Anglo Platinum Interim Result
Anglo American PLC
30 July 2003
News Release
30 July 2003
Anglo American plc ("Anglo American") notification:
Anglo Platinum interim results 2003
Anglo American wishes to draw attention to Anglo Platinum's announcement of
their results for the 6 months to 30 June 2003, attached hereto.
Anglo American Platinum Corporation Limited
(Incorporated in the Republic of South Africa)
(Registration No. 1946/022452/06)
("Anglo Platinum")
JSE Share Code: AMS ISIN: ZAE000013181
A Member of the Anglo American plc Group
Interim Report for the six months ended 30 June 2003
Main features
for the six months ended 30 June 2003
Earnings per share (cents)550,2
Interim dividend per share (cents)370,0
Pt production from mines+ 9,6%
Cash on-mine cost per ton milled
at steady-state operations* +9,4%
* Includes all operations except Bafokeng-Rasimone Platinum Mine,
Rustenburg UG2 Project and Modikwa Platinum Mine all which are in a production
ramp-up phase.
Consolidated income statement
Reviewed Reviewed Audited
----------------- ------- ---------- ---------- ------- -----------
Six months Six months Year
----------------- ------- ---------- ---------- ------- -----------
ended ended ended
----------------- ------- ---------- ---------- ------- -----------
30 June 30 June % 31 December
----------------- ------- ---------- ---------- ------- -----------
R millions Notes 2003 2002 Change 2002
----------------- ------- ---------- ---------- ------- -----------
Gross sales 7 349,6 9 697,6 20 285,7
revenue -------- ---------- ---------- -------- -----------
----------------
Commissions paid 203,5 433,2 733,0
---------------- -------- ---------- ---------- -------- -----------
Net sales revenue 7 146,1 9 264,4 (23) 19 552,7
---------------- -------- ---------- ---------- -------- -----------
Cost of sales 5 266,6 4 463,6 (18) 10 129,9
---------------- -------- ---------- ---------- -------- -----------
Cash operating 5 087,4 3 960,6 8 883,9
costs -------- ---------- ---------- -------- -----------
----------------
On-mine - steady 3 025,4 2 640,0 5 733,3
state operations -------- ---------- ---------- -------- -----------
----------------
On-mine - projects 1 140,1 676,8 1 636,1
in ramp-up phase -------- ---------- ---------- -------- -----------
----------------
Purchases of metals 126,3 - 121,9
in concentrate -------- ---------- ---------- -------- -----------
----------------
Smelting 416,9 282,2 640,6
---------------- -------- ---------- ---------- -------- -----------
Treatment and 378,7 361,6 752,0
refining -------- ---------- ---------- -------- -----------
----------------
Amortisation of 4 514,7 343,8 763,8
operating assets -------- ---------- ---------- -------- -----------
----------------
Increase in metal (665,9) (146,3) (109,1)
inventories -------- ---------- ---------- -------- -----------
----------------
Other costs 330,4 305,5 591,3
---------------- -------- ---------- ---------- -------- -----------
Gross profit on 5 1 879,5 4 800,8 (61) 9 422,8
metal sales -------- ---------- ---------- -------- -----------
----------------
Other net income/ 6 25,5 (494,0) (754,7)
(expenditure) -------- ---------- ---------- -------- -----------
----------------
Market development (129,4) (139,4) (266,5)
and promotional -------- ---------- ---------- -------- -----------
expenditure
------------------
Operating profit 1 775,6 4 167,4 (57) 8 401,6
------------------ -------- ---------- ---------- -------- -----------
Net interest (paid)/ (19,5) 107,4 155,7
received -------- ---------- ---------- -------- -----------
------------------
Income from 12,8 105,6 181,6
associates -------- ---------- ---------- -------- -----------
------------------
Profit before 1 768,9 4 380,4 (60) 8 738,9
taxation -------- ---------- ---------- -------- -----------
------------------
Taxation 585,9 1 735,0 66 2 998,9
------------------ -------- ---------- ---------- -------- -----------
Net profit 1 183,0 2 645,4 (55) 5 740,0
------------------ -------- ---------- ---------- -------- -----------
Headline earnings 7 1 115,9 2 614,6 (57) 5 630,4
------------------ -------- ---------- ---------- -------- -----------
Number of ordinary 215,1 214,7 214,9
shares in issue -------- ---------- ---------- -------- -----------
(millions)
------------------
Weighted average
number of -------- ---------- ---------- -------- -----------
------------------
ordinary shares in 215,0 214,3 214,5
issue (millions) -------- ---------- ---------- -------- -----------
------------------
Earnings per share
(cents) -------- ---------- ---------- -------- -----------
------------------
- Basic 550,2 1 234,4 (55) 2 676,0
------------------ -------- ---------- ---------- -------- -----------
- Headline 519,0 1 220,1 (58) 2 624,9
------------------ -------- ---------- ---------- -------- -----------
- Diluted (basic) 549,7 1 216,8 (55) 2 671,0
------------------ -------- ---------- ---------- -------- -----------
- Diluted (headline) 518,5 1 205,3 (57) 2 620,0
-------- ---------- ---------- -------- -----------
------------------
Dividends per share 370,0 900,0 (66) 1 800,0
(cents) -------- ---------- ---------- -------- -----------
------------------
- Interim 370,0* 900,0 900,0
------------------ -------- ---------- ---------- -------- -----------
- Final - - 900,0
------------------ -------- ---------- ---------- -------- -----------
Dividend cover 1,4 1,4 21 1,5
(headline earnings) -------- ---------- ---------- -------- -----------
------------------
* Proposed dividend
Consolidated balance sheet
Reviewed Reviewed Audited
--------------------- ------- ---------- ---------- ------------
as at as at as at
--------------------- ------- ---------- ---------- ------------
30 June 30 June 31 December
--------------------- ------- ---------- ---------- ------------
R millions Notes 2003 2002 2002
--------------------- ------- ---------- ---------- ------------
ASSETS
--------------------- -------- ---------- ---------- ------------
Non-current assets 18 760,3 12 958,3 16 192,3
--------------------- -------- ---------- ---------- ------------
Property, plant and equipment 14 355,6 8 884,0 10 503,1
--------------------- -------- ---------- ---------- ------------
Capital work-in-progress 3 718,5 3 468,4 4 941,5
--------------------- -------- ---------- ---------- ------------
Platinum Producers' 95,1 73,1 89,3
Environmental Trust -------- ---------- ---------- ------------
---------------------
Investment in associates 8 492,5 301,2 557,6
--------------------- -------- ---------- ---------- ------------
Non-current accounts 98,6 231,6 100,8
receivable -------- ---------- ---------- ------------
---------------------
Current assets 4 632,0 5 952,3 5 017,6
--------------------- -------- ---------- ---------- ------------
Inventories 3 2 537,8 1 813,6 1 819,9
--------------------- -------- ---------- ---------- ------------
Accounts receivable 1 452,7 1 800,6 1 617,7
--------------------- -------- ---------- ---------- ------------
Cash and cash equivalents 641,5 2 338,1 1 580,0
--------------------- -------- ---------- ---------- ------------
Total assets 23 392,3 18 910,6 21 209,9
--------------------- -------- ---------- ---------- ------------
EQUITY AND LIABILITIES
--------------------- -------- ---------- ---------- ------------
Share capital and reserves
--------------------- -------- ---------- ---------- ------------
Share capital 21,5 21,5 21,5
--------------------- -------- ---------- ---------- ------------
Share premium 767,5 1 252,5 754,0
--------------------- -------- ---------- ---------- ------------
Accumulated profits before
proposed dividend -------- ---------- ---------- ------------
---------------------
and related secondary tax on 3 11 656,2 10 727,1 12 408,6
companies (STC) -------- ---------- ---------- ------------
---------------------
Accumulated profits after
proposed dividend -------- ---------- ---------- ------------
---------------------
and related STC 10 760,8 8 553,3 10 232,7
--------------------- -------- ---------- ---------- ------------
Proposed ordinary dividend 795,9 1 932,3 1 934,1
--------------------- -------- ---------- ---------- ------------
STC in respect of proposed 99,5 241,5 241,8
