHP Billiton announced that they had
reached agreement for the sale of their respective 40% and 60% shareholdings in
Samancor Chrome at an enterprise value of $469 million. In May, Highveld
Steel sold its remaining stainless steel investments, Acerinox and Columbus, at
an attributable enterprise value of $91 million. This followed the $70m
attributable enterprise value disposal of Acerinox shares made by the Group in
January 2005.
In July, Kumba's local partner in the Hope Downs iron ore project in Australia
exercised an option to purchase Kumba's 49% interest in the project for $176
million.
SA mining rights
The achievement by AngloGold Ashanti of the conversion of its mineral rights in
South Africa in respect of the Minerals and Petroleum Development Act ("the Act
") is a significant milestone in terms of South African Black Economic
Empowerment. It recognises the substantial empowerment transactions put in place
by AngloGold Ashanti, as well as the educational, community and social
programmes in place in the company. The intention is to introduce an Employee
Share Ownership Scheme that will extend ownership in AngloGold Ashanti to its
employees.
The granting of the new order mining rights represents real progress in terms of
the South African government's desire to achieve certainty in terms of
implementing the Act. Anglo American is greatly encouraged by this positive
outcome which reflects the open and constructive dialogue between the Group's
mining businesses and the SA Department of Minerals and Energy.
Outlook
The outlook for most of the Group's commodities remains sound. Dollar prices for
many metals and minerals have continued at high levels on the back of strong
Chinese growth which has offset weaker OECD demand in the first half. If Chinese
demand continues at current levels and prospects for OECD growth improve in the
second six months, the Group's earnings should remain strong for the remainder
of the year.
Anglo American continues to generate substantial cash flows which it is
investing in its $5.1 billion approved project pipeline. The growth projects
span all of the Group's business sectors and will generate attractive returns.
Further projects, growth opportunities and asset optimisations are being
evaluated.
For further information, please contact:
Investor Relations Media Relations
Nick von Schirnding Kate Aindow
Tel: +44 207 968 8540 Tel: +44 207 968 8619
Charles Gordon Daniel Ngwepe
Tel: +44 207 968 8933 Tel: +27 11 638 2267
Anne Dunn
Tel: +27 11 638 4730
Webcast: a live webcast of the interim results presentation starting at 10.00am
UK time on 4th August can be accessed through the Anglo American website at
www.angloamerican.co.uk.
Pictures: high resolution images can be downloaded by the media at
www.vismedia.com
Anglo American plc is one of the world's largest mining and natural resource
groups. With its subsidiaries, joint ventures and associates, it is a global
leader in platinum group metals, gold and diamonds, with significant interests
in coal, base and ferrous metals, industrial minerals and paper and packaging.
The group is geographically diverse, with operations in Africa, Europe, South
and North America, Australia and Asia.
Note: Throughout this press release '$' denotes United States dollars and '
cents' refers to United States cents; special items are defined in note 5 and
headline earnings are calculated as set out in note 8 to the financial
information. EBITDA is operating profit before special items plus depreciation
and amortisation of subsidiaries and joint ventures and share of EBITDA of
associates. EBITDA is reconciled to cash inflows from operations in note 16 to
the financial information.
Financial review of Group results
Headline earnings per share for the half year increased to $1.24 per share, up
43% over the first six months of 2004. Headline earnings totalled $1,784
million, with strong contributions from Base Metals and Ferrous Metals as well
as a significant increase in contributions from Coal and Platinum. Industrial
Minerals also increased its contribution over the previous period, while
AngloGold Ashanti's results were in line with the prior corresponding period.
The contribution from Diamonds before exchange gains and losses on preference
shares declined. Paper and Packaging recorded lower earnings owing to tough
market conditions.
The Group performance was further enhanced by a lower effective tax rate, as set
out on the following page, and a $59 million reduction in net finance charges
resulting principally from a $91 million exchange gain on the De Beers
preference shares.
Headline earnings 6 months 6 months
30 June 30 June
$ million 2005 2004
Profit for the financial period attributable to equity holders 1,838 2,226
Operating special items 55 -
Net loss/(profit) on disposals 1 (1,005)
Associates net profit on disposals (68) (2)
Tax on special items (28) 32
Related minority interests (14) (3)
Headline earnings 1,784 1,248
Headline earnings per share ($) 1.24 0.87
Profit for the period after special items decreased by 17% to $1,838 million
compared with $2,226 million in the first half of 2004. This decrease was due to
a reduction in net profit on disposals which, including associates, was $940
million higher in the first half of 2004, with the $464 million profit on the
sale of the Group's interest in Gold Fields and the $415 million gain on the
deemed disposal of AngloGold.
Summary income statement 6 months 6 months
30 June 30 June
$ million 2005 2004
Operating profit before special items 2,408 1,758
Special items (55) -
Group operating profit before associates 2,353 1,758
Net (loss)/profit on disposals (1) 1,005
Net income from associates (1) 407 330
Profit before finance costs 2,759 3,093
Net finance costs (102) (161)
Profit before tax 2,657 2,932
Tax (526) (516)
Profit after tax 2,131 2,416
Minority interests (293) (190)
Profit for the financial period attributable to equity holders 1,838 2,226
Earnings per share ($) 1.27 1.56
Group operating profit including associates before special items 2,975 2,325
(1)
(1) Operating profit from associates 567 567
Net profit on disposals 68 2
Net finance costs (40) (66)
Income tax expense (185) (164)
Underlying minority interest (3) (9)
Net income from associates 407 330
The Group's results are influenced by a variety of currencies owing to the
geographic diversity of the Group. The South African rand on average
strengthened against the US dollar compared with the comparative period, with an
average exchange rate of R6.21 compared with R6.67 in the first half of 2004.
Currency movements positively impacted headline earnings by $44 million, with
the favourable exchange gain on the De Beers preference shares more then
offsetting the impact on operating results of the strengthening of the rand.
There was also a positive impact of increased prices amounting to $887 million.
Special items
Operating special charges in respect of impairment and mine closure amounted to
$55 million including a $31 million loss on the closure of Ergo in AngloGold
Ashanti.
Net profit on sale of operations, including associates, amounted to $67 million.
These included $52 million profit on sale of Samancor Chrome, $25 million profit
on sale of Acerinox and $21 million profit on sale of Wendt. This was partially
offset by a $50 million loss on the anticipated disposal of Hope Downs.
Special items including associates were significantly higher in the first half
of 2004 at $1,007 million with the sale of the Group's interest in Gold Fields
for a profit of $464 million, a gain of $415 million on the deemed disposal of
AngloGold and gains on disposal of the Group's interests in First Rand Limited,
Nkomati and Avgold.
Net finance costs
Net finance costs decreased from $161 million in the first half of 2004 to $102
million. The decrease reflects the favourable exchange gain of $91 million on
the De Beers preference shares.
Taxation
$ million Before special Associates' Including Before special Associates' Including
items tax Associates 30 items tax Associates 30
30 June 30 June 2005 June 2005 30 June 30 June 2004 June 2004
2005 2004
Profit before tax 2,645 185 2,830 1,925 164 2,089
Tax (554) (185) (739) (484) (164) (648)
Profit for financial 2,091 - 2,091 1,441 - 1,441
period
Effective tax rate including 26.1% 31.0%
associates
The effective rate of taxation including share of associates' tax before special
items was 26.1%. This was a decrease from the effective rate including share of
associates' tax of 31% in the six months ended 30 June 2004. The reduction in
the effective tax rate was principally due to a reduction in the South African
statutory rate from 30% to 29% and a reduction in the Ghanaian tax rate, which
resulted in a $136 million reduction in deferred tax, the benefit of which was
taken in the six month results. Without this one off benefit the effective tax
rate for the period would have been 30.9%. In future periods it is expected the
effective tax rate, as adjusted above for associates' tax, will remain above the
statutory rate of 30%.
Balance sheet
Total shareholders' equity was $22,067 million compared with $23,125 million as
at 31 December 2004. The decrease was primarily due to exchange movements.
Net debt was $7,030 million, a decrease of $1,420 million from 31 December 2004,
restated for the adoption of IAS 32 and IAS 39. The reduction was principally
due to exchange movements of $843 million as well as cash inflow of $600
million. Net debt at 30 June 2005 comprised $9,711 million of debt (net of hedge
of $24 million), offset by $2,681 million of cash, cash equivalents and
current financial asset investments. Net debt to total capital as at 30 June
2005 was 21.1%, compared with 22.9% at 31 December 2004.
Adoption of IAS 32 and IAS 39 prospectively from 1 January 2005 gave rise to a
net reduction in total shareholders' equity of $5 million. Additional detail of
the adjustments is provided in note 24 to the financial information. The net
impact largely represents the recognition and fair value of derivatives,
including embedded derivatives; the fair value of investments that were
previously cost accounted; and the separation of the equity conversion option
within convertible debt instruments. Pro forma 2004 information, adjusted for
these two standards is provided in the appendix.
Cash flow
Net cash inflows from operating activities was $2,931 million compared with
$2,135 million in the first half of 2004. EBITDA was $4,249 million, up
significantly from $3,400 million in the first half of 2004. Depreciation
increased by $236 million to $1,199 million.
Acquisition expenditure accounted for an outflow of $300 million compared with
$957 million in the first half of 2004. This included $150 million in respect of
the Group's investment in the Initial Public Offering of China Shenhua Energy
Company Limited.
Income from disposals totalled $293 million, with proceeds on the sale of
Acerinox and Columbus of $194 million and Wendt of $62 million. Proceeds
remitted by associates in respect of disposals included $83 million for the
sale of Samancor Chrome.
Repayment of loans and capital from associates amounted to $208 million.
Purchases of tangible fixed assets amounted to $1,433 million, a similar level
to the first half of 2004.
Dividends
An interim dividend of 28 US cents per share to be paid on 20 September 2005 has
been declared.
OPERATIONS REVIEW
In the operations review on the following pages, operating profit includes
associates' operating profit and is before special items unless otherwise
stated.
Ferrous Metals and Industries
$ million 6 months ended 6 months ended
30.06.05 30.06.04
Operating profit including associates 791 394
Kumba 246 98
Highveld Steel 261 67
Scaw Metals 58 46
Samancor Group 121 89
Tongaat-Hulett 56 28
Boart Longyear 55 30
Terra - 41
Other (6) (5)
EBITDA 961 563
Net operating assets 4,355 5,017
Capital expenditure 133 144
Share of Group operating profit (%) 27% 17%
Share of Group net operating assets (%) 12% 14%
Operating profit reached a record $791 million compared with $394 million in the
corresponding period. This was attributable to sharply higher prices for
vanadium and iron ore, improved volumes and increased cost savings.
Significant progress has been made in reorganising the business as a supplier of
raw materials to the global carbon steel industry with the disposal of several
assets at an aggregate attributable enterprise value of $1 billion. In
February 2005, Anglo American and BHP Billiton announced that they had reached
agreement for the sale of their respective 40% and 60% shareholdings in Samancor
Chrome at an enterprise value of $469 million. In May, Highveld Steel sold its
remaining stainless steel investments, Acerinox and Columbus, for an
attributable enterprise value of $91 million. This followed the $70m
attributable enterprise value disposal of Acerinox shares made by the Group in
January 2005. The sales of Boart Longyear's subsidiary, Wendt, and the Boart
Longyear Group were announced in March and June, respectively, at a combined
enterprise value of $635 million. In June, Anglo American announced the sale of
Zimbabwe Alloys at an enterprise value of $10 million.
