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AGL
ANAAL
AGL - Anglo American plc - Interim Results For The Six Months Ended 30 June 2007
And Dividend Declaration
Anglo American plc
(Incorporated in the United Kingdom)
Registration number: 3564138
Share code: AGL
ISIN: GB0004901517
(the "Company")
Anglo American
News Release
03 August 2007
Anglo American announces record underlying earnings of $3.1 billion, up 22%,
and an additional $4 billion capital return
* Operating profit (1) increased to $5.5 billion, up 19%
* Record underlying earnings (2) of $3.1 billion, up 22%
* EBITDA(3) of $6.6 billion, up 12%
* Strong performances from Platinum, Base Metals, Ferrous Metals and
Industrial Minerals
* Further $4 billion buyback announced
* Interim dividend increased from 33 to 38 cents per share, up 15%
* Substantial $8.2 billion project pipeline:
o Acquisition of 49% interest in the MMX Minas-Rio iron ore project in Brazil
for $1.15 billion
o Winning tender for Michiquillay copper project in Peru for $403 million
o Acquisition of a 50% stake in the Pebble copper project in Alaska for
$1.4 billion
o Major Australian coal projects on track for 2007/08
o Sishen Expansion project on track for first commercial output Q4 2007
o Snap Lake diamonds to commence production at the end of Q3 2007
* Good progress in completing our restructuring:
o Decision taken to sell Tarmac
o Completion of demerger of Mondi
o Disposal of holding in Highveld Steel
o Unbundling of Hulamin from the Tongaat-Hulett Group
* Actions taken to improve poor safety performance
o Unacceptable safety performance, particularly in Platinum
o Immediate measures put in place at Rustenburg section platinum mine
to address safety concerns
* Strong management focus on operational improvements
HIGHLIGHTS FOR THE SIX MONTHS ENDED 6 months 6 months %
30 JUNE 2007 ended ended change
30 June 30 June
US$ million (except per share) 2007 2006
Group revenue including associates(4) 19,849 18,825 5.4%
Operating profit including associates
before special items and 5,452 4,563 19.5%
remeasurements(1)
Profit for the period attributable to
equity shareholders 3,379 2,943 14.8%
Underlying earnings for the period(2) 3,058 2,502 22.2%
EBITDA(3) 6,554 5,856 11.9%
Net cash inflows from operating activities 3,678 3,289 11.8%
Earnings per share(5) (US$):
Basic earnings per share 2.41 2.00 20.5%
Underlying earnings per share 2.18 1.70 28.2%
Interim dividend (US cents per share):
Interim dividend 38 33 15.2%
(1) Operating profit includes share of associates` operating profit and is
before special items and remeasurements, unless otherwise stated. See note 3 to
the financial information. For definition of special items and remeasurements
see note 6 to the financial information.
(2) See note 9 to the financial information for basis of calculation of
underlying earnings.
(3) EBITDA is operating profit before special items and remeasurements,
depreciation and amortisation of subsidiaries and joint ventures and share of
EBITDA of associates. `Total profit from operations and associates` is
reconciled to EBITDA in note 13 to the financial information. EBITDA is
reconciled to `Cash inflows from operations` in the primary statements.
(4) The Group`s share of associates` turnover is $2,903 million (2006: $2,650
million). See note 3 to the financial information.
(5) Going forward, the impact on Earnings per share of the demerger with Mondi
is explained in note 18 of the financial information.
Cynthia Carroll, Chief Executive, said:
"The six months to June mark another record financial performance by Anglo
American. Underlying earnings were up 22% to $3.1 billion, driven by a
continued favourable trading environment and generally strong performances
across our business.
We continued to make good progress in the completion of our restructuring
plans, further simplifying the Group structure and focusing on our core mining
portfolio. The demerger of our paper and packaging division, Mondi, was
concluded at the beginning of July. We have disposed of our 29% stake in
Highveld Steel and the unbundling of Hulett Aluminium (Hulamin) from
Tongaat-Hulett has now been completed.
So far this year, we have announced three significant acquisitions, further
enhancing our strong $8.2 billion project pipeline a successful entry into
the MMX Minas-Rio iron ore project in Brazil, the Michiquillay copper project
in Peru and a 50% stake in the Pebble copper project in Alaska. We are today
announcing a new $4 billion share buyback programme, on the back of our
continued strong cash flows.
Operating challenges have persisted, in particular cost pressures at certain
operations. Base Metals and Anglo Platinum experienced labour disruption
associated with difficult wage negotiations. Port and rail logistics in
Australia remain an issue for Anglo Coal and we continue to focus intensively
on cost containment across the Group.
In May, I announced that we were evaluating Tarmac`s fit within our portfolio
of assets and, as a result of this review, we have decided that Tarmac is not
core to the future development of Anglo American as a focused mining company
and a sale process will be initiated.
The Group`s safety performance for the first half of 2007 has been completely
unacceptable. I have taken immediate action to address the safety situation,
particularly in Anglo Platinum, and initiated a major new drive to improve
safety.
Looking to the future, Anglo American is well placed to strengthen its position
as one of the world`s leading mining companies. Metal inventories remain low in
general and continued supply-side pressures are envisaged across the industry.
Against this favourable backdrop, we are confident we can continue to realise
the Group`s exciting growth prospects, both organically and through
acquisitions."
Financial results
Anglo American`s first half underlying earnings were a record $3.1 billion as
continued strong metal prices reflected the favourable trading environment for
the Group`s key commodities. Operating profit of $5.5 billion was 19% higher
than for the corresponding period last year, with EBITDA up 12% at a record
$6.6 billion.
Strong contributions came from Base Metals, which achieved its highest ever
operating profit in the period due to increases in nickel, zinc and lead
prices, and Ferrous Metals where higher iron ore prices and sales volumes led
to a 12% increase in operating profit.
Anglo Platinum`s record operating profit reflected an increase of 62% compared
with the same period in 2006, boosted by higher platinum group metals (PGM)
prices, but partially offset by higher labour costs and above inflation
increases in operating costs.
Despite Coal`s operating profit being higher in its South African and South
American operations, results were lower from Australia, leading to a reduction
in overall operating profit. This was due to ongoing port and rail constraints
and a combination of softening prices for metallurgical coal, a stronger
Australian dollar, and higher inflation relating to mining industry costs. An
improvement in the performance of the Australian coal operations is expected in
the second half.