dividend -------- ---------- ---------- ------------
---------------------
Shareholders' equity 12 445,2 12 001,1 13 184,1
--------------------- -------- ---------- ---------- ------------
Non-current liabilities 5 126,7 3 672,5 4 580,8
--------------------- -------- ---------- ---------- ------------
Deferred taxation 4 198,0 2 940,7 3 763,3
--------------------- -------- ---------- ---------- ------------
Environmental obligations 207,5 183,5 192,8
--------------------- -------- ---------- ---------- ------------
Employees' service benefit 459,4 548,3 488,3
obligations -------- ---------- ---------- ------------
---------------------
Obligations due under finance 261,8 - 136,4
leases -------- ---------- ---------- ------------
---------------------
Current liabilities 5 820,4 3 237,0 3 445,0
--------------------- -------- ---------- ---------- ------------
Accounts payable 1 853,9 1 350,9 1 893,7
--------------------- -------- ---------- ---------- ------------
Taxation 3 413,3 1 886,1 1 551,3
--------------------- -------- ---------- ---------- ------------
Interest-bearing borrowings 9 3 553,2 - -
--------------------- -------- ---------- ---------- ------------
Total equity and liabilities 23 392,3 18 910,6 21 209,9
--------------------- -------- ---------- ---------- ------------
Group statement of changes in shareholders' equity
Share Share Accumulated
------------------- --------- ---------- ------------ -----------
R millions capital premium profits Total
------------------- --------- ---------- ------------ -----------
Balance as at 31 December 2001
- --------- ---------- ------------ -----------
-------------------
previously reported (audited) 21,4 1 203,6 11 296,6 12 521,6
--------- ---------- ------------ -----------
-------------------
Change in accounting policy
with respect --------- ---------- ------------ -----------
-------------------
to recognising metals in
concentrate as --------- ---------- ------------ -----------
-------------------
inventory on the balance sheet 215,4 215,4
(Note 3) --------- ---------- ------------ -----------
-------------------
Gross 322,1 322,1
------------------- --------- ---------- ------------ -----------
Taxation (106,7) (106,7)
------------------- --------- ---------- ------------ -----------
Balance as at 31 December
2001 --------- ---------- ------------ -----------
-------------------
- restated (reviewed) 21,4 1 203,6 11 512,0 12 737,0
------------------- --------- ---------- ------------ -----------
Net profit 2 645,4 2 645,4
------------------- --------- ---------- ------------ -----------
Dividends paid in cash (3 430,3) (3 430,3)
------------------- --------- ---------- ------------ -----------
Share capital issued 0,1 48,9 49,0
------------------- --------- ---------- ------------ -----------
Balance as at 30 June 2002
------------------- --------- ---------- ------------ -----------
- restated (reviewed) 21,5 1 252,5 10 727,1 12 001,1
------------------- --------- ---------- ------------ -----------
Net profit 3 094,6 3 094,6
------------------- --------- ---------- ------------ -----------
Dividends paid in cash (1 932,6) (1 932,6)
------------------- --------- ---------- ------------ -----------
Share capital issued - * 25,9 25,9
------------------- --------- ---------- ------------ -----------
Repurchase of ordinary - (524,4) 519,5 (4,9)
shares --------- ---------- ------------ -----------
-------------------
Cost of shares sold by wholly 0,2 491,8 492,0
owned subsidiary to parent --------- ---------- ------------ -----------
company
-------------------
Unrealised after-tax Group 27,7 27,7
profit on disposal of holding --------- ---------- ------------ -----------
company shares to parent
company
-------------------
Shares repurchased by parent (0,2) (524,4) (524,6)
company from wholly-owned --------- ---------- ------------ -----------
subsidiary (cancelled)
-------------------
Balance as at 31 December
2002 --------- ---------- ------------ -----------
-------------------
- restated (reviewed) 21,5 754,0 12 408,6 13 184,1
------------------- --------- ---------- ------------ -----------
Net profit 1 183,0 1 183,0
------------------- --------- ---------- ------------ -----------
Dividends paid in cash (1 935,4) (1 935,4)
------------------- --------- ---------- ------------ -----------
Share capital issued - * 13,5 13,5
------------------- --------- ---------- ------------ -----------
Balance as at 30 June 2003 21,5 767,5 11 656,2 12 445,2
(reviewed) --------- ---------- ------------ -----------
-------------------
* Less than R50 000.
Consolidated cash flow statement
Reviewed Reviewed Audited
------------------------- ----------- ----------- ------------
Six months Six months Year
------------------------- ----------- ----------- ------------
ended ended ended
------------------------- ----------- ----------- ------------
30 June 30 June 31 December
------------------------- ----------- ----------- ------------
R millions 2003 2002 2002
------------------------- ----------- ----------- ------------
CASH FLOWS FROM OPERATING ACTIVITIES
------------------------- ----------- ----------- ------------
Cash receipts from customers 7 187,1 9 234,4 20 004,9
------------------------- ----------- ----------- ------------
Cash paid to suppliers and employees (5 550,8) (5 057,7) (10 399,6)
------------------------- ----------- ----------- ------------
Cash from operations 1 636,3 4 176,7 9 605,3
------------------------- ----------- ----------- ------------
Interest expensed (79,8) (19,8) (35,4)
------------------------- ----------- ----------- ------------
Taxation paid (1 277,3) (2 551,3) (3 304,1)
------------------------- ----------- ----------- ------------
Net cash from operating activities 279,2 1 605,6 6 265,8
------------------------- ----------- ----------- ------------
CASH FLOWS USED IN INVESTING
ACTIVITIES ----------- ----------- ------------
-------------------------
Purchase of property, plant and (3 053,9) (2 477,4) (5 994,1)
equipment ----------- ----------- ------------
-------------------------
To maintain operations (1 482,7) (630,5) (2 140,9)
------------------------- ----------- ----------- ------------
To expand operations (1 519,8) (1 846,9) (3 853,2)
------------------------- ----------- ----------- ------------
Interest capitalised (51,4) - -
------------------------- ----------- ----------- ------------
Proceeds from sale of property, plant,
equipment ----------- ----------- ------------
-------------------------
and mineral rights 76,3 632,3 778,4
------------------------- ----------- ----------- ------------
Investment in associates (1,4) (0,3) (300,3)
------------------------- ----------- ----------- ------------
Interest received 72,4 135,8 203,1
------------------------- ----------- ----------- ------------
Capital reduction by Northam Platinum 10,3 - 39,0
Limited ----------- ----------- ------------
-------------------------
Dividends received 47,3 37,0 89,7
------------------------- ----------- ----------- ------------
Net cash used in investing activities (2 849,0) (1 672,6) (5 184,2)
------------------------- ----------- ----------- ------------
CASH FLOWS FROM/ (USED IN) FINANCING
ACTIVITIES ----------- ----------- ------------
-------------------------
Proceeds from the issue of share - * 0,1 0,1
capital ----------- ----------- ------------
-------------------------
Increase in share premium 13,5 48,9 74,8
------------------------- ----------- ----------- ------------
Proceeds from current borrowings 3 553,2 - -
------------------------- ----------- ----------- ------------
Dividends paid (1 935,4) (3 430,3) (5 362,9)
------------------------- ----------- ----------- ------------
Net cash from/(used in) financing 1 631,3 (3 381,3) (5 288,0)
activities ----------- ----------- ------------
-------------------------
Net decrease in cash and cash (938,5) (3 448,3) (4 206,4)
equivalents ----------- ----------- ------------
-------------------------
Cash and cash equivalents at beginning 1 580,0 5 786,4 5 786,4
of year ----------- ----------- ------------
-------------------------
Cash and cash equivalents at end of 641,5 2 338,1 1 580,0
period/year ----------- ----------- ------------
-------------------------
* Less than R 50 000.
