Interim Results - Part 2

ANGLO AMERICAN PLC 8 September 1999 Part 2 Consolidated profit and loss account Unaudited Note 6 months US$ million ended 30.6.99 Group and share of turnover of associates and 2 10,529 joint ventures Less: share of joint ventures' turnover (698) Less: share of associates' turnover (2,682) Group turnover 7,149 Operating costs (6,475) Exploration expenditure 4 (62) Group operating profit 612 Share of operating profits in joint ventures 91 Share of operating profits in associates 290 Total operating profit before exceptional items 2 993 Exceptional items 8 49 Profit on ordinary activities before interest 1,042 Investment income 426 Interest expense (323) Profit on ordinary activities before taxation 1,145 Tax on profit on ordinary activities 5 (226) Profit on ordinary activities after taxation 919 Equity minority interests (359) Profit for the period 560 Dividends paid and proposed (164) Retained profit for the period 396 Profit before exceptional items 3,8 514 Earnings per share (US$): Profit for the period 1.47 Profit before exceptional items 1.35 Dividend per ordinary share (US cents) 42 Number of ordinary shares (millions) 380(1) Consolidated profit and loss account (continued) Unaudited 6 months Year US$ million ended ended 30.6.98 31.12.98 pro forma pro forma Group and share of turnover of associates and 11,155 20,660 joint ventures Less: share of joint ventures' turnover (561) (1,087) Less: share of associates' turnover (3,110) (5,270) Group turnover 7,484 14,303 Operating costs (6,635) (12,870) Exploration expenditure (71) (137) Group operating profit 778 1,296 Share of operating profits in joint ventures 68 113 Share of operating profits in associates 355 563 Total operating profit before exceptional 1,201 1,972 items Exceptional items (155) 165 Profit on ordinary activities before interest 1,046 2,137 Investment income 502 1,012 Interest expense (302) (747) Profit on ordinary activities before taxation 1,246 2,402 Tax on profit on ordinary activities (368) (555) Profit on ordinary activities after taxation 878 1,847 Equity minority interests (337) (571) Profit for the period 541 1,276 Dividends paid and proposed (161) (483) Retained profit for the period 380 793 Profit before exceptional items 689 1,107 Earnings per share (US$): Profit for the period 1.44 3.38 Profit before exceptional items 1.83 2.94 Dividend per ordinary share (US cents) 41 124 Number of ordinary shares (millions) 377 377 (1)Represents issued share capital (407.6 million) less shares in ESOP trust (18 million) weighted for the average number of treasury shares held until placed in market on 24 May 1999 (10 million). Consolidated balance sheet Unaudited As at As at US$ million 30.6.99 31.12.98 pro forma Fixed assets Intangible assets 1,257 1,151 Tangible assets 10,703 10,318 Investments in joint ventures and 5,466 5,852 associates Other financial assets 1,953 1,408 19,379 18,729 Current assets Stocks 1,612 1,958 Debtors 2,306 2,142 Current asset investments 2,661 3,029 Cash at bank and in hand 1,309 1,192 Short term borrowings (857) (1,170) Other current liabilities (2,401) (2,984) 4,630 4,167 Total assets less current liabilities 24,009 22,896 Long term liabilities (3,812) (3,788) Provisions (1,626) (1,533) Equity minority interest (3,037) (3,230) Net Assets 15,534 14,345 Capital and reserves Share capital and premium 2,033 1,169 Reserves 8,317 8,388 Profit and loss account 5,184 4,788 Total shareholders' funds (all equity) 15,534 14,345 Consolidated cash flow statement Unaudited 30.6.99 US$ million Note Net cash flow from operating activities 9 605 Dividends from associates and joint ventures 120 Returns on investment and servicing of finance (289) (a) Taxation (148) Capital expenditure 7 (604) Financial investment (b) 247 Disposals / (acquisitions) 94 Equity dividends paid (130) Cash outflow before use of liquid resources (105) and financing Management of liquid resources (c) 368 Financing (126) Increase in cash in the period 137 Reconciliation of net cash flow to movement in net debt Increase in cash in the period 137 Cash inflow / (outflow) from change in debt 257 Cash (outflow) / inflow from change in liquid (368) resources Change in net debt resulting from cash flows 26 Loans, finance leases and current asset (51) investments acquired with subsidiary Other non-cash items 21 Translation differences 42 Movement in net debt in the period 38 Net debt at beginning of the period (737) Net debt at end of period 10 (699) Consolidated cash flow statement (continued) Unaudited 6 Year US$ million months ended ended 31.12.98 30.6.98 pro pro forma forma Net cash flow from operating activities 973 2,092 Dividends from associates and joint 202 341 ventures Returns on investment and servicing of (216) (625) finance (a) Taxation (107) (388) Capital expenditure (617) (1,425) Financial investment (b) 174 391 Disposals / (acquisitions) (189) (208) Equity dividends paid (359) (517) Cash outflow before use of liquid resources (139) (339) and financing Management of liquid resources (c) (127) (356) Financing 975 781 Increase in cash in the period 709 86 Reconciliation of net cash flow to movement in net debt Increase in cash in the period 709 86 Cash inflow / (outflow) from change in debt (968) (749) Cash (outflow) / inflow from change in 127 356 liquid resources Change in net debt resulting from cash (132) (307) flows Loans, finance leases and current asset - (354) investments acquired with subsidiary Other non-cash items - (16) Translation differences 7 (43) Movement in net debt in the period (125) (720) Net debt at beginning of the period (17) (17) Net debt at end of period (142) (737) (a)Interest payable and receivable, dividend income from cost accounted investments and dividend payments to minorities (b)Disposal and acquisition of other financial assets included in fixed assets (c)Cash flows in respect of current asset investments included in current assets Consolidated statement of total recognised gains and losses Unaudited Note 6 months US$ million ended 30.6.99 Profit for the period 560 Currency translation differences on foreign (71) currency net investments Total recognised gains and losses relating 489 to the period Consolidated statement of total recognised gains and losses (continued) Unaudited Year 31.12.98 US$ million ended pro 30.6.98 forma pro forma Profit for the period 541 1,276 Currency translation differences on foreign (1,273) (1,257) currency net investments Total recognised gains and losses relating (732) 19 to the period Combined statement of movements in shareholders' funds and movements on reserves Unaudited Share Other Profit Total US$ million capital reserves and and loss premium account At 1 January 1998 - pro 1,169 9,645 3,995 14,809 forma Profit for the period - - 1,276 1,276 Dividends paid and proposed - - (483) (483) Currency adjustments - (1,257) - (1,257) At 31 December 1998 - pro 1,169 8,388 4,788 14,345 forma Shares issued to Executive 864 - - 864 Share Option Scheme Profit for the period - - 560 560 Dividends paid and proposed - - (164) (164) Currency adjustments - (71) - (71) At 30 June 1999 2,033 8,317 5,184 15,534 Notes to financial information 1. Accounting policies The financial information has been prepared in accordance with generally accepted accounting principles in the UK. The accounting policies applied in preparing the financial information are consistent with those adopted and disclosed in the Accountants' Report on the company included in Part IV of the Listing Prospectus. 