Interim Results

Merrill Lynch World Mining Tst PLC 05 August 2004 FOR IMMEDIATE RELEASE 5 August 2004 MERRILL LYNCH WORLD MINING TRUST plc Interim results for the six months ended 30 June 2004 Performance to 30 June 2004 Six months Five years Net asset value per share: - capital only -16.4% +123.3% - with net income reinvested -16.0% +138.3% Ordinary share price: - capital only -17.3% +140.9% - with net income and 1/5th warrant reinvested -15.4% +163.7% HSBC Global Mining Index: - capital only* -12.0% +46.1% - with net income reinvested -11.1% +67.4% * Adjusted for exchange rates relative to sterling. Performance is based on mid-market values. Dividends totalling 1.7p per share went ex-dividend on 25 February 2004. Where performance has income included, it is reinvested on the ex-dividend date. Where performance includes the warrant reinvestment, it assumes it was sold and reinvested on the first day of trading. Sources: Merrill Lynch Investment Managers, Datastream. • As at 30 June 2004, the net asset value per share and share price were 200.69p and 179.50p respectively (31.12.03, NAV 239.09p, share price 217.00p). • In the Fund Manager's view, metals and mineral prices will remain at generally elevated levels until such time as the mining industry makes significant capital investment decisions. This is unlikely to happen quickly and this bodes well for industry earnings in 2005. For further information please contact the following: Graham Birch 020 7743 2690 Fund Manager Merrill Lynch Investment Managers Nigel Webb 020 7743 5938 Public Relations Merrill Lynch Investment Managers William Clutterbuck 020 7379 5151 Maitland Consultancy The Chairman, Peter Wilmot-Sitwell, comments: 'The Company's net asset value declined by 16% in the first six months of the year, mainly due to a sharp fall in mining share prices in April and early May. The share price fell by a similar amount, with the benchmark falling by 11%, all on a total return basis. At 30 June 2004 the NAV and share price were 201p and 180p per share respectively. 'These falls were largely attributable to concerns in the market about the slow down of the Chinese economy, as well as rising interest rates generally, in particular in the US. 'On a more positive note, I am pleased to say, the sector has rallied since mid May, although it has not recouped all of the fall. 'The Company made a bonus issue of warrants to its shareholders on 26 March 2004, on the basis of one warrant for every five shares held on 23 March 2004. Initially these warrants traded at 12.5p each but the price at 30 June 2004 was 5.75p. They are exercisable on 29 April 2005 at 219p per warrant. Although the warrants are 'out of the money' at present, this situation could change by the exercise date, due to the volatility in the sector. 'I am sorry to report that Adam Fleming resigned as a director of the Company on 17 June 2004 because he felt his future main activities could lead to a conflict of interest with ours. We are most grateful to him for the contribution he has made over the past five years and we shall miss his experience in the mining sector and in Board discussions with the fund managers. 'Following a search for a replacement with similar experience, I am pleased to report that Oliver Baring has agreed to join the Board with effect from November. Oliver has extensive experience of the mining sector, both from an investment and a commercial aspect. 'In our view, the prospects for the sector remain good, with continuing demand and a reduction in metal inventories putting upward pressure on commodity prices. In all likelihood, these conditions will lead to record cash flows and earnings for the mining industry as a whole.' Commenting upon the outlook for the Company, Graham Birch of Merrill Lynch Investment Managers, the Investment Manager, notes: 'Sentiment has gradually recovered after the Spring sell-off in mining shares. While the Northern Hemisphere summer is usually a sluggish period for this sector, we expect market conditions to pick up again in the autumn. In our view, metals and minerals prices will remain at generally elevated levels until such time as the industry makes significant expansionary capital investment decisions. This is unlikely to