A non cash transaction in the form of a finance lease for housing was concluded.
During the period assets of R125,4 million (December 2002: R136,4 million) were
acquired in terms of this transaction.
Notes to the interim report
1. This interim report complies with International Accounting Standard 34 -
Interim Financial Reporting and South African Statement of Generally Accepted
Accounting Practice, AC127, with the same title, and with Schedule 4 of the
South African Companies Act.
2. The interim report has been prepared using accounting policies that comply
with South African Statements of Generally Accepted Accounting Practice and
International Financial Reporting Standards. Except for the change in accounting
policy described below, the policies are consistent with those applied in the
financial statements for the year ended 31 December 2002.
3. Change in accounting policy
The Group is increasingly entering into agreements to purchase significant
quantities of concentrate from joint venture partners. When such material is on
hand at the end of a reporting period, it is recognised as inventory on the
Group's balance sheet. To ensure that the accounting treatment of 'purchased'
and 'produced' concentrate is congruent, the Group has changed its accounting
policy to recognise its own production of metals in concentrate within
inventory. This change in accounting policy results in improved matching of
costs with revenue.
This change in accounting policy resulted in a net credit to accumulated profits
at 1 January 2002 of R 215,4 million, after tax of R 106,7 million.
Opening retained earnings, inventory and taxation have been restated, however,
no restatement of the six months ended 30 June 2002 and the year ended 31
December 2002 was done as the change in accounting policy is not material to
those results.
Gross Taxation Net
------------------------------ --------- ----------- ---------
Rm Rm Rm
------------------------------ --------- ----------- ---------
Effect of the change in accounting policy
with --------- ----------- ---------
------------------------------
respect to recognising purchased and
------------------------------ --------- ----------- ---------
produced concentrate inventory:
------------------------------ --------- ----------- ---------
Opening retained earnings 322,1 (106,7) 215,4
------------------------------ --------- ----------- ---------
Earnings for the six months ended 30 June 447,1 (148,0) 299,1
2003 --------- ----------- ---------
------------------------------
Reviewed Reviewed Audited
--------------------- ------------ ------------ -------------
Six months Six months Year
--------------------- ------------ ------------ -------------
ended ended ended
--------------------- ------------ ------------ -------------
30 June 30 June 31 December
--------------------- ------------ ------------ -------------
2003 2002 2002
--------------------- ------------ ------------ -------------
Rm Rm Rm
--------------------- ------------ ------------ -------------
4. Amortisation and depreciation of
property, ------------ ------------ -------------
---------------------
plant and equipment 524,4 365,9 797,2
--------------------- ------------ ------------ -------------
Amortisation of operating assets 514,7 343,8 763,8
--------------------- ------------ ------------ -------------
Mining 427,1 287,9 646,1
--------------------- ------------ ------------ -------------
Smelting 48,3 25,8 57,0
--------------------- ------------ ------------ -------------
Treatment and refining 37,8 28,8 57,9
--------------------- ------------ ------------ -------------
Decommissioning asset 1,5 1,3 2,8
--------------------- ------------ ------------ -------------
Depreciation - non-mining assets
--------------------- ------------ ------------ -------------
(included in Other costs) 9,7 22,1 33,4
--------------------- ------------ ------------ -------------
5. Gross profit on metal sales - Segmental information
Purchases of
------------------------ ----------- ------------- -----------
metals in
------------------------ ----------- ------------- -----------
R millions Mined concentrate Total
------------------------ ----------- ------------- -----------
Six months ended 30 June 2003
(reviewed) ----------- ------------- -----------
------------------------
Gross sales revenue 7 210,4 139,2 7 349,6
------------------------ ----------- ------------- -----------
Commissions paid 199,5 4,0 203,5
------------------------ ----------- ------------- -----------
Net sales revenue 7 010,9 135,2 7 146,1
------------------------ ----------- ------------- -----------
Cost of sales 5 166,3 100,3 5 266,6
------------------------ ----------- ------------- -----------
Cash operating costs 4 942,8 144,6 5 087,4
------------------------ ----------- ------------- -----------
On-mine - steady state operations 3 025,4 - 3 025,4
------------------------ ----------- ------------- -----------
On-mine - projects in ramp-up phase 1 140,1 - 1 140,1
------------------------ ----------- ------------- -----------
Purchases of metals in concentrate - 126,3 126,3
------------------------ ----------- ------------- -----------
Smelting 405,0 11,9 416,9
------------------------ ----------- ------------- -----------
Treatment and refining 372,3 6,4 378,7
------------------------ ----------- ------------- -----------
Amortisation of operating assets 512,6 2,1 514,7
------------------------ ----------- ------------- -----------
Increase in metal inventories (612,9) (53,0) (665,9)
------------------------ ----------- ------------- -----------
Other costs 323,8 6,6 330,4
------------------------ ----------- ------------- -----------
1 844,6 34,9 1 879,5
------------------------ ----------- ------------- -----------
Year ended 31 December 2002 (audited)
------------------------ ----------- ------------- -----------
Gross sales revenue 20 194,4 91,3 20 285,7
------------------------ ----------- ------------- -----------
Commissions paid 723,3 9,7 733,0
------------------------ ----------- ------------- -----------
Net sales revenue 19 471,1 81,6 19 552,7
------------------------ ----------- ------------- -----------
Cost of sales 10 049,2 80,7 10 129,9
------------------------ ----------- ------------- -----------
Cash operating costs 8 753,2 130,7 8 883,9
------------------------ ----------- ------------- -----------
On-mine - steady state operations 5 733,3 - 5 733,3
------------------------ ----------- ------------- -----------
On-mine - projects in ramp-up phase 1 636,1 - 1 636,1
------------------------ ----------- ------------- -----------
Purchases of metals in concentrate - 121,9 121,9
------------------------ ----------- ------------- -----------
Smelting 633,6 7,0 640,6
------------------------ ----------- ------------- -----------
Treatment and refining 750,2 1,8 752,0
------------------------ ----------- ------------- -----------
Amortisation of operating assets 762,8 1,0 763,8
------------------------ ----------- ------------- -----------
Increase in metal inventories (55,4) (53,7) (109,1)