Operating profit from De Beers was down 9% due to diminishing supplies of rough
diamonds to the Diamond Trading Company (DTC) from Russian diamond producer
Alrosa, as well as price corrections in the gem diamond market in the second
six months of 2006.
Industrial Minerals saw a significant improvement in its operating profit, up
37% compared to the same period in 2006, due in part to disciplined margin
management and favourable demand in certain sectors.
Paper and Packaging substantially improved its performance, with operating
profit up 53%, due in part to a better trading environment. Its results were
fully consolidated by Anglo American in the period and up until 2 July 2007.
Operating profit from AngloGold Ashanti was down 54% to $138 million due to the
Group accounting for AngloGold Ashanti as a subsidiary until 20 April 2006,
when attributable ownership fell from 51% to 42%, resulting in reclassification
as an associate. Performance was impacted by increased costs and a decline in
production.
The Group achieved cost savings of $257 million in synergies, efficiencies and
procurement. Despite the continued cost pressures currently being experienced
by the mining industry, growth in cash costs was limited to 3.3%. Two major
cost-saving exercises are under way. First, shared services will be launched
across common business functions such as Finance, IT and HR, along with a
centralised procurement programme. Secondly, a major initiative to optimise
operational performance has started with Coal and Base Metals and will extend
to Anglo Platinum, Ferrous Metals and Diamonds by year-end.
Production
Production volumes were up for copper, coal, iron ore, industrial minerals and
diamonds. Mined platinum production, in terms of equivalent refined ounces, was
up 1.3%, although total refined output decreased due to a short-term process
pipeline stock increase. The short-term build-up of pipeline stock will be
refined for sale during the second half of the year. Challenging operating
conditions continued to be felt at some of AngloGold Ashanti`s operations,
where overall production volumes were down compared with first half 2006.
Interim dividend
The interim dividend has been set at 38 US cents per share (cps) 15% higher
than the 33 cps interim dividend declared for the first half of 2006.
Capital structure and increased return to shareholders
Net debt increased by $2.0 billion since 31 December 2006 and at 30 June 2007
amounted to $5.3 billion. The $3 billion share buyback programme announced in
February is 61% complete, with around $1.8 billion of shares having been
repurchased as at 2 August 2007. Given the continued strong cash generation, it
has been decided to increase the buyback by a further $4 billion for this year.
Strategy update
Good progress in advancing the restructuring programme was made, leading to a
continued focus on the Group`s core mining portfolio.
In May, it was announced that an evaluation of Tarmac`s fit within Anglo
American`s portfolio of assets was under way. As a result, it has been decided
that Tarmac is not core to the future development of Anglo American as a
focused mining company and a sale process will be initiated.
Tarmac has a leading position in the UK construction materials industry and
some significant positions in continental Europe and the Middle East. It is a
cash-generative business with strong prospects. Interest in the aggregates
sector is currently high as a result of ongoing industry consolidation and it
is felt that a sale will maximise value for Anglo American shareholders. The
disposal process is expected to be completed in the first half of 2008.
The paper and packaging business, Mondi, was successfully demerged from the
Group on 2 July. Mondi is now a dual-listed company: Mondi plc has its primary
listing in London and secondary listing on the Johannesburg Stock Exchange
(JSE), and holds Mondi`s non-African assets; and Mondi Limited is listed on the
JSE and holds the African assets. Following the demerger and a share
consolidation by Anglo American, for every 100 Anglo American shares held
before the demerger, a shareholder received 91 new Anglo American shares, 25
Mondi plc shares and 10 Mondi Limited shares.
In early May, the disposal of the remaining 29.2% shareholding in Highveld
Steel to Evraz was announced. The sale marks the completion of Anglo American`s
disposal of its interest in Highveld, with total proceeds of $678 million
generated, including the initial payment of $412 million, dividends of $28
million and the final payment of $238 million.
In June, the unbundling of Hulamin from the Tongaat-Hulett Group was completed
with the listing of Hulamin on the JSE and simultaneous injection of
broad-based black economic ownership into both Tongaat-Hulett and Hulamin.
Options continue to be examined to effect an orderly exit of the Group`s 41.6%
stake in AngloGold Ashanti.
Strong project pipeline driving growth
Anglo American`s $8.2 billion portfolio of approved projects is developing well
and has been further strengthened with the addition of Phase I of the MMX
Minas-Rio iron ore project in Brazil (49%). Phase I of the project should
deliver 26.5 million tonnes per annum (Mtpa) of iron ore pellet feed, ramping
up from the fourth quarter of 2009, at a total anticipated cost of $2.35
billion (100%).
It was announced in April that Anglo American had won the tender for the
Michiquillay copper project in Peru. The $403 million consideration for this
world-class resource will be payable over five years and a Peru-based team is
in the process of being mobilised.
A 50% stake in the Pebble copper project in Alaska was acquired in August for
$1.4 billion. The project`s key assets are its near-surface, 4.1 billion tonne,
open-pit Pebble West deposit and the deeper and higher grade 3.4 billion tonne
Pebble East deposit. As one of the world`s largest copper-gold- molybdenum
deposits, Pebble has the potential to be a world-class operation.
The implementation of Anglo Platinum`s mining and processing projects to
maintain and expand production continues on schedule and within budget.
Projects that continue to increase output include Kroondal, Marikana and the
Mototolo joint venture. The approval this year of the expansion of the base
metals refinery, at an anticipated cost of $279 million, the Lebowa Platinum
Mine Middelpunt Hill project, at an expected cost of $252 million, and the $139
million Townlands ore replacement project further supports growth.
In Australia, the $835 million Dawson coal expansion project is on track to
reach full production later this year. The increase in production will be 5.7
Mtpa. Work on the Lake Lindsay greenfield project at German Creek is proceeding
as planned, with first coal scheduled for 2008 and incremental production of 4
Mtpa. In Colombia, the expansion of Cerrejon from 28 to 32 Mtpa is under way
and on track to reach full production in 2008. In South Africa, the development
of Mafube is progressing well, with plant commissioning expected to commence in
November 2007.
The feasibility study regarding a potential expansion of the Los Bronces copper
mine in Chile has been completed and is due for approval in the fourth quarter
of 2007. Also in Chile, a two-stage debottlenecking project at Collahuasi is
being studied. The revised feasibility study for the Peruvian copper mine at
Quellaveco will be completed during the first half of 2008. The $1.2 billion
Barro Alto nickel project in Brazil continues towards first production,
scheduled for early 2010.