2. Turnover and operating profit before exceptional items Turnover 6 6 months Year months ended ended ended 31.12.98 30.6.99 30.6.98 pro pro forma forma 30.6.99 30.6.98 31.12.98 pro pro forma forma By business segment Gold 1,113 1,301 2,650 Platinum 636 652 1,250 Diamonds 1,062 790 1,543 Coal 400 430 912 Base metals 523 404 794 Industrial minerals 488 511 1,073 Ferrous metals 649 808 1,631 Forest products 1,200 1,079 2,282 Industries 4,458 5,180 8,525 Financial services - - - Exploration - - - Rationalisation costs - - - Corporate activities and - - technical services - 10,529 11,155 20,660 Operating profit before exceptional items 6 6 months Year months ended ended ended 30.6.98 31.12.98 30.6.99 pro pro forma forma By business segment (continued) Gold 239 271 502 Platinum 207 189 331 Diamonds 89 94 148 Coal 65 91 166 Base metals 57 44 86 Industrial minerals 48 67 95 Ferrous metals 46 80 158 Forest products 113 129 232 Industries 209 288 357 Financial services 66 60 120 Exploration (62) (71) (137) Rationalisation costs (32) _ _ Corporate activities and (52) (41) (86) technical services 993 1,201 1,972 By geographical segment (by origin) Turnover 6 months 6 Year ended months ended 30.6.99 ended 31.12.98 30.6.98 pro pro forma forma South Africa 5,376 6,373 12,423 Rest of Africa 994 694 1,376 Europe 1,273 1,212 2,302 North America 1,878 2,168 3,422 South America 433 370 737 Australia and Asia 575 338 400 10,529 11,155 20,660 By geographical segment (by origin)(continued) Operating profit before exceptional items 6 6 months Year ended months ended 31.12.98 ended 30.6.98 pro forma 30.6.99 pro forma South Africa 744 868 1,482 Rest of Africa 43 40 75 Europe 82 125 263 North America 25 150 135 South America 79 24 26 Australia and Asia 20 (6) (9) 993 1,201 1,972 By geographical segment (by destination) Turnover Operating profit before exceptional items 6 6 Year months months ended ended ended 31.12.9 30.6.9 30.6.9 8 9 8 pro pro forma forma South Africa 4,280 5,319 10,081 Rest of Africa 184 157 301 Europe 2,774 2,410 4,642 North America 2,285 2,659 4,119 South America 238 199 375 Australia and 768 411 1,142 Asia 10,529 11,155 20,660 3. Profit before exceptional items (A) By business segment Operating Net investment profit income before exceptional items Gold 239 40 Platinum 207 10 Diamonds 89 (8) Coal 65 - Base metals 57 (31) Industrial minerals 48 2 Ferrous metals 46 (22) Forest products 113 (25) Industries 209 (16) Financial services 66 9 De Beers investments (1) - 140 Exploration (62) - Rationalisation costs (32) - Corporate activities and (52) 4 technical services Profit before exceptional 993 103 items Exceptional items 49 - Profit for the period 1,042 103 (1)Represents De Beers share of Anglo American plc earnings for the 6 months to 30 June 1999. 3. Profit before exceptional items (A) (continued) 30.6.99 By business segment Equity Profit Tax minority before interests exceptional items Gold (48) (105) 126 Platinum (55) (89) 73 Diamonds (31) (9) 41 Coal (28) - 37 Base metals (6) (5) 15 Industrial minerals (18) - 32 Ferrous metals 3 - 27 Forest products (11) (2) 75 Industries (24) (83) 86 Financial services (22) (1) 52 De Beers investments (1) (32) (42) 66 Exploration - 8 (54) Rationalisation costs - - (32) Corporate activities and 18 - (30) technical services Profit before exceptional items (254) (328) 514 Exceptional items 28 (31) 46 Profit for the period (226) (359) 560 (1)Represents De Beers share of Anglo American plc earnings for the 6 months to 30 June 1999. 