------------------------ ----------- ------------- -----------
Other costs 588,6 2,7 591,3
------------------------ ----------- ------------- -----------
9 421,9 0,9 9 422,8
------------------------ ----------- ------------- -----------
The Group commenced purchases of metals in concentrate from the 3rd quarter of
2002 and therefore no comparative figures are presented for the six months ended
30 June 2002.
Reviewed Reviewed Audited
---------------------- ------------ ------------ -------------
Six months Six months Year
---------------------- ------------ ------------ -------------
ended ended ended
---------------------- ------------ ------------ -------------
30 June 30 June 31 December
---------------------- ------------ ------------ -------------
R millions 2003 2002 2002
---------------------- ------------ ------------ -------------
6. Other net income/(expenditure)
---------------------- ------------ ------------ -------------
Other net income/(expenditure)
consists of the following principal ------------ ------------ -------------
categories:
----------------------
Net realised and unrealised foreign
---------------------- ------------ ------------ -------------
exchange losses (198,2) (551,4) (879,1)
---------------------- ------------ ------------ -------------
Profit on disposal of mineral 64,6 25,0 98,0
rights ------------ ------------ -------------
----------------------
Profit on commodity contracts 156,3 - -
---------------------- ------------ ------------ -------------
Other 2,8 32,4 26,4
---------------------- ------------ ------------ -------------
25,5 (494,0) (754,7)
---------------------- ------------ ------------ -------------
7. Reconciliation between net profit and headline earnings
---------------------- ----------------- ---------- ----------
Net profit 1 183,0 2 645,4 5 740,0
---------------------- ----------------- ---------- ----------
Adjustments:
---------------------- ----------------- ---------- ----------
Profit on disposal of mineral (64,6) (25,0) (98,0)
rights ----------------- ---------- ----------
----------------------
Net negative goodwill amortisation (2,5) (5,8) (11,6)
---------------------- ----------------- ---------- ----------
Headline earnings 1 115,9 2 614,6 5 630,4
---------------------- ----------------- ---------- ----------
8. Investment in associates 492,5 301,2 557,6
---------------------------- ----------- ---------- ----------
Unlisted investment in associate Carrying 267,8 - 298,3
amount ----------- ---------- ----------
----------------------------
Directors' valuation - R267,8m (Dec 02 -
R298,3m) ----------- ---------- ----------
----------------------------
Listed investment in associate
---------------------------- ----------- ---------- ----------
Carrying amount 224,7 301,2 259,3
---------------------------- ----------- ---------- ----------
Market value R643,4m (Jun 02 -
---------------------------- ----------- ---------- ----------
R874,2m; Dec 02 - R972,8m)
---------------------------- ----------- ---------- ----------
9. Borrowing facilities
---------------------------- ----------- ---------- ----------
The Group has the following borrowing
---------------------------- ----------- ---------- ----------
facilities:
---------------------------- ----------- ---------- ----------
Reviewable annually by lenders at
---------------------------- ----------- ---------- ----------
various dates during 2003 and 2004 4 900,0 2 735,0 2 735,0
---------------------------- ----------- ---------- ----------
Amount utilised: floating rate (3 553,2) - -
---------------------------- ----------- ---------- ----------
Available undrawn borrowing facilities 1 346,8 2 735,0 2 735,0
---------------------------- ----------- ---------- ----------
Facilities under negotiation:
---------------------------- ----------- ---------- ----------
Short term 1 000,0
---------------------------- ----------- ---------- ----------
Long term 2 000,0
---------------------------- ----------- ---------- ----------
3 000,0
---------------------------- ----------- ---------- ----------
10. Borrowing powers
The borrowing powers in terms of the articles of association of the holding
company and its subsidiaries are unlimited.
Reviewed Reviewed Audited
--------------------- ------------ ------------ -------------
Six months Six months Year
--------------------- ------------ ------------ -------------
ended ended ended
--------------------- ------------ ------------ -------------
30 June 30 June 31 December
--------------------- ------------ ------------ -------------
R millions 2003 2002 2002
--------------------- ------------ ------------ -------------
11. Commitments
--------------------- ------------ ------------ -------------
Mining property, plant and
equipment ------------ ------------ -------------
---------------------
Contracted for 2 776,8 1 532,3 2 094,3
--------------------- ------------ ------------ -------------
Not yet contracted for 12 548,3 10 262,9 14 850,6
--------------------- ------------ ------------ -------------
Authorised by the directors 15 325,1 11 795,2 16 944,9
--------------------- ------------ ------------ -------------
Allocated for:
--------------------- ------------ ------------ -------------
Expansion of capacity 8 689,3 8 560,6 13 913,9
--------------------- ------------ ------------ -------------
- for remainder of the year/within 2 334,7 2 309,3 5 013,9
one year ------------ ------------ -------------
---------------------
- within two to five years 6 354,6 6 251,3 8 900,0
--------------------- ------------ ------------ -------------
Maintenance of capacity 6 635,8 3 234,6 3 031,0
--------------------- ------------ ------------ -------------
- for remainder of the year/within 1 686,9 946,4 1 570,1
one year ------------ ------------ -------------
---------------------
- within two to five years 4 948,9 2 288,2 1 460,9
--------------------- ------------ ------------ -------------
Other
--------------------- ------------ ------------ -------------
Operating lease rentals - premises 440,1 45,1 38,1
--------------------- ------------ ------------ -------------
- for remainder of the year/within 7,9 7,1 15,2
one year ------------ ------------ -------------
---------------------
- within two to five years 59,9 38,0 22,9
--------------------- ------------ ------------ -------------
- thereafter 372,3 - -
--------------------- ------------ ------------ -------------
Information Technology Service 112,2 179,6 139,4
Providers ------------ ------------ -------------
---------------------
- for remainder of the year/within 15,7 26,0 42,9
one year ------------ ------------ -------------
---------------------
- within two to five years 96,5 153,6 96,5
--------------------- ------------ ------------ -------------
Commitments will be funded from future cash flows from operations after payment
of dividends, borrowings and any other funding strategy embarked on by the
Group.
12. Contingent liabilities
Letters of comfort have been issued to financial institutions to cover certain
banking facilities. There are no encumbrances of Group assets, other than the
houses held under finance leases by the Group.
The Group provided guarantees in favour of Changing Tides 166 (Proprietary)
Limited, a wholly-owned subsidiary of Group 5 Construction Limited (Group 5).
The guarantee provides security for lease payments to Group 5 by the Anglo
Platinum Housing Trust (APHT). The probability of any obligation arising under
this guarantee is considered remote.
The Group provided a guarantee in favour of BoE Merchant Bank Limited (BoE) for
financing provided by BoE to Salene Mining (Proprietary) Limited (Salene). The
Group provided the guarantee to enable Salene to put mining infrastructure in
place. The guarantee is valid until 1 July 2006 or if earlier, on repayment by
Salene of the loan. Salene will sell all ore production from the mine to the
Group. The facility granted by BoE to Salene is for a maximum amount of R120
million. In the event that BoE calls up the guarantee, the Group holds bonds
over sufficient assets of Salene to make good any obligations that may be
incurred. It is unlikely that the Group will incur obligations under this
guarantee.
13. Comparative figures
Comparative figures have been restated as explained in note 3. Where
appropriate, comparative figures have been reformatted to facilitate
comparability.
Supplementary information for convenience of users
Consolidated income statement
UNITED STATES DOLLAR EQUIVALENT
Reviewed Reviewed Audited
--------------------- ------------ ------------ -------------
Six months Six months Year
--------------------- ------------ ------------ -------------
ended ended ended
--------------------- ------------ ------------ -------------
30 June 30 June 31 December
--------------------- ------------ ------------ -------------
US $ millions 2003 2002 2002
--------------------- ------------ ------------ -------------
Gross sales revenue 915,1 882,8 1 936,1
--------------------- ------------ ------------ -------------
Commissions paid 25,3 39,4 70,0
--------------------- ------------ ------------ -------------
Net sales revenue 889,8 843,4 1 866,1
--------------------- ------------ ------------ -------------
Cost of sales 655,6 406,3 966,7
--------------------- ------------ ------------ -------------
Cash operating costs 633,3 360,5 847,8
--------------------- ------------ ------------ -------------
On-mine - steady state operations 376,7 240,3 547,2
--------------------- ------------ ------------ -------------
On-mine - projects in ramp-up phase 141,9 61,6 156,1
--------------------- ------------ ------------ -------------
Purchases of metals in concentrate 15,7 - 11,6
--------------------- ------------ ------------ -------------
Smelting 51,9 25,7 61,1
--------------------- ------------ ------------ -------------
Treatment and refining 47,1 32,9 71,8
--------------------- ------------ ------------ -------------
Amortisation of operating assets 64,1 31,3 72,9
--------------------- ------------ ------------ -------------
Increase in metal inventories (82,9) (13,3) (10,4)
--------------------- ------------ ------------ -------------
Other costs 41,1 27,8 56,4
--------------------- ------------ ------------ -------------
Gross profit on metal sales 234,2 437,1 899,4
--------------------- ------------ ------------ -------------
Other net income/(expenditure) 3,2 (44,9) (72,0)
--------------------- ------------ ------------ -------------
Market development and promotional (16,1) (12,7) (25,4)
expenditure ------------ ------------ -------------
---------------------
Operating profit 221,3 379,5 802,0
--------------------- ------------ ------------ -------------
Net interest (paid)/received (2,4) 9,8 14,9
--------------------- ------------ ------------ -------------
Income from associates 1,6 9,6 17,3
--------------------- ------------ ------------ -------------
Profit before taxation 220,5 398,9 834,2
--------------------- ------------ ------------ -------------
Taxation 72,9 157,9 286,1
--------------------- ------------ ------------ -------------
Net profit 147,6 241,0 548,1
--------------------- ------------ ------------ -------------
Dividends paid in cash (241,0) (312,3) (511,8)
--------------------- ------------ ------------ -------------
Exchange rate translation 204,3 143,2 398,2
adjustment ------------ ------------ -------------
---------------------
Accumulated profits at beginning of 1 446,6 962,5 962,5
year as restated ------------ ------------ -------------
---------------------
As previously stated 1 446,6 944,5 944,5
--------------------- ------------ ------------ -------------
Change in accounting policy
translated at 2001 ------------ ------------ -------------
---------------------
closing rate (Note 3) - 18,0 18,0
--------------------- ------------ ------------ -------------
Repurchase of shares by holding
company from ------------ ------------ -------------
---------------------
wholly owned subsidiary - - 49,6
--------------------- ------------ ------------ -------------
Accumulated profits at end of period/ 1 557,5 1 034,4 1 446,6
year ------------ ------------ -------------
---------------------
Average Rand/US$ exchange rate 8,0319 10,9855 10,4778
--------------------- ------------ ------------ -------------
Number of ordinary shares in issue 215,1 214,7 214,9
(millions) ------------ ------------ -------------
---------------------
Weighted average number of ordinary
shares ------------ ------------ -------------
---------------------
in issue (millions) 215,0 214,3 214,5
--------------------- ------------ ------------ -------------
Earnings per share (cents)
--------------------- ------------ ------------ -------------
- Basic 68,7 112,5 255,5
--------------------- ------------ ------------ -------------
- Headline 64,6 111,2 250,5
--------------------- ------------ ------------ -------------
- Diluted (basic) 68,4 110,8 254,9
--------------------- ------------ ------------ -------------
- Diluted (headline) 64,6 109,7 250,1
--------------------- ------------ ------------ -------------
Dividends per share (cents) 46,1 86,0 191,7
--------------------- ------------ ------------ -------------
- Interim 46,1* 86,0 86,8
--------------------- ------------ ------------ -------------
- Final - - 104,9
--------------------- ------------ ------------ -------------
Income statement items were translated at the average exchange rate for the
period/year.
