Annual Report & Accounts
Anglo American PLC
25 February 2004
News Release
25 February 2004
Anglo American's resilient performance reflects underlying strength of
geographic and product diversity
• Headline earnings(1) of $1,694 million ($1.20 per share), 4% lower than
2002. Total profit for the year of $1,592 million, a 2% increase over the
prior year.
• Adverse impact of strong South African rand and Australian dollar.
Currency movements reduce headline earnings by $578 million. Despite this
significant factor, Anglo American maintained a steady earnings and EBITDA
(2) performance.
• Strong cash generation: EBITDA of $4.8 billion; EBITDA interest cover(2)
of 12.7 times; EBITDA return on total capital(2) of 16.9%.
• Recommended increased final dividend of 39 US cents, giving a total
dividend for 2003 of 54 US cents per ordinary share, up 6%.
• Diversified product portfolio underpinned performance: record earnings
from Diamonds, strong contributions from Base and Ferrous Metals, Paper and
Packaging and Industrial Minerals offset lower earnings from Platinum, Gold
and Coal.
• Balanced geographical exposure: split of headline earnings - Europe 26%;
South Africa 34%; Americas 18% and Rest of World 22%.
• Key acquisitions delivering value across the Group - Minera Sur Andes
(formerly Disputada) contributed $111 million to headline earnings in first
year and reported increased reserves.
• Further cost savings and efficiency improvements of $335 million in 2003,
significantly ahead of $200 million target.
• $2 billion projects commissioned during the year. Path to growth: $6
billion expansion programme - a strong pipeline of projects across all key
commodities.
HIGHLIGHTS FOR THE YEAR TO 31 DECEMBER 2003 Year ended Year ended Change
31.12.03 31.12.02
US$ million except per share amounts
Turnover including share of joint ventures and associates 24,909 20,497 22%
Total operating profit for the year 2,606 3,251 (20)%
Total operating profit before operating exceptional items 2,892 3,332 (13)%
Profit for the year 1,592 1,563 2%
Profit for the year before exceptional items 1,498 1,583 (5)%
Headline earnings for the year (1) 1,694 1,759 (4)%
Net operating assets (3) 29,709 21,122 41%
EBITDA (2) 4,785 4,792 -
Net cash inflow from operating activities 3,184 3,618 (12)%
Capital expenditure 3,025 2,139 41%
Earnings per share (US$):
Profit for the year 1.13 1.11 2%
Profit for the year before exceptional items 1.06 1.12 (5)%
Headline earnings for the year 1.20 1.25 (4)%
Dividend for the year (US cents per share) 54.0 51.0 6%
(1) See note 7 for basis of calculation of headline earnings.
(2) EBITDA is operating profit before exceptional items plus depreciation and amortisation of subsidiaries
and share of EBITDA of joint ventures and associates. EBITDA interest cover is EBITDA divided by net
interest expense after adjusting for other net financial income. EBITDA return on capital is EBITDA divided
by average total capital. EBITDA is reconciled to net cash inflow from operating activities above the cash
flow statement.
(3) See note 2 for definition of net operating assets.
Tony Trahar, Chief Executive, said:
"The Group recorded headline earnings of $1,694 million, a resilient performance
during a challenging year for our businesses. This solid achievement reflects
our success in building a portfolio of high quality assets and maintaining a
balanced geographic and product exposure. Group cash flow (EBITDA) remained
strong and was virtually unchanged at $4.79 billion for the year.
Operating performances were generally very good across the board, though the
Group's South African and Australian operations were impacted by a substantially
weaker US dollar. This was partially offset by higher dollar prices for gold,
diamonds, platinum and base metals and by the further expansion of the Group
through acquisition and the commissioning of brownfield and greenfield projects
during the year.
Anglo American also benefited from the full year earnings contributions from
acquisitions made recently across the Group. Our strategy of pursuing growth
through both acquisitions and organic projects is now being reflected in
significant production volume growth in most of our product areas.
A major feature was the turnaround in the performance of Base Metals. The
integration of the Minera Sur Andes (formerly Disputada) copper operations in
Chile has been successfully completed. The business is now well positioned to
benefit from stronger prices.
In terms of iron ore, we have delivered our long-term strategic goal of entering
the global iron ore market and this will present major expansion opportunities
in the medium term.
Our focus on driving returns has produced significant results with group-wide
cost cutting programmes. We have consistently exceeded our targets in terms of
cost savings and efficiency improvements and over the last two years achieved
total savings of just over $600 million.
The positive outlook for a number of our commodities provides an encouraging
platform for the year ahead. Improved economic growth in the US and Japan,
combined with the strong industrial performance of China, is encouraging. After
two decades of generally flat or declining real prices for metals, despite a
background of steadily increasing demand, the backdrop for commodities is more
positive than it has been for a number of years. Although the potential for a
further weakening of the US dollar remains a cause for concern, this is likely
to be offset by rising dollar prices for our key commodities.
The Group offers a unique mix of geographic and product diversity which
insulates it from the volatility associated with single product cycles. Our
gold, platinum, diamond, coal, base and ferrous metals businesses are benefiting
from recent price rises and should continue to enjoy steady growth. In
addition, paper and packaging and industrial minerals are generating strong cash
flows. The Group will also benefit from a number of new projects and recent
acquisitions. On the basis of prevailing commodity prices and exchange rates,
the Group should achieve good growth in 2004.
REVIEW OF 2003
Financial results:
Headline earnings per share were $1.20, a reduction of 4% from the prior year.
Strong performances by many of the Group's businesses were offset by the
significant impact on the Group's results of the stronger South African rand
against the US dollar. Despite the weakening of the dollar, headline earnings
reached $1,694 million resulting from an outstanding performance from De Beers
and strong contributions from Base Metals, Industrial Minerals and Paper and
Packaging. Lower earnings were recorded by Anglo Platinum, AngloGold, the Coal
business and Ferrous Metals & Industries.
Profit for the year was $1,592 million compared with $1,563 million in the prior
year. The increased profit for 2003 is principally due to profits on the sale of
the Group's interests in Li & Fung and FirstRand Limited, reduced minority
interests and a reduced tax rate.
Diamonds recorded a 19% increase on 2002 headline earnings to $386 million (23%
of Anglo American's total headline earnings) and was the largest contributor to
the Group's headline earnings. Sustained diamond retail demand and, in
particular, stronger than expected Thanksgiving/Christmas demand in the US
resulted in an improved performance.
Platinum recorded a 42% decrease in headline earnings to $205 million (12% of
Anglo American's total) due primarily to the strength of the rand. This effect
was partially offset by a higher average dollar basket price of platinum group
metals sold and higher sales volumes. Operating costs increased as a result of
increased production volumes from ramp-up mining and smelting operations. The
expansion plans to increase platinum output are continuing but have been slowed
down due to the impact of the stronger than anticipated rand/dollar exchange
rate on cash generated from operations and project returns.
Gold's contribution to headline earnings decreased by 19% to $167 million (10%
of Anglo American's total) as a result of lower ore grades at Morila in Mali,
the sale of Jerritt Canyon and the weakening of the US dollar against local
currencies in those countries where AngloGold operates. The stronger local
currencies also impacted total cash costs which increased from $161 to $229 per
ounce.
Coal recorded headline earnings of $232 million, 13% below the prior year (14%
of Anglo American's total). In spite of an 8% increase in production to 87
million tonnes and excellent cost containment, the appreciation of the rand and
the Australian dollar significantly impacted earnings for the year.
Base Metals recorded improved headline earnings of $206 million (12% of Anglo
American's total), a 199% increase over 2002. A major turnaround has been
achieved in Base Metals. The integration of Minera Sur Andes, which had its
first full year of contribution in 2003, has been successfully completed. Copper
and nickel operations benefited from higher prices in the second half while zinc
prices remained relatively flat.
Industrial Minerals increased headline earnings by 17% to $270 million (16% of
Anglo American's total) following another year of significant improvement.
Tarmac's performance benefited from the full year contribution of acquisitions
made in 2002, efficiency improvements in the UK and the strength of European
currencies against the US dollar. Copebras also contributed to the increase, the
new plant at Goias allowing it to benefit more fully from the buoyant Brazilian
market conditions for phosphate fertilizers.
Paper and Packaging contributed $368 million to headline earnings, 2% lower than
the prior year (22% of Anglo American's total). In spite of weaker market
conditions in both the packaging and office communications sectors, Paper and
Packaging's steady performance reflected the contribution of full year earnings
from businesses acquired in 2002, combined with incremental cost savings from
process efficiencies and integration synergies and additional production
capacity.
Ferrous Metals & Industries contributed $107 million to headline earnings (6% of
Anglo American's total), a decrease of 15% over 2002. This was due largely to
significantly lower earnings from Tongaat-Hulett which was severely impacted by
the strength of the rand together with low international prices. Highveld Steel
also suffered from adverse currency movements, while Scaw Metals recorded an
improved performance on the back of a full-year contribution from Moly-Cop,
acquired in 2002.
GROWTH THROUGH ACQUISITIONS
Anglo American has developed a strong track record in terms of acquisitions. The
EBITDA cash flow returns on the key acquisitions of Minera Sur Andes, Shell
Coal, Syktyvkar and Tarmac range between 16% and 23%. The acquisition of Minera
Sur Andes late in 2002 has proved extremely attractive for the Group. Not only
were the projected synergies exceeded but the operations were earnings accretive
in their first full year after acquisition, at an average copper price of 81 US
cents/lb. Additional reserves totalling 368 million tonnes have also been
identified during the year, thereby extending considerably the life of this
large, low-cost producer at a time when few large, new copper mines are coming
into production.
Since 1999, the Group has achieved significant volume growth: for platinum,
volume growth has been 17%, 40% for diamonds, 67% for copper, 57% for nickel,
197% for zinc, 40% for coal, 152% for aggregates, 166% for uncoated woodfree
paper, 158% for packaging papers, 346% for industrial sacks. In terms of
geographic exposure, significant progress has been made in transforming Anglo
American's asset base into a more diverse platform with 30% of its assets today
in Europe, 40% in South Africa, 16% in the Americas and the balance spread
across the globe.
Further acquisitions were announced in 2003:
- Anglo American increased its shareholding in Anglo Platinum from
67.6% to 74.1% for a total of $533 million, as part of its ongoing programme of
buying shares in the market from time to time.
- In November, the Ghanaian government gave its backing to AngloGold's
bid to bring about a merger with Ashanti Goldfields. The merger, which is
expected to be completed in the first half of 2004, will create one of the
world's largest gold mining companies in terms of reserves and gold production.
Ashanti Goldfields has six operations spread across the African continent
including the long-life Obuasi mine, where $1 billion is estimated to be spent
over its remaining life, including $570 million on the Obuasi Deeps Project.
During the year, Anglo American increased its shareholding in AngloGold by 3.1%
to 54.5% for a total of $301 million.
- In October, Anglo American's shareholding in Kumba increased to just
over 35% following approval from South Africa's Competition Tribunal and, as a
consequence, the Company extended a mandatory cash offer to Kumba's
shareholders, resulting in Anglo American's stake increasing to 66.6% for
consideration of $539 million for the mandatory offer. Discussions are
continuing with the South African government and Black Economic Empowerment
partners.