Kumba's operating profit increased by 151% to $246 million (2004: $98 million)
on the back of stronger commodity prices and higher sales volumes, together with
solid operational performances and increased cost savings. From the second
quarter, Kumba benefited from the annual dollar denominated benchmark iron ore
price increase of 71.5% in Japan. On 1 July, Kumba received $176 million after
its local partner in Australia exercised its option to acquire Kumba's interest
in the Hope Downs iron ore project. The funds will be returned to Kumba's
shareholders.
Highveld Steel had a record first half, with an operating profit of $261 million
(2004: $67 million). This was largely a result of significantly higher vanadium
prices and volumes, together with increased South African steel sales.
Scaw Metals achieved an operating profit of $58 million (2004: $46 million).
Higher raw material prices, particularly steel scrap, increased pressure on
margins, while South African steel volumes were impacted adversely by market
uncertainty around pricing.
The attributable share of Samancor's operating profit amounted to $121 million
(2004: $89 million). The manganese and chrome operations benefited from higher
ore and alloy prices.
Tongaat-Hulett's operating profit increased from $28 million to $56 million
owing to improved volumes and prices, reduced costs and a more favourable
aluminium sales mix.
Offtake in the seaborne iron ore market remains strong, given Chinese crude
steel production. Vanadium and manganese prices for the rest of the year are
expected to be below those achieved in the first six months. South African steel
demand could recover in the fourth quarter, although prices may come under
further downward pressure, in keeping with international trends.
Base Metals
$ million 6 months ended 6 months ended
30.06.05
30.06.04
Operating profit 721 568
Copper 570 435
Nickel, Niobium, Mineral Sands 141 117
Zinc 29 31
Other (19) (15)
EBITDA 875 720
Net operating assets 4,928 5,473
Capital expenditure 100 176
Share of Group operating profit (%) 24% 24%
Share of Group net operating assets (%) 13% 15%
Operating profit increased significantly by 27% to $721 million on the back of
higher copper, nickel and zinc prices.
Copper production was impacted adversely by an estimated 20,000 (attributable)
tonne shortfall at Collahuasi arising from an outage of the main ore conveyor
system, a change in mine sequencing and a failure of a major mill motor (in
respect of which an insurance claim has been submitted). A recovery plan has
been implemented and mill throughput of above design capacity is being achieved,
but at marginally lower grades than budgeted.
Nickel production increased to 12,600 tonnes, following ramping up of the $67
million Codemin 2 project, which was commissioned towards the end of 2004 within
budget and on time.
Namakwa Sands saw record production of zircon and rutile.
Skorpion's zinc output was unchanged at 56,300 tonnes. A tankhouse fire in
February impacted production but it has since recovered well and 100% of design
capacity was achieved in June. Black Mountain increased output of zinc and lead
as it began to benefit from the higher grade Deeps orebody.
While cost savings and margin improvement targets continue to be achieved, the
operations experienced significant upward pressure in uncontrollable costs
arising from dollar weakness and increases in treatment and refining charges,
freight, steel, power, acid, fuel and other costs.
Current growth initiatives include the Barro Alto feasibility study for a
30,000-35,000 tonnes per annum ferronickel operation in Brazil, as well as
de-bottlenecking projects at both Namakwa Sands and Catalao and scoping
studies for increases in production at Collahuasi and Los Bronces. The Chagres
Smelter expansion and the Collahuasi molybdenum projects remain within budget
and on time for commissioning in the fourth quarter.
Continued investor fund interest dominated base metal prices, which reached new
highs during the first quarter, thereafter easing, before surging again in June.
Conflicting signals continue to be seen, with weak first half demand in the OECD
contrasting with stronger than anticipated Chinese consumption. Inventories
remain at very low levels, although supply growth, particularly in the case of
copper, has continued to pick up.
Platinum
$ million 6 months ended 6 months ended
30.06.05
30.06.04
Operating profit 410 314
EBITDA 610 465
Net operating assets 6,612 6,618
Capital expenditure 243 292
Share of Group operating profit (%) 14% 14%
Share of Group net operating assets (%) 18% 18%
Anglo Platinum's operating profit rose by 31% to $410 million. Factors leading
to this increase included higher dollar prices realised on metals sold,
increased production and sales volumes, and a one-off benefit arising from a
gain in the quantity of pipeline stocks. The adverse effect of the stronger
average rand on the translation of costs was largely offset by gains on foreign
exchange as the rand weakened during the first half of 2005.
Refined platinum production for the first half of 2005 rose by 9.5% to 1,268,500
ounces. The increase was due mainly to a shortening of the process pipeline and
improved recoveries. Equivalent refined production from the mines managed by
Anglo Platinum and its joint venture partners decreased by 18,100 ounces. This
was primarily as a result of difficult geological and ground conditions at
Amandelbult, Rustenburg and Union that were partly offset by new production from
the expansion of the Kroondal Platinum Mine venture with Aquarius Platinum.
The current operational constraints at Amandelbult, Rustenburg and Union,
together with the 2004 wage settlement of 8%, led to a 13.3% increase in rand
unit costs compared with the first half of 2004. The added effect of the
stronger average rand/dollar exchange rate for the period resulted in a cash
operating cost per equivalent refined ounce of platinum of $873. Cost
initiatives, including supply chain savings, yielded savings of $12 million in
comparison with the 2004 cost base.
Anglo Platinum remains confident of the robustness of current and future demand
for platinum and is continuing with its expansion programme. The rate of
expansion is reviewed on an ongoing basis, with particular emphasis on forecast
rand revenue streams, to ensure that returns are maintained and shareholder
value is enhanced. The recent weakening of the rand against the US dollar,
combined with strong prevailing metal prices, results in higher projected
returns from the projects being evaluated. If this improvement appears
sustainable, the development of certain projects may be accelerated.
Increased production volumes in the second half of 2005 are expected to result
in refined platinum production of 2.6 million ounces for the full year. Demand
for platinum continues to be strong and remains supportive of firm platinum
prices. The most significant variable affecting operating profit in the second
half of 2005 will be the rand/dollar exchange rate.
Coal
$ million 6 months 6 months ended
ended
30.06.05 30.06.04
Operating profit including associates 374 201
South Africa 205 93
Australia 48 26
South America 121 82
EBITDA 476 286
Net operating assets 2,350 2,105
Capital expenditure 126 64
Share of Group operating profit (%) 13% 9%
Share of Group net operating assets (%) 6% 6%
Anglo Coal's operating profit was $374 million, 86% higher than for the first
half of 2004, mainly as a result of improved export prices.
Export thermal coal prices, although well above historic average levels, have
come off the peaks reached in 2004 and are currently at around US$50 per tonne.
In Europe, prices are being supported by a strong energy sector, high gas and
power prices and lower freight rates. Consequently, despite the increased cost
of carbon credits, coal fired generation is enabling European utilities to
realise healthy margins, which in turn underpin thermal coal price levels. In
Asia, demand remains similarly firm, although Chinese stocks have been
increasing. Coking coal markets remain firm, despite steel prices beginning to
come under pressure in some regions. In South Africa and Australia, constraints
associated with the rail and port infrastructure remain a concern.
Operating profit for South African sourced coal increased by 120% to $205
million. This reflects a 52% increase in export prices and a 1% increase in
sales volume underpinned by a 3% improvement in production to 26.6 million
tonnes. This production increase included 0.6 million tonnes from the new
Mafube mine.
In Australia, operating profit was $48 million, which included a $28 million
insurance claim relating to last year's incident at the Moranbah North coking
coal mine (the 2004 first half insurance claim amounted to $33 million).
Production increased to 12.7 million tonnes, including 1.9 million from Moranbah
North which did not produce in the first half of 2004. The operating results
were impacted by geological difficulties which restricted production at the
Dartbrook thermal coal mine as well as the impact of carry over tonnage at
Moranbah North. Total sales from the Australia region were 7% higher and export
coal prices rose on average by 53%. Second half performance in Australia should
be materially better than the first half with increased production levels and
higher realised coking coal prices as new contracts become effective.
In Colombia, attributable sales tonnes increased by 4% to 4.3 million tonnes.
This, together with continued tight cost control, resulted in attributable
operating profit rising from $79 million in 2004 to $109 million. At the
Carbones del Guasare operation in Venezuela, attributable sales tonnes increased
by 1% to 0.8 million tonnes.
The new Isibonelo colliery project, which provides coal to Sasol in South Africa
entered production in July, and satisfactory progress was made at the major
Grasstree and Dawson projects in Australia. At Cerrejon in Colombia, the
expansion to a total mine production of 28 million tonnes per annum is on track
and is expected to be completed on time, and below budget, by 2007. A further
expansion to 32 million tonnes has recently been approved. The initial drilling
programme at Xiwan in China was completed successfully and further drilling and
a pre-feasibility study will be concluded later this year.
Performance in the second half is expected to be positively impacted by the high
prices for coking coal in Australia and completion of the carry-over contracts
at Moranbah North.
Diamonds
$ million 6 months ended 6 months
30.06.05 ended
30.06.04
Share of associate's operating profit 297 340
EBITDA 337 375
Group's share of De Beers' net assets (1) 2,114 2,052
Share of Group operating profit (%) 10% 15%
(1) De Beers is an independently managed associate of the Group. The Group's
share of De Beers' net assets is disclosed.
The figures for the Group's share of net operating assets shown for other
businesses relate to the Group's subsidiaries only.
Attributable operating profit from De Beers of $297 million represented a 13%
reduction against $340 million for the corresponding period last year. The
decrease was mostly due to the impact of a weaker dollar and to tighter margins
arising largely from a significant reduction in stockpile realisations.
Total production from De Beers and its partners grew by 23% to 23.7 million
carats. As a result of the increased output, stocks have risen by about $400
million compared with the levels as at 30 June 2004.
Despite mixed economic data, it is estimated that demand for diamond jewellery
in the United States was up by 6% on the same period last year. Larger chains
and high-end independents have shown the strongest results and polished prices
have started to edge up at the consumer level. Performance in other markets was
mixed. The local currency value of global diamond jewellery sales is estimated
to be 5% higher than for the equivalent period in 2004. De Beers is currently
forecasting growth of 6% in local currency retail demand for the full year owing
to the level and quality of diamond marketing activity, as well as regional
macro-economic strength.
Throughout the first half, demand for rough diamonds from the cutting centres
was strong. Sales by The Diamond Trading Company (DTC), the marketing arm of De
Beers, rose by 8% to total $3.2 billion. The DTC raised its rough diamond prices
on two occasions.
De Beers recently announced the approval of two projects in Canada, the $513
million Snap Lake project and the $791 million Victor project (which is subject
to regulatory approvals). Further expansion projects are under evaluation.
During the reporting period, agreement was reached with Endiama, the Angolan
state mining company, for the establishment of a joint venture for the
exploration of diamonds.
In early June, the European Commission published a notice indicating its
intention to accept the commitments offered by De Beers and the Russian diamond
producer Alrosa in relation to the Alrosa Trade Agreement and allowed a 30-day
period for public comment. The Commission is now considering any third party
comments received.
The Group's share of De Beers' headline earnings was $153 million (30 June 2004:
$183 million). Headline earnings for Diamonds totalled $270 million (30 June
2004: $169 million) and included preference share income of $26 million (30 June
2004: $35 million) and exchange gains related to the preference shares of $91
million (30 June 2004: $49 million loss). On 30 June 2005, De Beers redeemed a
further 25% of the total 10% preference shares originally in issue, with Anglo
American receiving $175 million.
The market for rough diamonds remains firm and it is expected that, unlike in
previous years, sales in the second half of 2005 will at least match those of
the first six months and that stocks will reduce. This should have a beneficial
impact on both cash flow and earnings.