The Sishen Expansion iron ore project in Ferrous Metals is on track to deliver
its first commercial output in the fourth quarter of 2007 with a ramp up to
full production of 13 Mtpa by 2009.
De Beers` Snap Lake project in Canada is on track to commence production at the
end of the third quarter of 2007, producing 24.6 million carats over the life
of the project. During June, the MV Peace in Africa, De Beers` newest marine
diamond mining vessel, commenced operations off the west coast of South Africa.
The vessel is expected to yield approximately 4.5 million carats over its
estimated operating life of 30 years.
Safety and sustainable development
Safety is being given renewed impetus, particularly in the light of a very
disappointing first half, during which there were 29 fatalities. In June, 130
of the Group`s most senior managers gathered at a safety summit in Johannesburg
where it was made clear that a step-change in safety performance was needed to
achieve the goal of zero harm. This is based upon rigorous adherence to Group
standards, effective learning from previous incidents, and a firm commitment
from leadership to facilitate zero harm and increase capacity to manage safety
risks at all levels.
The significant deterioration in safety performance in the first half of 2007
at Rustenburg section platinum mine resulted in the suspension of production at
all shafts on a staggered basis, with the aim of ensuring that every employee
fully understands the principles and accountability underlying all current
safety standards, initiatives and programmes.
Important progress was made during the period in developing a new framework of
occupational health policies called the Anglo Occupational Health Way.
Following the success of the Anglo Socio-Economic Assessment Toolbox (SEAT)
process over the past three years, a new version of the toolbox will be rolled
out across the Group, including De Beers, during the second half of the year.
Outlook
The outlook for the majority of the Group`s metals and minerals remains
positive as demand growth continues to be vigorous. Slower US economic growth
has been offset by strength across the rest of the globe, most notably in the
Asian economies, where both China and India continue to grow strongly.
Looking to the future, Anglo American is well placed to strengthen its position
as one of the world`s leading mining companies. Metal inventories remain low in
general and ongoing supply-side pressures are envisaged across the industry.
Against this favourable backdrop, the Group will continue to realise its
exciting growth prospects, both organically and through acquisitions.
For further information:
Investor and Media Relations
Charles Gordon
Tel: +44 207 968 8933
Anna Poulter
Tel: +44 207 968 2155
Daniel Ngwepe
Tel: +27 11 638 2267
Webcast of presentation:
A live webcast of the annual results presentation starting at 10.00am UK time
on 3 August can be accessed through the Anglo American website at
www.angloamerican.co.uk.
Pictures:
High resolution images can be downloaded by the media at www.vismedia.co.uk
Notes to Editors:
Anglo American plc is one of the world`s largest mining and natural resource
groups. With its subsidiaries, joint ventures and associates, it is a global
leader in platinum, gold and diamonds, with significant interests in coal, base
and ferrous metals and industrial minerals. The Group is geographically
diverse, with operations in Africa, Europe, South and North America, Australia
and Asia.
Note: Throughout this press release `$` denotes United States dollars and
`cents` refers to United States cents; operating profit includes associates`
operating profit and is before special items and remeasurements unless
otherwise stated; special items and remeasurements are defined in note 6 and
underlying earnings are calculated as set out in note 9 to the financial
information. EBITDA is operating profit before special items and
remeasurements, depreciation and amortisation of subsidiaries and joint
ventures and share of EBITDA of associates. `Total profit from operations and
associates` is reconciled to EBITDA in note 13 to the financial information.
EBITDA is reconciled to `Cash inflows from operations` in the primary
statements.
Financial review of Group results
Underlying earnings per share for the half year increased to $2.18 per share,
up 28% over the first six months of 2006. Underlying earnings totalled $3.1
billion, with strong contributions from Base Metals and Platinum. There was an
increase in operating profit from Ferrous Metals, Industrial Minerals and Paper
and Packaging. Coal recorded lower contributions as higher profits from South
Africa and South America were more than offset by lower profits in Australia,
where difficult trading conditions were experienced. Operating profit at De
Beers was below prior half-year levels due to diminishing supplies of rough
diamonds to the DTC from Russian diamond producer Alrosa, as well as price
corrections in the gem diamond market in the second six months of 2006. The
reduced contribution from Gold is the result of the change in its status to an
associate in April 2006, the impact of exchange rates, increased costs and a
decline in production, partly offset by a stronger gold price.
6 months 6 months
ended ended
30 June 30 June
Underlying earnings 2007 2006
$ million
Profit for the financial period attributable to
equity shareholders 3,379 2,943
Operating special items including associates 11 482
Operating remeasurements including associates 31 462
Net profit on disposals including associates (319) (1,035)
Financing special items 2 -
Financing remeasurements:
Fair value (gain)/loss on AngloGold Ashanti
convertible option (21) 31
Exchange gain on De Beers preference shares (1) (44)
Unrealised gains on non-hedge derivatives including
associates (29) (20)
Tax on special items and remeasurements including
associates 38 (134)
Related minority interests on special items and
remeasurements (33) (183)
Underlying earnings 3,058 2,502
Underlying earnings per share ($) 2.18 1.70
Profit for the financial period attributable to equity shareholders increased
by 15% to $3.4 billion compared with $2.9 billion in the first half of 2006.
This increase relates mainly to strong operational results, as discussed above
and in the Chief Executive`s statement, and lower operating special charges
partly offset by a lower level of net profit on disposals.
There was a net profit on disposals of $319 million (2006: $1,035 million)
which included profit on the sale of the remaining shareholding in Highveld,
profit on the part-disposal of the investment in shares in Exxaro and profit on
the part-disposal of Mondi Packaging Paper Swiecie. In 2006, the profit on
disposal was generated mainly as a result of the Group`s disposal of 19.7
million ordinary shares in AngloGold Ashanti and the Group`s non-participation
in the issue of ordinary shares by AngloGold Ashanti ($896 million total net
profit on disposal). There have been no significant operating special item
losses or financial remeasurements in 2007. In 2006, the operating special
charges related to the impairment and restructuring of certain Tarmac assets
($278 million), impairment and closure costs relating to the Dartbrook coal
mine in Australia ($122 million) and the impairment of certain downstream
converting Packaging assets at Paper and Packaging ($72 million). The operating
remeasurement in 2006 related to unrealised losses on non-hedge derivatives
($462 million) recorded principally at AngloGold Ashanti.