- Anglo Industrial Minerals further strengthened its European presence
with acquisitions in the UK, France, Spain, Germany and the Czech Republic
totalling $100 million. Tarmac is now the largest aggregates producer in the
Czech Republic, and is well placed to benefit from the country's forthcoming
entry into the EU.
- Anglo Paper and Packaging continued to develop and expand its
European and South African asset base. In December, Mondi Packaging acquired the
Austrian Bauernfeind Group for $118 million, a corrugated paper and packaging
business with extensive European operations. Frantschach acquired, subject to
competition approval, the industrial sack business of Mexico's Copamex for $52
million, one of the world's largest producers of industrial sacks.
ORGANIC GROWTH - $6 BILLION PROJECT PIPELINE
Anglo American has one of the strongest pipelines of growth projects in the
mining and natural-resource industry, spanning all of its key products, with
around $6 billion of approved project capital expenditure over the next five
years. A number of projects were successfully commissioned during 2003,
including the $454 million Skorpion zinc project in Namibia which has already
reached 75% of design capacity levels. The timing of this project appears
opportune with zinc prices and demand starting to recover from recent record
lows. At Hudson Bay, the $276 million 777 project was substantially completed
ahead of schedule and within budget.
The $233 million Ruzomberok paper mill project in Slovakia was also commissioned
successfully increasing the group's paper production capacity by some 100,000
tonnes. Industrial Minerals' new phosphate fertilizer plant at Goias in Brazil
was completed during the year, $19 million under its budgeted cost of $147
million and is operating at full capacity. Other developments in the project
pipeline include:
- The $173 million cement plant at Buxton, which is undergoing final
commissioning trials, is expected to be in full production in the second quarter
of 2004. In China, Tarmac is developing a quarry 140 kilometres from Shanghai.
The quarry is the nearest known reserve of top-quality asphalting aggregates to
China's booming commercial capital.
- In Paper and Packaging, the $221 million Richards Bay pulp mill
expansion in South Africa, set to increase pulp production capacity by 40% to
475,000 tonnes by 2005, and the $150 million upgrade of the Merebank paper mill,
which will increase production by 160,000 tonnes per annum by 2005, are both on
track.
- In Base Metals, the $288 million (being the Group's share) Rosario
project at Collahuasi and Black Mountain's $110 million Deeps project are on
budget, with Collahuasi scheduled to complete and Black Mountain scheduled to
produce its first ore in 2004.
- As part of Anglo Platinum's continuing expansion programme, Modikwa
will build up to its full production level by the end of 2004 and the Western
Limb Tailings Retreatment project commenced operations in January 2004.
Polokwane Smelter and the Anglo Platinum Converting Process will increase
throughput in line with increasing volumes of mined and purchased material.
- In Gold, the $191 million Mponeng deepening project is due to be
completed by the end of 2004.
- Major expansionary capital in the Coal business in 2004 will include
the Kriel South, as well as the Greenside and Kleinkopje expansions in South
Africa. In Australia, a feasibility study is under way regarding the development
of the remainder of the Dawson complex, which incorporates Moura and Theodore
while work continues on several other projects. In Colombia, Cerrejon is
expanding its operations to an output of 28 million tonnes of coal annually by
2007.
Other developments during 2003:
In May, Anglo American sold its 34.5% stake in Anglovaal Mining Limited to a
black empowerment consortium for $231 million. In line with its strategy of
disposing of non-core assets, Anglo American sold its 11.5% stake in Avgold
Limited for $88 million and also disposed of its remaining stakes in Li & Fung
Limited and FirstRand Limited for $269 million and $176 million respectively.
Restructuring in Base Metals continued in line with its strategy of focusing on
fewer, large, long life operations, disposing of its investments in Anaconda
Nickel in Australia and Bindura Nickel in Zimbabwe in 2003 and its stake in the
Nkomati Joint Venture in February 2004.
Other developments during the year included the launch of Anglo American's
inaugural euro-denominated benchmark bond offering, the five-year bond raising
€1.0 billion, and its inaugural 7 year sterling denominated benchmark bond
offering, which was issued under the existing EMTN programme, raising £300
million. The proceeds from both these issues, made through Anglo American
Capital plc, have been used to repay existing bank borrowings.
Cost savings:
All businesses across the Group continued to focus on efficiency initiatives and
cost control during 2003. The total cost savings achieved amounted to $335
million, of which operating efficiencies (comprising maintenance, administration
and overheads, labour and materials and supplies) realised $217 million,
restructuring and synergies $18 million and procurement $100 million.
Black Economic Empowerment:
The legislative framework governing the transformation of the South African
Mining Industry is continuing to emerge. Promulgation of the Minerals and
Petroleum Resources Development Act is expected later this year together with
the regulations governing its application. The process of conversion from old
order to new order mineral rights will then begin. The South African government
has confirmed that regarding the Royalties Bill, royalties based on turnover
will only become payable in 2009 when the conversion process is complete.
In terms of Black Economic Empowerment (BEE), the Group continues to make steady
progress having now recorded over $2 billion in major transactions and over $1.5
billion in procurement and small business promotion spend. The Group is making
good progress towards complying with the Mining Charter BEE targets.
Exceptional items:
Operating exceptional charges amounted to $286 million. These included
impairments or write-downs of $208 million to the carrying value of Hudson Bay
in Base Metals, $20 million against the Boyongan project by Exploration and $43
million to mining assets in AngloGold, principally Savuka.
An exceptional finance charge of $13 million relates to the Group's share of De
Beers' costs on the early redemption of debt.
Non-operating exceptional gains amounted to $386 million. These included $163
million for the profit on sale of the Group's remaining holding in Li & Fung
Limited, $117 million for the profit on the sale of shares in FirstRand Limited,
$51 million for the profit on the sale of the Group's stake in Avgold Limited
and $42 million for sale of shares in East Africa Gold mines and Randgold
Resources.
Taxation:
The effective rate of taxation for the Group before exceptional items was 29%.
This saw a reduction from the effective rate of 33% in 2002, due to the impact
of a number of one-off deferred tax benefits arising from tax rate reductions in
a number of countries, benefits from losses not previously recognised, and the
change in the mix of earnings contributed by the Group's businesses.
Dividend:
The directors recommend a final dividend of 39 US cents per share to be paid on
29 April 2004. Total dividends for the year will amount to 54 US cents per
share, increasing last year's total dividend by 6%.
Outlook:
The positive outlook for a number of Anglo American's commodities provides an
encouraging platform for the year ahead. Improved economic growth in the US and
Japan, combined with the strong industrial performance of China, is encouraging.
After two decades of generally flat or declining real prices for metals,
despite a background of steadily increasing demand, the backdrop for commodities
is more positive than it has been for a number of years. Although the potential
for a further weakening of the US dollar remains a cause for concern, this is
likely to be offset by rising dollar prices for the Group's key commodities.
The Group offers a unique mix of geographic and product diversity which
insulates it from the volatility associated with single product cycles. Anglo
American's gold, platinum, diamond, coal, base and ferrous metals businesses are
benefiting from recent price rises and should continue to enjoy steady growth.
In addition, paper and packaging and industrial minerals are generating strong
cash flows. The Group will also benefit from a number of new projects and
recent acquisitions. On the basis of prevailing commodity prices and exchange
rates, the Group should achieve good growth in 2004.
For further information:
Anglo American - London
Investor Relations Media Relations
Nick von Schirnding Kate Aindow
Tel: +44 207 698 8540 Tel: +44 207 698
8619
Anglo American - Johannesburg
Investor Relations Media Relations
Anne Dunn Marion Dixon
Tel: +27 11 638 4730 Tel: +27 11 638
3001
Notes to Editors:
Anglo American plc with its subsidiaries, joint ventures and associates is a
global leader in the mining and natural resource sectors. It has significant and
focused interests in gold, platinum, diamonds, coal, base metals, ferrous metals
and industries, industrial minerals and paper and packaging as well as financial
and technical strength. The Group is geographically diverse, with operations in
Africa, Europe, South and North America and Australia and Asia.
(www.angloamerican.co.uk)
Note: Throughout this press release '$' denotes United States dollars.
OPERATIONS REVIEW
Diamonds
$ million 2003 2002
Total operating profit 562 541
Headline earnings 386 324
Group's share of De Beers' net assets(1) 2,706 2,149
Share of Group headline earnings (%) 23 18
In 2003, the Group's share of De Beers' operating profit was $21 million higher
at $562 million, while De Beers' contribution to Anglo American's headline
earnings was $386 million. Increased sales at higher prices and lower financing
costs more than compensated for the negative impact of the significant
appreciation of the South African rand against the dollar. Sales by the Diamond
Trading Company (DTC), the marketing arm of De Beers, were 7% higher at $5.52
billion. Diamond stocks were reduced further by nearly $700 million during the
year and, for the second year running, operating cash flow of $1.6 billion was
generated. This enabled the group to reduce net interest-bearing debt from $1.72
billion to $906 million and to reduce net gearing to 15% (2002: 28%).
Overall, 2003 was a good year for the diamond industry, with further encouraging
growth in retail sales of diamond jewellery, up 6% in dollar terms. There was
particularly strong growth in sales in the second six months as the world
economy and consumer confidence rebounded. The USA, which accounts for over 50%
of world diamond jewellery sales, was particularly strong, as were India, China
and the UK. Encouragingly, Japan also recorded growth for the first time in
several years.
The combined total production of De Beers and its partners, Debswana and Namdeb,
totalled 43.9 million carats (2002: 40.2 million carats). The Combined Treatment
Plant in Kimberley, South Africa, was fully commissioned during the year.
De Beers had a strong first sight in 2004 at which it raised its rough diamond
prices by a further 3% and there is optimism that 2004 will be another good year
for the diamond industry. Macro-economic indicators are positive for the global
economy and there is growing evidence that the transformation of the diamond
industry, stimulated by De Beers' Supplier of Choice strategy, is producing the
desired results. Greater investment by the trade in marketing and branding is
driving demand for diamond jewellery and helping diamonds to gain a larger share
of the luxury goods sector.
(1) De Beers is an associate of the Group. The Group's share of De Beers' net
assets is disclosed. The figures for share of Group net operating assets shown
for other businesses relate to the Group's subsidiaries only.
Platinum
$ million 2003 2002
Total operating profit 433 802
Total operating profit before exceptionals 447 802
Headline earnings 205 351
Net operating assets 6,119 3,580
Capital expenditure 1,004 586
Share of Group headline earnings (%) 12 20
Share of Group net operating assets (%) 21 17
Anglo Platinum's contribution to headline earnings dipped sharply to 12% from
2002's 20%, while operating profit was 46% lower at $433 million. The adverse
impact of the firmer rand was only partly compensated by improved average dollar
prices for platinum group metals (PGMs) and higher sales.