3. Profit before exceptional items (continued)(B) 30.6.98 By business segment - pro forma Operating Net profit investment before income exceptiona l items Gold 271 29 Platinum 189 17 Diamonds 94 32 Coal 91 - Base metals 44 (8) Industrial minerals 67 4 Ferrous metals 80 (27) Forest products 129 (21) Industries 288 (34) Financial services 60 7 De Beers investments (1) - 182 Exploration (71) - Corporate activities and technical (41) 19 services Profit before exceptional items 1,201 200 Exceptional items (155) - Profit for the period 1,046 200 Represents De Beers share of Anglo American plc earnings for the 6 months to 30 June 1998. 3. Profit before exceptional items (continued)(B) (continued) 30.6.98 By business segment - pro forma Equity Profit Tax minority before interest exceptiona s l items Gold (65) (115) 120 Platinum (64) (81) 61 Diamonds (34) (10) 82 Coal (44) - 47 Base metals (7) (6) 23 Industrial minerals (12) (3) 56 Ferrous metals (6) (17) 30 Forest products (15) (4) 89 Industries (79) (73) 102 Financial services (21) (1) 45 De Beers investments (1) (48) (42) 92 Exploration - 10 (61) Corporate activities and 25 - 3 technical services Profit before exceptional items (370) (342) 689 Exceptional items 2 5 (148) Profit for the period (368) (337) 541 Represents De Beers share of Anglo American plc earnings for the 6 months to 30 June 1998. 3. Profit before exceptional items (continued) (C) 31.12.98 By business segment - pro forma Operating Net profit investmen before t income exceptional items Gold 502 76 Platinum 331 41 Diamonds 148 17 Coal 166 - Base metals 86 (9) Industrial minerals 95 11 Ferrous metals 158 (41) Forest products 232 (73) Industries 357 (48) Financial services 120 6 De Beers investments (1) - 289 Exploration (137) - Corporate activities and technical (86) (4) services Profit before exceptional items 1,972 265 Exceptional items 165 - Profit for the period 2,137 265 (1)Represents De Beers share of Anglo American plc earnings for the 12 months to 31 December 1998. 3. Profit before exceptional items (continued) (c) (Continued) 31.12.98 By business segment - pro forma Equity Profit Tax minority before interest exceptiona s l items Gold (132 (193) 253 ) Platinum (87) (160) 125 Diamonds (62) (16) 87 Coal (80) - 86 Base metals 3 (10) 70 Industrial minerals (9) (5) 92 Ferrous metals (17) (21) 79 Forest products (37) - 122 Industries (49) (114) 146 Financial services (43) (4) 79 De Beers investments (1) (71) (70) 148 Exploration - 21 (116) Corporate activities and 24 2 (64) technical services Profit before exceptional items (560) (570) 1,107 Exceptional items 5 (1) 169 Profit for the period (555) (571) 1,276 (1)Represents De Beers share of Anglo American plc earnings for the 12 months to 31 December 1998. 4. Exploration expenditure 6 months Year ended 30.6.99 ended 31.12.98 30.6.98 pro forma pro forma Gold 21 30 62 Coal - - 1 Base metals 41 41 74 62 71 137 5. Tax on profit on ordinary activities 6 months Year ended 30.6.99 ended 31.12.98 30.6.98 pro forma pro forma Tax payable in 11 10 22 the UK Share of 100 124 225 associates tax Foreign tax 115 234 308 payable 226 368 555 6. Net operating assets As at As at 30.6.99 31.12.98 pro forma By business segment Gold 2,939 2,617 Platinum 1,373 1,147 Coal 754 811 Base metals 1,426 1,402 Industrial minerals 1,190 1,308 Ferrous metals 747 746 Forest products 1,326 1,102 Industries 3,464 3,465 Financial services (21) (5) Corporate activities 588 143 13,786 12,736 By geographical segment South Africa 8,303 8,186 Rest of Africa 233 57 Europe 2,189 1,583 North America 1,779 1,762 South America 1,203 1,046 Asia 79 102 13,786 12,736 Net operating assets consist of tangible and intangible fixed assets (excluding investments in joint ventures and associates), stocks and debtors less non-interest bearing current liabilities. 