Paper and Packaging
$ million 6 months ended 6 months ended
30.06.05 30.06.04
Operating profit including associates 233 328
Packaging 132 170
Business Paper 89 119
Other 12 39
EBITDA 449 523
Net operating assets 6,636 6,166
Capital expenditure 392 383
Share of Group operating profit (%) 8% 14%
Share of Group net operating assets (%) 18% 17%
Operating profit declined by 29% from $328 million to $233 million. While margin
pressure continued across most key markets, Mondi delivered a further $96
million in cost savings and profit improvements.
The rebranding and reorganisation of the existing businesses under the Mondi
name announced in November 2004 has gone extremely well. This has served to
reduce overhead structures and costs and improve the company's visibility and
attractiveness to customers.
Mondi Packaging's operating profit was $38 million lower at $132 million. The
marginal impact of acquisitions in early 2004 and significant cost-saving and
profit improvement initiatives have been offset by one-off restructuring costs
and weak trading conditions, the latter owing mainly to a combination of
lacklustre manufacturing growth in the core European markets and the strong euro
eroding competitiveness internationally. There have, however, been some positive
signs with improved order intake in the sack paper sector in recent months.
Mondi Business Paper's operating profit was down by 25% at $89 million. Sales
volumes increased by 3%, mainly owing to additional output from the successful
Ruzomberok PM18 rebuild, while cost saving and profit improvement initiatives
yielded benefits of $43 million. During the first six months pricing remained
under pressure owing to a strong euro attracting dollar denominated imports.
Capacity utilisation is gradually improving which, together with the stronger
dollar, is increasing the likelihood of price increases.
The Richards Bay RB720 project has been commissioned and ramp-up is ahead of
budget, with full production expected during 2006. The PM31 paper machine
rebuild at Merebank is on track for commissioning at the end of 2005.
With effect from 1 January 2005, Mondi sold a 42% interest in its South African
packaging business to Shanduka Resources in an empowerment transaction that
values the entire business at $370 million.
The recent strengthening of the dollar may support a firming in euro based paper
prices. Efforts will intensify to ensure the continued delivery of cost
reductions and productivity gains.
Industrial Minerals
$ million 6 months ended 6 months ended
30.06.05 30.06.04
Operating profit including associates 193 181
Tarmac 183 162
Copebras 10 19
EBITDA 317 288
Net operating assets 4,622 4,535
Capital expenditure 120 130
Share of Group operating profit (%) 6% 8%
Share of Group net operating assets (%) 13% 12%
Industrial Minerals' operating profit of $193 million was $12 million higher
than in the first half of 2004. Tarmac's operating profit was 13% higher,
largely reflecting the additional contribution from the new Buxton cement plant
which began operating in March 2004. Profits in Copebras were $9 million down on
2004 owing to the combined effects of the Brazilian currency's appreciation
relative to the dollar and reduced seasonal demand in Brazil, partially
mitigated by improved prices.
In the UK, demand was comparable with 2004 and volumes were slightly above last
year, though market conditions remain challenging. In general, margins were
favoured by price increases in January 2005 although higher hydrocarbon costs
lessened the benefit. Performance in the concrete products business was
marginally better than in 2004, reflecting the benefits of restructuring;
however, the impact was undermined by lower demand in the housing market, which
particularly affected block sales. The cement plant at Buxton performed well, in
line with expectations.
Tarmac has conducted a fundamental organisational review to facilitate
improvements in customer service and efficiency, with Industrial Minerals
achieving cost savings of $25 million in the year to date. The new organisation
brings the benefit of greater alignment with a changing customer base, while
better positioning Finance, HR, Procurement and other functions to lead
continuous improvement in the UK and international operations. Supplementing the
business development resources already established in the UK, Tarmac has
recently created a new business development function, based in Frankfurt, to
further strengthen its ability to grow its international business.
Tarmac's operating profit from its international businesses fell by 3%, largely
attributable to weaker demand in Germany and Poland. Profit in Tarmac France
improved 12% following small bolt-on acquisitions made in the past year. The
business in Spain reported profits in line with last year on the back of
stronger demand for concrete, offset by the increased cost of raw materials.
Tarmac's operations in the Middle East continue to benefit from strong local
demand. Progress continues in Tarmac China and a new quarry in the Shanghai
region, which was adversely affected by delays in securing local land access
rights, is now expected to commence operations in the second half of the year.
In Brazil, demand for fertiliser weakened following the drop in world soya
prices and the consequent reduction in the number of farmers planting the crop.
This had a negative effect on fertiliser sales but was offset by improved sales
of other products and by higher prices.
The operational outlook for the year is for a continuation of challenging
conditions in the UK offset in part by improved performance in Tarmac
International. The impact of exchange rates will become more significant if the
recent appreciation in the dollar continues.
Gold
$ million 6 months ended 6 months ended
30.06.05 30.06.04
Operating profit 154 156
EBITDA 415 319
Net operating assets 7,105 6,971
Capital expenditure 311 234
Share of Group operating profit (%) 5% 7%
Share of Group net operating assets (%) 19% 19%
Operating profit compared with the corresponding period was 1% lower at $154
million, with total cash costs increasing from $254 to $281 per ounce, owing to
inflationary cost increases and stronger operating currencies. These effects
were partially offset by an 8% increase in the realised dollar gold price, and
higher grades.
Gold production increased by 21% to 3 million ounces, following the inclusion of
Ashanti's production for the full period compared to two months in the prior
half year. The East and West Africa and Australia mines also posted increased
production, particularly at Morila and Sunrise Dam.
Management continues to focus on the turnaround of the Ashanti Goldfields
assets. AngloGold Ashanti has eight approved organic growth projects in the
pipeline, including the Cuiaba expansion project in Brazil which was approved
during the period. These projects will contribute nearly 15 million ounces at a
weighted average cash cost of $184 per ounce. In addition there are several
other projects awaiting approval. Organic growth and brownfields exploration
represent the foundation of the company's strategic aim to replace ounces and
grow the reserve and resource base.
In January, AngloGold Ashanti announced a significant restructuring of its hedge
book, which saw its net hedge position reduce by some 2.2 million ounces to
10.49 million ounces, being 31% of five years' production. It is the company's
intention to continue to actively manage its hedge book.
AngloGold Ashanti continues to focus on reducing costs and is targeting savings
of $112 million of which $61 million has been achieved to date. Continuing cost
pressures, particularly in oil price impacts and mining contractor costs, as
well as continued local currency strength, have had the effect of negating some
of the gains made on the cost management side.
The strong investor interest in gold during the latter half of 2004 abated in
the first quarter of 2005, though there has been a return in buying interest in
the second quarter. The price rally of the past three years appears underpinned
by strong fundamentals, with the average spot price for the half-year at $427
per ounce.
AngloGold Ashanti recently announced that it had received notification that the
Department of Minerals and Energy in South Africa has granted its applications
for new order mining rights in terms of the Mineral Resources and Petroleum
Development Act. The rights apply to AngloGold Ashanti's operating assets in
South Africa.
Consolidated income statement
for the six months ended 30 June 2005
Before Special
items
special (note 5)
items
6 months 6 months 6 months 6 months Year
ended ended ended ended ended
US$ million Note 30.06.05 30.06.05 30.06.05 30.06.04 31.12.04
Group revenue 4 14,510 - 14,510 12,346 26,268
Total operating costs (12,102) (55) (12,157) (10,588) (22,602)
Operating profit from subsidiaries and joint
ventures 2,408 (55) 2,353 1,758 3,666
Net (loss)/profit on disposals 5 - (1) (1) 1,005 1,015
Net income from associates 4 339 68 407 330 550
Total profit from operations and associates 2,747 12 2,759 3,093 5,231
Investment income 320 - 320 195 563
Investment expense (422) - (422) (356) (930)
Net finance costs (102) - (102) (161) (367)
Profit before tax 2,645 12 2,657 2,932 4,864
Income tax expense 6 (554) 28 (526) (516) (923)
Profit for the financial period 2,091 40 2,131 2,416 3,941
Attributable to:
Minority interests 307 (14) 293 190 440
Equity shareholders of the Company 7 1,784 54 1,838 2,226 3,501
Earnings per share (US$)
Basic 8 1.27 1.56 2.44
Diluted 8 1.23 1.50 2.35
Dividends
Proposed dividend per share (US cents) 28.0 19.0 70.0
Proposed dividend (US$ millions) 404 273 1,007
Dividends paid during the period per share (US cents) 51.0 39.0 58.0
Dividends paid during the period (US$ 734 554 827
millions)
The impact of acquired and discontinued operations on the results for the period is not material.
Headline earnings and headline earnings per share are set out in note 8.
Consolidated balance sheet
as at 30 June 2005
As at As at As at
Note 30.06.05 30.06.04 31.12.04
US$ million
Intangible fixed assets 2,588 2,501 2,644
Tangible fixed assets 29,604 30,227 33,172
Biological assets 331 374 374
Environmental rehabilitation trusts 217 182 237
Investments in associates 3,269 3,386 3,486
Financial asset investments 851 1,197 1,084
Deferred tax assets 226 97 128
Other financial assets (derivatives) 266 - -
Other non current assets 62 - 66
Total non current assets 37,414 37,964 41,191
Inventories 3,180 3,148 3,549
Trade and other receivables 5,289 5,041 5,534
Current tax assets 96 192 220
Other current financial assets (derivatives) 527 - -
Current financial asset investments 5 75 2
Cash and cash equivalents 17 2,788 2,495 2,955
Total current assets 11,885 10,951 12,260
Assets classified as held for sale 11 757 - -
Total assets 50,056 48,915 53,451
Short term borrowings (2,623) (3,266) (3,383)
Trade and other payables (4,500) (4,732) (5,368)
Current tax liabilities (790) (679) (831)
Other current financial liabilities (derivatives) (547) - -
Total current liabilities (8,460) (8,677) (9,582)
Medium and long term borrowings (7,250) (8,258) (7,817)
Retirement benefit obligations (1,016) (1,081) (1,201)
Other financial liabilities (derivatives) (406) - -
Deferred tax liabilities (5,022) (5,279) (5,810)
Provisions (1,370) (1,155) (1,328)
Total non current liabilities (15,064) (15,773) (16,156)
Liabilities directly associated with assets classified
as held for sale 11 (283) - -
Total liabilities (23,807) (24,450) (25,738)
Net assets 26,249 24,465 27,713
Equity
Called-up share capital 9, 22 747 746 747
Share premium account 22 1,634 1,609 1,633
Other reserves 22 1,100 1,297 3,074
Retained earnings 22 18,586 16,673 17,671
Equity attributable to equity holders of the Company 22,067 20,325 23,125
Minority interests 22 4,182 4,140 4,588
Total equity 26,249 24,465 27,713
The interim financial information was approved by the board of directors on 3 August 2005.