The average realised price of PGMs and nickel in dollars was slightly higher in
2003. Platinum and nickel moved upward, while palladium and rhodium declined.
Platinum, at $696 per ounce, gained $152, with nickel moving upward from $3.03
to $4.07 per pound. Platinum's sister metals, palladium and rhodium, were both
down, at $198 per ounce (2002: $329) and $527 per ounce (2002: $831),
respectively.
During 2003, the Polokwane smelter was successfully commissioned, as were the
new slag-cleaning furnace and the Anglo Platinum Converting Process plant near
Rustenburg. Total platinum received at the smelters, including platinum
purchased from joint venture partners, increased by 8%, while refined production
rose by 2.5% to 2.3 million ounces.
The robustness of the rand continues to have a major impact on operating
margins, cash generation and the future funding of new projects. In consequence,
the expansion plan to raise platinum output from around 2 million ounces a year
to 3.5 million by the end of 2006 has been slowed down, with a new target of 2.9
million ounces. Notwithstanding this, the company's long-term strategy to grow
markets for PGMs, to expand production to meet that growing demand, and to
optimise value in existing operations remains in place. In light of its funding
requirements, on 16 February 2004 Anglo Platinum announced a R4 billion ($570
million) convertible preference share offer. Anglo American will be subscribing
for its pro rata share of the issue and continues to believe in the fundamental
long-term attraction of the platinum business.
In 2004, Anglo Platinum plans to raise platinum output to 2.45 million ounces.
The platinum price is expected to remain firm, supported by a continuing supply
deficit. The palladium price, despite firming demand, is largely dependent on
Russian supply patterns.
Gold
$ million 2003 2002
Total operating profit 326 463
Total operating profit before exceptional items 369 463
Headline earnings 167 205
Net operating assets 3,302 2,511
Capital expenditure 339 246
Share of Group headline earnings (%) 10 12
Share of Group net operating assets (%) 11 12
In 2003, a combination of stronger currencies in most of AngloGold's operating
regions, as well as inflation and lower ore grade had a significant negative
impact on AngloGold's costs, margins and earnings. This was partly offset by a
20% increase in the dollar gold price. Headline earnings fell by 19% to $167
million, while operating profit was 30% lower at $326 million. Gold production
declined by 5% to 5.6 million ounces following the sale of Jerritt Canyon in the
United States and lower ore grades at Morila in Mali. Total cash costs increased
from $161 to $229 per ounce.
AngloGold has a number of major capital projects in South Africa, which will
yield some 12 million ounces of gold production over their lives, while future
capital projects could add a further 7.5 million ounces. Potential growth
projects elsewhere include the Cuiaba expansion in Brazil and the Sunrise Dam
underground project and Boddington mine in Australia, which together could add a
further 7 million ounces of gold production. The completion of the
AngloGold-Ashanti merger would pave the way for the exploitation of Obuasi Deeps
in Ghana, extending Obuasi's life by some 20 years.
Production in 2004 is expected to decrease to some 5.4 million ounces, following
the sale of Jerritt Canyon, the closure of Union Reefs in Australia and lower
grades at Morila in Mali. However, following the expected completion of the
Ashanti deal during April, AngloGold is anticipating that production will
increase to some 6.6 million ounces. Assuming an exchange rate of R7.00 to the
dollar, AngloGold is expecting total unit cash costs to rise to $238 per ounce
and capital expenditure to increase to $589 million.
Many of the economic factors which are negative for the US currency have been,
conversely, incentives for investors to buy gold. It is expected that these
factors will remain in play in the year ahead, and there is good reason to
expect gold price strength to be maintained.
Coal
$ million 2003 2002
Total operating profit 333 427
South Africa 133 247
Australia 130 130
South America 70 50
Headline earnings 232 266
Net operating assets 2,152 1,658
Capital expenditure 207 142
Share of Group headline earnings (%) 14 15
Share of Group net operating assets (%) 7 8
Anglo Coal's operating profit was 22% down at $333 million, mainly as a result
of the appreciation of the South African rand and Australian dollar, while
headline earnings declined by 13% to $232 million. Production increased by 8% to
87 million tonnes.
Operating profit for South African-sourced coal fell by 46% to $133 million. The
effects of the rand's 28% appreciation(1) were partially offset by production
and sales increases, as well as by rigorous cost control. Major expansionary
capital projects, including the Kriel South project and the Greenside and
Kleinkopje expansions, are progressing to plan.
The Australian operations maintained operating profit at $130 million.
Attributable saleable coal production rose by 4% to 26.1 million tonnes, while
attributable sales were 6% lower at 26.4 million tonnes. The longwall mines at
Dartbrook and Moranbah had a good first six months with record production but
technical problems slowed production in the second half of the year. Drayton
production was steady, while both Moura and German Creek exceeded previous
performances. Theodore commenced production in September. Grasstree remains on
schedule for start-up of production during 2006. Full production at Kayuga
should be reached in 2004. A significant fall of ground in January 2004 at
Moranbah North will reduce production by some 10% compared with 2003. The effect
on earnings will be felt in the first half of 2004.
Operating profit at the South American operations rose by 40% to $70 million. In
Colombia, synergies achieved as a result of merging Cerrejon Zona Norte and
Carbones del Cerrejon exceeded expectations. The operation is now being expanded
from 22 million to reach 28 million tonnes per annum by 2007. Carbones del
Guasare in Venezuela was hit by the national strike at the beginning of 2003 and
subsequently by problems in the administration of the exchange controls imposed
at that time.
In 2004 average coal prices are expected to be significantly better than those
in 2003, while the upward trend looks set to continue for some time yet in
respect of export coal prices.
(1) increase in average exchange rate year on year
Base Metals
$ million 2003 2002
Total operating profit before exceptional items 286 133
Copper 269 110
Nickel, Niobium, Mineral Sands 106 94
Zinc (62) (51)
Other (27) (20)
Exceptional items (208) (51)
Total operating profit after exceptional items 78 82
Headline earnings 206 69
Net operating assets 4,087 3,617
Capital expenditure 352 346
Share of Group headline earnings (%) 12 4
Share of Group net operating assets (%) 14 17
Headline earnings grew strongly to $206 million from $69 million in 2002.
Operating profit before exceptionals increased from $133 million to $286
million.
The average copper price increased from 70.6 US cents/lb to 80.7 US cents/lb,
nickel moved from 307 US cents/lb to 437 cents/lb, while zinc prices remained
roughly flat at 37.6 US cents/lb (2002: 35.3 US cents/lb). Commodity price rises
were offset by US dollar weakness against the local currencies of many
operations.
Attributable copper production rose from 497,700 tonnes to 708,800 tonnes, with
Minera Sur Andes (formerly Disputada) contributing 278,300 tonnes. Collahuasi's
$654 million Rosario Project is on budget and on schedule to enter production in
mid-2004.
Attributable nickel output totalled 24,900 tonnes (2002: 25,600 tonnes).
Codemin's production rose 7%, while Loma de Niquel attained design capacity,
with output rising to 17,200 tonnes. The $67 million Codemin II project to treat
Barro Alto ore is scheduled to enter production in early 2005. At Catalao,
production and sales were maintained. Namakwa's output of zircon and rutile
products declined following a fire in October and profits were severely impacted
by the strong rand.
Attributable zinc output rose from 211,500 tonnes to 360,500 tonnes. Hudson
Bay's zinc output rose 9% to a record 117,900 tonnes. Skorpion produced 47,400
tonnes and is on target to achieve design throughput of 150,000 tonnes per annum
by the end of 2004. Lisheen achieved record output of 169,300 tonnes. At Hudson
Bay, the $276 million 777 project was substantially completed ahead of schedule
and within budget. Black Mountain's $110 million Deeps project is on budget and
scheduled to deliver first ore in late 2004.
Robust global growth is widely forecast for 2004. However, Chinese demand will
have to remain very firm, and OECD demand improve markedly, to sustain prices at
their present levels. Nevertheless, the outlook for base metals is more
encouraging than at any time in the past five years.
Industrial Minerals
$ million 2003 2002
Total operating profit 325 277
Tarmac 290 253
Copebras 35 24
Headline earnings 270 231
Net operating assets 4,304 3,848
Capital expenditure 316 363
Share of Group headline earnings (%) 16 13
Share of Group net operating assets (%) 14 18
Headline earnings were 17% higher at $270 million, with Tarmac contributing $256
million, a rise of 20%. Operating profit also improved by 17% to $325 million.
During 2003, Tarmac made ten acquisitions, thereby widening its asphalt and road
contracting interests in the UK, and bolstering its aggregates businesses in
France, Spain, Germany and the Czech Republic. In China, Tarmac is developing a
quarry approximately 140 kilometres from Shanghai.
In the UK, three new dry silo mortar plants were constructed, underpinning
Tarmac's leadership position in the mortar market. The core aggregates
businesses in the UK all improved their profitability in a disappointing market,
while the cement business at Buxton had a satisfactory year. The new plant
should commence operation in the second quarter of 2004. In continental Europe,
operating profit increased by 56%, reflecting continuing strong market
conditions in Spain and a full-year contribution from Mavike. France suffered
weak market conditions, while the businesses in eastern Europe moved forward
satisfactorily.
The Middle Eastern operations strongly increased operating profit owing to
buoyant market conditions, while the Far East business also had an improved
year.
Copebras' operating profit increased by 46% due to continued strong demand for
fertilizers and higher prices. The new plant at Goias is already operating at
full capacity.
In the UK the challenge will be to improve margins in a highly competitive
market while at least maintaining market share. Difficult trading conditions are
expected to continue in Germany. However, EU entry is expected to lead to an
improvement in demand in Poland and the Czech Republic. In Spain, demand should
remain firm, but France may see some further weakening. Brazilian fertilizer
demand is expected to remain strong.
Paper and Packaging
$ million 2003 2002
Total operating profit 656 649
Europe 471 434
South Africa 185 215
Headline earnings 368 376
Net operating assets 4,820 3,897
Capital expenditure 601 365
Share of Group headline earnings (%) 22 21
Share of Group net operating assets (%) 16 18
Headline earnings were $368 million, a 2% decrease on 2002, while operating
profit of $656 million was marginally higher. Operating profit at Mondi Europe
increased by 9% to $471 million in spite of weaker market conditions in both the
packaging and office communications sectors. In Slovakia, the $233 million
modernisation and expansion at the Ruzomberok pulp and paper mill proceeded
according to schedule. Annual output is expected to increase by 100,000 tonnes
of paper in 2004 and 105,000 tonnes of pulp by 2005.
Neusiedler Syktyvkar in Russia and the La Rochette corrugated packaging plants
in France and the UK have been fully integrated with the rest of the group. In
December, the Bauernfeind corrugated paper and packaging business was acquired,
thereby achieving a further step towards attaining critical mass in European
markets. Frantschach also acquired (subject to competition approval) the sack
business of Mexican industrial packaging group Copamex, providing the
opportunity to expand in North America.