7. Capital expenditure 6 months 6 months Year ended ended ended 31.12.98 30.6.99 30.6.98 pro forma pro forma By business segment Gold 92 106 235 Platinum 103 109 251 Coal 7 12 33 Base metals 144 143 370 Industrial minerals 35 46 85 Ferrous metals 23 20 53 Forest products 59 62 86 Industries 130 110 279 Corporate activities 11 9 33 Capital expenditure 604 617 1,425 8. Profit before exceptional items 6 6 months Year months ended ended ended 30.6.98 31.12.9 30.6.99 pro 8 forma pro forma Profit for the period 560 541 1,276 Adjustment for exceptional (gains) / losses: Disposal of interest in (89) - - Driefontein Disposal of the Copebras carbon - - (124) black business Disposal by Terra of 67 - - distribution business Disposal of interest in Lonrho - 96 96 Disposal of other non-core (27) 59 (137) assets Exceptional items (49) 155 (165) Taxation (28) (2) (5) Minority interest 31 (5) 1 Profit before exceptional items 514 689 1,107 9. Reconciliation of group operating profit to net cash flow from operating activities 6 6 months Year months ended ended ended 30.6.98 31.12.98 30.6.99 pro pro forma forma Group operating profit per the 612 778 1,296 accounts Depreciation and amortisation 402 387 774 charges Decrease / (increase) in stock 107 (64) 61 Increase in debtors (473) (656) (485) (Decrease) / increase in (156) 441 429 creditors Other non-cash items 113 87 17 Net cash flow from operating 605 973 2,092 activities 10. Analysis of net debt Acquisition At s excluding 01.01.98 Cash cash & pro flow overdrafts forma Cash at bank and in hand 1,180 709 - Debt due after one year (3,349) (414) - Debt due within one year (621) (554) - (3,970) (968) - Current asset investments 2,773 127 - Total (17) (132) - At Acquisition 01.07.98 s excluding pro Cash cash & forma flow overdrafts Cash at bank and in hand 1,777 (623) - Debt due after one year (3,572) 216 (354) Debt due within one year (1,157) 3 - (4,729) 219 (354) Current asset investments 2,810 229 - Total (142) (175) (354) Acquisition At s excluding 01.01.99 Cash cash & pro flow overdrafts forma Cash at bank and in hand 1,192 137 - Debt due after one year (3,788) (58) (51) Debt due within one year (1,170) 315 - (4,958) 257 (51) Current asset investments 3,029 (368) - Total (737) 26 (51) 10. Analysis of net debt (continued) Other Exchange At 30.06.98 non- movement pro forma cash s changes Cash at bank and in hand 24 (136) 1,777 Debt due after one year (4) 195 (3,572) Debt due within one year (20) 38 (1,157) (24) 233 (4,729) Current asset investments - (90) 2,810 Total - 7 (142) Other Exchange At 31.12.98 non- movement pro forma cash s changes Cash at bank and in hand 34 4 1,192 Debt due after one year (14) (64) (3,788) Debt due within one year (21) 5 (1,170) (35) (59) (4,958) Current asset investments (15) 5 3,029 Total (16) (50) (737) Other Exchange non- movements At 30.06.99 cash changes Cash at bank and in hand 1 (21) 1,309 Debt due after one year 20 65 (3,812) Debt due within one year (15) 13 (857) 5 78 (4,669) Current asset investments 15 (15) 2,661 Total 21 42 (699) 11.Reconciliation of pro forma 1998 profit disclosed in prospectus to pro forma comparatives in the interim report 31.12.98 Operating profit Net before Exceptional investment exceptional items income items Per prospectus 2,016 149 43 Acquisition of minorities: Anglo American Gold - - - Investment Co. Ltd Anglo American - - - Investment Trust Ltd Adjustments and reallocations: De Beers diamonds (23) (3) (38) De Beers investments (57) 19 260 Other adjustments and 36 - - reclassifications Per interim report 1,972 165 265 11.Reconciliation of pro forma 1998 profit disclosed in prospectus to pro forma comparatives in the interim report (continued) 31.12.98 Tax on