The Group`s results are influenced by a variety of currencies owing to the
geographic diversity of the Group. The overall impact on underlying earnings of
currency movements was positive at $161 million. Most of this related to the
South African rand. The rand weakened against the US dollar from an average
exchange rate of R6.31 in the first half of 2006 to an average of R7.16 in the
first six months of 2007, though this was partly offset by the strengthening
Australian dollar, which had a negative impact of $28 million. There was a
significant positive effect of increased prices, amounting to $842 million on
underlying earnings.
6 months 6 months
Summary income statement 30 June 30 June
2007 2006
$ million
Operating profit before special items and
remeasurements 4,817 4,006
Operating special items (6) (462)
Operating remeasurements 22 (392)
Group operating profit before associates 4,833 3,152
Net profit on disposals 294 927
Share of net income from associates (1) 369 369
Profit before finance costs and tax 5,496 4,448
Net finance costs before special items and
remeasurements (84) (88)
Financing special items and remeasurements 21 13
Profit before tax 5,433 4,373
Tax (1,560) (1,202)
Profit for the financial period 3,873 3,171
Minority interests (494) (228)
Profit for the financial period attributable
to equity holders 3,379 2,943
Earnings per share ($) 2.41 2.00
Group operating profit including associates
before special items and remeasurements 5,452 4,563
(1) Operating profit from associates
before special items and remeasurements 635 557
Operating special items and remeasurements
(2) (58) (90)
Net profit on disposals(2) 25 108
Net finance costs (before remeasurements) (59) (50)
Financing remeasurements(2) 28 20
Income tax expense (after special items and
remeasurements) (173) (166)
Minority interests (after special items and
remeasurements) (29) (10)
Share of net income from associates 369 369
(2) See note 6 to the financial information.
Special items and remeasurements
30 June 2007
Excluding
associates Associates Total
$ million
Operating special items (6) (5) (11)
Operating
remeasurements 22 (53) (31)
Operating special items
and remeasurements 16 (58) (42)
30 June 2006
Excluding
associates Associates Total
$ million
Operating special items (462) (20) (482)
Operating
remeasurements (392) (70) (462)
Operating special items
and remeasurements (854) (90) (944)
Operating special items and remeasurements, including associates, amounted to
$42 million. Special operating charges of $11 million included a $5 million
impairment of Business Paper assets.
Operating remeasurements of $31 million included $22 million unrealised net
gains on non-hedge derivatives within subsidiaries and joint ventures,
primarily arising at Scaw Metals, and $53 million unrealised net losses in
associates, primarily relating to unrealised losses on non-hedge commodity
derivatives at AngloGold Ashanti.
Net profit on sale of operations, including associates, amounted to $319
million. This included $140 million profit on the sale of the remaining 29.2%
shareholding in Highveld and $68 million profit on the sale of 19 million
shares in Exxaro. In addition, to avoid a mandatory offer for the minority
interests in Mondi Packaging Paper Swiecie being triggered by Mondi`s demerger
from Anglo American plc, a 5.3% stake in Swiecie was disposed of, resulting in
a profit on sale of $77 million.
Financing special items and remeasurements, including associates, include a $21
million fair-value gain on the AngloGold Ashanti convertible bond option,
unrealised gains of $29 million on non-hedge derivatives and a $1 million
foreign-exchange gain on De Beers US dollar preference shares held by a rand
denominated entity.
Net finance costs
Net finance costs, excluding net financing special items and remeasurement
gains of $21 million (2006: gain of $13 million), were $84 million compared
with $88 million in the corresponding period in 2006.
Taxation
30 June 2007
Before
special Associates`
items and tax and
remeasure- minority Including
$ million ments interests(1) associates
Profit before tax 5,106 203 5,309
Tax (1,521) (174) (1,695)
Profit for the
financial period 3,585 29 3,614
Effective tax rate 31.9%
30 June 2006
Before
special Associates`
items and tax and
remeasure- minority Including
$ million ments interests(1) associates
Profit before tax 4,231 194 4,425
Tax (1,318) (184) (1,502)
Profit for the
financial period 2,913 10 2,923
Effective tax rate 33.9%
(1) Before special items and remeasurements
IAS 1 Presentation of Financial Statements requires income from associates to
be presented net of tax on the face of the income statement. Associates` tax is
therefore not included within the Group`s total tax charge on the face of the
income statement. Associates` tax and minority interests before special items
and remeasurements included within `Net income from associates` for the period
ended 30 June 2007 was $203 million (2006: $194 million).
The effective rate of taxation including share of associates` tax and minority
interests before special items and remeasurements was 31.9%. This was a
decrease from the effective rate on the same basis of 33.9% in the six months
ended 30 June 2006. The June 2007 tax rate reflects the relative impact of the
statutory tax rates, on a fully distributed basis where appropriate, of the
countries in which the Group`s operations are based. In future periods it is
expected that the effective tax rate, including associates` tax, will remain
above the UK statutory tax rate of 30%.
Balance sheet
Total shareholders` equity was $24.2 billion compared with $24.3 billion as
at 31 December 2006.
Net debt, excluding hedges but including balances that have been reclassified
as held for sale, was $5.3 billion, an increase of $2.0 billion from 31
December 2006. The increase was principally due to share buybacks of $3.1
billion which took place in the first half of 2007.
Net debt at 30 June 2007 comprised $8.2 billion of debt, offset by $2.9 billion
of cash and cash equivalents. Net debt to total capital(2) as at 30 June 2007
was 20.2%, compared with 12.9% at 31 December 2006.
Cash flow
Net cash inflows from operating activities were $3.7 billion compared with $3.3
billion in the first half of 2006. EBITDA was $6.6 billion, an increase of 12%
from $5.9 billion in the first half of 2006.
Depreciation and amortisation, excluding associates, decreased by $256 million
to $907 million.
Receipts of long-term borrowings were $2.0 billion, reflecting the increase in
debt on the Group`s
balance sheet.
(2) Net debt to total capital is calculated as net debt divided by total
capital less investments in associates. Total capital is net assets excluding
net debt.
Acquisition expenditure accounted for an outflow of $73 million compared with
$230 million in the first half of 2006.