In South Africa, in difficult external trading conditions, operating profits
reduced by only 14% to $185 million. The stronger rand resulted in increasing
pressure on domestic prices and lower export margins. However, improved
operating efficiencies and higher outputs, as well as initiatives to sustain
market share and grow volumes, compensated for much of the negative impact of
prices. The Richards Bay mill modernisation and expansion is progressing well,
with completion due in April 2005. The upgrade of Merebank's PM1 machine, with
the plan to produce 250,000 tonnes per year of uncoated woodfree papers from
late 2005, has been approved.
Mondi will continue to focus on operating efficiencies, capitalising on recent
expansions and extracting synergistic benefits from the integration of
acquisitions. General economic conditions are expected to remain weak, with the
dollar's current low levels and a buoyant euro creating difficult trading
conditions with margins flat at best.
Ferrous Metals & Industries
$ million 2003 2002
Ferrous Metals operating profit 156 150
Industries operating profit 52 114
Total operating profit 208 264
Kumba 33 -
Highveld Steel 11 38
Scaw Metals 70 51
Samancor 41 48
Boart Longyear 33 31
Tongaat-Hulett 10 96
Terra 14 (3)
Other (4) 3
Headline earnings 107 126
Net operating assets 4,629 1,696
Capital expenditure 194 85
Share of Group headline earnings (%) 6 7
Share of Group net operating assets (%) 16 8
Headline earnings were $107 million (2002: $126 million). Operating profit was
$56 million lower at $208 million, mainly as a result of sharply reduced
earnings from Tongaat-Hulett in a year when many operations were affected by the
strengthening South African rand.
In December, control was acquired of Kumba, the world's fifth largest iron ore
producer, with attractive growth prospects in South Africa and Australia. In
2003, Kumba contributed $33 million to operating profit.
In 2003, Scaw's operating profit rose by $19 million to $70 million, which
included a $21 million full-year contribution from Moly-Cop. Highveld's
operating profit was impacted by the appreciating rand and fell by $27 million
to $11 million and Samancor's contribution to operating profit reduced by $7
million to $41 million. Boart Longyear's operating profit was $2 million higher
at $33 million. Tongaat-Hulett's operating profit fell to $10 million from $96
million. This severe downturn arose from a combination of factors that included
a firming rand, lower world sugar and aluminium prices, and substantially higher
maize input costs. Terra turned an operating loss of $3 million into an
attributable operating profit of $14 million.
The outlook for 2004 is cautiously optimistic, with the possibility of higher
ferrous metal prices. Scaw and Highveld are likely to benefit from an improved
domestic market. Profitability should be restored to more normal levels at
Tongaat-Hulett through increasing aluminium volumes and more stable
maize-procurement costs. Attention is now being focused on unlocking value for
shareholders in Highveld Steel and Tongaat-Hulett.
Exploration
In 2003, total Group cash expenditure on exploration was $105 million including
$50 million spent by Base Metals, $11 million by Anglo Platinum and $36 million
by AngloGold. In addition, there was a non-cash exceptional charge of $20
million against the Boyongan project in the Philippines.
Base Metals' exploration efforts focused on areas most likely to produce
enhanced results, including significant brownfields exploration around
operations. The rationalisation programme continued in 2003 with closure of the
Zambian and DRC country offices and reduction of global staff.
Drilling adjacent to the Chilean copper operations intersected several potential
new resources. Copper was also targeted in Brazil, Mexico, Peru, Philippines and
Sweden. A nickel sulphide programme focused in the Arctic had early success,
with nickel-copper-platinum group elements drill intersections at West Raglan in
northern Quebec. Zinc exploration continued in India and Australia and around
the Black Mountain, Flin Flon, Lisheen and Skorpion operations.
Anglo Platinum's exploration effort in South Africa was directly linked to its
commitment to increase production. Internationally, Anglo Platinum's partners
have progressed several programmes in Canada and Russia.
AngloGold's exploration was focused around operations in Argentina, Australia,
Brazil, Tanzania, Mali, Namibia, South Africa and the USA. In addition,
exploration was pursued in highly prospective areas in Canada and Peru.
Cash flow
Group EBITDA was maintained at $4,785 million compared with $4,792 million in
2002. Net cash inflow from operations was $3,184 million compared with $3,618
million in 2002. Depreciation and amortisation, which increased by $362 million,
are analysed below.
Analysis of depreciation by business segment (subsidiaries)
US$ million 2003 2002
Platinum 206 107
Gold 180 182
Coal 124 104
Base Metals 220 124
Industrial Minerals 176 142
Paper and Packaging 285 228
Ferrous Metals & Industries 105 63
Other 14 12
1,310 962
Analysis of goodwill amortisation by business segment (subsidiaries)
US$ million 2003 2002
Platinum 17 16
Gold 32 31
Coal 5 4
Base Metals 1 1
Industrial Minerals 53 46
Paper and Packaging 18 15
Ferrous Metals & Industries 5 4
Other 22 22
153 139
Acquisition expenditure accounted for an outflow of $1,469 million. The
principal acquisitions included an increase in the Group's shareholding in Kumba
to 66.6%. The Group has also increased its interests in Anglo Platinum and
AngloGold.
Purchase of tangible fixed assets amounted to $3,025 million, an increase of
$886 million from 2002. The major components of expansion were in Platinum and
Paper and Packaging.
Analysis of capital expenditure by business segment (subsidiaries)
US$ million 2003 2002
Platinum 1,004 586
Gold 339 246
Coal 207 142
Base Metals 352 346
Industrial Minerals 316 363
Paper and Packaging 601 365
Ferrous Metals & Industries 195 85
Other 11 6
3,025 2,139
Balance sheet
Total shareholders' funds were $20,394 million compared with $16,261 million as
at 31 December 2002. The increase was primarily due to retained earnings and the
appreciation of the South African rand.
Net debt was $8,633 million, an increase of $3,055 million from 2002. This
increase was principally due to debt incurred to fund acquisitions during the
period. Net debt at 31 December 2003 comprised $10,759 million of debt, offset
by $2,126 million of cash and current asset investments. Net debt to total
capital as at 31 December 2003 was 26.6%, compared with 23.1% in 2002.
Exchange rates against the US dollar
Average 2003 2002
South African rand 7.55 10.48
Pound sterling 0.61 0.67
Euro 0.88 1.06
Australian dollar 1.53 1.84
Year end
South African rand 6.67 8.58
Pound sterling 0.56 0.62
Euro 0.79 0.95
Australian dollar 1.33 1.79
Commodity prices
Average market prices for the period
2003 2002
Gold - US$/oz 363 310
Platinum - US$/oz 692 541
Palladium - US$/oz 201 336
Rhodium - US$/oz 530 838
Copper - US cents/lb 81 71
Nickel - US cents/lb 437 307
Zinc - US cents/lb 38 35
Lead - US cents/lb 23 21
European eucalyptus pulp price (CIF) - US$/tonne 500 452
Consolidated profit and loss account
for the year ended 31 December 2003
Before Exceptional Before Exceptional
exceptional items exceptional items
items (note 5) items (note 5)
US$ million Note 2003 2003 2003 2002 2002 2002
Group turnover 2 24,909 - 24,909 20,497 - 20,497
including share of
joint ventures and
associates
Less: Share of joint 2 (1,060) - (1,060) (1,066) - (1,066)
ventures' turnover
Share of associates' 2 (5,212) - (5,212) (4,286) - (4,286)
turnover
Group turnover - 2 18,637 - 18,637 15,145 - 15,145
subsidiaries
Operating costs (16,740) (286) (17,026) (12,757) (47) (12,804)
Group operating profit 2 1,897 (286) 1,611 2,388 (47) 2,341
- subsidiaries
Share of operating 2 247 - 247 219 (34) 185
profit of joint
ventures
Share of operating 2 748 - 748 725 - 725
profit of associates
Total operating 2 2,892 (286) 2,606 3,332 (81) 3,251
profit
Profit on disposal of 5 - 386 386 - 98 98
fixed assets
Loss on termination of 5 - - - - (34) (34)
operations
Profit on ordinary 3 2,892 100 2,992 3,332 (17) 3,315
activities before
interest
Investment income 308 - 308 304 - 304
Interest payable (614) (13) (627) (483) - (483)
Profit on ordinary 2,586 87 2,673 3,153 (17) 3,136
activities before
taxation
Tax on profit on 6 (749) 13 (736) (1,042) (3) (1,045)
ordinary activities
Profit on ordinary 1,837 100 1,937 2,111 (20) 2,091
activities after
taxation
Equity minority 3 (339) (6) (345) (528) - (528)
interests
Profit for the 3 1,498 94 1,592 1,583 (20) 1,563
financial year
Equity dividends to (766) - (766) (720) - (720)
shareholders
Retained profit for the 732 94 826 863 (20) 843
financial year
Headline earnings for 7 1,694 1,759
the financial year
Basic earnings per
share (US$):
Profit for the 8 1.13 1.11
financial year
Headline earnings for 8 1.20 1.25
the financial year
Diluted earnings per
share (US$):
Profit for the 8 1.10 1.10
financial year
Headline earnings for 8 1.17 1.23
the financial year
Dividend per share (US 54.0 51.0
cents):
Basic number of shares 8 1,415 1,411
outstanding(1)
(million)
Diluted number of 8 1,478 1,426
shares outstanding(1)
(million)
(1) Basic and diluted number of shares outstanding represent the weighted
average for the year.
The impact of acquired and discontinued operations on the results for the year
is not material.
Consolidated balance sheet
as at 31 December 2003
US$ million 2003 2002
Fixed assets
Intangible assets 2,267 2,310
Tangible assets 24,379 16,531
Investments in joint ventures: 1,630 1,544
Share of gross assets 2,483 2,763
Share of gross liabilities (853) (1,219)
Investments in associates 4,804 4,119
Other investments 1,394 1,713
34,474 26,217
Current assets
Stocks 2,744 1,814
Debtors 4,383 3,337
Current asset investments 1,032 1,143
Cash at bank and in hand 1,094 1,070
9,253 7,364
Liabilities due within one year:
Short term borrowings (4,094) (1,918)
Other current liabilities (5,224) (4,329)
Net current (liabilities)/assets (65) 1,117
Total assets less current liabilities 34,409 27,334
Liabilities due after one year:
Long term borrowings (6,665) (5,873)
Convertible debt (1,088) (1,084)
Other long term liabilities (5,577) (4,789)
Provisions for liabilities and charges (3,954) (2,896)
Equity minority interests (3,396) (2,304)
Net assets 20,394 16,261
Capital and reserves
Called-up share capital 738 735
Share premium account 1,284 1,216
Merger reserve 460 636
Other reserves 716 716
Profit and loss account 17,196 12,958
Total shareholders' funds (equity) 20,394 16,261
The financial statements were approved by the board of directors on 24 February
2004.