Consolidated cash flow statement
for the six months ended 30 June 2005
6 months 6 months Year
ended ended ended
US$ million Note 30.06.05 30.06.04 31.12.04
Cash inflows from operations 15 3,074 2,242 5,291
Dividends from associates 300 136 368
Dividends from financial asset investments 4 15 28
Income tax paid (447) (258) (500)
Net cash inflows from operating activities 2,931 2,135 5,187
Cash flows from investing activities
Acquisition of subsidiaries, net of cash acquired (111) (953) (1,135)
Investment in associates (26) (1) -
Purchases of tangible fixed assets 14 (1,433) (1,428) (3,166)
Purchases of biological assets 14 (26) (28) (67)
Purchases of financial asset investments (163) (3) (108)
Loans granted to related parties - - 6
Disposal of subsidiaries, net of cash disposed 11 67 16 274
Sale of interests in joint ventures - 37 37
Sale of interests in associates - 1,180 1,424
Repayment of loans and capital from associates 208 220 299
Proceeds from disposal of tangible fixed assets 37 56 151
Proceeds from sale of financial asset investments 226 82 263
Loan repayments from related parties - 16 -
Utilised in hedge restructure (69) - -
Other adjustments 10 5 (4)
Net cash used in investing activities (1,280) (801) (2,026)
Cash flows from financing activities
Movement on current financial asset investments (5) (50) 23
Issue of shares by subsidiaries 21 146 146
Sale of treasury shares to employees 82 - 46
Interest received and other investment income 102 143 195
Interest paid (319) (314) (601)
Dividends paid to minority interests (165) (100) (178)
Issue of convertible debt - 990 990
Repayment of short term borrowings (510) (1,539) (1,830)
(Repayment)/receipt of medium and long term borrowings (33) 174 (598)
Movement in minority loans - 7 (2)
Other financing activity (45) (32) (48)
Dividends paid to Company shareholders (727) (547) (818)
Net cash used in financing activities (1,599) (1,122) (2,675)
Net increase in cash and cash equivalents 52 212 486
Cash and cash equivalents at start of period(1) 2,781 2,186 2,186
Cash movements in period 52 212 486
Effects of changes in exchange rate (157) 19 109
Cash and cash equivalents at end of period(1) 17 2,676 2,417 2,781
(1) Cash and cash equivalents per the cash flow statement includes overdrafts and cash flows from disposal
groups and is reconciled to the balance sheet in note 17.
Consolidated statement of recognised income and expense
for the six months ended 30 June 2005
6 months 6 months Year
ended ended ended
US$ million 30.06.05 30.06.04 31.12.04
Loss on revaluation of available-for-sale investments (20) - -
Loss on cash flow hedges (87) - -
Exchange differences on translation of foreign operations (2,557) 548 2,617
Actuarial loss on defined benefit schemes (48) (11) (26)
Other movements - (8) (32)
Tax on items taken directly to equity 53 3 6
Net (expense)/income recognised directly in equity (2,659) 532 2,565
Transfers
Transferred to profit or loss on sale of available-for-sale investments (32) - -
Transferred to profit or loss on cash flow hedges (6) - -
Transferred to the initial carrying amount of hedged items on cash flow hedges (4) - -
Transferred exchange differences on disposal of foreign operations - (5) (30)
Tax on items transferred from equity 1 - -
Profit for the period 2,131 2,416 3,941
Total recognised income and expense (569) 2,943 6,476
Adoption of IAS 32 and IAS 39(1) (127) - -
Total recognised income and expense for the period (696) 2,943 6,476
Attributable to:
Equity shareholders of the Company (451) 2,691 5,721
Minority interests (245) 252 755
(696) 2,943 6,476
(1) Details of the accounting policy change are set out in note 24.
Notes to financial information
1. General information
These June 2005 interim consolidated financial statements are for the six months
ended 30 June 2005. The information for the year ended 31 December 2004 does
not constitute statutory accounts as defined in section 240 of the Companies Act
1985. A copy of the statutory accounts for that year, which were prepared under
UK Generally Accepted Accounting Principles ('GAAP'), has been delivered to the
Registrar of Companies. The auditor's report on those accounts was unqualified.
Investors should consider non-GAAP financial measures in addition to, and not as
a substitute for or as superior to, measures of financial performance reported
in accordance with International Financial Reporting Standards ('IFRS'). The
IFRS results reflect all items that affect reported performance and therefore it
is important to consider the IFRS measures alongside the non-GAAP measures.
Reconciliations of key non-GAAP data to directly comparable GAAP financial
measures are presented in notes 7, 8 and 16 to this report.
2. Accounting policies
The interim financial report including all comparatives, has been prepared using
the accounting policies consistent with IFRSs, including International
Accounting Standard ('IAS') 34 Interim financial reporting and International
Financial Reporting Interpretations Committee ('IFRIC') interpretations issued
and effective or issued and early adopted as at the time of preparing these
statements (August 2005). These standards and interpretations are subject to
ongoing review and possible amendment or interpretive guidance and are therefore
still subject to change. The Group has adopted early the proposed amendment to
IAS 19 Employee Benefits which assumes it will be endorsed by the European Union
prior to 31 December 2005, and has recognised all actuarial gains or losses
directly through equity.
These statements are covered by IFRS 1 First-time adoption of International
Financial Reporting Standards, because they form part of the period included in
the Group's first IFRS financial statements for the year ended 31 December 2005.
Except as set out in note 3 below, the same accounting policies and methods of
computation are followed in the interim report as published by the Company in
its news release on 9 May 2005 entitled 'IFRS restatement for 2004 and update on
adoption of IFRS'. The news release, including full disclosure of these
accounting policies, is available on the Company's website on
www.angloamerican.co.uk. The policies have been consistently applied to all
years presented except for those relating to the classification and measurement
of financial instruments, and to discontinued operations and disposal groups,
which have been applied prospectively as detailed in note 3, below.
3. Changes in accounting policies
Financial instruments
The Group has taken the exemption under IFRS 1 to apply IAS 32 Financial
Instruments: Disclosure and Presentation and IAS 39 Financial Instruments:
Recognition and Measurement prospectively from 1 January 2005. As such, the
financial information presented for the periods ended 30 June 2004 and 31
December 2004 excludes any adjustments required from adoption of these two
standards. Pro forma 2004 consolidated financial information including the
impact of IAS 32 and IAS 39 is provided in the appendix to this press release.
As set out in note 24, the consolidated balance sheet as at 31 December 2004 has
been adjusted to apply IAS 32 and 39 prospectively from 1 January 2005.
Discontinued operations
The Group has applied IFRS 5 Non-Current Assets Held for Sale and Discontinued
Operations prospectively from 1 January 2005. Application of the policy change
is in accordance with transitional provisions set out in the standard.
Non current assets and disposal groups are classified as held for sale if their
carrying amount will be recovered through a sale transaction rather than through
continuing use. This condition is regarded as met only when the sale is highly
probable and the asset (or disposal group) is available for immediate sale in
its present condition. Management must be committed to the sale, which should
be expected to qualify for recognition as a completed sale within one year from
the date of classification.
Non current assets (and disposal groups) and associated liabilities held for
sale are measured at the lower of carrying amount and fair value less costs to
sell.
$757 million of assets and $283 million of liabilities associated with disposal
groups were reclassified as 'held for sale' as at 30 June 2005. The impact on
the consolidated income statement for the period ended 30 June 2005 is a $36
million net charge.
4. Segmental information
Primary reporting format - by business segment
Operating profit
Revenue(1) before special items(2)(3) Net operating assets(4)
6 months 6 months Year 6 months 6 months Year 6 months 6 months Year
ended ended ended ended ended ended ended ended ended
US$ million 30.06.05 30.06.04 31.12.04 30.06.05 30.06.04 31.12.04 30.06.05 30.06.04 31.12.04
(5)
Subsidiaries and joint
ventures
Platinum(6) 1,738 1,446 3,065 405 308 527 6,612 6,618 7,607
Gold 1,325 1,051 2,396 153 156 296 7,105 6,971 7,459
Coal 1,191 828 1,914 243 115 321 2,350 2,105 2,546
Base Metals 1,629 1,548 3,232 721 576 1,280 4,928 5,473 5,180
Industrial Minerals 2,021 1,831 3,833 191 179 416 4,622 4,535 4,864
Ferrous Metals and
Industries 3,175 2,380 5,137 667 266 591 4,355 5,017 5,592
Paper and Packaging 3,431 3,262 6,691 226 322 575 6,636 6,166 6,879
Exploration - - - (67) (56) (120) - - -
Corporate Activities - - - (131) (108) (245) 13 34 14
Total subsidiaries and
joint ventures 14,510 12,346 26,268 2,408 1,758 3,641 36,621 36,919 40,141
Associates
Platinum 29 29 55 5 6 9
Gold 8 7 13 1 - -
Diamonds 1,628 1,647 3,177 297 340 573
Coal 288 212 468 131 86 176
Base Metals - 44 88 - (8) (4)
Industrial Minerals 14 12 25 2 2 5
Ferrous Metals and
Industries 519 803 1,526 124 128 296
Paper and Packaging 149 109 228 7 6 (6)
Corporate Activities - 90 90 - 7 7
Total associates 2,635 2,953 5,670 567 567 1,056
Total Group operations 17,145 15,299 31,938 2,975 2,325 4,697
(1) Revenue 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 2005 was $36 million
(June 2004: $40 million, December 2004: $81 million) and relates principally to
AngloGold Ashanti who credit uranium, silver and acid to cost of sales in
accordance with the Gold Industry Standard on production cost.
(2) Operating profit from associates is stated before operating special items
set out in note 5. It is reconciled to 'Net income from associates' as follows:
6 months 6 months Year
ended ended ended
30.06.05 30.06.04 31.12.04
US$ million
Operating profit from associates before special items 567 567 1,056
Special items - - (117)
Operating profit from associates after special items 567 567 939
Net profit on disposals 68 2 10
Net finance costs (40) (66) (100)
Income tax expense (185) (164) (280)
Underlying minority interest (3) (9) (19)
Net income from associates 407 330 550
(3) Operating profit including associates is stated before operating special
items set out on in note 5. It is reconciled to 'Total profit from operations
and associates' as follows:
6 months 6 months Year
ended ended ended
30.06.05 30.06.04 31.12.04
US$ million
Operating profit including associates before special items 2,975 2,325 4,697
Special items:
Subsidiaries and joint ventures (55) - 25
Industrial Minerals (16) - (9)
Gold (38) - (1)
Base Metals - - (120)
Ferrous Metals and Industries (1) - 155
Associates
Base Metals - - (117)
Operating profit including associates after special items 2,920 2,325 4,605
Net (loss)/profit on disposals
Subsidiaries and joint ventures (1) 1,005 1,015
Associates 68 2 10
Associates' net finance costs (40) (66) (100)
Associates' income tax expense (185) (164) (280)
Associates' underlying minority interests (3) (9) (19)
Total profit from operations and associates 2,759 3,093 5,231
(4) Net operating assets at 30 June 2005 consist of tangible ($29,604 million)
and intangible assets ($2,588 million), biological assets ($331 million),
inventories ($3,180 million) and operating debtors ($4,218 million) less
non-interest bearing current liabilities ($3,300 million).
(5) Base Metals' turnover for the period to 30 June 2005 and for the year to 31
December 2004 is stated net of treatment and refining charges on concentrate
sales to external parties and refining charges on copper anode sales from
Chagres to refineries. On this basis, total Base Metals' turnover for the
period to 30 June 2004 would be $1,501 million. There is no impact on
operating profit for either 2005 or 2004.
(6)See note 20.
Secondary reporting format - by geographical segment (by origin)
Operating profit
Revenue before special items(1) Net operating assets
6 months 6 months Year 6 months 6 months Year 6 months 6 months Year
ended ended ended ended ended ended ended ended ended
US$ million 30.06.05 30.06.04 31.12.04 30.06.05 30.06.04 31.12.04 30.06.05 30.06.04 31.12.04
Subsidiaries and joint
ventures
South Africa 5,849 4,920 10,279 1,156 640 1,217 15,187 16,039 18,258
Rest of Africa 553 259 804 15 29 44 4,218 4,065 4,184
Europe 5,085 4,645 9,449 370 395 783 9,271 9,002 9,756
North America 342 437 1,018 14 21 21 465 853 603
South America 1,742 1,430 3,176 755 609 1,418 4,688 4,460 4,564
Australia and Asia 939 655 1,542 98 64 158 2,792 2,500 2,776
Total subsidiaries and
joint ventures 14,510 12,346 26,268 2,408 1,758 3,641 36,621 36,919 40,141
Associates
South Africa 768 838 1,565 139 130 170
Rest of Africa 1,065 1,042 1,972 192 215 356
Europe 359 461 969 60 91 166
North America - 288 461 - 29 32
South America 263 202 447 107 72 249
Australia and Asia 180 122 256 69 30 83
Total associates 2,635 2,953 5,670 567 567 1,056
Total Group operations 17,145 15,299 31,938 2,975 2,325 4,697
1) Operating profit including associates is stated before special items as set
out in note 5. Operating profit including associates after special items for the
period ended 30 June 2005 is $1,263 million for South Africa, $414 million for
Europe and $160 million for Australia and Asia. There were no special items
affecting operating profit in the period to 30 June 2004. Operating profit
including associates after special items for the year ended 31 December 2004 was
$1,168 million for South Africa, $940 million for Europe, $209 million for North
America, and $1,647 million for South America.