Proceeds from disposals(3) of $468 million arose principally from the
completion of the disposal of Highveld, disposal of a 5.3% stake in Mondi
Packaging Paper Swiecie and a dilution of an effective 12% and 6% interest in
Tongaat-Hulett and Hulamin respectively.
Dividends paid to minority interests increased to $417 million in the first
half of 2007 from $193 million in the same period in 2006 and relate primarily
to higher dividends paid by Anglo Platinum.
Repayment of loans and capital from associates amounted to $25 million.
Purchases of tangible assets amounted to $1.8 billion, an increase of $324
million. Increased capital expenditure by Anglo Platinum, Coal, Ferrous Metals
and Base Metals was partially offset by a reduction in capital expenditure at
Paper and Packaging, as well as the impact of including AngloGold Ashanti`s
capital expenditure up to 20 April 2006, after which it was accounted for as an
associate, compared with a full six months as an associate in 2007.
Dividends
An interim dividend of 38 US cents per share to be paid on 20 September 2007
has been declared.
Demerger of Mondi
On 2 July 2007, the Paper and Packaging business was demerged from the Anglo
American Group by way of a dividend in specie paid to Anglo American plc
shareholders. The pro forma set out below shows, for information, a summary of
Group results excluding Paper and Packaging.
Group results (before
special items and
remeasurements)
before demerger
6 months 6 months
ended ended
$ million 30.06.07 30.06.06
Total profit from operations
and associates 5,190 4,319
Profit before tax 5,106 4,231
Income tax expense (1,521) (1,318)
Profit for the financial period 3,585 2,913
Underlying operating profit(4) 5,452 4,563
Net segment assets 29,477 27,039
Underlying earnings 3,058 2,502
Paper and Packaging
results (before special
items and
remeasurements)(5)
6 months 6 months
ended ended
$ million 30.06.07 30.06.06
Total profit from operations
and associates 323 210
Profit before tax 283 172
Income tax expense (81) (51)
Profit for the financial period 202 121
Underlying operating profit(4) 324 212
Net segment assets 7,200 6,671
Underlying earnings 167 94
Group results (before
special items and
remeasurements) excluding
Paper and Packaging
6 months 6 months
ended ended
$ million 30.06.07 30.06.06
Total profit from operations
and associates 4,867 4,109
Profit before tax 4,823 4,059
Income tax expense (1,440) (1,267)
Profit for the financial period 3,383 2,792
Underlying operating profit(4) 5,128 4,351
Net segment assets 22,277 20,368
Underlying earnings 2,891 2,408
Further analysis of the demerger of Mondi can be found in note 18 of the
financial information.
(3) Represents proceeds from disposal of subsidiaries, sale of interest in
joint ventures and associates, and sale of financial asset investments.
(4) Underlying operating profit includes associates` operating profit and is
before special items and remeasurements.
(5) These results include inter-company interest expense of $22 million (six
months ending 30 June 2006: $26 million), which from the Group`s perspective
would be external after the Paper and Packaging demerger.
Going forward, the weighted average number of ordinary shares and earnings per
share (EPS) of the Group will be impacted by the Anglo American share
consolidation which, on 2 July 2007, resulted in 100 existing Anglo American
ordinary shares being exchanged for 91 new Anglo American ordinary shares.
In accordance with IAS 33 Earnings per Share, the share consolidation will only
impact the calculation of the weighted average number of shares following the
date of the consolidation. However, if both the demerger and the share
consolidation had occurred at the beginning of the period, the Group`s
underlying EPS would have been $2.27 (2006: $1.79).
Operations review
In the operations review on the following pages, operating profit includes
associates` operating profit and is before special items and remeasurements
unless otherwise stated. Capital expenditure relates to cash expenditure on
fixed assets. Share of Group operating profit and Group net operating assets is
based on Group results including the contribution of Mondi.
Base Metals
6 months 6 months
30 June 30 June
$ million 2007 2006*
Operating profit 2,165 1,853
Copper 1,428 1,536
Nickel, niobium, mineral sands and phosphates 436 140
Zinc 345 208
Other (44) (31)
EBITDA 2,329 2,032
Net operating assets 4,937 5,195
Capital expenditure 148 111
Share of Group operating profit (%) 40 41
Share of Group net operating assets (%) 17 19
*Copebras has been reclassified from Industrial Minerals to Base Metals to
align with internal management reporting. As such, the comparative data has
been restated.
Base Metals attained its highest-ever operating profit against a background of
strong base metal prices, increased copper production and marginally lower zinc
and nickel production. Nickel, zinc and lead prices moved significantly higher
with the average realised copper price unchanged. Ongoing pressure on the cost
of energy, labour and some key consumables, however, affected the financial
performance.
Although copper and zinc treatment and refining charges eased, increases in
metal price-linked smelter deductions and price participation in the case of
zinc concentrate producers, adversely impacted margins.
Average (1) LME prices (c/lb) 2007 2006
Copper 307 275
Nickel 2,024 787
Zinc 162 125
Lead 90 53
(1) Represents six-month average
Market conditions remain highly supportive. Strong demand growth from China was
bolstered by a pick-up in offtake in Europe offsetting US weakness and this,
together with ongoing supply-side disruptions, led to metal market deficits and
inventories remaining at very low levels. Speculative and investor funds`
interest in commodities markets remains an ongoing feature.
Copper division 2007 2006
Attributable production (tonnes) 308,300 300,000
All Chilean copper mines except Collahuasi increased production. At Los
Bronces, greater sulphide ore throughput more than offset a small decrease in
grade, resulting in higher production of 112,400 tonnes of copper and 1,100
tonnes of molybdenum. Cathode production was at an all-time high. El Soldado
experienced similar levels of sulphide mill throughput, though increased
sulphide and oxide ore grades resulted in production increasing to 35,800
tonnes. Chagres` production fell by 8% to 82,700 tonnes, with lower
concentrate grades having an impact on both throughput and recoveries. Mantos
Blancos raised overall output by 8% to 45,700 tonnes while production at
Mantoverde rose marginally by 1% to 29,600 tonnes. At Collahuasi, downtime
incurred during the replacement of the motor stator at SAG Mill
No. 3 led to a production shortfall of 21,000 tonnes of copper (on a 100%
basis). This, together with a planned decrease in sulphide ore grades,
resulted in attributable copper output falling to 83,600 tonnes.