Equity profit on minority Profit ordinary interests for the activities year Per prospectus (441) (618) 1,149 Acquisition of minorities: Anglo American Gold - 49 49 Investment Co. Ltd Anglo American - 53 53 Investment Trust Ltd Adjustments and reallocations: De Beers diamonds (11) 26 (49) De Beers investments (62) (77) 83 Other adjustments and (41) (4) (9) reclassifications Per interim report (555) (571) 1,276 interim dividend An interim dividend on the company's ordinary share capital in respect of the six months to 30 June 1999 will be payable as follows: Amount 42 US cents per ordinary share (see notes) Currency conversion date Friday, 3 September 1999 Ex-dividend on the London and Monday, 20 September 1999 Johannesburg Stock Exchanges from the commencement of trading on Record date Friday, 24 September 1999 Dividend warrants posted Thursday, 21 October 1999 Payment date of dividend Friday, 22 October 1999 Notes: Shareholders on the United Kingdom register of members with an address in the United Kingdom will be paid in pounds sterling, unless they elect for payment in US dollars, and those shareholders with an address elsewhere will be paid in US dollars, unless they elect for payment in pounds sterling, provided all such elections are received by the UK Registrar by Friday, 24 September 1999. The equivalent of the dividend in sterling will be 26.082 pence per ordinary share based on an exchange rate of US$1 = £0.6210. Shareholders on the South African branch register will be paid in South African Rand, at R2.5325 per ordinary share based on an exchange rate of US$1 = R6.0297. Production statistics Production statistics (1) Production statistics for the six 1999 1998 months ended 30 June AngloGold (gold in ounces) South Africa 2,895,000 3,252,000 North and South America 433,000 411,000(2) Rest of World 117,000 115,000 3,445,000 3,778,000 Anglo Platinum (troy ounces) Platinum 928,000 958,000 Palladium 464,000 481,000 Rhodium 76,000 90,000 Nickel (tonnes) 9,000 10,000 Anglo Coal (tonnes) Eskom 20,900,000 17,500,000 Trade 9,600,000 9,100,000 Cerrejon 200,000 600,000 30,700,000 27,200,000 Anglo Base Metals Copper (tonnes) Collahuasi 96,000 - Mantos Blancos 76,000 68,000 Hudson Bay 22,000 24,000 Other 18,000 16,000 212,000 108,000 Zinc (tonnes) Hudson Bay 44,000 47,000 Black Mountain 16,000 - 60,000 47,000 Lead (tonnes) Black Mountain 38,000 - 38,000 - Nickel (tonnes) Codemin 3,300 3,500 Bindura 4,700 4,900 Tati 1,500 1,300 9,500 9,700 Namakwa Sands (tonnes) Chloride slag 42,000 26,000 Sulphate slag 6,000 7,000 Pig iron 23,000 17,000 Zircon 39,000 18,000 Rutile 7,000 3,000 (1)Includes entire output of consolidated entities and the group's share of joint ventures where applicable. (2)Production in 1998 relates to Minorco's gold operations. Production statistics Production statistics (1) Production statistics for the six 1999 1998 months ended 30 June (continued) Anglo Industrial Minerals (tonnes) Aggregates 14,200,000 14,900,000 Coated Stone 900,000 900,000 Concrete products 1,300,000 1,100,000 Cement 150,000 145,000 Potash 430,000 500,000 Sodium tripolyphosphate 41,000 32,000 Phosphates 190,000 210,000 Anglo Forest Products (tonnes) South Africa Pulp 187,000 164,000 Graphic papers 151,000 151,000 Packaging papers 239,000 266,000 Corrugated board (000 m2) 46,000 22,000 Lumber (000 m3) 183,000 234,000 Wood chips 473,000 504,000 Mining timber 69,000 134,000 Europe Pulp 69,000 70,000 Graphic papers 274,000 261,000 Packaging papers 168,000 160,000 Corrugated board (000 m2) 293,000 14,000 Paper sacks (000 units) 315,000 317,000 Brazil Pulp 73,000 71,000 (1)Includes entire output of consolidated entities and the group's share of joint ventures where applicable.
UK 100