5. Special items
'Special items' are those items of financial performance that the Group believes
should be separately disclosed on the face of the income statement to assist in
the understanding of the financial performance achieved by the Group. Such
items are material by nature or amount to the period's results and require
separate disclosure in accordance with IAS 1.86. Special items that relate to
the operating performance of the business are classified as special operating
items and include impairment charges and reversals. Special items that relate
to changes in the portfolio of business are included below operating profit on
the income statement. These items include profits and losses on disposals of
investments and businesses. The Group believes that items which were previously
referred to as 'exceptional items' under UK GAAP fall within the scope of
special items under IFRS.
6 months 6 months Year
ended ended ended
US$ million 30.06.05 30.06.04 31.12.04
Special items: operating
Closure of Ergo (31) - -
Impairment of Loch Aline (12) - -
Reversal of impairment of Terra Industries Inc - - 154
Impairment of Black Mountain Mineral Development - - (100)
Write down of assets at Mantos Blancos SA - - (20)
Other impairments (12) - (9)
Total special items: operating (55) - 25
Taxation 17 - 6
Minority interests 12 - (1)
(26) - 30
Profits and (losses) on disposals
Anticipated disposal of Hope Downs (50) - -
Sale of Acerinox 25 - -
Disposal of Wendt 21 - -
Part disposal of Mondi Packaging South Africa (18) - -
Sale of Columbus 14 - -
Disposal of interest in Gold Fields Ltd - 464 464
Gains on deemed disposal of AngloGold - 415 415
Gains on disposal of Pandora - 15 15
Part disposal of Western Areas 7 - 45
Disposal of remaining interest in FirstRand Limited - 32 32
Disposal of interest in Nkomati - 28 28
Disposal of interest in Avgold - 25 25
Disposal of Terra Industries Inc - - 13
Loss on disposal of Hudson Bay Mining and Smelting Co. Ltd. - - (10)
Other items - 26 (12)
Net (loss)/profit on disposals (1) 1,005 1,015
Taxation 11 (32) (44)
Minority interests 2 3 (1)
12 976 970
Associates' special items
Net profit on disposals
Disposal of Samancor Chrome 52 - -
Other 16 2 10
Operating impairment charge - Palabora Mining Company Limited - - (117)
Total associates' special items 68 2 (107)
Taxation - - 36
Minority interests - - -
68 2 (71)
Total special items (net of tax and minority interests) 54 978 929
6. Tax on profit on ordinary activities
6 months 6 months Year
ended ended ended
US$ million 30.06.05 30.06.04 31.12.04
United Kingdom corporation tax at 30% 55 55 61
South Africa taxation 224 97 253
Other overseas taxation 323 132 347
Total current tax 602 284 661
Deferred taxation (48) 200 260
Total deferred tax (48) 200 260
Total tax on special items (28) 32 2
Total tax charge 526 516 923
The effective rate of taxation including share of associates' tax before special
items was 26.1%. This was a decrease from the effective rate including
associates' tax of 31% in the six months ended 30 June 2004. The reduction in
the effective tax rate was principally due to a reduction in the South African
statutory rate from 30% to 29% and a reduction in the Ghanaian tax rate, which
resulted in a $136 million reduction in deferred tax, the benefit of which was
taken in the six month results. Without this one off benefit the effective tax
rate for the period would have been 30.9%. In future periods it is expected the
effective tax rate, including associates' tax, will remain above the statutory
rate of 30%.
IAS 1 requires income from associates to be presented net of tax on the face of
the income statement. The associates' tax is no longer included within the
Group's total tax charge. Associates' tax included within 'Net income from
associates' for the period ended 30 June 2005 is $185 million (June 2004: $164
million; December 2004: $280 million).
7. Profit for the financial period
The table below analyses the contribution of each business segment to the
Group's operating profit for the financial period and its headline earnings,
which the directors consider to be a useful additional measure of the Group's
performance. A reconciliation from profit for the financial period to headline
earnings is given in note 8. Group operating profit is reconciled to 'Profit for
the financial period' as set out in the table below:
6 months ended 30.06.05
Operating Operating Net
profit profit interest,
before after Special Net profit tax and
special special items: on disposals minority
US$ million items(1) items operating interests Total
By business segment
Platinum 410 410 - - (151) 259
Gold 154 116 38 - (81) 73
Diamonds 297 297 - - (27) 270
Coal 374 374 - - (111) 263
Base Metals 721 721 - - (196) 525
Industrial Minerals 193 177 16 - (53) 140
Ferrous Metals and Industries 791 790 1 - (378) 413
Paper and Packaging 233 233 - - (101) 132
Exploration (67) (67) - - 17 (50)
Corporate Activities (131) (131) - - (110) (241)
Total/Headline earnings 2,975 2,920 55 - (1,191) 1,784
Headline earnings adjustments (note (55) 67 42 54
8)
Profit for the financial period(2) 1,838
(1) Operating profit includes associates' operating profit which is reconciled
to 'Net income from associates' in note 4.
(2) Profit for the financial period is the amount attributable to equity
shareholders.
6 months ended 30.06.04
Operating Operating Net
profit profit interest,
before after Special Net profit tax and
special special items: on minority
US$ million items items operating disposals interests Total
By business segment
Platinum 314 314 - - (177) 137
Gold 156 156 - - (89) 67
Diamonds 340 340 - - (171) 169
Coal 201 201 - - (53) 148
Base Metals 568 568 - - (134) 434
Industrial Minerals 181 181 - - (61) 120
Ferrous Metals and Industries 394 394 - - (186) 208
Paper and Packaging 328 328 - - (105) 223
Exploration (56) (56) - - 14 (42)
Corporate Activities (101) (101) - - (115) (216)
Total/Headline earnings 2,325 2,325 - - (1,077) 1,248
Headline earnings adjustments (note - 1,007 (29) 978
8)
Profit for the financial period 2,226
Year ended 31.12.04
Operating Operating Net
profit profit interest,
before after Special Net profit tax and
special special items: on disposals minority
US$ million items items operating interests Total
By business segment
Platinum 536 536 - - (296) 240
Gold 296 295 1 - (157) 139
Diamonds 573 573 - - (305) 268
Coal 497 497 - - (140) 357
Base Metals 1,276 1,039 237 - (240) 1,036
Industrial Minerals 421 412 9 - (133) 288
Ferrous Metals and Industries 887 1,042 (155) - (411) 476
Paper and Packaging 569 569 - - (202) 367
Exploration (120) (120) - - 29 (91)
Corporate Activities (238) (238) - - (270) (508)
Total/Headline earnings 4,697 4,605 92 - (2,125) 2,572
Headline earnings adjustments (note (92) 1,025 (4) 929
8)
Profit for the financial year 3,501
8. Earnings per share
6 months 6 months Year
ended ended ended
30.06.05 30.06.04 31.12.04
Profit for the financial period attributable to equity
shareholders:
Basic earnings per share (US$) 1.27 1.56 2.44
Diluted earnings per share (US$) 1.23 1.50 2.35
Headline earnings for the financial period(1):
Basic earnings per share (US$) 1.24 0.87 1.79
Diluted earnings per share (US$) 1.19 0.84 1.73
(1) 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.
The calculation of the basic and diluted earnings per share is based on the
following data:
6 months 6 months Year
ended ended ended
US$ million (unless otherwise stated) 30.06.05 30.06.04 31.12.04
Earnings
Basic earnings being profit for the financial period attributable to
equity shareholders 1,838 2,226 3,501
Effect of dilutive potential ordinary shares:
Interest on convertible loan notes (net of tax) 15 15 29
Diluted earnings 1,853 2,241 3,530
Number of shares (million)
Basic number of ordinary shares outstanding(1) 1,442 1,429 1,434
Effect of dilutive potential ordinary shares(2):
Share options 19 19 18
Convertible loan notes 48 48 48
Diluted number of ordinary shares outstanding(1) 1,509 1,496 1,500
1) Basic and diluted number of ordinary shares outstanding represent the
weighted average for the period. The average number of ordinary shares in issue
excludes the shares held by the employee benefit trust.
(2) Dilutive 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.
The calculation of basic and diluted earnings per share based on headline
earnings uses the following earnings data:
Earnings (US$ million) Basic earnings per share (US$)
6 months 6 months Year 6 months 6 months Year
ended ended ended ended ended ended
30.06.05 30.06.04 31.12.04 30.06.05 30.06.04 31.12.04
Profit for the financial period
attributable to equity shareholders 1,838 2,226 3,501 1.27 1.56 2.44
Special items: operating 55 - (25) 0.04 - (0.02)
Net loss/(profit) on disposals 1 (1,005) (1,015) - (0.71) (0.71)
Special items: associates (68) (2) 107 (0.04) - 0.08
Related tax (28) 32 2 (0.02) 0.02 -
Related minority interest (14) (3) 2 (0.01) - -
Headline earnings for the financial period 1,784 1,248 2,572 1.24 0.87 1.79
9. Called-up share capital
6 months 6 months Year
ended ended ended
30.06.05 30.06.04 31.12.04
US$ US$
million
Number of Number of US$ million Number of million
shares shares shares
Authorised:
5% cumulative preference shares
of £1 each 50,000 - 50,000 - 50,000 -
Ordinary shares of 50 US cents
each 2,000,000,000 1,000 2,000,000000 1,000 2,000,000,000 1,000
Called-up, allotted and
fully paid:
5% cumulative preference shares
of £1 each 50,000 - 50,000 - 50,000 -
Ordinary shares of 50 US cents
each
1,493,849,673 747 1,491,985,521 746 1,493,839,387 747
At general meetings, every member who is present in person has one vote on a
show of hands and, on a poll, every member who is present in person or by proxy
has one vote for every ordinary share held.
In the event of winding up, the holders of the cumulative preference shares will
be entitled to the repayment of a sum equal to the nominal capital paid up, or
credited as paid up, on the cumulative preference shares held by them and any
accrued dividend, whether such dividend has been earned or declared or not,
calculated up to the date of the winding up.
During 2005, 10,286 (June 2004: 6,946; December 2004: 15,110) ordinary shares of
50 US cents each were allotted in respect of certain non-executive directors by
subscription of their after-tax directors' fees. No ordinary shares were
allotted on exercise of employee share option plans (June 2004: 2,182,665;
December 2004: 4,028,867).
10. Acquisition of subsidiaries
No significant acquisitions were made during the 6 months to 30 June 2005 and
there were no significant adjustments made to the fair values estimated relating
to prior year acquisitions.
Other acquisitions in the year ended 31 December 2004 included additional
consideration and goodwill of $120 million relating to the acquisition of Minera
Sur Andes (formerly Disputada) in 2002. This was the maximum amount payable as
a result of copper prices reaching a certain average threshold since the date of
acquisition. $34 million of this additional consideration was paid in the year
ended 31 December 2004. The remaining $86 million additional consideration was
paid during the six months ended 30 June 2005.