happen quickly and this bodes well for industry earnings into 2005. We believe that medium to long term growth prospects for China continue to represent a significant business opportunity for the mining industry and this has positive implications for sectors within the industry.' CONSOLIDATED REVENUE STATEMENT for the six months ended 30 June 2004 Six months Six months Year ended ended 30 June ended 30 June 31 December 2004 2003 2003 £'000 £'000 £'000 (unaudited) (unaudited) (audited) Note Income 3 4,607 4,364 7,657 Investment management fees 4 (1,729) (1,129) (2,969) Operating expenses 5 (396) (289) (705) ------- ------- -------- Net return before finance costs and taxation 2,482 2,946 3,983 Interest payable and similar charges (937) (115) (495) ------- ------- -------- Revenue on ordinary activities before taxation 1,545 2,831 3,488 Taxation on ordinary activities (256) (528) (672) ------- ------- -------- Revenue on ordinary activities after taxation 1,289 2,303 2,816 Dividends in respect of equity shares 6 - - (2,768) ------- ------- -------- Transfer to revenue reserve 1,289 2,303 48 ======= ======= ======== CONSOLIDATED STATEMENT OF TOTAL RETURN PER ORDINARY SHARE for the six months ended 30 June 2004 Six months Six months Year ended ended ended 31 December 30 June 2004 30 June 2003 2003 (unaudited) (unaudited) (audited) Calculated on weighted average shares: Earnings per ordinary share 0.79p 1.41p 1.73p Capital return per ordinary share (39.19p) (3.97p) 89.58p ------- ------- -------- Total return per ordinary share (38.40p) (2.56p) 91.31p ======= ======= ======== Ordinary dividend per share - - 1.70p ======= ======= ======== SUMMARISED CONSOLIDATED BALANCE SHEET as at 30 June 2004 30 June 30 June 31 December 2004 2003 2003 £'000 £'000 £'000 (unaudited) (unaudited) (audited) Fixed assets Listed investments at mid-market valuation 350,610 238,244 419,488 Unlisted investments at directors' valuation 3,990 4,385 4,042 ---------- ---------- ---------- 354,600 242,629 423,530 Current assets Investments of subsidiary undertakings 3,742 557 3,513 Debtors 2,474 1,102 1,254 ---------- ---------- ---------- 6,216 1,659 4,767 ---------- ---------- ---------- Creditors - amounts falling due within one year Bank overdraft (31,003) (2,907) (32,852) Other creditors (3,041) (2,163) (6,191) ---------- ---------- ---------- (34,044) (5,070) (39,043) ---------- ---------- ---------- Net current liabilities (27,828) (3,411) (34,276) ---------- ---------- ---------- Total assets less current liabilities 326,772 239,218 389,254 Provision for liabilities and charges (49) (35) (10) ---------- ---------- ---------- Net assets 326,723 239,183 389,244 ====== ====== ====== Capital and reserves Share capital 8,140 8,140 8,140 Capital redemption reserve 22,779 22,779 22,779 Other capital reserves 85,682 (2,824) 149,492 ---------- ---------- ---------- 116,601 28,095 180,411 Special reserve 203,244 203,244 203,244 Revenue reserve 6,878 7,844 5,589 ---------- ---------- ---------- Total equity shareholders' funds 326,723 239,183 389,244 ====== ====== ====== Basic net asset value per ordinary share 200.69p 146.92p 239.09p ====== ====== ====== CONSOLIDATED CASH FLOW STATEMENT for the six months ended 30 June 2004 Six months Six months Year ended ended 30 June 2004 ended 30 June 2003 31 December (unaudited) (unaudited) 2003 £'000 £'000 (audited) £'000 Net cash flow from operating activities 1,184 3,669 2,519 Returns on investment and servicing of finance (937) (115) (495) Taxation paid (102) (830) (1,122) Capital expenditure and financial investment Purchase of fixed asset investments (54,161) (48,040) (127,945) Proceeds from the sale of fixed asset investments 59,040 39,361 90,006 Exchange (loss)/gain on foreign currency transactions (389) (102) 1,035 Equity dividends paid (2,768) (3,419) (3,419) Financing Warrant issue expenses paid (18) - - --------- --------- --------- Increase/(decrease) in cash in the period 1,849 (9,476) (39,421) ========= ========= ========= RECONCILIATION OF NET RETURN BEFORE FINANCE COSTS AND TAXATION TO NET CASH FLOW FROM OPERATING ACTIVITIES Six months Six months Year ended ended 30 June ended 30 June 31 December 2004 2003 2003 (unaudited) (unaudited) (audited) £'000 £'000 £'000 Net return