* Proposed dividend
Supplementary information for convenience of users
Consolidated balance sheet
UNITED STATES DOLLAR EQUIVALENT
Reviewed Reviewed Audited
------------------------- ----------- ----------- ------------
as at as at as at
------------------------- ----------- ----------- ------------
30 June 30 June 31 December
------------------------- ----------- ----------- ------------
US $ millions 2003 2002 2002
------------------------- ----------- ----------- ------------
ASSETS
------------------------- ----------- ----------- ------------
Non-current assets 2 506,8 1 249,5 1 887,8
------------------------- ----------- ----------- ------------
Current assets 618,9 574,1 585,0
------------------------- ----------- ----------- ------------
Total assets 3 125,7 1 823,6 2 472,8
------------------------- ----------- ----------- ------------
EQUITY AND LIABILITIES
------------------------- ----------- ----------- ------------
Shareholders' equity 1 663,0 1 157,3 1 537,0
------------------------- ----------- ----------- ------------
Non-current liabilities 685,0 354,1 534,0
------------------------- ----------- ----------- ------------
Current liabilities 777,7 312,2 401,8
------------------------- ----------- ----------- ------------
Total equity and liabilities 3 125,7 1 823,6 2 472,8
------------------------- ----------- ----------- ------------
Closing Rand/US$ exchange rate 7,4838 10,3705 8,5775
------------------------- ----------- ----------- ------------
Balance sheet items were translated at the closing exchange rate.
Supplementary information for convenience of users
Consolidated cash flow statement
UNITED STATES DOLLAR EQUIVALENT
Reviewed Reviewed Audited
--------------------- ------------ ------------ -------------
Six months Six months Year
--------------------- ------------ ------------ -------------
ended ended ended
--------------------- ------------ ------------ -------------
30 June 30 June 31 December
--------------------- ------------ ------------ -------------
US$ millions 2003 2002 2002
--------------------- ------------ ------------ -------------
Net cash from operating activities 34,9 146,2 598,1
--------------------- ------------ ------------ -------------
Net cash used in investing (354,7) (152,2) (494,7)
activities ------------ ------------ -------------
---------------------
Net cash from/(used in) financing 203,1 (307,8) (504,7)
activities ------------ ------------ -------------
---------------------
Net decrease in cash and cash (116,7) (313,8) (401,3)
equivalents ------------ ------------ -------------
---------------------
Exchange rate translation 18,2 55,5 101,7
adjustment ------------ ------------ -------------
---------------------
Cash and cash equivalents at 184,2 483,8 483,8
beginning of year ------------ ------------ -------------
---------------------
Cash and cash equivalents at end of 85,7 225,5 184,2
period/year ------------ ------------ -------------
---------------------
Average Rand/US$ exchange rate 8,0319 10,9855 10,4778
--------------------- ------------ ------------ -------------
Cash flow items were translated at the average exchange rate for the period/
year.
* Less than US$ 50 000
A non cash transaction in the form of a finance lease for housing was concluded.
During the period assets of $12,0 million (December 2002: $17,0 million) were
acquired in terms of this transaction.
Supplementary information
Consolidated statistics (Unaudited)
Six months Six months Year
-------------- --------------- --------- ----------- -----------
ended ended ended
-------------- --------------- --------- ----------- -----------
30 June 30 June 31 December
-------------- --------------- --------- ----------- -----------
Total 2003 2002 2002
operations --------------- --------- ----------- -----------
--------------
Marketing
statistics --------------- --------- ----------- -----------
--------------
Average market
prices achieved --------------- --------- ----------- -----------
--------------
Platinum (US$/oz) 649 513 544
-------------- --------------- --------- ----------- -----------
Palladium (US$/oz) 202 371 329
-------------- --------------- --------- ----------- -----------
Rhodium (US$/oz) 556 946 831
-------------- --------------- --------- ----------- -----------
Nickel (US$/lb) 3,62 2,91 3,03
-------------- --------------- --------- ----------- -----------
Net sales revenue (US$) 899 819 829
per Pt ounce --------------- --------- ----------- -----------
sold
--------------
Platinum (R/oz) 5 198 5 533 5 567
revenue --------------- --------- ----------- -----------
--------------
Palladium (R/oz) 1 614 4 036 3 403
revenue --------------- --------- ----------- -----------
--------------
Rhodium revenue (R/oz) 4 460 10 387 8 683
-------------- --------------- --------- ----------- -----------
Nickel revenue (R/lb) 29,46 32,02 31,92
-------------- --------------- --------- ----------- -----------
Net sales revenue (R) 7 222 8 995 8 690
per Pt ounce --------------- --------- ----------- -----------
sold
--------------
Average Pt (R : $) 8,0052 10,7842 10,2422
exchange rates --------------- --------- ----------- -----------
achieved
--------------
Exchange rates at (R : $) 7,4838 10,3705 8,5775
end of period --------------- --------- ----------- -----------
--------------
Profitability
statistics --------------- --------- ----------- -----------
--------------
Gross sales (R) 441 669 703
revenue per ton --------------- --------- ----------- -----------
milled
--------------
Gross profit (%) 25,6 49,5 46,5
margin --------------- --------- ----------- -----------
--------------
Earnings before (R millions) 2 300,7 4 633,9 9 368,4
interest, --------------- --------- ----------- -----------
taxation,
depreciation and
amortisation
(EBITDA)
--------------
Operating profit (%) 21,9 71,6 66,3
to average --------------- --------- ----------- -----------
operating
assets
--------------
Return on average (%) 18,5 44,2 44,3
shareholders' --------------- --------- ----------- -----------
equity
--------------
Return on capital (%) 17,9 44,5 42,7
employed --------------- --------- ----------- -----------
--------------
Interest bearing (%) 30,7 - -
debt to --------------- --------- ----------- -----------
shareholders'
equity
--------------
Analysis of
operating --------------- --------- ----------- -----------
--------------
contribution by (R millions)
mine --------------- --------- ----------- -----------
--------------
Rustenburg 575,1 1 419,0 2 794,2
Section --------------- --------- ----------- -----------
--------------
Union Section 195,4 630,3 1 059,3
-------------- --------------- --------- ----------- -----------
Amandelbult 1 007,8 2 060,9 3 886,2
Section --------------- --------- ----------- -----------
--------------
Potgietersrust 312,1 518,5 926,1
Platinums --------------- --------- ----------- -----------
--------------
Lebowa Platinum 88,0 238,5 450,1
Mines --------------- --------- ----------- -----------
--------------
Steady state 2 178,4 4 867,2 9 115,9
operating --------------- --------- ----------- -----------
contribution
--------------
Bafokeng-Rasimone 51,2 171,8 433,9
Platinum Mine --------------- --------- ----------- -----------
--------------
Rustenburg UG2 (7,4) 67,3 451,4
Project --------------- --------- ----------- -----------
--------------
Modikwa Platinum (12,3) - 12,9
Mine --------------- --------- ----------- -----------
--------------
Consolidated
operating --------------- --------- ----------- -----------