Attributable molybdenum production rose to 700 tonnes.
Mantos Blancos and Mantoverde completed the renegotiation of collective
bargaining agreements.
However, the Collahuasi negotiations broke down and strike action commenced on
9 July. The strike was resolved on 13 July with limited impact on volumes.
With the virtual cessation of gas supplies from Argentina to the northern
Chilean grid, the availability and cost of power are a key concern. Anglo
American and Collahuasi are monitoring the situation closely and, along with
the industry and government, investigating both short- and medium-to-long-term
solutions.
The Los Bronces feasibility study, which contemplates increasing sulphide mill
throughput from 61,000 tonnes per day (tpd) to 148,000 tpd and total initial
production in excess of 400,000 tonnes per annum (tpa) of copper, has been
completed and will be presented for approval in the fourth quarter. The
Quellaveco revised feasibility study, examining a project with copper
production of about 200,000 tpa, will be completed during the first half of
2008. At Collahuasi, debottlenecking studies aimed at raising sulphide mill
throughput from 130,000 tpd to about 170,000 tpd and total initial copper
production to around 650,000 tpa (on a 100% basis), are proceeding
satisfactorily.
In May, Anglo American won the privatisation auction for the Michiquillay
copper project in Peru with a bid of $403 million, payable over five years.
Michiquillay is a significant deposit, which, it is envisaged, could support a
150,000 tpa operation, with additional upside potential.
The acquisition of a 50% stake for $1.4 billion in the Pebble project in south
western Alaska was announced at the beginning of August. The project`s key
assets are the near-surface, 4.1 billion tonne Pebble West deposit and the
deeper and higher grade, 3.4 billion tonne Pebble East deposit.
Nickel, niobium, mineral sands and phosphates division 2007 2006
Attributable nickel production (tonnes) 12,900 13,700
Production at Loma de Niquel was marginally down at 8,200 tonnes mainly as a
result of an electric furnace outage, unscheduled maintenance and labour
disruption. Codemin`s nickel output was 4% lower at 4,700 tonnes, while
Catalao`s niobium production rose 5% to 2,300 tonnes. Copebras operated at
full capacity as agricultural demand rebounded and prices firmed materially.
By mid-year, total commitments on the $1.2 billion Barro Alto project had
reached $500 million. The project remains on track to produce its first metal
early in 2010.
Zinc division 2007 2006
Attributable zinc production (tonnes) 168,500 169,800
Attributable lead production (tonnes) 30,400 33,200
Skorpion operated at design capacity, maintaining production levels, with
improvements in throughput and recoveries offsetting the anticipated grade
decline. Sales tonnages, however, were down due to the timing of shipments.
Although Lisheen maintained mill throughput levels, lower zinc and lead grades
were encountered. These resulted from reduced mining flexibility arising from
poor ground conditions, increased volumes of water underground and the mining
of higher tonnages of waste ground in the wake of the backfill programme.
Production of zinc and lead totalled 79,000 tonnes and 9,000 tonnes
respectively. At Black Mountain, the opening up of the Deeps orebody and the
development of its infrastructure have affected mining flexibility.
The sale of 100% of Namakwa Sands and 26% of each of Black Mountain and
Gamsberg (total combined consideration of R2.2 billion subject to contractual
purchase price adjustments) to black economic empowerment group Exxaro is
anticipated to be completed in the second half of 2007.
Fundamentals for most base metals are expected to continue to be positive.
Although some inventory rebuilding will take place, overall stock levels should
remain below their historical averages well into 2008, particularly in the case
of copper and nickel. There is growing evidence, however, of price- induced
substitution and scrap recycling in these two markets.
Platinum
6 months 6 months
30 June 30 June
$ million 2007 2006
Operating profit 1,517 934
EBITDA 1,737 1,171
Net operating assets 7,617 6,515
Capital expenditure 643 276
Share of Group operating profit (%) 28 20
Share of Group net operating assets (%) 26 24
Anglo Platinum`s operating profit was $1,517 million, an increase of 62%
compared with the same period last year. The increase was mainly attributable
to higher US dollar prices realised on metals sold.
The average dollar price realised for the basket of metals sold equated to
$2,613 per platinum ounce, 34% higher than in 2006, with firmer platinum,
rhodium and nickel prices making the largest contribution. The average realised
price for platinum was $1,233 per ounce while nickel averaged $44,051 per
tonne. Rhodium averaged $4,274 per ounce and includes the effect of long-term
contractual arrangements with some customers.
Equivalent refined platinum production (mined ounces converted to expected
refined ounces) increased by 1.3% to 1,274,000 ounces. The increase was lower
than anticipated due to a number of labour issues, including a shortage of
skilled labour, strike action at joint ventures, the unsettled situation
associated with wage negotiations and lower process recovery at Potgietersrust.
Despite higher production from operations, refined platinum output at 1,193,700
ounces was down 11%, reflecting 90,000 ounces of platinum that remained in
process pipeline stocks. These stocks are expected to be refined for sale
during the second half of 2007. In addition, refined production in the first
half of 2006 significantly exceeded production from operations due to the
processing of concentrate built up at the Polokwane smelter in 2005.
Costs per equivalent refined platinum ounce went up by 19.2% to R7,200 as a
consequence of an increase in workforce numbers to support the planned
expansion at mining operations, coupled with the decline in production
efficiencies arising from labour issues.
The implementation of Anglo Platinum`s suite of projects to maintain and expand
production continues on schedule and within budget. Projects that continue to
increase output include Kroondal, Marikana and the Mototolo joint venture.
In the first half of 2007, Anglo Platinum approved a number of projects,
including the expansion of the base metals refinery plant to 33,000 tonnes per
annum (tpa) of nickel by 2010, the Lebowa Middelpunt Hill project and the
Rustenburg Townlands ore replacement project. The PPRust North expansion
project, which aims to produce an additional 230,000 platinum ounces per annum
from 2009, is progressing on schedule. The relocation of the neighbouring
Ga-Puka and Ga-Sekhaolelo communities commenced in July 2007 under the guidance
of a representative task team, which is facilitated by the office of the
premier of Limpopo. The relocation is the result of extensive consultations
with the communities, tribal authorities and local and provincial governments
over the past few years. The relocation is expected to cost $107 million and is
being conducted according to World Bank resettlement guidelines and aims to
ensure that the communities are better off after resettlement.