before finance costs and taxation 2,482 2,946 3,983 Net sales/(purchases) of investments by subsidiary undertakings 497 2,062 (1,035) (Increase)/decrease in debtors (560) (337) 11 (Decrease)/increase in creditors (265) 1 525 Tax on investment income included within gross income (243) (217) (464) Profit on investments by subsidiary undertakings (727) (786) (501) --------- --------- --------- Net cash flow from operating activities 1,184 3,669 2,519 ========= ========= ========= NOTES ON THE INTERIM RESULTS 1. Principal activity The principal activity of the Company is that of an investment trust company within the meaning of section 842 of the Income and Corporation Taxes Act 1988. The principal activity of its two subsidiary undertakings, Merrill Lynch Gold Limited and World Mining Investment Company Limited, is investment dealing. 2. Basis of preparation The interim financial statements have been prepared on the basis of the accounting policies set out in the Company's financial statements at 31 December 2003. Income and operating expenses have been accrued in accordance with the same principles used in the preparation of the annual financial statements. The taxation charge has been calculated by applying an estimate of the annual effective tax rate to the profit for the period. 3. Income Six months Six months Year ended ended 30 June ended 30 June 31 December 2004 2003 2003 £'000 £'000 £'000 (unaudited) (unaudited) (audited) Income from investments Dividends: UK listed 660 677 1,232 Overseas listed 3,038 2,818 5,836 ------- ------- -------- 3,698 3,495 7,068 ------- ------- -------- Interest receivable and other income Bank interest and other income 182 83 88 Profit on investments by subsidiary undertakings 727 786 501 ------- ------- -------- 909 869 589 ------- ------- -------- Total income 4,607 4,364 7,657 ======= ======= ======== 4. Investment management fees Six months Six months Year ended ended 30 June ended 30 June 31 December 2004 2003 2003 £'000 £'000 £'000 (unaudited) (unaudited) (audited) Investment management fees 1,649 1,100 2,821 Irrecoverable VAT thereon 80 29 148 ------- ------- ------- 1,729 1,129 2,969 ======= ======= ======== The investment management fee is levied quarterly, based on the gross assets on the last day of each quarter. All investment management fees are charged to revenue. 5. Operating expenses Six months Six months Year ended ended 30 June ended 30 June 31 December 2004 2003 2003 £'000 £'000 £'000 (unaudited) (unaudited) (audited) Custody fee 174 116 297 Administration fee 102 68 174 Registrar's fees and other administration costs 82 69 164 Directors' emoluments 38 36 70 ----- ----- ----- 396 289 705 ===== ===== ===== 6. Dividend The Board has not declared an interim dividend, as dividends are considered and paid annually in respect of each accounting period. 7. Gearing ratio The ratio of borrowings to net assets at 30 June 2004 were 9.0% (31.12.2003 : 8.8%). A subsidiary of the Company also has a number of futures contracts and investments which has the effect of increasing gearing of the Company by a further 5.4%. 8. Ordinary shares 30 June 2004 30 June 2003 31 December 2003 (unaudited) (unaudited) (audited) The actual and weighted average number of ordinary shares in issue during each period, on which the return per ordinary share was calculated, was: 162,800,000 162,800,000 162,800,000 9. Publication of non-statutory accounts The financial information contained in this interim statement does not constitute statutory accounts as defined in section 240 of the Companies Act 1985. The financial information for the six months ended 30 June 2003 and 2004 has not been audited. The information for the year ended 31 December 2003 has been extracted from the latest published audited financial statements, which have been filed with the Registrar of Companies. The report of the independent auditor on those accounts contained no qualification or statement under sections 237(2) or (3) of the Companies Act 1985. 5 August 2004 33 King William Street London EC4R 9AS AJM/sf/MLWMT/Stock Exchange Announcements/Interim July 2004 This information is provided by RNS The company news service from the London Stock Exchange

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