contribution
--------------
- all 2 209,9 5 106,3 10 014,1
operations --------------- --------- ----------- -----------
--------------
Other costs 330,4 305,5 591,3
-------------- --------------- --------- ----------- -----------
Gross profit on 1 879,5 4 800,8 9 422,8
metal sales --------------- --------- ----------- -----------
--------------
Refined
production from --------------- --------- ----------- -----------
--------------
mining
operations --------------- --------- ----------- -----------
--------------
Platinum (thousands) 897,9 1 043,3 2 238,5
-------------- (oz) --------- ----------- -----------
---------------
Palladium (thousands) 456,0 515,5 1 103,1
-------------- (oz) --------- ----------- -----------
---------------
Rhodium (thousands) 94,3 82,5 210,0
-------------- (oz) --------- ----------- -----------
---------------
Gold (thousands) 51,9 60,1 106,7
-------------- (oz) --------- ----------- -----------
---------------
Nickel (thousands) 10,1 9,2 19,4
-------------- (tons) --------- ----------- -----------
---------------
Copper (thousands) 6,2 5,1 10,5
-------------- (tons) --------- ----------- -----------
---------------
PGM's (thousands) 1 622,0 1 787,5 3 920,6
-------------- (oz) --------- ----------- -----------
---------------
Refined
production from --------------- --------- ----------- -----------
--------------
purchases of
metals in --------------- --------- ----------- -----------
--------------
concentrate
-------------- --------------- --------- ----------- -----------
Platinum (thousands) 17,2 - 12,6
-------------- (oz) --------- ----------- -----------
---------------
Palladium (thousands) 14,1 - 12,2
-------------- (oz) --------- ----------- -----------
---------------
Rhodium (thousands) 3,5 - 1,7
-------------- (oz) --------- ----------- -----------
---------------
Gold (thousands) 0,7 - 0,4
-------------- (oz) --------- ----------- -----------
---------------
Nickel (thousands) 0,1 - -
-------------- (tons) --------- ----------- -----------
---------------
Copper (thousands) 0,1 - -
-------------- (tons) --------- ----------- -----------
---------------
PGM's (thousands) 39,8 - 27,0
-------------- (oz) --------- ----------- -----------
---------------
Total refined
production --------------- --------- ----------- -----------
--------------
Platinum (thousands) 915,1 1 043,3 2 251,1
-------------- (oz) --------- ----------- -----------
---------------
Palladium (thousands) 470,1 515,5 1 115,3
-------------- (oz) --------- ----------- -----------
---------------
Rhodium (thousands) 97,8 82,5 211,7
-------------- (oz) --------- ----------- -----------
---------------
Gold (thousands) 52,6 60,1 107,1
-------------- (oz) --------- ----------- -----------
---------------
Nickel (thousands) 10,2 9,2 19,4
-------------- (tons) --------- ----------- -----------
---------------
Copper (thousands) 6,3 5,1 10,5
-------------- (tons) --------- ----------- -----------
---------------
PGM's (thousands) 1 661,8 1 787,5 3 947,6
-------------- (oz) --------- ----------- -----------
---------------
Total (thousands) 1 173,2 1 070,8 2 276,6
concentrator (oz) --------- ----------- -----------
platinum ounces ---------------
--------------
Commentary
SAFETY
Anglo Platinum has continued its intense focus on safety programmes and is
pleased to report a further significant improvement in the lost-time injury
frequency rate per 200 000 hours worked ("LTIFR") for the period under review.
The LTIFR was 0,79 for the first half of 2003 compared with 1,49 for the same
period in 2002. Most regrettably and notwithstanding the overall improvement in
safety, 12 employees died at managed operations as a result of work related
accidents.
The Board and management are committed to eliminating fatalities at work and
maintain focus on this objective.
RESULTS SUMMARY
Platinum ounces in concentrate delivered to the Process Division rose by 9,6%
over the equivalent period last year and amounted to 1 173 200 ounces. The
increase is attributable mainly to the added contribution from mines in the ramp
up phase - Modikwa, Bafokeng-Rasimone and phases 1 and 2 of the Rustenburg UG2
project.
Refined platinum production was negatively affected by a 205 000 ounce build-up
of pipeline stocks in the Process Division, and amounted to 915 100 ounces for
the six months to June 2003. The majority of the build-up is temporary and will
be released in the second half of 2003.
The average rand/US dollar exchange rate for the six months to June 2003 was
26,9% lower than it was in the same period in 2002. Had the average rand/US
dollar exchange rate been the same as that for the first half of 2002, gross
sales revenue would have been R2,54 billion higher than the R7,35 billion
recorded. Cost of sales rose by 18,0% or R0,80 billion mainly because of
increased production from ramp-up operations and inflationary cost pressures.
Headline earnings declined by 57,3% to R1,12 billion. Headline earnings per
share decreased by 57,5% to 519 cents per share. Dividend cover has been
maintained at 1,4 in line with last year, and accordingly a dividend of 370
cents per share has been declared.
OPERATIONS
Mining operations
The first six months of 2003 saw a pleasing increase in total production, with
an additional
102 400 platinum ounces in concentrate delivered to the smelters. Total
production was slightly below plan because of shortfalls at the Waterval Mine at
Rustenburg Section and at Modikwa. These shortfalls were due to limited face
availability resulting from development rates falling below plan. Accelerated
development plans are in place at both operations to address the backlog.
Potgietersrust has successfully brought the Zwartfontein South pit into
production and this has resulted in a significant improvement in the mine's head
grade. The additional ounces from this source will assist in partly offsetting
production shortfalls at Waterval Mine and Modikwa in the second half of 2003.
The increasing shift to UG2 mining at the steady state operations resulted in
lower grade and associated lower concentrating recovery. This led to a 4,7%
decrease in the ratio of concentrator platinum ounces produced to tons milled.
Mining costs
Cash on-mine costs at steady state operations increased by 14,6% to R3,03
billion. Expressed in terms of cost per ton milled the increase was 9,4%,
slightly above inflation. This was achieved in the face of a 9,8% annual wage
increase, above inflation increases in steel costs and costs to equalise
retirement fund contribution rates across the Group. In addition the Group
raised the level of expenditure in key areas such as safety, training and
health. As a result of the lower grade and recovery arising from increased UG2
production, the cash cost per platinum ounce increased by 14,5%.
Cash on-mine costs at ramp-up operations increased by R463,3 million due to
higher production.
Process operations
The smelting operations have undergone substantial change over the past six
months.
Three significant capital plants were commissioned and are in the process of
being ramped up - the Polokwane Smelter, the ACP Converter and the slag cleaning
furnace. In addition the smelter leasing arrangements with Xstrata were
terminated. The combination of these activities caused a temporary stock
build-up during June which resulted in material being transferred to the
magnetic concentration plant at the base metal refinery too late to be processed
into refined metal by the end of the reporting period.