Reconciliation from EBITDA to net cash inflow from operating activities
US$ million 2003 2002
EBITDA 4,785 4,792
Less:
Share of operating profit of joint ventures (247) (219)
Share of operating profit of associates (748) (725)
Amortisation of goodwill in joint ventures and (50) (50)
associates
Underlying depreciation and amortisation in joint (380) (309)
ventures and associates
Increase in stocks (302) (117)
(Increase)/decrease in debtors (246) 67
Increase in creditors 348 48
Increase in provisions 38 115
Other items (14) 16
Net cash inflow from operating activities 3,184 3,618
Consolidated cash flow statement
for the year ended 31 December 2003
US$ million Note 2003 2002
Net cash inflow from operating activities 10 3,184 3,618
Dividends from joint ventures and associates 426 258
Returns on investments and servicing of finance
Interest received and other financial income 201 309
Interest paid (452) (281)
Dividends received from other fixed asset 42 49
investments
Dividends paid to minority shareholders (349) (375)
Net cash outflow from returns on investments and (558) (298)
servicing of finance
Taxation
UK corporation tax (6) (10)
Overseas tax (701) (712)
Taxes paid (707) (722)
Capital expenditure and financial investment
Payments for tangible fixed assets (3,025) (2,139)
Proceeds from the sale of tangible fixed assets 117 313
Exit funding for Konkola Copper Mines (KCM) - (182)
Payments for other investments(1) (46) (351)
Proceeds from the sale of other investments(1) 617 217
Net cash outflow for capital expenditure and (2,337) (2,142)
financial investment
Acquisitions and disposals
Acquisition of subsidiaries(2)(3) (1,469) (2,911)
Disposal of subsidiaries 3 24
Investment in joint ventures (1) (34)
Sale of interests in joint ventures - 122
Investment in proportionally consolidated joint - (13)
arrangements
Investment in associates(3) (78) (613)
Sale of interests in associates 260 24
Net cash outflow from acquisitions and disposals (1,285) (3,401)
Equity dividends paid to Anglo American (741) (732)
shareholders
Cash outflow before management of liquid resources (2,018) (3,419)
and financing
Management of liquid resources 182 1,021
Financing 10 1,785 2,458
(Decrease)/increase in cash in the year 11 (51) 60
(1) Disposal and acquisition of other investments included in fixed assets.
(2) Net of cash acquired within subsidiaries of $214 million (2002: $157
million).
(3) All amounts paid in 2003 in respect of the acquisition of Kumba are included
within acquisition of subsidiaries.
Consolidated statement of total recognised gains and losses
for the year ended 31 December 2003
US$ million Note 2003 2002
Profit for the financial year 3 1,592 1,563
Joint ventures 190 83
Associates 479 384
Unrealised profit on deemed disposal 13 39
Less: Related overseas current tax charge - (22)
Currency translation differences on foreign currency 3,282 2,531
net investments
Less: Related tax charge (59) -
Total recognised gains for the financial year 4,828 4,111
Combined statement of movement in shareholders' funds and movement of reserves
for the year ended 31 December 2003
US$ million Issued Share Merger Other Profit Total
share premium reserves reserves and loss
capital account
Balance at 1 January 735 1,216 636 716 12,958 16,261
2003
Profit for the financial - - - - 1,592 1,592
period
Dividends paid and - - - - (766) (766)
proposed
Shares issued 3 68 - - - 71
Realisation of merger - - (176) - 176 -
reserve
Unrealised profit on - - - - 13 13
deemed disposal
Currency translation - - - - 3,282 3,282
differences
Less: related tax - - - - (59) (59)
charge
Balance at 31 December 738 1,284 460 716 17,196 20,394
2003
Notes to financial information
1. Basis of preparation
The financial information has been prepared according to the historical cost
convention, and in accordance with accounting standards applicable in the United
Kingdom. The accounting policies applied in preparing the financial information
are consistent with those adopted and disclosed in the Group's financial
statements for the year ended 31 December 2002.
2. Segmental information
Turnover Operating profit(1) Net operating assets(2)
_____________ _________________________________ ______________
Before Exceptional
exceptional items
items (note 5)
US$ million 2003 2002 2003 2003 2003 2002 2003 2002
By business
segment
Group
subsidiaries
Platinum 2,232 1,964 442 (14) 428 784 6,119 3,580
Gold 1,718 1,450 269 (43) 226 351 3,302 2,511
Coal 1,556 1,463 260 - 260 379 2,152 1,658
Base Metals 1,720 907 172 (208) (36) 30 4,087 3,617
Industrial 3,196 2,811 308 - 308 264 4,304 3,848
Minerals
Paper and 5,352 4,529 638 - 638 624 4,820 3,897
Packaging
Ferrous 1,198 780 86 - 86 83 3,030 461
Metals
Industries 1,665 1,241 44 - 44 121 1,599 1,235
Exploration - - (105) (20) (125) (93) - -
Corporate - - (217) (1) (218) (202) 296 315
Activities
18,637 15,145 1,897 (286) 1,611 2,341 29,709 21,122
Joint
ventures
Gold 312 312 99 - 99 108
Base Metals 346 413 114 - 114 41
Industrial 100 76 14 - 14 9
Minerals
Paper and 274 252 18 - 18 25
Packaging
Ferrous 28 13 2 - 2 2
Metals
1,060 1,066 247 - 247 185
Associates
Platinum 46 40 5 - 5 18
Gold 11 7 1 - 1 4
Diamonds 2,967 2,746 562 - 562 541
Coal 295 247 73 - 73 48
Base Metals 60 58 - - - 11
Industrial 22 25 3 - 3 4
Minerals
Paper and 2 24 - - - -
Packaging
Ferrous 813 457 68 - 68 65
Metals
Industries 663 516 8 - 8 (7)
Corporate 333 166 28 - 28 41
Activities
5,212 4,286 748 - 748 725
24,909 20,497 2,892 (286) 2,606 3,251
(1) Comparative figures for operating profit for 2002 are stated after deducting
the following exceptional items:
US$ million
Operating profit before 3,332
exceptional items
Less: Group subsidiaries'
exceptional items:
Base Metals (17)
Corporate Activities (30)
Less: Share of joint ventures (34)
exceptional items - Base Metals
Operating profit after 3,251
exceptional items
Further details of these exceptional items are given in note 5.
(2) Net operating assets consist of tangible assets, intangible assets, stocks
and operating debtors less non-interest bearing current liabilities. See note 12
for the reconciliation of net operating assets to net assets.
2. Segmental information (continued)
Turnover Operating profit Net operating assets(1)
_____________ _________________________________ ______________
Before Exceptional
exceptional items
items (note 5)
US$ million 2003 2002 2003 2003 2003 2002 2003 2002
By geographical segment
(by origin)
Group
subsidiaries
South Africa 7,308 5,863 886 (49) 837 1,587 14,148 7,712
Rest of 44 67 (4) - (4) 21 873 555
Africa
Europe 7,721 6,545 592 - 592 509 8,086 7,001
North 708 634 (71) (208) (279) (41) 868 934
America
South 1,675 908 361 (1) 360 151 3,168 3,196
America
Australia and 1,181 1,128 133 (28) 105 114 2,566 1,724
Asia
Joint
ventures
South Africa 17 12 9 - 9 5
Rest of 312 330 98 - 98 106
Africa
Europe 372 398 31 - 31 (50)
North 28 13 2 - 2 1
America
South 323 313 105 - 105 123
America
Australia and 8 - 2 - 2 -
Asia
Associates
South Africa 1,302 1,068 135 - 135 198
Rest of 2,157 1,582 398 - 398 312
Africa
Europe 640 733 116 - 116 124
North 504 527 (4) - (4) 21
America
South 280 238 61 - 61 46
America
Australia and 329 138 42 - 42 24
Asia
24,909 20,497 2,892 (286) 2,606 3,251 29,709 21,122
By geographical segment (by
destination)
Group
subsidiaries
South Africa 3,503 2,566
Rest of 295 302
Africa
Europe 9,726 8,295
North 1,607 1,144
America
South 859 436
America
Australia and 2,647 2,402
Asia
Joint
ventures
South Africa 7 3
Rest of 11 35
Africa
Europe 787 803
North 91 99
America
South 45 19
America
Australia and 119 107
Asia
Associates
South Africa 399 309
Rest of 34 40
Africa
Europe 1,287 947
North 2,157 1,901
America
South 41 23
America
Australia and 1,294 1,066
Asia
24,909 20,497
(1) Net operating assets consist of tangible and intangible assets, stocks and
operating debtors less non-interest bearing current liabilities. See note 12 for
the reconciliation of net operating assets to net assets.
3. Profit for the financial year
The table below analyses the contribution of each business segment to the
Group's profit for the financial year and its headline earnings.
2003
US$ million Opera Opera Non- Good Pro- Inter- Divid Other Inter- Net Tax Equity Total
ting ting opera will fit est End finan- est invest minority
profit except ting amorti before income income cial exp- ment interests
ional excep sation inter income/ ense income/
items tional est (exp (expense)
items ense)
By business
segment
Platinum 433 14 - 17 464 14 - 21 (47) (12) (152) (95) 205
Gold 326 43 - 41 410 42 - 51 (44) 49 (122) (170) 167
Diamonds 562 - - 32 594 10 - - (59) (49) (153) (6) 386
Coal 333 - - 8 341 13 2 (31) (7) (23) (86) - 232
Base Metals 78 208 - 1 287 6 - (12) (38) (44) (32) (5) 206
Industrial 325 - - 53 378 7 1 (4) (15) (11) (81) (16) 270
Minerals
Paper and 656 - - 18 674 27 5 31 (126) (63) (172) (71) 368
Packaging
Ferrous 156 - - 9 165 14 2 3 (50) (31) (41) (4) 89
Metals
Industries 52 - - 4 56 44 9 (11) (104) (62) 21 3 18
Exploration (125) 20 - - (105) - - 1 - 1 - 21 (83)
Corporate (190) 1 - 20 (169) 23 17 23 (124) (61) 69 (3) (164)
Activities
Headline 2,606 286 - 203 3,095 200 36 72 (614) (306) (749) (346) 1,694
earnings for
the financial
year
Headline - (286) 386 (203) (103) - - - (13) (13) 13 1 (102)
earnings
adjustments
Profit for 2,606 - 386 - 2,992 200 36 72 (627) (319) (736) (345) 1,592
the financial
year
2002
US$ million Opera Opera Non- Good Pro Inter Divid Other Interest Net Tax Equity Total
ting ting oper will fit est End finan Ex invest min
profit except ating amorti before income income cial pense ment ority
ional except sation inter income/ income/ inter
items ional est (expense) (ex ests
items pense)
By business
segment
Platinum 802 - - 17 819 17 - - (5) 12 (265)(215) 351
Gold 463 - - 39 502 39 - 75 (47) 67 (157)(207) 205
Diamonds 541 - - 29 570 16 - - (95) (79) (159) (8) 324
Coal 427 - - 7 434 8 1 (65) (5) (61) (107) - 266
Base Metals 82 51 - 1 134 4 - (2) (43) (41) (22) (2) 69
Industrial 277 - - 46 323 6 - 7 (3) 10 (86) (16) 231
Minerals
Paper and 649 - - 15 664 12 9 18 (84) (45) (173) (70) 376
Packaging
Ferrous 150 - - 5 155 16 3 2 (23) (2) (53) (12) 88
Metals
Industries 114 - - 3 117 32 9 (17) (66) (42) (10) (27) 38
Exploration (93) - - - (93) - - (1) - (1) - 17 (77)
Corporate (161) 30 - 27 (104) 95 28 (8) (112) 3 (10) (1) (112)
Activities
Headline 3,251 81 - 189 3,521 245 50 9 (483) (179)(1,042)(541) 1,759
earnings for
the financial
year
Headline - (81) 64 (189) (206) - - - - - (3) 13 (196)
earnings
adjustments
Profit for 3,251 - 64 - 3,315 245 50 9 (483) (179)(1,045)(528) 1,563
the financial
year
4. Exploration expenditure
US$ million 2003 2002
By business segment
Platinum 11 13
Gold 36 27
Base Metals 50 47
Impairment of Boyongan (see note 5) 20 -
Other 8 6
125 93
5. Exceptional items
US$ million 2003 2002
Operating exceptional items
Impairment of Hudson Bay Mining and Smelting Co Ltd (208) -
Impairment of Boyongan (20) -
Impairment of Savuka (34) -
Disposal of Salobo Metais SA - reversal of previous - 46
impairment
Write-down of investments - (30)
Other impairments (24) (97)
Total operating exceptional items (286) (81)
Taxation 22 -
Minority interests 23 -
(241) (81)
Exceptional finance charge
Share of associate's charge on early redemption of debt (13) -
Total exceptional finance charge (13) -
Non-operating exceptional items
Disposal of interest in Li & Fung 163 -
Further disposal of interests in FirstRand Limited 117 7
Disposal of interest in Avgold 51 -
Disposal of interest in East Africa Gold Mines 25 -
Disposal of interest in Randgold Resources 17 -
Disposal of interest in JCI (20) -
Disposal of Anglovaal Mining Limited (13) -
Disposal of Tati Nickel Mining Company (Pty) Limited - 53
Disposal of Salobo Metais SA - 5
Disposal of other fixed assets and investments 21 14
Share of associates' exceptional items 25 19
Profit on disposal of fixed assets 386 98
KCM exit costs - (34)
Total non-operating exceptional items 386 64
Taxation (9) (3)
Minority interests (29) -
348 61
Total exceptional items (net of tax and minority interest) 94 (20)
Operating exceptional items
A review of the carrying value of the Hudson Bay assets has resulted in a $208
million exceptional charge to operating profit, attributable to Base Metals. The
review was based on estimated value in use.