The Amandelbult East Upper UG2 project, which will contribute an additional
100,000 ounces of refined platinum per annum by 2012, is progressing ahead of
schedule. The Rustenburg Paardekraal 2 shaft replacement project is on track
and is expected to yield 120,000 ounces of refined platinum annually by 2015,
replacing decreasing production as a result of continuing Merensky ore reserve
depletion.
Demand for platinum remains firm and supportive of higher prices. Purchases of
newly mined platinum for jewellery manufacturing in China have held up well in
the face of higher prices, though new-metal demand has slowed in the Japanese
and US jewellery markets. The increase in China of recycled platinum jewellery
and higher US dollar spend are indicators of strong brand support. Platinum
demand autocatalysts remains robust, driven by European demand for catalysts,
particulate filters for diesel vehicles and growing Asian automotive
production. Industrial demand remains firm, particularly in the glass and
petroleum sectors.
As a result of the operating difficulties encountered in the first half of the
year and their ongoing impact on operational efficiencies, refined platinum
production for 2007 is expected to be between 2.60 million ounces and 2.65
million ounces and, for 2008, between 2.80 million ounces and 2.95 million
ounces.
Ferrous Metals
6 months 6 months
30 June 30 June
$ million 2007 2006
Operating profit 719 644
Kumba Iron Ore 409 305
Kumba - other - 73
Highveld Steel 108 95
Scaw Metals 84 74
Samancor Group 57 26
Tongaat-Hulett 65 78
Other (4) (7)
EBITDA 780 783
Net operating assets 1,865 2,488
Capital expenditure 250 222
Share of Group operating profit (%) 13 14
Share of Group net operating assets (%) 6 9
Operating profit increased by 12% to $719 million largely on the back of higher
iron ore prices and sales volumes.
Kumba Iron Ore achieved a record operating profit of $409 million, up 34% on
the same period in 2006, mainly due to iron ore price increases. In addition,
sales volumes rose by 8%, due principally to the sale of some 1.5 million
tonnes of iron ore that had accumulated at the Saldanha port due to the
breakdown of loading equipment in September 2006. Production volumes were up 2%
despite several production stoppages due to power outages and some unplanned
maintenance. Construction of the $754 million, 13 million tonnes per annum
(Mtpa) Sishen Expansion project continues, with first commercial output
expected in the last quarter of 2007 and ramp-up to full production by 2009.
Scaw Metals produced its highest-ever interim operating profit of $84 million
as it experienced strong demand for its steel, mining and infrastructure
related products. Margins, however, remained under pressure owing to
significant price increases in key raw materials and import competition for
some of its South African product lines.
The attributable share of Samancor Manganese`s operating profit increased 119%
to $57 million, reflecting significantly higher manganese alloy and ore prices.
Tongaat-Hulett`s profits included the impacts of a small South African sugar
crop in 2006, improved export sugar prices and an increase in property
development profits, partly offset by the adverse effect of higher maize prices
on starch and glucose margins. Hulett Aluminium (Hulamin) increased sales
volumes by 6% over the comparative period.
As part of the process of growing the iron ore asset base, it was announced in
May that Anglo American had reached agreement with Brazilian-listed MMX to
acquire a 49% interest in the Minas- Rio iron ore project in Brazil for an
effective $1.15 billion. The transaction was concluded on 18 July.
Work is under way to secure the permits necessary to begin construction of the
first phase of the project. Planned annual production capacity will be 26.5
Mtpa of iron ore pellet feed, for start-up in the fourth quarter of 2009 at an
anticipated cost of approximately $2.35 billion.
In line with Anglo American`s strategic restructuring programme, Ferrous Metals
continued to optimise its asset base during the period under review. The sale
of the remaining 29% in Highveld to Evraz was completed in April. Three major
black economic empowerment (BEE) transactions were also completed. In March,
the sale of a 26% stake in Scaw South Africa to a BEE consortium and employee
trust was announced. In June, the unbundling of Hulamin from Tongaat-Hulett was
completed, with the listing of Hulamin on the Johannesburg Stock Exchange and
the simultaneous injection of broad-based BEE ownership into both
Tongaat-Hulett and Hulamin.
The global market for iron ore remains tight, with major suppliers experiencing
difficulties in bringing on new production to meet increasing demand,
principally from China. In addition, India`s recent iron ore export tax,
logistical constraints and weather-related supply interruptions in Australia
have adversely affected the seaborne market. As a result, spot prices are near
the record levels of March 2005.
Issues affecting second-half earnings include the 9.5% benchmark annual iron
ore price increase (effective 1 April 2007), current strong manganese market
conditions, and the deconsolidation of Tongaat and Hulamin.
Coal
6 months 6 months
30 June 30 June
$ million 2007 2006
Operating profit 320 356
South Africa 178 148
Australia 38 102
South America 115 110
Projects and corporate (11) (4)
EBITDA 442 464
Net operating assets 3,380 2,199
Capital expenditure 443 290
Share of Group operating profit (%) 6 8
Share of Group net operating assets (%) 11 8
Operating profit decreased by 10% to $320 million. Although profits from South
Africa and South America were higher, difficult trading conditions in Australia
reduced profits overall.
Operating profit from South Africa was $178 million, 20% higher, mainly as a
consequence of an 8% improvement in export prices and a 5% rise in domestic and
export sales volumes.
South African coal production increased by 8.2% to 29.4 million tonnes (Mt).
Fewer lost days due to rain and the delivery of benefits from production
initiatives such as mini-pit working at Landau, Goedehoop, Kleinkopje and
Kriel, are starting to have a positive impact. Most of the Eskom collieries are
optimising output to meet continued growth in electricity demand. Production at
the trade mines declined slightly.
Operating profit from Australia fell by 63% to $38 million. Production was
affected by ongoing port and rail constraints and mine plans are being adjusted
to optimise available port and rail capacity and to reduce costs. Results were
also affected by a stronger Australian dollar and higher inflation relating to
mining.
Attributable operating profit from South America was 5% higher at $115 million.
Sales volumes increased at the Cerrejon operation in Colombia. Production in
May and June was limited by equipment availability and heavy rain. Ongoing
trucking problems at Carbones del Guasare in Venezuela affected sales tonnage,
though the financial impact was offset by favourable price settlements for the
mine`s pulverised coal injection (PCI) coals.
