De Beers Interim Results

Anglo American PLC
25 July 2005


News Release


25 July 2005




De Beers Societe Anonyme ("Dbsa") today reported headline earnings for the six
months ended 30 June 2005 of US$336 million.



Anglo American plc ("AA plc") arrives at its headline earnings in respect of De
Beers by accounting for the interests arising from the ordinary shares and the
10% preference shares it holds in DB Investments ("DBI").



AA plc will therefore report headline earnings of US$270 million for the six
months ended 30 June 2005 from its investment in DBI, as reconciled in the table
below:






      Reconciliation of headline earnings for the six months ended 30 June 2005

      US$ million                                                          Total
•     DBI headline earnings (100%)                                           336
•     Adjustments (1)                                                          5
•     DBI headline earnings - AA plc basis (100%)                            341
•     AA plc's 45% ordinary share interest                                   153
•     Income from preference shares                                           26
•     Exchange gains related to preference shares                             91
•     AA plc headline earnings                                               270

(1) Adjustments include the reclassification of the actuarial gains and losses
booked to the income statement by Dbsa under the corridor mechanism of IAS19.
As AA plc has early adopted the amended version of IAS19, this charge has been
included in the deficit booked to reserves in prior years.







On 30 June 2005, Dbsa redeemed a second 25% of the preference shares originally
in issue and on that date AA plc received US$175 million, representing 25% of
its original US$701 million preference share interest.



In the six months ended 30 June 2005, AA plc received from DBI a US$90 million
final dividend on ordinary shares relating to FY 2004, US$26 million dividends
representing the second payment on preference shares for 2004, and US$9 million
representing the first dividend for 2005 on the redeemed preference shares.  A
US$17 million first dividend for 2005 on the remaining preference shares and a
US$68 million interim dividend on ordinary shares relating to FY 2005 are
scheduled for payment on 1 August 2005.



In the six months ended 30 June 2004, AA plc received from DBI a US$68 million
final dividend on ordinary shares relating to FY 2003, US$35 million dividends
representing the second US$35 million payment on preference shares for 2003, and
US$9 million representing the first dividend for 2004 on the redeemed preference
shares.  A US$26 million first dividend for 2004 on the remaining preference
shares and a US$112 million interim dividend on ordinary shares relating to FY
2004 were received from DBI during the second half of 2004.




      Reconciliation of headline earnings for the six months ended 30 June 2004

      US$ million                                                           Total
•     DBI headline earnings (100%)                                           424
•     Adjustments (1)                                                        (48)
•     DBI headline earnings - AA plc basis (100%)                            376
•     AA plc's 48.65% ordinary share interest (2)                            183
•     Income from preference shares                                           35
•     Exchange losses related to preference shares                           (49)
•     AA plc headline earnings                                               169

(1) Adjustments include the impact of IAS32 and IAS39 which applied to Dbsa in
2004, but have only been adopted by AA plc in 2005.

(2) As a result of De Beers' partial interest in Debswana Diamond Company
(Proprietary) Limited (one of the shareholders in DBI), AA plc accounted for an
additional 3.65% of DBI's post-tax earnings attributable to ordinary shares. As
previously announced, the Debswana interest in DBI was ceded to the Government
of the Republic of Botswana as part of a renewal of De Beers' mining licences in
Botswana, agreed on 20 December 2004.  Accordingly, from this date AA plc no
longer accounts for this additional 3.65% interest.





The above figures are unaudited.



                            De Beers Societe Anonyme

                  (incorporated under the laws of Luxembourg)



Monday, 25 July 2005

                                 INTERIM RESULTS

                     FOR THE SIX MONTHS ENDED 30 JUNE 2005





DIRECTORS' COMMENT



Results

Own earnings at US$345 million were 8% lower than the equivalent period in 2004,
and headline earnings were 21% lower at US$336 million. The decrease in own
earnings was mostly due to the impact of a weaker dollar and to tighter margins
arising largely from a significant reduction in stockpile realisations. Headline
earnings were further impacted by the negative swing of US$46 million in the
group's share of retained earnings of joint ventures. This was because of the
release last year, as the diamond stockpile was being run down, of higher
provisions for unearned profits in diamond stocks purchased from the group's
joint venture partners.



Operating cash flow fell to US$158 million from US$871 million in the first half
of 2004 when there was a draw down of stocks of nearly US$500 million. In
addition there was a substantial increase in other working capital in 2005.



In line with the lower earnings and cashflow, the Board has declared a reduced
interim dividend of US$150 million (2004: US$250 million) payable on 1st August
2005.



Production

Group production for the period was 23.7 million carats, an increase of 23% over
the same period in 2004. As a result of the increased production, stock levels
have risen by about $400 million compared with June 2004.



Sales and marketing

Despite mixed economic data it is estimated that the demand for diamond
jewellery in the United States is up by 6% in the first half over the same
period last year. Larger chains and high-end independents have shown the
strongest results and polished prices have started to edge up at the consumer
level. Performance in other markets was mixed. The local currency value of
global diamond jewellery sales is estimated to be higher by 5% than the
equivalent period in 2004. De Beers is currently forecasting growth of 6% in
local currency retail demand for the full year due to the level and quality of
diamond marketing activity as well as regional macro-economic strength.