The base and precious metals refineries performed well. During June, the
combination of the late release of metal from Waterval Smelter and certain
technical challenges arising from the processing of different sources of matte
caused a temporary build-up in process stocks.
The total increase in pipeline stock was equivalent to 205 000 ounces.
Approximately 20% of the increase is the expected absorption by the ACP
convertor and Polokwane Smelter and the remainder is temporary and will be
released over the next few months.
Process costs
As previously advised, the old convertors and acid plant at Waterval Smelter are
continuing to operate to provide dual processing capability during the ACP
Converter build-up. Together with the commissioning of the Polokwane Smelter
this resulted in an increase in cash smelting costs of
R134,7 million to R416,9 million, an increase of 47,7%. Smelting capacity is now
greater than the mines' short term requirements and consequently unit costs per
ton smelted will remain high until increased concentrate deliveries from the
expansion programme result in closer matching of capacity to actual throughput.
Cash treatment and refining costs increased by 4,7%, from R361,6 million to
R378,7 million.
Operations costs
The steady state cash operating cost per refined platinum ounce, adjusted to
take into account the build-up in pipeline stocks, increased by 14,8%.
FINANCIAL RESULTS
Gross sales revenue decreased by R2,35 billion to R7,35 billion. The decrease
was caused primarily by the stronger rand (R2,54 billion) and lower sales
volumes (R0,09 billion), partly offset by an increase in US dollar revenues for
metals sold (R0,28 billion). The net sales revenue per platinum ounce sold
("basket price") decreased by 19,7%, from R8 995 in the first half of 2002 to R7
222 in the first half of 2003.
Cost of sales rose by R0,80 billion to R5,27 billion.
Cash mining, smelting and refining costs increased by R1,00 billion to R4,96
billion as explained in the Operations commentary.
Purchases of metal in concentrate amounted to R126,3 million.
Amortisation of operating assets rose by R170,9 million with the addition of
amortisation charges for Modikwa, the Polokwane Smelter and the ACP Converter,
which were not operating in the first half of 2002. Increased ongoing capital
expenditure has also contributed to a general increase in amortisation charges
across the operations.
The value of metals in inventory increased by R665,9 million during the six
months to June 2003, primarily because of the increase in pipeline stocks. The
valuation incorporated an amount of R447,1 million in respect of a change in the
accounting policy for metal inventories which now includes values for all metal
at the smelters, whereas previously only metal suitable for despatch to the
magnetic concentration plant was included. The change, which increased earnings
for the first half of 2003 by approximately R299,1 million, was necessary to
account for concentrate purchases from joint venture partners and also to more
properly match the cost of sales with sales revenue during a period when an
appreciable change in smelter stocks occurred.
Other net income in the first half of 2003 amounted to R25,5 million compared
with other net expenditure of R494,0 in the first half of 2002. This primarily
reflects lower foreign exchange losses resulting from a lower appreciation of
the rand than in the previous period, profits realised on commodity contracts
and a higher profit on the disposal of mineral rights.
Net interest paid during the review period amounted to R19,5 million, compared
with interest received of R107,4 million in the first half of 2002, as a result
of the Group moving into a borrowed position. Interest paid is net of R51,3
million of interest on borrowings allocated to capital projects under
construction.
CAPITAL EXPENDITURE
Capital expenditure amounted to R3,05 billion (2002: R2,48 billion). Expenditure
to maintain operations increased from R0,63 billion to R1,48 billion owing to
increased expenditure on projects to replace production at steady state mines,
including the Rustenburg UG2 Phase 2 project. Expansion capital expenditure
amounted to R1,52 billion (2002: R1,85 billion). Capital commitments at 30 June
2003 amounted to R2,78 billion (June 2002: R1,53 billion).
Following a focused capital optimisation programme, the Group has revised its
total capital spend for the year from R7,7 billion down to R7,0 billion. The
Group will continue to ensure that, where possible, capital expenditure is
deferred without adversely affecting planned production levels.
NET DEBT (borrowings less cash reserves)
During the six months ended 30 June 2003 the Group moved from a net cash
position of
R1,44 billion to a net debt position of R3,17 billion - a net outflow of R4,61
billion. Cash generated by operations amounted to R1,64 billion (2002: R4,18
billion). Payments consisted mainly of capital expenditure totalling R3,05
billion (2002: R2,48 billion), dividends of R1,94 billion
(2002: R3,43 billion) and taxation of R1,28 billion (2002: R2,55 billion).
Borrowings as at 30 June 2003 are made up primarily of short-term debt
facilities. Discussions with external financiers and with Anglo Platinum's major
shareholder, Anglo American plc with a view to structuring an appropriate
financing package to meet the funding required for the company's expansion
programmme in the face of reduced cash inflows, caused primarily by the
sustained strength of the South African Rand are well advanced.
NEW MINERALS LEGISLATION, EMPOWERMENT OF HISTORICALLY DISADVANTAGED SOUTH
AFRICANS and progress on social upliftment programmes
Anglo Platinum continues to work closely with the Department of Minerals and
Energy and good progress is being made towards meeting the challenging ownership
and attributable production requirements of the Mineral and Petroleum Resources
Development Act and Broad Based Economic Empowerment Charter. In addition, the
Group advises that the mining licenses applied for on the Eastern Limb have been
granted. Several significant ventures with Historically Disadvantaged South
African (HDSA) partners have commenced, and other agreements are being
negotiated.
The Group is very concerned about the impact of the Mineral and Petroleum
Royalty Bill on existing operations and new projects. Representations have been
made to the Department of Finance regarding matters of concern and there is
ongoing interaction with government in this regard.
Social upliftment programmes, the provision of anti-retroviral treatment for
employees with AIDS, development of small and medium HDSA enterprises and
employment equity targets are all being vigorously pursued as part of the
Group's commitment to broad based economic empowerment initiatives.
PROJECTS
Anglo Platinum believes that the expansion programme target to produce at the
rate of
3,5 million ounces of refined platinum per year by the end of 2006 remains
appropriate in view of market demand fundamentals. Clearly the viability of
projects needs to be evaluated in view of changing market parameters, such as
the strong rand when compared to the US dollar, and this may affect project
scheduling and the time taken to bring new projects on stream. Progress on the
major projects is as follows:
• Rustenburg UG2 Project:
• Phase 1: The project consists of the 400 000 tons per month Waterval UG2
concentrator processing ore from the new Waterval Mine as well as the
Brakspruit, Bleskop and Paardekraal shafts. Production has continued to build
up, albeit at a slower rate than planned for 2003 because of limited face
availability resulting from below plan development at the Waterval Mine. An
accelerated development programme is in place to address this. The ore upgrading
project will be commissioned in the second half of 2003.
• Phase 2: This phase consists of two new decline shafts at Boschfontein as
well UG2 production from the existing Frank and Townlands shafts. The UG2
Waterval concentrator will be expanded to process the additional 400 000 tons
per month of UG2 ore that will be produced when all of the shafts are operating
at capacity. Development at Frank and Townlands shafts is proceeding on plan and
portal excavation at the Boschfontein East and West declines is complete. UG2
production at Frank and Townlands has commenced as planned.
• Bafokeng-Rasimone: The mine has made steady progress during the first half
of 2003. Grade and recovery have improved materially compared with the first
half of 2002 and platinum ounces delivered to smelting operations has increased
by 14,4%.
• Modikwa Platinum Mine: Build-up in run of mine ore was below plan owing to
limited face availability. Development rates are improving and production rates
are expected to be in line with the plan by the end of the year. The
concentrator continues to perform well.
• Anglo Platinum Converting Process ("ACP") Project: Matte converting
operations in terms of phase 1 commenced at the beginning of 2003. Commissioning
has progressed in line with plan and management remains confident that the
project will achieve design parameters, including the restriction of sulphur
emissions to 20 tons per day by the end of 2004. In addition design work on
phase 2 of the project, which includes a second convertor, is well advanced.