During the year the Exploration division has made an exceptional charge of $20
million against the Boyongan project in the Philippines.
AngloGold impaired the mining assets of Savuka in South Africa with a charge of
$34 million.
Exceptional finance charge
The exceptional finance charge of $13 million relates to the Group's share of De
Beers' costs on the early redemption of debt, being facility fees not yet
amortised.
Non-operating exceptional items
During the year, Ferrous Metals & Industries disposed of their investment in Li
& Fung for net proceeds of $269 million, leading to an exceptional gain of $163
million. The Group made further sales of its interest in FirstRand Limited
during the year for a total consideration of $176 million, leading to an
exceptional gain of $117 million attributable to Corporate Activities.
The Group also disposed of its remaining stake in Avgold in November 2003
resulting in an exceptional gain of $51 million attributable to Corporate
Activities.
6. Tax on profit on ordinary activities
a) Analysis of charge for the year
US$ million 2003 2003 2002 2002
Excluding Including Excluding Including
exceptional exceptional exceptional exceptional
items items items items
United Kingdom corporation tax at 26 26 (4) (4)
30%
South Africa corporation tax at 74 74 435 435
30%
Other overseas taxation 240 240 187 187
Share of taxation charge of joint 15 15 29 29
ventures
Share of taxation charge of 200 200 216 216
associates
Current tax on exceptional items - 9 - 3
Total current tax 555 564 863 866
Deferred taxation - subsidiaries 193 193 160 160
Deferred taxation - joint 17 17 14 14
ventures
Deferred taxation - associates (16) (16) 5 5
Deferred tax on exceptional - (22) - -
items
Total deferred tax 194 172 179 179
Total tax charge 749 736 1,042 1,045
b) Factors affecting current tax charge for the year
The current tax charge assessed for the year is lower than the standard rate of
corporation tax in the United Kingdom and South Africa (30%). The differences
are explained below:
US$ million 2003 2002
Including Including
exceptional exceptional
items items
Profit on ordinary activities before 2,673 3,136
tax
Tax on profit on ordinary activities at 802 941
30% (2002: 30%)
Tax effects of:
Expenses not deductible for tax
purposes:
Operating exceptional items 86 24
Goodwill amortisation 61 41
Exploration costs 32 28
Other permanent items - 10
Non-taxable income:
Dividends receivable (11) (15)
Non-operating exceptional items (103) (19)
Tax allowances for capital expenditure (207) (175)
in excess of depreciation
Movement in tax losses 15 37
South African secondary tax on 45 53
companies
Effect of differences between local and (66) -(1)
UK tax rates
Other differences (90) (59)
Current tax charge for the year 564 866
(1) The prior year comparative is included within other differences.
c) Factors that may affect future tax charges
The Group anticipates that its effective rate will move above the statutory rate
of 30% as the Group operates in certain countries where tax rates are higher
than the UK rate, including South Africa (effective rate of 37.8% assuming
distribution of profits).
In addition to the amounts provided in deferred tax, unrecognised assets exist
in respect of taxable losses. No asset has been recognised in respect of these
losses as it is not regarded as more likely than not that there will be suitable
taxable profits against which to offset these losses. Any utilisation of these
losses in the future may lead to a reduction in effective tax rates.
No deferred tax has been provided in respect of accumulated reserves of overseas
subsidiaries, associates or joint ventures as no dividends have been declared.
Overseas earnings have not been remitted to the UK in such a way as to incur a
UK tax charge.
7. Headline earnings
2003 2002
Basic Basic
earnings earnings
per per
share share
US$ million (unless otherwise stated) Earnings US$ Earnings US$
Profit for the financial year 1,592 1.13 1,563 1.11
Operating exceptional items 286 0.20 81 0.06
Exceptional finance charge 13 0.01 - -
Non-operating exceptional items (386) (0.27) (64) (0.05)
Amortisation of goodwill:
Subsidiaries 153 0.11 139 0.10
Joint ventures and associates 50 0.04 50 0.04
Related tax (13) (0.01) 3 -
Related minority interest (1) (0.01) (13) (0.01)
Headline earnings for the financial 1,694 1.20 1,759 1.25
year
Headline earnings per share is calculated in accordance with the definition in
the Institute of Investment Management and Research ("IIMR") Statement of
Investment Practice No 1, 'The Definition of IIMR Headline Earnings', which the
directors believe to be a useful additional measure of the Group's performance.
8. Earnings per share
2003 2002
Basic number of ordinary shares outstanding 1,415 1,411
(million)(1)
Potentially dilutive ordinary shares (million) 63 15
Diluted number of ordinary shares outstanding 1,478 1,426
(million)(1)
Profit for the financial year:
Basic earnings per share (US$)(2) 1.13 1.11
Diluted earnings per share (US$)(3) 1.10 1.10
Headline earnings for the financial year(4):
Basic earnings per share (US$) 1.20 1.25
Diluted earnings per share (US$) 1.17 1.23
(1) Basic and diluted number of shares outstanding represent the weighted
average for the year.
(2) Basic earnings per share is calculated by dividing the profit for the year
attributable to ordinary shareholders by the weighted average number of ordinary
shares in issue during the year. The average number of shares in issue excludes
the shares held by the employee benefit trust.
(3) Diluted earnings per share is calculated by adjusting the weighted average
number of ordinary shares in issue on the assumption of conversion of all
dilutive potential ordinary shares.
(4) Basic and diluted earnings per share are also shown based on headline
earnings, which the directors believe to be a useful additional measure of the
Group's performance. Headline earnings per share is calculated in accordance
with the definition issued by the Institute of Investment Management and
Research (now Society of Investment Professionals), in Statement of Investment
Practice No. 1, 'The Definition of Headline Earnings'.
9. Capital expenditure
US$ million 2003 2002
Platinum 1,004 586
Gold 339 246
Coal 207 142
Base Metals 352 346
Industrial Minerals 316 363
Paper and Packaging 601 365
Ferrous Metals & Industries 195 85
Other 11 6
3,025 2,139
10. Consolidated cash flow statement analysis
a) Reconciliation of Group operating profit to net cash inflow from
operating activities
US$ million 2003 2002
Group operating profit - subsidiaries 1,611 2,341
Exceptional charges (all non cash items) 286 47
Group operating profit before exceptionals 1,897 2,388
Depreciation and amortisation charges 1,463 1,101
Increase in stocks (302) (117)
(Increase)/decrease in debtors (246) 67
Increase in creditors 348 48
Increase in provisions 38 115
Other items (14) 16
Net cash inflow from operating activities 3,184 3,618
b) Financing
US$ million 2003 2002
Increase/(decrease) in short term borrowings 875 (514)
Increase in long term borrowings 531 2,932
Net movement in minorities' shares and loans 3 (1)
Exercise of share options 71 41
Issue of shares in subsidiaries 305 -
Financing 1,785 2,458
c) Reconciliation of net cash flow to movement in net debt
US$ million 2003 2002
(Decrease)/increase in cash in the year (51) 60
Cash inflow from debt financing (1,406) (2,418)
Cash inflow from management of liquid resources (182) (1,021)
Change in net debt resulting from cash flows (1,639) (3,379)
Loans and current asset investments acquired with (746) (212)
subsidiaries
Loans and current asset investments disposed with 5 4
subsidiaries
Cessation of consolidation of KCM(1) - 148
Exchange adjustments (675) (121)
Movement in net debt (3,055) (3,560)
Net debt at start of year (5,578) (2,018)
Net debt at end of year (8,633) (5,578)
(1) KCM ceased to be consolidated by the Group during 2002.
11. Movement in net debt
Acquisitions Disposals
excluding excluding Overdrafts Other
cash and cash and Included Non-cash Exchange
US$ million 2002 Cash overdrafts overdrafts In debt movements movements 2003
flow
Cash at bank 1,040 (51) - - 30 - 75 1,094
and in hand
(1)
Debt due (5,873) (531) (537) 2 - 453 (179) (6,665)
after one
year
Debt due (1,888) (875) (209) 3 (30) (453) (642) (4,094)
within one
year
(7,761) (1,406) (746) 5 (30) - (821) (10,759)
Current asset 1,143 (182) - - - - 71 1,032
investments
Total (5,578) (1,639) (746) 5 - - (675) (8,633)
(1) Net of bank overdrafts in 2002.