Throughout the first half, demand for rough diamonds from the cutting centres
was strong. Sales by the DTC, the marketing arm of De Beers, for the first six
months totalled US$ 3.2 billion, 8% higher than the equivalent period in 2004.
The DTC raised its rough diamond prices on two occasions.



Projects

De Beers recently announced the approval of C$636 million for the Snap Lake
project in Canada with construction scheduled to commence in 2006. Further
expansion projects in Canada and Southern Africa are under evaluation.



Agreement was reached with Endiama, the Angolan state mining company, for the
establishment of a joint venture for the exploration of diamonds.



Regulatory

In early June, the European Commission published a notice indicating its
intention to accept the commitments offered by De Beers and Alrosa in relation
to the Alrosa Trade Agreement and allowed a 30 day period for public comment.
The Commission is now considering any third party comments received.



Outlook                                                           

The market for rough diamonds remains firm and we expect that, unlike in
previous years, sales in the second half of 2005 will at least match those of
the first half and that stocks will reduce. This should have a beneficial impact
on both cash flow and earnings.



De Beers announces interim results as follows:





                            De Beers Societe Anonyme

                         Consolidated Income Statement

                      for the half-year ended 30 June 2005


                                   (Abridged)




                                                                        US Dollar millions
                                                        6 Months to        6 Months to           12 Months to
                                                        30 June 2005       30 June 2004       31 December 2004
Diamond sales
     -DTC                                                     3 220              2 983                  5 695
     -Other                                                     265                259                    512
Joint venture and other income                                  421                373                    836
                                                              3 906              3 615                  7 043
Deduct:
Cost of sales                                                 2 810              2 507                  4 825
Depreciation and amortisation (Note 1)                          104                 88                    201
Sorting and marketing                                           199                230                    543
Exploration, research and development (Note 2)                  106                 99                    239
Corporate expenses                                               43                 34                     80
Net diamond account                                             644                657                  1 155

Deduct:
Net finance charges (Note 3)                                     56                 55                     83
Costs related to reorganisation and                              12                 17                     39
restructuring
Income before taxation                                          576                585                  1 033
Taxation                                                        228                203                    386
Income after taxation                                           348                382                    647

Attributable to outside shareholders in                           3                  9                     26
subsidiaries
Own earnings                                                    345                373                    621

Share of retained income of joint ventures                      (6)                 40                     21
Total earnings                                                  339                413                    642

Amortisation of goodwill (Note 1)                                                   72                    144

Net earnings                                                    339                341                    498



Headline earnings reconciliation

Net earnings                                                    339                341                    498

Adjusted for :
Amortisation of goodwill (Note 1)                                                   72                    144

Amortisation of intangible fixed assets                                             15                     31

After tax surplus on realisation of fixed assets                (3)                (4)                   (21)
less provisions
Headline earnings                                               336                424                    652

Cash available from operating activities                        158                871                    985


Dividends in respect of:

2003 - Final                                                                        150                     150
2004 - Interim                                                                                              250
2004 - Final                                                    200
2005 - Interim                                                  150






                            De Beers Societe Anonyme

                            Consolidated Balance Sheet

                                  30 June 2005


                                   (Abridged)




                                                                       US Dollar millions
                                                         30 June 2005        30 June 2004   31 December 2004

Ordinary shareholders' interests                                3 663               3 663              3 801
Outside shareholders' interests                                   130                 124                132
Total shareholders' interests                                   3 793               3 787              3 933
Net interest bearing debt (Notes 3 &4)                          1 842               1 169              1 588
Other liabilities                                               1 490               1 489              1 776
                                                                7 125               6 445              7 297

Fixed assets                                                    5 196               5 001              5 360
Investments and loans                                              76                  87                 81
Diamond stocks and other assets                                 1 853               1 357              1 856
                                                                7 125               6 445              7 297
Exchange rates US$ = Rand
- average                                                        6.17                6.58               6.43
- period end                                                     6.87                6.62               5.74



Notes and Comments



1.             In terms of International Financial Reporting Standard 3
(Business Combinations), with effect from 1 January 2005 it is no longer
permissible to amortise goodwill arising on consolidation. The standard does not
require the restatement of prior periods, which include amortisation of goodwill
amounting to US$72 million and US$144 million for June and December 2004
respectively.



2.             The costs of feasibility studies to prove the viability of
mineral resources, previously included in cost of sales, have now been included
with exploration, research and development. Prior periods have been restated
accordingly.



3.             Preference share capital is included in net interest bearing
debt. Preference dividends, amounting to US$32 million (2004 : US$43 million and
US$75 million for June and December respectively) are included in finance
charges in the respective income statements.



On 30 June 2005, the Company took advantage, for the second time, of an early
redemption clause attaching to its 10 per cent preference shares in issue and
redeemed the maximum permissible amount of US$214 million, or 25 per cent of the
total originally in issue.



4.                   The US$2.5 billion revolving credit facility was replaced
on 31 March with a US$3 billion multicurrency revolving facility, on more
favourable terms, split into two equal tranches with tenors of five and seven
years.



Cash has been offset against interest bearing debt.









Contacts:

De Beers London:
Lynette Hori                          [phone]/[phone]
De Beers South Africa
Nicola Wilson                         [phone]/[phone]



Visit the official De Beers group website for more information on the Company
and where you can view and download a selection of images - www.debeersgroup.com





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