11. Disposal of subsidiaries and businesses
6 months ended
US$ million 30.06.05
Net assets disposed:
Intangible fixed assets 1
Tangible fixed assets 34
Financial asset investments 12
Investments in associates 2
Deferred tax assets 1
Inventories 25
Trade and other receivables 33
Current financial asset investments -
Cash and cash equivalents 7
Short term borrowings -
Other current liabilities (58)
Medium and long term borrowings (1)
Provisions (8)
Minority interests (3)
Profit on disposal 29
Disposal proceeds 74
Total proceeds
Net cash and cash equivalents disposed (7)
Deferred consideration or allotted shares -
Net cash inflow from disposal of subsidiaries during the year 67
Subsidiaries and businesses disposed of during the period contributed $1 million
to total profit for the financial period.
The following assets and liabilities relating to disposal groups have been
reclassified as held for sale at
30 June 2005. The Group expects to complete the sale of these businesses within
12 months of the period end.
US$ million Boart Hope Downs Other Total
Intangible fixed assets 32 - - 32
Tangible fixed assets 123 170 14 307
Financial asset investments 18 - - 18
Deferred tax assets 22 - - 22
Total non current assets 195 170 14 379
Inventories 121 - - 121
Trade and other receivables 219 - - 219
Cash and cash equivalents 38 - - 38
Total current assets 378 - - 378
Total assets 573 170 14 757
Short term borrowings (7) - - (7)
Trade and other payables (139) - - (139)
Total current liabilities (146) - - (146)
Medium and long term borrowings (5) - - (5)
Retirement benefit obligations (72) - - (72)
Deferred tax liabilities - (49) - (49)
Provisions (11) - - (11)
Total non current liabilities (88) (49) - (137)
Total liabilities (234) (49) - (283)
Net assets 339 121 14 474
The net carrying amount of assets and associated liabilities reclassified as
held for sale were written down by $36 million (after tax) in the current period
to their fair value less costs to sell. The above assets and liabilities are
held principally within Ferrous Metals and Industries.
12. Contingent liabilities and contingent assets
There have been no significant changes in contingent liabilities from those
reported at 31 December 2004.
There were no significant contingent assets in the Group at either 31 December
2004 or at 30 June 2005.
At 31 December 2004, contingent liabilities comprised aggregate amounts of $272
million in respect of loans and performance guarantees given to banks and other
third parties.
At 31 December 2004, AngloGold North America had $30 million of reclamation
bonds with various federal and governmental agencies, to cover potential
environmental obligations. These obligations are guaranteed by AngloGold
Ashanti Limited.
There are a number of legal or potential claims against the Group where an
outcome cannot be foreseen and as such any loss cannot be reliably measured.
Provision is made for all liabilities that are expected to materialise.
13. Exploration expenditure
6 months 6 months Year
ended ended ended
US$ million 30.06.05 30.06.04 31.12.04
By business segment
Platinum 9 11 13
Gold 22 19 43
Coal 4 3 9
Base Metals 20 18 41
Ferrous Metals and Industries 12 5 14
67 56 120
14. Capital expenditure
6 months 6 months Year
ended ended ended
US$ million 30.06.05 30.06.04 31.12.04
Platinum 243 292 633
Gold 311 234 585
Coal 126 64 218
Base Metals 100 176 367
Industrial Minerals 120 130 304
Paper and Packaging 392 383 758
Ferrous Metals and Industries 133 144 284
Other 8 5 17
Purchase of tangible fixed assets 1,433 1,428 3,166
Purchase of biological assets 26 28 67
1,459 1,456 3,233
15. Reconciliation of profit before tax to cash inflows from
operations
6 months 6 months Year
ended ended ended
US$ million 30.06.05 30.06.04 31.12.04
Profit before tax 2,657 2,932 4,864
Depreciation and amortisation 1,199 963 2,107
Share option expense 40 32 50
Special items of subsidiaries and joint ventures 56 (1,005) (1,040)
Net finance costs 102 161 367
Fair value gains (43) - -
Net income from associates (407) (330) (550)
Provisions 60 2 17
Increase in inventories (113) (61) (279)
Increase in operating debtors (471) (418) (444)
Increase/(decrease) in operating creditors 13 (42) 113
Other adjustments (19) 8 86
Cash inflows from operations 3,074 2,242 5,291
16. EBITDA by business segment
6 months 6 months Year
ended ended ended
US$ million 30.06.05 30.06.04 31.12.04
By business segment
Platinum 610 465 853
Gold 415 319 694
Diamonds 337 375 655
Coal 476 286 687
Base Metals 875 720 1,625
Industrial Minerals 317 288 638
Ferrous Metals and Industries 961 563 1,231
Paper and Packaging 449 523 978
Exploration (67) (56) (120)
Corporate Activities (124) (83) (210)
EBITDA 4,249 3,400 7,031
EBITDA is stated before special items and is reconciled to 'Total profit from operations and
associates' as follows:
6 months 6 months Year
ended ended ended
US$ million 30.06.05 30.06.04 31.12.04
Total profit from operations and associates 2,759 3,093 5,231
Special items (including associates) 55 - 92
Net profit on disposals (including associates) (67) (1,007) (1,025)
Depreciation and amortisation: subsidiaries and joint ventures 1,199 963 2,107
Share of associates' interest, tax, depreciation, amortisation
and underlying minority interest 303 351 626
EBITDA 4,249 3,400 7,031
EBITDA is reconciled to cash inflows from operations as follows:
6 months 6 months Year
ended ended ended
US$ million 30.06.05 30.06.04 31.12.04
EBITDA 4,249 3,400 7,031
Share of operating profit of associates, before special items (567) (567) (1,056)
Underlying depreciation and amortisation in associates (75) (112) (227)
Share option expense 40 32 50
Fair value gains (43) - -
Provisions 60 2 17
Increase in inventories (113) (61) (279)
Increase in operating debtors (471) (418) (444)
Increase/(decrease) in operating creditors 13 (42) 113
Other adjustments (19) 8 86
Cash inflows from operations 3,074 2,242 5,291
17. Cash and cash equivalents
As at As at As at
US$ million 30.06.05 30.06.04 31.12.04
Cash and cash equivalents per balance sheet
Continuing operations 2,788 2,495 2,955
Disposal groups 38 - -
Bank overdrafts
Continuing operations (143) (78) (174)
Disposal groups (7) - -
Net cash and cash equivalents per cash flow statement 2,676 2,417 2,781
18. Movement in net debt
Debt due within Debt due after
one year one year(1)
Current
US$ million Cash and financial
cash Carrying Carrying asset
equivalents value value investments Total
Hedge(2) net debt
Hedge(2)
Opening balance at 1 January 2005 2,781 (3,209) - (7,817) - 2 (8,243)
IAS 32 and IAS 39 adjustments - (63) - (144) - - (207)
Adjusted opening balance sheet at
1 January 2005 2,781 (3,272) - (7,961) - 2 (8,450)
Cash flow 52 510 - 33 - 5 600
Disposal of business (note 11) - - - 1 - - 1
Accretion of convertible debt - - - (23) - - (23)
Reclassifications - (59) - 59 - - -
Movement in fair value - - - (25) 24 - (1)
Exchange movements (157) 341 - 661 - (2) 843
Closing balance at 30 June 2005 2,676 (2,480) - (7,255) 24 5 (7,030)
The Group's net debt position as at 30 June 2005, disclosed above, includes the
following balances that have been reclassified as 'held for sale' at period end
and are included within 'Assets classified as held for sale' and 'Liabilities
directly associated with assets classified as held for sale':
Debt due within Debt due after
one year one year
Current
US$ million Cash and financial
cash asset
equivalents Carrying Carrying investments Total
value value net funds
Hedge(2) Hedge(2)
Disposal groups 31 - - (5) - - 26
1) Debt due after 1 year includes convertible debt of $1,954 million and
excludes overdrafts (see note 17).
(2) Derivatives of net debt items that have been designated as hedges and are
effective are included within this table to give a true reflection of the
Group's net debt position at period end. These derivatives are classified within
'Other current financial assets (derivatives)', 'Other financial assets
(derivatives)', 'Other current financial liabilities (derivatives)' and 'Other
financial liabilities (derivatives)' in the balance sheet.
19. Events occurring after end of the period
Effective 29 July 2005, the Boart Longyear Group has been sold to Advent
International plc for an enterprise value of $545 million. For the purpose of
reporting as at 30 June 2005 Boart Longyear was treated as a disposal group.
A cash settlement of A$231 million ($176 million) was received by Kumba on 1
July 2005 on sale of its 49% interest in the Hope Downs project. The disposal
follows the exercise of an option to purchase this interest by Kumba's local
partner in the project.
Since the end of the period, AngloGold Ashanti has received notification that
the Department of Minerals and Energy in South Africa has granted its
applications for new order mining rights in terms of the Mineral Resources and
Petroleum Development Act.
20. Changes in estimates
Anglo Platinum - Metal inventories
During the period, Anglo Platinum changed its estimate of the quantities of
valuation of inventory based on the outcome of a physical count of in-process
metal inventory. Anglo Platinum runs a theoretical metal inventory system based
on inputs, the results of previous physical counts and outputs. Due to the
nature of in-process inventories being contained in weirs, pipes and other
vessels, physical counts only take place periodically.
This change in estimate has had the effect of increasing the value of inventory
disclosed in the financial statements by $54 million to $524 million. This
results in the recognition of an after-tax gain of $38 million.
21. Related party transactions
With effect from 1 June 2001, the cross-holding between Anglo American and De
Beers was eliminated and Anglo American now accounts for its 45% interest in DB
Investments (DBI), the new holding company of De Beers Societe Anonyme. As a
result of De Beers' partial interest in Debswana Diamond Company (Proprietary)
Limited (one of the shareholders in DBI), Anglo American accounted for an
additional 3.65% of DBI's post-tax equity earnings. As part of an agreement to
extend a number of mining licences, this partial interest was ceded during 2004
by De Beers to the Government of the Republic of Botswana. Following this
restructuring, Anglo American only accounts for its direct 45% interest in DBI.
Anglo American accounts for the dividends attributable to 10% non-cumulative
preference shares as interest income.
The Company and its subsidiaries, in the ordinary course of business, enter into
various sales, purchase and service transactions with associates and others in
which the Group has a material interest. These transactions are under terms
that are no more favourable than those arranged with third parties. These
transactions, in total, are not considered to be significant.
Dividends received from associates during the period totalled $300 million (June
2004: $136 million; December 2004: $368 million), as disclosed in the
consolidated cash flow statement on page 18.
22. Consolidated interim statement of changes in shareholders'
equity
Attributable to equity holders of the Company
Fair
Share Cumulative value
US$ million Total based translation and
share Retained payment adjustment other Minority Total
capital earnings reserve reserve reserves interests equity
(1)
Balance at 1 January 2004 2,022 15,012 25 - 772 3,365 21,196
Total recognised income and expense - 2,210 - 481 - 252 2,943
Dividends paid - (554) - - - - (554)
Shares issued 333 - - - - - 333
Share based payments - 5 19 - - 3 27
Subsidiary shares issued - - - - - 890 890
Minority interest acquired - - - - - (425) (425)
Dividends paid to minority interests - - - - - (100) (100)
Deemed disposal of AngloGold - - - - - 155 155
Balance at 30 June 2004 2,355 16,673 44 481 772 4,140 24,465
Balance at 1 July 2004 2,355 16,673 44 481 772 4,140 24,465
Total recognised income and expense - 1,264 - 1,766 - 503 3,533
Dividends paid - (273) - - - - (273)
Shares issued 25 - - - - - 25
Share based payments - 7 11 - - - 18
Minority interest acquired - - - - - 23 23
Dividends paid to minority interests - - - - - (78) (78)
Balance at 31 December 2004 2,380 17,671 55 2,247 772 4,588 27,713
Adoption of IAS 32 and IAS 39(2) - (231) - - 226 (122) (127)
Balance at 1 January 2005 2,380 17,440 55 2,247 998 4,466 27,586
Total recognised income and expense - 1,798 - (2,147) (97) (123) (569)
Dividends paid - (734) - - - - (734)
Shares issued 1 - - - - - 1
Share based payments - - 35 - - 3 38
Disposal of business - - - - - (3) (3)
Minority interest acquired - - - - - 3 3
Dividends paid to minority interests - - - - - (165) (165)
Exercise of employee share options - 82 - - - - 82
Other movements - - 9 - - 1 10
Balance at 30 June 2005 2,381 18,586 99 100 901 4,182 26,249
(1) Total share capital comprises called-up share capital and the share premium
account.