12. Reconciliation of net operating assets to net assets
US$ million 2003 2002
Net operating assets 29,709 21,122
(see note 2)
Fixed asset 7,828 7,376
investments
Current asset 1,032 1,143
investments
Cash at bank and in 1,094 1,070
hand
Other non-operating assets and (4,700) (2,868)
liabilities
Long term liabilities (6,665) (5,873)
Provisions for liabilities and (3,954) (2,896)
charges
Equity minority (3,396) (2,304)
interests
Proposed dividend (554) (509)
Net assets 20,394 16,261
13. Status of financial information
The financial information set out herein does not constitute the Company's
statutory accounts for the year ended 31 December 2003, but is derived from
those accounts which were approved by the board of directors on 24 February
2004. Statutory accounts for the year ended 31 December 2002 have been delivered
to the Registrar of Companies, and those for 2003 will be delivered following
the Company's annual general meeting convened for 21 April 2004. The auditors
have reported on these accounts; their reports were unqualified and did not
contain statements under section 237(2) or (3) of the Companies Act 1985.
Production statistics
2003 2002
Anglo Platinum (troy
ounces)(1)(2)
Platinum 2,356,100 2,294,300
Palladium 1,213,700 1,136,500
Rhodium 237,400 215,900
Nickel (tonnes) 22,500 19,700
AngloGold (gold in troy
ounces)(2)
South Africa 3,281,000 3,412,000
North and South America 922,000 940,000
Australia and Asia 432,000 502,000
Rest of the world 981,000 1,085,000
5,616,000 5,939,000
Gold Fields (gold in troy
ounces)(2)
Gold 870,500 464,600
Anglo Coal (tonnes)
South Africa:
Eskom 31,301,000 28,649,000
Trade
- Thermal 18,600,200 15,681,000
- Metallurgical 1,835,500 3,889,000
51,736,700 48,219,000
Australia
- Thermal 17,025,400 16,341,000
- Metallurgical 9,100,000 8,679,000
26,125,400 25,020,000
South America
- Thermal 8,728,400 6,937,000
86,590,500 80,176,000
Anglo Base Metals
Copper
Collahuasi
100% basis (Anglo American
44%)
Ore mined tonnes 27,680,000 34,871,000
Ore processed Oxide tonnes 6,355,000 5,358,000
Sulphide tonnes 24,415,000 25,231,000
Ore grade processed Oxide %Cu 0.8% 0.9%
Sulphide %Cu 1.5% 1.6%
Production Copper concentrate dmt 861,600 1,019,400
Copper cathode tonnes 63,400 60,600
Copper in tonnes 331,300 372,900
concentrate
Total copper production tonnes 394,700 433,500
for Collahuasi
(1) Includes Anglo Platinum's share of Northam
Platinum Limited.
(2) See Anglo American Platinum Corporation Limited, Northam Limited, AngloGold
Limited and Gold Fields Limited
published results for further analysis of production information.
Production statistics (continued)
2003 2002
Minera Sur Andes(1)
- Los Bronces mine
Ore mined tonnes 20,901,000 3,291,000
Marginal ore mined tonnes 23,676,000 1,577,400
Las Tortolas Ore processed tonnes 19,514,000 2,523,300
concentrator
Ore grade processed %Cu 1.1% 1.1%
Average recovery % 87.1% 85.6%
Production Copper concentrate dmt 553,800 81,300
Copper cathode tonnes 27,700 3,600
Copper in tonnes 180,100 25,400
concentrate
Total tonnes 207,800 29,000
- El Soldado mine
Ore mined Open pit - ore tonnes 3,188,000 583,200
mined
Open pit - marginal tonnes 1,590,000 47,800
ore mined
Underground tonnes 3,267,000 389,000
(sulphide)
Total tonnes 8,045,000 1,020,000
Ore processed Oxide tonnes 531,000 91,200
Sulphide tonnes 6,581,000 931,700
Ore grade processed Oxide %Cu 1.7% 1.2%
Sulphide %Cu 1.1% 1.1%
Production Copper concentrate dmt 228,600 31,200
Copper cathode tonnes 8,000 1,000
Copper in tonnes 62,500 9,000
concentrate
Total tonnes 70,500 10,000
- Chagres Smelter
Copper concentrates tonnes 165,500 23,300
smelted
Production Copper blister/ tonnes 160,100 21,900
anodes
Acid tonnes 436,700 66,400
Total copper production tonnes 278,300 39,000
for
Minera Sur Andes group
Mantos Blancos
- Mantos Blancos mine
Ore mined Oxide tonnes 4,738,000 4,606,000
Sulphide tonnes 4,021,000 4,005,000
Marginal ore mined tonnes 8,819,000 5,672,000
Ore grade processed Oxide %Cu
(Soluble) 0.7% 0.8%
Sulphide %Cu
(Insoluble) 1.0% 1.2%
Marginal ored %CuS 0.4% 0.4%
Production Copper concentrate dmt 110,200 137,600
Copper cathode tonnes 51,600 51,000
Copper in tonnes 35,300 45,200
concentrate
Total tonnes 86,900 96,200
- Mantoverde mine
Ore processed Oxide tonnes 9,001,000 8,398,200
Marginal ore tonnes 6,048,000 4,573,000
Ore grade processed Oxide %Cu
(Soluble) 0.7% 0.7%
Marginal ore %Cu
(Soluble) 0.3% 0.3%
Production Copper cathode tonnes 60,200 57,300
Black Mountain and Hudson Bay tonnes 87,800 88,800
Other tonnes 21,900 25,600
Total attributable copper production tonnes 708,800 497,700
(1) Results for 2002 represent 49 days of operations - since date of acquisition.
Production statistics (continued)
2003 2002
Nickel, Niobium and
Mineral Sands
Nickel
Codemin
Ore mined tonnes 500,600 513,200
Ore processed tonnes 530,300 500,800
Ore grade processed % Ni 1.4% 1.4%
Production tonnes 6,400 6,000
Loma de Niquel
Ore mined tonnes 1,208,000 1,301,100
Ore processed tonnes 1,216,000 1,095,200
Ore grade processed % Ni 1.7% 1.7%
Production tonnes 17,200 15,500
Other tonnes 1,300 4,100
Total attributable nickel tonnes 24,900 25,600
production
Niobium
Catal(C)?o
Ore mined tonnes 559,100 591,600
Ore processed tonnes 529,700 568,400
Ore grade processed kg Nb/ 10.87 10.57
tonne
Production tonnes 3,300 3,300
Mineral Sands
Namakwa Sands
Ore mined tonnes 16,739,000 16,434,500
Production - Ilmenite tonnes 314,600 315,900
- Rutile tonnes 20,400 26,000
- Zircon tonnes 93,300 112,400
Smelter production - Slag tapped tonnes 165,800 162,700
- Iron tapped tonnes 105,900 103,000
Zinc and Lead
Black Mountain
Ore mined tonnes 1,501,000 1,588,700
Ore processed tonnes 1,449,000 1,554,000
Ore grade processed - Zinc % 2.6% 2.6%
- Lead % 3.3% 3.5%
- Copper % 0.5% 0.5%
Production - Zinc in tonnes 25,900 27,600
concentrates
- Lead in tonnes 39,600 45,300
concentrates
- Copper in tonnes 4,700 5,400
concentrates
Hudson Bay
Ore mined tonnes 2,206,000 2,989,300
Ore processed tonnes 2,207,000 3,004,500
Ore grade processed - Copper % 1.9% 1.7%
- Zinc % 5.0% 4.1%
Concentrate treated - Copper tonnes 273,000 294,100
- Zinc tonnes 228,500 211,100
Production (domestic) - Copper tonnes 39,400 42,900
- Zinc tonnes 93,100 102,100
Production (total) - Copper tonnes 83,100 83,400
- Zinc tonnes 117,900 108,100
- Gold ozs 57,500 59,300
- Silver ozs 1,032,800 1,234,200
Production statistics (continued)
2003 2002
Lisheen
100% basis (Anglo American
50% in 2002)
Ore mined tonnes 1,522,000 1,571,400
Ore processed tonnes 1,521,000 1,541,300
Ore grade processed - Zinc %Zn 12.3% 11.2%
- Lead %Pb 2.1% 2.1%
Production - Zinc in tonnes 169,300 151,500
concentrate
- Lead in tonnes 20,800 22,000
concentrate
Other zinc production tonnes 47,400 -
Total attributable zinc tonnes 360,500 211,500
production
Anglo Industrial Minerals
(tonnes)
Aggregates 67,158,100 63,928,400
Lime products 893,800 871,000
Concrete (m3) 7,874,600 6,955,700
Sodium tripolyphosphate 88,800 88,200
Phosphates 1,040,300 734,600
Anglo Paper and Packaging
(tonnes)
South Africa
Pulp 109,810 81,550
Graphic papers 507,270 518,200
Packaging papers 590,740 572,900
Corrugated board (000 m3) 297,780 300,050
Lumber (m3) 56,060 126,500
Wood chips (green metric 2,122,470 1,647,700
tonnes)
Mining timber 158,640 143,100
Europe
Pulp 181,860 181,800
Graphic papers 1,648,280 1,475,700
Packaging papers 1,790,600 1,506,800
Corrugated board (000 m2) 1,384,900 1,121,100
Industrial sacks (m units) 2,723 2,600
Consumer bags and pouches 544 470
(m units)
Anglo Ferrous Metals &
Industries (tonnes)
Kumba)(1)
Iron ore - Production -
- Lump 18,172,000 -
- Fine 11,421,000 -
Total iron ore 29,593,000 -
Coal
Power Station Coal 13,868,700 -
Coking Coal 2,161,700 -
Steam Coal 2,932,800 -
Total coal 18,963,200 -
Zinc metal 112,000 -
Heavy minerals
Crude Ilmenite 457,000 -
Ilmenite 609,000 -
(1) 100% of production has been reported for full year 2003. See Kumba Resources
Limited published results for further analysis of production information.
Production statistics (continued)
2003 2002
Scaw Metals
Rolled products 352,343 356,446
Cast products 114,716 114,701
Grinding media 388,886 224,483
Highveld Steel
Rolled products 578,035 701,087
Continuous cast blocks 877,405 951,921
Vanadium slag 69,814 68,100
Samancor
Chrome ore 1,127,360 1,055,588
Chrome alloys 407,680 310,900
Manganese ore (mtu m) 76 62
Manganese alloys 288,176 306,100
Zimbabwe Alloys
Chrome alloys 39,179 44,064
Tongaat-Hulett
Sugar 843,307 811,780
Aluminium 146,729 120,613
Starch & glucose 609,532 616,404
Hippo Valley
Sugar 223,595 284,109
Terra
Ammonia 677,000 729,400
Nitrogen solutions 1,862,400 1,923,100
Urea 264,500 300,800
Ammonium nitrate 452,800 442,400
The figures above include the entire output of consolidated entities and the
Group's share of joint ventures and associates where applicable, except for
Collahuasi in Base Metals which is quoted on a 100% basis.
Reconciliation of subsidiaries' and associates' profits to those included in the
consolidated financial statements
For the year to 31 December 2003
Note only key reported lines are reconciled
AngloGold Limited 2003
US$
million
IAS adjusted headline earnings (published) (1) 282
Exploration (excluding joint ventures) 36
318
Depreciation on assets revalued on acquisition (1)
Minority interest (150)
UK GAAP contribution to headline earnings 167
(1) before unrealised non-hedge derivatives and mark-to-market of debt
financial instruments, and related deferred tax.