Commissioning difficulties with reverts handling during the transition from the
leased Xstrata smelter to the slag cleaning furnace caused a build-up in
material that was mostly cleared from the smelters by the end of June 2003.
• Polokwane Smelter: Throughput build-up is progressing exceptionally well.
Some logistical problems were experienced with handling and storage of furnace
matte. These are not considered major and will be resolved in the second half of
the year.
• Twickenham Platinum Mine: Access development operations and surface
earthworks are well under way. Full contractor site establishment is complete.
• Rustenburg Tailings Retreatment: Construction is on schedule and the plant
is expected to commence commissioning in the first quarter of 2004.
The following major projects were announced in the six months to June 2003:
• The venture with Aquarius Platinum (SA) to jointly mine adjacent
properties: Certain mining assets will be pooled and operated with both parties
sharing equally in the proceeds. While Anglo Platinum will start to treat
concentrate from the venture only in 2005, the Group will share in profits from
the commencement of the venture in November 2003. The project is expected to
require capital expenditure of R750 million in 2003 terms, and will produce
280 000 ounces of platinum at full production.
• The Unki Project: Negotiations are underway for Anglo Platinum to obtain a
majority shareholding in this project from Anglo American Corporation Zimbabwe
Limited. The project entails the development of an 85 000 ton per month mine on
Zimbabwe's Great Dyke near Gweru. At full capacity, the mine will produce
concentrate containing the equivalent of 58 000 ounces of refined platinum per
year. The concentrate produced by the mine will be smelted and refined by Anglo
Platinum in South Africa.
DIVIDEND
The Board has declared an interim cash dividend of 370 cents (2002: 900 cents)
per ordinary share.
The Group is committed to large capital expenditures for several years in order
to increase production volumes. During this period cash generated by operations
may vary considerably depending on short-term metal prices and the rand/US
dollar exchange rate. The declaration of cash dividends will continue to be
considered by the Board in conjunction with an evaluation of current and future
funding requirements, and will be adjusted to levels considered appropriate at
the time of the declaration. Dividends will be paid out of cash generated from
operations.
PROSPECTS
Production from the mines is expected to continue increasing in the second half
of the year and, boosted by the release of much of the pipeline build-up will
result in a significant increase in refined production in the second half of the
year. However, the shortfall in mines' production in the first half of 2003 will
not be recovered and there is a risk that pipeline stocks at the end of the year
will still be higher than planned. As a result, it is anticipated that refined
platinum production for 2003 will be in the region of 2,3 million ounces.
The PGM markets over the last few months have settled into fairly stable trading
ranges and these are expected to continue.
Industrial demand for platinum remains firm. Jewellery demand in China is
encouraging despite the current relatively high price level and has largely
recovered from the setback created by the measures taken to control SARS.
Palladium demand is firm and is expected to increase as destocking by
autocatalyst manufacturers tapers off. In spite of this, the current price is
weak and will be determined by Russian supply patterns. The announcements by
some automobile companies that they are considering returning to a higher
percentage use of palladium in their mix of PGMs is welcomed.
Notwithstanding the planned increase in volumes, earnings for the full year
ending December 2003 will be significantly lower than those for the year ended
December 2002 as a result of the stronger rand/US dollar exchange rate.
R Havenstein B E Davison Johannesburg
(Chief Executive Officer) (Chairman)29 July 2003
Report of the independent auditors
To the members of
Anglo American Platinum Corporation Limited
We have reviewed the accompanying summarised consolidated financial statements
included in the interim report of Anglo American Platinum Corporation Limited
and its subsidiaries for the six months ended 30 June 2003, set out on pages 1
to 11. This interim report is the responsibility of the Company's directors. Our
responsibility is to issue a report on this interim report based on our review.
Scope
We conducted our review in accordance with the statement of South African
Auditing Standards applicable to review engagements. This standard requires that
we plan and perform the review to obtain moderate assurance that the interim
financial information is free of material misstatement. A review is limited
primarily to enquiries of Company personnel and analytical procedures applied to
financial data and thus provides less assurance than an audit. We have not
performed an audit and, accordingly, we do not express an audit opinion.
Review opinion
Based on our review, nothing has come to our attention that causes us to believe
that the accompanying interim report is not fairly presented, in all material
respects, in accordance with South African Statements of Generally Accepted
Accounting Practice and International Financial Reporting Standards applicable
to interim financial reporting and the Companies Act in South Africa.
Deloitte & Touche
Registered Accountants and Auditors
Chartered Accountants (SA)
Johannesburg
29 July 2003
Declaration of interim ordinary dividend (No. 101)
Notice is hereby given that an interim dividend of 370 cents per ordinary share,
in the currency of the Republic of South Africa, has been declared in respect of
the financial year ending 31 December 2003. The dividend is payable to
shareholders recorded in the books of the Company at the close of business on
Friday 29 August 2003.
The salient dates for the interim ordinary dividend are as follows:
Salient Dates for South Africa and United Kingdom2003
Last day to trade (cum dividend)Friday, 22 August
First day of trading (ex dividend)Monday, 25 August
Currency conversion date (for sterling payments from London)Tuesday, 26 August
Record dateFriday, 29 August
Payment dateWednesday, 3 September
Share certificates may not be dematerialised or re-materialised between Monday,
25 August 2003 and Friday, 29 August 2003, both days inclusive, nor may
transfers take place between the South African and United Kingdom share
registers during this period.
On Wednesday, 3 September 2003, the dividends will be electronically transferred
to the bank accounts of all certificated shareholders where this facility is
available. Where electronic fund transfer is not available or desired, cheques
dated 3 September 2003 will be posted on that date. Dematerialised shareholders
will have their accounts at their CSDP or broker credited on 3 September 2003.
Shareholders registered on the United Kindom section of the register will be
paid the dividend in pounds sterling at the rate of exchange determined on
Tuesday, 26 August 2003.
A further announcement stating the rand/sterling conversion rate will be
released through the relevant South African and United Kingdom news services on
Wednesday, 27 August 2003.
The dividend is payable subject to conditions which may be inspected at or
obtained from the Company's Johannesburg office or from its London Secretaries.
By order of the Board
R A Venter
Company Secretary
Johannesburg
29 July 2003
Administration
EXECUTIVE DIRECTORS
R Havenstein (Chief Executive Officer),
J A Dreyer, D T G Emmett, R G Mills, B E Ngubane,
R H H van Kerckhoven (Belgian), A I Wood (British)
NON-EXECUTIVE DIRECTORS
B E Davison (Chairman), L Boyd, M W King, W A Nairn, A J Trahar
INDEPENDENT NON-EXECUTIVE DIRECTORS
T A Wixley (Deputy Chairman), C B Brayshaw, B A Khumalo, THNyasulu
ALTERNATE DIRECTORS
A H Calver (British), J M Halhead (British)
P J V Kinver (British), R Pilkington, C B Sheppard, V P Uren
Company Secretary
R A Venter
REGISTERED OFFICE
55 Marshall Street, Johannesburg, 2001
(P.O. Box 62179, Marshalltown, 2107)
Facsimile +27 11 373-5111
Telephone +27 11 373-6111
SOUTH AFRICAN REGISTRARS
Computershare Limited,
(Registration No. 2000/006082/06),
70 Marshall Street, Johannesburg, 2001
(P.O. Box 61051, Marshalltown, 2107)
Facsimile +27 11 836-0792/6145
Telephone +27 11 370-7700
LONDON SECRETARIES
Anglo American Services (UK) Limited,
20 Carlton House Terrace, London,
SW1Y 5AN, England
Facsimile +44 207 698-8755
Telephone +44 207 698-8888
UNITED KINGDOM REGISTRARS
Capita IRG plc, The Registry, 34 Beckernham Road
Beckenham, Kent, BR3 4TU, England
Facsimile +44 207 478-7717
Telephone +44 207 478-8241
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