(2) Details of the accounting policy change is set out in note 24 to the press
release.
23. Reconciliation between UK GAAP and IFRS
The Group published financial information in accordance with IFRS for 2004, as
required by IFRS 1, on 9 May 2005 in its news release entitled 'IFRS restatement
for 2004 and update on adoption of IFRS'. The news release is published on the
Company's website, www.angloamerican.co.uk, and includes explanations of the
significant UK GAAP to IFRS differences and reconciliations for:
• total equity as at 1 January 2004 (date of transition to IFRSs), 30
June 2004 and 31 December 2004;
• profit attributable to shareholders for the period to 30 June 2004
and the year to 31 December 2004; and
• proforma IAS 32 and IAS 39 information for the period to 30 June
2004 and the year to 31 December 2004.
The news release also included detailed IFRS accounting policies and
supplementary notes to provide more information for understanding the
restatement. A summary of the detailed information presented in the news
release is provided below:
Reconciliation of equity
As at As at As at
US$ million 01.01.04 30.06.04 31.12.04
Total equity presented under UK GAAP 19,772 22,531 24,998
Reclassification of UK GAAP minority interests within equity 3,396 4,160 4,620
Proposed dividend adjustment 622 349 815
Recognition of deferred tax on fair value adjustments(1) (1,712) (1,782) (1,899)
Defined benefit pension obligations (576) (585) (628)
Translation of goodwill arising post 1 January 2004 - - 21
Treatment of De Beers' preference shares (130) (143) (218)
Net impairment of goodwill (214) (214) (214)
Reversal of goodwill amortisation - 112 221
Fair value of biological assets 26 24 14
Share based payments 6 14 1
Net impact of other IFRS adjustments 6 (1) (18)
Total equity and reserves presented under IFRS 21,196 24,465 27,713
Reconciliation of profit attributable to equity shareholders of the Company
6 months Year
ended ended
US$ million 30.06.04 31.12.04
Attributable profit under UK GAAP 1,709 2,913
Reclassification of unrealised gains 424 427
Deferred tax on fair value adjustments 2 41
Defined benefit pension schemes 8 -
Recycling of currency translation adjustments - 30
Treatment of De Beers' preference shares (5) (69)
Reversal of goodwill amortisation 104 205
Fair value of biological assets (4) (21)
Share based payments (14) (21)
Net impact of other IFRS adjustments 2 (4)
Attributable profit under IFRS 2,226 3,501
(1) Since the release of the Group's restated IFRS information on 9 May 2005,
an additional deferred tax liability of £126 million ($227 million) has been
recognised on transition to IFRS in respect of underlying fair value
adjustments. This adjustment was taken to opening retained earnings in
accordance with IFRS 1.
Reconciliation of cash flows
The material adjustments made to the presentation of the Group's consolidated
cash flow statement were the inclusion of cash flows from joint venture entities
on a line-by-line basis in accordance with proportional consolidation rules set
out in IAS 31; and the inclusion of short term cash investments maturing within
90 days of deposit previously disclosed as 'current asset investments' as 'cash
equivalents' in accordance with IAS 7.
24. Adoption of IAS 32 and IAS 39
The consolidated balance sheet as at 31 December 2004 has been adjusted to apply
IAS 32 and IAS 39 prospectively from 1 January 2005 as set out below:
Effect of Restated
adoption of IAS
IFRS 32 IFRS
US$ million
Footnotes 31.12.04 and IAS 39 01.01.05
Intangible fixed assets 2,644 - 2,644
Tangible fixed assets 1 33,172 (173) 32,999
Biological assets 374 - 374
Environmental rehabilitation trusts 237 - 237
Investments in associates 3,486 4 3,490
Financial asset investments 1,084 58 1,142
Deferred tax assets 128 (1) 127
Other financial assets (derivatives) 2 - 675 675
Other non current assets 66 - 66
Total non current assets 41,191 563 41,754
Inventories 3,549 - 3,549
Trade and other receivables 5,534 (86) 5,448
Current tax assets 220 - 220
Other current financial assets 2 - 670 670
(derivatives)
Current financial asset investments 2 - 2
Cash and cash equivalents 2,955 - 2,955
Total current assets 12,260 584 12,844
Total assets 53,451 1,147 54,598
Short term borrowings (3,383) (63) (3,446)
Trade and other payables (5,368) 78 (5,290)
Current tax liabilities (831) 1 (830)
Other current financial liabilities 2 - (628) (628)
(derivatives)
Total current liabilities (9,582) (612) (10,194)
Medium and long term borrowings 3 (7,817) (144) (7,961)
Retirement benefit obligations (1,201) - (1,201)
Other financial liabilities (derivatives) 2 - (610) (610)
Deferred tax liabilities (5,810) 92 (5,718)
Provisions (1,328) - (1,328)
Total non current liabilities (16,156) (662) (16,818)
Total liabilities (25,738) (1,274) (27,012)
Net assets 27,713 (127) 27,586
Equity
Called-up share capital 747 - 747
Share premium account 1,633 - 1,633
Other reserves 3,074 226 3,300
Cash flow hedge reserve 4 - 50 50
Convertible debt reserve 5 - 128 128
Available for sale reserve - 48 48
Other 3,074 - 3,074
Retained earnings 4 17,671 (231) 17,440
Equity attributable to equity holders of
the Company 23,125 (5) 23,120
Minority interests 4,588 (122) 4,466
Total equity 27,713 (127) 27,586
The IFRS news release issued on 9 May 2005 sets out the detailed accounting
policies for the Group's financial instruments and a reconciliation by
adjustment type on adoption of IAS 32 and IAS 39.
The key changes in accounting policy on adoption of IAS 32 and IAS 39 are:
• recognition and fair value of derivatives, including embedded derivatives;
• fair value of investments that were previously cost accounted; and
• the separation of the equity conversion option within convertible debt
instruments.
A summary of the more significant adjustments is set out below:
1. The reduction in tangible fixed assets was largely due to an impairment
triggered by the recognition of an embedded derivative. The derivative was in a
commercial purchase contract in a Base Metals' operation and the resulting
financial asset increased the carrying value of total assets over their
recoverable amount.
2. All outstanding derivatives, other than commodity contracts which meet
the normal sale exemption criteria of IAS 39, are now recognised on the balance
sheet at their mark-to-market value and are disclosed within 'Other financial
assets (derivatives)' or 'Other financial liabilities (derivatives).' They are
classified as current or non current depending on the maturity of the
derivative.
3. The increase in 'medium and long term borrowings' is largely due to a
$277 million increase following the separate presentation of derivatives within
'Other financial assets (derivatives)' and 'Other financial liabilities
(derivatives)'. This is partially offset by a $133 million reduction in
liabilities following the separation of the conversion option from the Group's
convertible debt instruments.
4. Derivative financial instruments that were designated and effective as
hedges of future cash flows as at 1 January 2005 were fair valued through the
'cash flow hedge reserve' at that date. Derivatives not designated as cash flow
hedges as at 1 January 2005 were fair valued through retained earnings.
5. The conversion option within the convertible bond issued by the Company
was fair valued at the date of issue and is included in equity, net of deferred
tax.
The conversion option within the convertible bond issued by AngloGold Ashanti
however is classified as a liability within 'Other financial liabilities
(derivatives).' This accounting treatment follows recent IFRIC guidance.
The pro forma information presented in the IFRS news release assumed application
of IAS 32 and IAS 39 from 1 January 2004. As such, it is slightly different to
the information restated here, for statutory purposes, which applies the
standards prospectively from 1 January 2005.
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 2005 which comprises the consolidated income
statement, the consolidated balance sheet, the consolidated cash flow statement,
the consolidated statement of total recognised income and expense and related
notes 1 to 24. 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 and the requirements of International
Accounting Standard 34 'Interim Financial Reporting' ('IAS 34') which require
that the accounting policies and presentation applied to the interim figures are
consistent with those applied in preparing the preceding annual accounts except
where any changes, and the reasons for them, are disclosed.
International Financial Reporting Standards
As disclosed in note 2, the next annual financial statements of the group will
be prepared in accordance with International Financial Reporting Standards as
adopted for use in the EU. Accordingly, the interim report has been prepared in
accordance with IAS 34, and the requirements of International Financial
Reporting Standard 1, 'First Time Adoption of International Financial Reporting
Standards' relevant to interim reports. The accounting policies are consistent
with those that the directors intend to use in the annual financial statements.
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 International Standards on Auditing (UK and
Ireland) 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 2005.