Anglo American Platinum Corporation Limited
IAS headline earnings (published) 277
Secondary Tax on Companies adjustment 17
Movement on unrealised profit on Forward Exchange Contracts 6
Exploration 11
Prior year stock adjustment change in Anglo Platinum's 29
accounting policy
Weighted average exchange impact 5
Other 3
348
Minority interest (95)
Depreciation on assets revalued on acquisition (48)
UK GAAP contribution to headline earnings 205
DB Investments SA 2003
US$
million
Reconciliation of headline Total Ordinary Preference
earnings shares shares(3)
DBI headline earnings - IAS (100%) 676 - -
GAAP adjustments(1) 40 - -
DBI headline earnings - UK GAAP 716 599 117
(100%)
AA plc's 45% ordinary share 269 269 -
interest
Additional 3.65% ordinary share 22 22 -
interest(2)
AA plc's portion of the preference 95 - 95
shares(3)
AA plc headline earnings 386 291 95
(1) The GAAP adjustments include +$39 million relating to the mark-to-market of
interest rate hedging contracts referred to in Dbsa's 5 February 2004 press
release. Whereas in Dbsa's earnings, the full amount of $70 million is charged
against earnings in 2003, under UK GAAP only $31 million is charged against
earnings in 2003, being the portion that was realised in the year.
(2)As a result of the De Beers' partial interest in Debswana Diamond Company
(Proprietary) Limited (one of the shareholders in DBI), AA plc accounts for an
additional 3.65% of DBI's post-tax earnings attributable to ordinary shares.
(3) AA plc grosses up its preference share income to the operating profit level
and accounts for its preference share interest in operating profit, exceptional
items, investment income and net interest, tax and minorities, in the same way
as it accounts for its ordinary share interest in these balances. This treatment
is in accordance with FRS9, paragraph 33, which indicates that where preference
shares are an integral part of the investor's long-term interest, it is
appropriate to include the preference share interest with the ordinary share
interest in determining the investor's overall share of an associate's results.
The headline earnings attributable to AA plc's $70 million preference share
income are arrived at by adjusting for a proportion of exceptional items (+$2
million) and goodwill amortisation (+$23 million) in the same way as the
ordinary share interest is calculated.
Key financial data
US$ million (unless stated otherwise) 2003 2002 2001(1) 2000(1) 1999(1)
Group and share of turnover of joint 24,909 20,497 19,282 20,570 19,245
ventures and associates
Less: Joint ventures' turnover (1,060) (1,066) (1,109) (1,590) (1,720)
Associates' turnover (5,212) (4,286) (3,387) (4,156) (5,947)
Group turnover - subsidiaries 18,637 15,145 14,786 14,824 11,578
Group operating profit before exceptional 2,892 3,332 3,298 3,479 2,141
items
Operating exceptional items(2) (286) (81) (513) (433) -
Total operating profit(2) 2,606 3,251 2,785 3,046 2,141
Non-operating exceptional items(2) 386 64 2,148 490 410
Net interest (expense)/investment income (319) (179) 130 308 265
Profit on ordinary activities before 2,673 3,136 5,063 3,844 2,816
taxation
Taxation on profit on ordinary (749) (1,042) (1,247) (1,143) (538)
activities
Taxation on exceptional items 13 (3) (147) - 18
Equity minority interests (345) (528) (584) (818) (758)
Profit for the financial year 1,592 1,563 3,085 1,883 1,538
Headline earnings 1,694 1,759 1,681 1,927 1,296
Earnings per share ($)(3) 1.13 1.11 2.09 1.20 1.00
Headline earnings per share ($)(3) 1.20 1.25 1.14 1.23 0.84
Dividend per share (US cents) 54.0 51.0 49.0 47.5 37.5
Basic number of shares outstanding 1,415 1,411 1,474 1,567 1,540
(million)(3)
EBITDA(4) 4,785 4,792 4,647 4,688 3,113
EBITDA interest cover(5) 12.7 20.0 31.2 - -
Operating margin (before exceptional 11.6% 16.3% 17.1% 16.9% 11.1%
items)
Dividend cover (based on headline 2.2 2.5 2.3 2.6 2.2
earnings)
Balance Sheet
Fixed assets 26,646 18,841 12,870 14,315 11,110
Investments 7,828 7,376 5,523 7,936 8,373
Working capital 1,903 822 282 971 914
Provisions for liabilities and charges (3,954) (2,896) (2,194) (2,594) (2,604)
Net (debt)/funds (8,633) (5,578) (2,018) (3,590) 81
Equity minority interests (3,396) (2,304) (1,607) (2,212) (2,477)
Shareholders' funds (equity) 20,394 16,261 12,856 14,826 15,397
Total capital(6) 32,423 24,143 16,481 20,628 17,793
Net cash inflow from operating 3,184 3,618 3,539 2,959 1,850
activities
Dividends received from joint ventures and 426 258 258 258 209
associates
Return on capital employed(7) 10.7% 17.5% 19.0% 19.5% 13.2%
EBITDA/average total capital 16.9% 23.6% 25.0% 24.4% 18.1%
Net debt/(funds) to total capital 26.6% 23.1% 12.2% 17.4% (0.5%)
(1) 1999, 2000 and 2001 restated for the adoption of FRS 19.
(2) Operating profit for 2000 has been restated for the reclassification of the
loss of $167 million arising on the anticipated disposal of Terra Industries
Inc. The disposal did not proceed and the loss has therefore been reclassified
into operating exceptional items as an impairment.
(3) 2000 and 1999 restated to reflect the three-for-one bonus issue in May 2001.
(4) EBITDA is operating profit before exceptional items plus depreciation and
amortisation of subsidiaries and share of joint ventures and associates.
(5) EBITDA interest cover is EBITDA divided by net interest expense, excluding
other net financial income (2003: $72 million) and exceptional financing charges
(2003: $13 million). EBITDA interest cover for 2002 is annualised to account for
acquisitions during the year. The actual EBITDA interest cover for 2002 was 25.5
times. For 2000 and 1999, EBITDA interest cover is not applicable as the Group
was a net interest recipient after adjusting for other net financial income.
(6) Total capital is the sum of shareholders' funds, net debt and minority
interests.
(7) Return on capital employed is calculated as total operating profit before
impairments for the year divided by the average total capital less other
investments and adjusted for impairments.
Summary by business segment
Headline earnings Operating profit
/(loss) /(loss)
US$ million 2003 2002 2003 2002
Platinum 205 351 433 802
Platinum 205 351 447 802
Exceptional items - - (14) -
Gold 167 205 326 463
Gold 167 205 369 463
Exceptional items - - (43) -
Diamonds 386 324 562 541
Coal 232 266 333 427
South Africa 79 133 133 247
Australia 94 98 130 130
South America 59 35 70 50
Base Metals 206 69 78 82
Copper 216 80 269 110
Nickel, Niobium, Mineral Sands 76 54 106 94
Zinc (65) (66) (62) (51)
Other (21) 1 (27) (20)
Exceptional items - - (208) (51)
Industrial Minerals 270 231 325 277
Europe 256 214 290 253
Brazil 14 17 35 24
Paper and Packaging 368 376 656 649
Europe 277 233 471 434
South Africa 91 143 185 215
Ferrous Metals 89 88 156 150
Kumba 18 - 33 -
Highveld Steel 5 20 11 38
Scaw Metals 55 41 70 51
Samancor Group 10 19 41 48
Other 1 8 1 13
Industries 18 38 52 114
Boart Longyear 21 26 33 31
Tongaat-Hulett (10) 24 10 96
Terra 7 (18) 14 (3)
Other - 6 (5) (10)
Exploration (83) (77) (125) (93)
Exploration (83) (77) (105) (93)
Exceptional items - - (20) -
Corporate (164) (112) (190) (161)
Gold Fields 35 27 28 41
Other (199) (139) (218) (202)
1,694 1,759 2,606 3,251
ANGLO AMERICAN plc
(Incorporated in England and Wales - Registered number 3564138)
("the Company")
Notice of Recommended Final Dividend
Notice is hereby given that a final dividend on the Company's ordinary share
capital in respect of the year to 31 December 2003 will, subject to approval by
shareholders at the Annual General Meeting to be held on 21 April 2004, be
payable as follows:
Amount (United States currency) 39 cents per ordinary share ( see
notes)
Currency conversion date Friday, 20 February 2004
Last day to trade on the JSE Securities Friday, 5 March 2004
Exchange, South Africa ("JSE") to qualify
for the dividend
Ex-dividend on the JSE from the commencement Monday, 8 March 2004
of trading on
Ex-dividend on the London Stock Exchange Wednesday, 10 March 2004
from the commencement of trading on
Record date (applicable to both the Friday, 12 March 2004
principal register and South African branch
register)
Last day for receipt of Dividend Thursday, 8 April 2004
Reinvestment Plan ("DRIP") Mandate Forms by
Computershare (note 4)
Dividend warrants posted Wednesday, 28 April 2004
Payment date of dividend Thursday, 29 April 2004
Notes:
1. Shareholders on the United Kingdom register of members with an address in
the United Kingdom will be paid in pounds sterling and, those with an address
in a country in the European Union which has adopted the euro, will be paid in
euros. Such shareholders may, however, elect to be paid their dividends in US
dollars provided the UK Registrar receives such election by Friday, 12 March
2004. Shareholders with an address elsewhere (except in South Africa) will be
paid in US dollars. The equivalent of the dividend in sterling will be 20.6934
pence per ordinary share based on an exchange rate of US$1 = £0.5306. The
equivalent of the dividend in euros will be 30.8295 euro cents per ordinary
share based on an exchange rate of US$1 = €0.7905.
2. Shareholders on the South African branch register will be paid in South
African Rand at R2.622750 per ordinary share based on an exchange rate of US$1
= R6.7250.
3. Dematerialisation and rematerialisation of registered share
certificates in South Africa will not be effected by Central Securities
Depositary participants (" CSDPs") during the period Monday, 8 March 2004 to
Friday, 12 March 2004 (both days inclusive).
4. DRIP election forms, in respect of elections by shareholders who hold
their shares in dematerialised form in STRATE, are required to be lodged with
CSDPs by Tuesday, 6 April 2004.
5. Share certificates/Crest Notifications are expected to be mailed and
CSDP investor accounts credited/updated on Thursday, 20 May 2004 in respect of
shares issued in terms of the DRIP, subject to the acquisition of shares on the
open market.
6. Copies of the Terms and Conditions of the DRIP are available from the
Company's Registrar or the Registrar's Agent.
By order of the Board Registered Office:
20 Carlton House Terrace
N Jordan London SW1Y 5AN
Company Secretary
24 February 2004
Registered office UK Registrar Registrar's Agent (South
20 Carlton House Terrace Computershare Investor Africa)
London Services PLC Computershare Limited
SW1Y 5AN P O Box 82 70 Marshall Street
United Kingdom The Pavilions Johannesburg 2001
Bridgwater Road (PO Box 61051, Marshalltown
Bristol BS99 7NH 2107)
United Kingdom South Africa
This information is provided by RNS
The company news service from the London Stock Exchange
Friday, 31st May 2024
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