Deloitte & Touche LLP
Chartered Accountants
London
3 August 2005
Production Statistics
6 months ended 6 months ended Year ended
30.06.05 30.06.04 31.12.04
Anglo Platinum (troy ounces)(1)(2)
Platinum 1,291,400 1,182,700 2,498,200
Palladium 731,700 634,900 1,331,800
Rhodium 175,700 109,300 258,600
Nickel (tonnes) 11,200 11,300 22,700
AngloGold Ashanti (gold in troy ounces)(2)(3)
South Africa 1,330,000 1,529,000 3,079,000
Argentina 108,000 82,000 211,000
Australia 261,000 184,000 410,000
Brazil 167,000 163,000 334,000
Ghana 342,000 123,000 485,000
Guinea 123,000 17,000 83,000
Mali 261,000 211,000 475,000
Namibia 37,000 31,000 67,000
Tanzania 357,000 233,000 570,000
USA 152,000 148,000 329,000
Zimbabwe - 4,000 9,000
3,138,000 2,725,000 6,052,000
Gold Fields (gold in troy ounces)(4)
Gold - 207,000 207,000
Anglo Coal (tonnes)
South Africa:
Eskom 16,585,200 15,995,300 33,668,300
Trade - Thermal 9,170,800 9,033,000 18,648,600
Trade - Metallurgical 852,800 912,300 2,143,700
26,608,800 25,940,600 54,460,600
Australia:
Thermal 8,147,700 8,694,000 17,378,800
Metallurgical 4,591,000 3,300,800 8,203,800
12,738,700 11,994,800 25,582,600
South America:
Thermal 4,835,300 4,891,700 9,589,600
44,182,800 42,827,100 89,632,800
Anglo Coal (tonnes)
South Africa:
Bank 1,415,600 1,271,600 2,733,100
Greenside 1,345,600 1,378,300 2,754,800
Goedehoop 3,029,100 3,201,200 6,462,100
Kriel 5,918,800 5,360,400 11,059,500
Kleinkopje 2,090,800 2,226,000 4,691,600
Landau 1,760,000 1,573,500 3,474,100
New Denmark 2,007,500 2,279,100 4,975,800
New Vaal 8,066,200 8,355,800 17,312,000
Nooitgedacht 382,400 294,700 676,600
Mafube 592,800 - 321,000
26,608,800 25,940,600 54,460,600
Australia:
Callide 4,851,500 4,774,200 9,355,300
Drayton 2,043,900 2,035,900 4,278,800
Dartbrook 501,000 1,062,600 2,268,100
German Creek 1,433,600 1,690,400 4,047,600
Jellinbah East 461,900 420,900 925,200
Moranbah 1,861,400 153,400 1,125,900
Dawson Complex 1,585,400 1,857,400 3,581,700
12,738,700 11,994,800 25,582,600
South America:
Carbones del Guasare 748,200 866,400 1,677,600
Carbones del Cerrejon 4,087,100 4,025,300 7,912,000
4,835,300 4,891,700 9,589,600
Production Statistics (continued)
6 months ended 6 months ended Year ended
30.06.05 30.06.04 31.12.04
Anglo Base Metals
Copper (tonnes)(5)
Collahuasi (44% basis) 93,000 84,300 211,700
Mantos Blancos 71,300 75,400 155,000
Minera Sur Andes 150,000 150,800 300,400
Black Mountain and Hudson Bay 1,300 43,200 79,500
Other - 10,200 19,400
315,600 363,900 766,000
Nickel (tonnes)
Loma de Niquel 8,300 8,500 17,400
Codemin 4,300 3,100 6,500
Other - 100 100
12,600 11,700 24,000
Zinc (tonnes)
Hudson Bay - 52,700 107,000
Black Mountain 16,200 13,300 28,200
Skorpion 56,300 56,700 119,200
Lisheen 81,300 80,500 156,300
153,800 203,200 410,700
Lead (tonnes)
Black Mountain 19,500 16,800 37,500
Lisheen 10,300 9,500 17,200
29,800 26,300 54,700
Mineral sands (tonnes)
Slag tapped 83,600 81,800 169,300
Iron tapped 53,200 51,100 105,900
Zircon 63,100 58,700 119,100
Rutile 14,700 10,800 23,700
Niobium (tonnes)
Catalao 1,900 1,700 3,500
Anglo Industrial Minerals (tonnes)
Aggregates 38,425,000 33,225,000 70,448,300
Lime products 751,800 503,600 1,185,700
Concrete (m3) 4,204,000 4,167,000 8,310,800
Sodium tripolyphosphate 60,700 55,900 115,700
Phosphates 471,000 563,200 1,169,300
Anglo Paper and Packaging
Mondi Packaging
Packaging papers (tonnes) 1,336,298 1,297,060 2,600,291
Corrugated board and boxes (m m2) 1,169 1,028 2,103
Paper sacks 1,667 1,660 3,251
Coating and release liners (m m2) 868 841 1,661
Pulp - external (tonnes) 85,282 74,266 153,045
Mondi Business Paper
Uncoated wood free paper (tonnes) 938,582 928,634 1,881,851
Pulp - external (tonnes) 66,989 25,494 53,142
Wood chips (green metric tonnes) 877,693 1,149,200 2,125,858
Mondi Packaging South Africa
Packaging papers (tonnes) 182,384 185,962 365,557
Corrugated case material (m m2) 154 156 335
Newsprint and other
Newsprint (attributable share) (tonnes) 247,636 294,759 550,986
Mining timber (tonnes) 59,981 74,100 154,727
Production Statistics (continued)
6 months ended 6 months ended Year ended
30.06.05 30.06.04 31.12.04
Anglo Ferrous Metals and Industries (tonnes)
Kumba Resources Limited(6)
Iron ore production 15,511,000 15,284,000 30,112,000
Coal 10,054,000 9,496,000 19,444,000
Zinc 53,000 56,000 116,000
Heavy minerals 345,000 374,000 694,000
Highveld Steel
Vanadium slag 32,612 32,516 67,587
Rolled products 319,627 325,123 674,013
Continuous cast blocks 421,315 456,971 922,477
Samancor
Manganese ore (mtu m) 46 53 106
Manganese alloys 164,400 173,960 321,100
Scaw Metals
Rolled products 179,237 216,517 458,000
Cast products 63,018 68,565 110,000
Grinding media 223,533 194,793 429,000
Tongaat-Hulett
Sugar 388,810 392,510 756,000
Aluminium 94,348 79,600 162,000
Starch and glucose 283,436 277,670 576,000
Hippo Valley
Sugar 74,946 60,398 200,000
(1) Includes Anglo Platinum's share of Northam Platinum Limited.
(2) See the published results of Anglo Platinum Limited or AngloGold Ashanti Limited for further analysis of production
information.
(3) 2005 excludes Ergo production. Ergo production for the 6 months ended 30 June 2004 was 121,000 ounces and for the
year ended 31 December 2004 was 222,000 ounces.
(4) Gold Fields was sold in March 2004.
(5) In respect of the 6 months ended 30 June 2005, production for Palabora is excluded.
(6) See the published results of Kumba Resources Limited for further analysis of production information.
The figures above and on the previous pages include the entire output of
consolidated entities and the Group's share of joint ventures, joint
arrangements and associates with the exception that the production for AngloGold
Ashanti is on an attributable basis for all of its operations.
Exchange rates and commodity prices
6 months ended 6 months ended Year ended
30.06.05 30.06.04 31.12.04
US dollar exchange rates
Average spot prices for the period
South African rand 6.21 6.67 6.44
Sterling 0.53 0.55 0.55
Euro 0.78 0.81 0.80
Australian dollar 1.29 1.35 1.36
Chilean peso 580 609 609
Period end spot prices
South African rand 6.68 6.23 5.65
Sterling 0.56 0.55 0.52
Euro 0.83 0.82 0.74
Australian dollar 1.31 1.44 1.28
Chilean peso 579 636 556
Commodity prices 6 months ended 6 months ended Year ended
30.06.05 30.06.04 31.12.04
Average market prices for the period
Gold - US$/oz 427 401 409
Platinum - US$/oz 867 850 847
Palladium - US$/oz 190 248 231
Rhodium - US$/oz 1,583 696 991
Copper - US cents/lb 151 125 130
Nickel - US cents/lb 720 619 628
Zinc - US cents/lb 59 48 48
Lead - US cents/lb 45 38 40
European eucalyptus pulp price (CIF) - US$/tonne 575 525 520
Summary by business segment
Revenue(1) EBITDA(2) Operating profit/(loss) Headline earnings/
(3) (loss)
6 months 6 months 6 months 6 months 6 months 6 months 6 months 6 months
ended ended ended ended ended ended ended ended
US$ million 30.06.05 30.06.04 30.06.05 30.06.04 30.06.05 30.06.04 30.06.05 30.06.04
Platinum 1,767 1,475 610 465 410 314 259 137
Gold 1,333 1,058 415 319 154 156 73 67
Diamonds 1,628 1,647 337 375 297 340 270 169
Coal 1,479 1,040 476 286 374 201 263 148
South Africa 681 501 231 115 205 93 142 64
Australia 536 343 109 71 48 26 36 26
South America 262 196 136 100 121 82 85 58
Base Metals 1,629 1,592 875 720 721 568 525 434
Copper 1,118 969 673 530 570 435 413 351
Collahuasi 319 237 209 154 174 126 133 102
Minera Sur Andes 559 463 355 269 306 221 216 175
Mantos Blancos 240 225 110 110 90 96 64 80
Palabora and other - 44 (1) (3) - (8) - (6)
Nickel, Niobium, Mineral
Sands 324 265 164 139 141 117 103 70
Catalao 25 22 11 11 10 10 6 9
Codemin 65 41 36 23 33 21 34 11
Loma de Niquel 143 136 89 87 79 77 47 43
Namakwa Sands 91 64 28 16 19 8 16 6
Nkomati and other - 2 - 2 - 1 - 1
Zinc 187 358 56 66 29 31 26 27
Black Mountain 33 35 6 (1) 6 (3) 4 (2)
Hudson Bay - 204 - 42 - 23 - 19
Lisheen 68 95 23 17 17 11 21 11
Skorpion 86 24 27 8 6 - 1 (1)
Other - - (18) (15) (19) (15) (17) (14)
Industrial Minerals 2,035 1,843 317 288 193 181 140 120
Tarmac 1,921 1,750 299 262 183 162 136 113
Copebras 114 93 18 26 10 19 4 7
Ferrous Metals and
Industries 3,694 3,183 961 563 791 394 413 208
Kumba 846 712 324 160 246 98 105 32
Highveld Steel 668 362 282 88 261 67 130 37
Scaw Metals 488 392 68 56 58 46 41 33
Samancor Group 466 375 133 105 121 89 85 67
Boart Longyear 512 408 72 42 55 30 33 17
Tongaat-Hulett 658 507 86 48 56 28 21 6
Terra - 368 - 66 - 41 - 17
Other 56 59 (4) (2) (6) (5) (2) (1)
Paper and Packaging 3,580 3,371 449 523 233 328 132 223
Mondi Packaging 1,969 1,788 250 282 132 170 81 111
Mondi Business Paper 1,063 980 164 188 89 119 54 87
Other 548 603 35 53 12 39 (3) 25
Exploration - - (67) (56) (67) (56) (50) (42)
Corporate - 90 (124) (83) (131) (101) (241) (216)
Gold Fields(4) - 90 - 19 - 7 - 6
Other - - (124) (102) (131) (108) (241) (222)
17,145 15,299 4,249 3,400 2,975 2,325 1,784 1,248
(1) Revenue includes share of joint ventures and associates. Base Metals'
turnover is shown before deduction of treatment and refining charges (TC/RCs) in
2004.
(2) EBITDA is operating profit before special items plus depreciation and
amortisation in subsidiaries and share of EBITDA of joint ventures and
associates.
(3) Operating profit includes operating profit from subsidiaries and joint
ventures and share of operating profit (before tax and interest) of associates.
See note 4 to the press release.
(4) Gold Fields was sold in March 2004.
Reconciliation of subsidiaries' and associates' headline earnings to those
included in the consolidated financial statements
For the six months ended 30 June 2005
Note only key reported lines are reconciled
AngloGold Ashanti Limited 2005
US$ million
IFRS headline earnings (published) 143
Exploration (excluding joint ventures) 22
165
Minority interest (81)
Depreciation on assets revalued on acquisition (net of tax) (11)
Contribution to Anglo American plc headline earnings 73
Anglo Platinum Limited 2005
US$ million
IFRS headline earnings (published) 344
Exploration 9
Other adjustments (4)
349
Minority interest (88)
Depreciation on assets revalued on acquisition (net of tax) (26)
Impact of change in South African corporate tax rate on assets revalued on acquisition 24
Contribution to Anglo American plc headline earnings 259
DB Investments SA 2005
US$ million
Reconciliation of headline earnings
DBI headline earnings (100%) 336
Adjustments(1) 5
DBI headline earnings - AA plc basis (100%) 341
AA plc's 45% ordinary share interest 153
Income from preference shares 26
Exchange gains related to preference shares 91
Contribution to Anglo American plc headline earnings 270
(1) Adjustments include the reclassification of the actuarial gains and losses booked to the income
statement by Dbsa under the corridor mechanism of IAS19. As AA plc has early adopted the
amended version of IAS19, this charge has been included in the deficit booked to
reserves in prior years.
Kumba Resources Limited 2005
US$ million
IFRS headline earnings (published) 155
Adjustments (11)
Depreciation on assets revalued on acquisition (net of tax) (7)
Impact of change in South African corporate tax rate on assets revalued on acquisition 10
Exploration 12
159
Minority interest (54)
Contribution to Anglo American plc headline earnings 105
Highveld Steel and Vanadium Corporation Limited 2005
US$ million
IFRS headline earnings (published) 167
Adjustments (2)
165
Minority interest (35)
Contribution to Anglo American plc headline earnings 130
The Tongaat-Hulett Group Limited 2005
US$ million
IFRS headline earnings (published) 33
Minority interest (15)
18
Add AA plc's share of Hulett Aluminium 3
Contribution to Anglo American plc headline earnings 21
This information is provided by RNS
The company news service from the London Stock Exchange
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