In Canada, Peace River Coal commenced production at the Trend Mine near Tumbler
Ridge in British Columbia, with some exports of metallurgical coal now under
way.
In South Africa, construction at Mafube is progressing well with design and
procurement activities almost complete and the main effort now focusing on
construction and plant installation. The Inyosi project was announced and is a
major step towards fully delivering on black economic empowerment commitments.
In Australia, production increases from the Dawson project remain on schedule
with staged expansion and mining in more favourable strip ratios to be realised
from the third quarter. The Lake Lindsay project is on track, with increased
tonnage expected in 2008. Third-party port and rail constraints, however, will
continue to have an impact on production, sales and profit until the expansions
in infrastructure capacity are completed in 2008.
Overall, export prices and volumes are expected to be higher for the year as a
whole. In the second half, fundamentals for the Asian market are set to remain
strong, although the Atlantic market is not expected to be as firm.
Prices for hard coking coal from Australia remain high, with capacity
constraints at Queensland`s Dalrymple Bay Coal Terminal, along with record
steel production, high prices for Chinese coke and low coal inventories at
plants, creating anxiety over raw-material security. If conditions remain
unchanged, indications point to an increase in prices in the second half and a
firmer outlook for 2008.
Diamonds
6 months 6 months
30 June 30 June
2007 2006
$ million
Share of associate`s operating profit 266 293
EBITDA 310 341
Group`s aggregate investment in De Beers 2,201 2,029
Share of Group operating profit (%) 5 6
Attributable operating profit from De Beers of $266 million represented a 9%
decrease against the first half of last year.
This reflected diminishing supplies of rough diamonds to the Diamond Trading
Company (DTC) from Russian diamond producer Alrosa as well as the price
corrections in the gem diamond market in the second six months of 2006. In
consequence, De Beers recorded a 7% decline in sales to $3.4 billion.
In the first half of 2007, total production from De Beers and its partners
amounted to 25.3 million carats, 2% higher than last year`s record figure
(2006: 24.7 million carats). Of this total, Debswana accounted for 16.4 million
carats, marginally ahead of 2006; South African production rose by 3% to
7.6 million carats, principally due to increased output from Venetia; while
Namdeb lifted production by 18% to 1.2 million carats, divided almost
equally between its sea and land mining operations.
De Beers continues to develop four major mining projects. Its first mine in
Canada, at Snap Lake in the Northwest Territories, is scheduled to start
production at the end of the third quarter this year.
Production is expected to total 24.6 million carats over the life of the
project. A second one, at Victor in Ontario, is expected to come on stream in
mid-2008. In South Africa, re-opening of the long- dormant Voorspoed mine is
forecast for mid-2009. During June this year, the MV Peace in Africa, De Beers`
newest marine diamond mining vessel, began operations off South Africa`s
Atlantic coast. The vessel is expected to yield approximately 4.5 million
carats over its estimated operating life of 30 years.
Diamond jewellery demand for 2007 as a whole is likely to be 4%-5% higher than
2006. The price increases for rough diamonds achieved this year, aligned with
steady demand, should lead to an improvement in sales over the first half,
though the continuing shortages of certain categories of diamond will constrain
full-year sales.
In the medium term, the positive supply/demand forecast should lead to
continued appreciation in the price of rough diamonds, which together with
increased production as the new projects in Canada and South Africa come on
stream, will drive earnings growth for De Beers.
Gold
6 months 6 months
30 June 30 June
$ million 2007 2006
Share of associate`s operating profit 138 303
EBITDA 265 540
Group`s aggregate investment in AngloGold Ashanti 1,670 1,519
Share of Group operating profit (%) 3 7
Attributable operating profit from AngloGold Ashanti of $138 million
represented a 54% decrease against $303 million for the corresponding period
last year. The decrease was due to the Group accounting for AngloGold Ashanti
as a subsidiary until 20 April 2006 when attributable ownership fell from 51%
to 42%, resulting in reclassification as an associate, the impact of exchange
rates and increased costs. This was partly offset by a stronger gold price,
with the average price received rising by 5.4% from $573 to $604 per ounce.
Production, however, declined from 2,755,000 ounces to 2,675,000 ounces, with
declines in South Africa, Ghana and Mali offset by increases in Australia,
Brazil and Guinea. Cash costs increased by 8.5% from $307 to $333 per ounce.
For the full year, AngloGold Ashanti is targeting gold production of around 5.7
million ounces. The company`s ability to meet its 2007 production target could
be impacted by, among other factors, seismicity in South Africa, power
shortages in Africa, lower grades at some mines and any setback in clearing a
pit wall failure at Geita. AngloGold Ashanti is also subject to the cost
pressures and wage negotiations currently facing the mining industry, which
could adversely affect the cash costs for 2007. Capital expenditure for the
year as a whole is expected to be around $1 billion.
AngloGold Ashanti continues to manage actively its hedge position in a
value-accretive manner, while reducing the overall hedge position. In the six
months to June 2007, AngloGold Ashanti`s hedge position reduced by
approximately 1,410,000 ounces and it received a price of $604 per ounce - $54
less than the average spot price for the period.
Industrial Minerals
6 months 6 months
30 June 30 June
2007 2006*
$ million
Operating profit 208 152
EBITDA 325 265
Net operating assets 4,646 4,046
Capital expenditure 105 108
Share of Group operating profit (%) 4 3
Share of Group net operating assets (%) 16 15
*Copebras has been reclassified from Industrial Minerals to Base Metals to
align with internal management reporting. As such, t he comparative data has
been restated.
Operating profit at Tarmac increased by 37% to $208 million from $152 million
in the first half of 2006. This improvement was mainly attributable to
disciplined margin management for costs and revenue, an environment which
featured healthy demand in certain sectors and favourable exchange-rate
movement gains.
Operating profit in Tarmac`s UK Aggregate Products business was 9% higher
compared with the prior corresponding period. In a highly competitive market,
good progress was made in ensuring the price increases announced at the start
of the year were realised.
Market demand for crushed rock and concrete was 5% and 3% higher respectively
than the first half of 2006, though unexpected cement shortages in the UK and a
3% fall-off in demand for asphalt had an impact on performance. The business is
also now starting to see the benefits from the operational efficiency
improvement programmes that have been put in place.
At Tarmac Building Products, operating profit rose by 37%. This performance
reflected the early benefit of the turnaround programme initiated in 2006,
improved trading conditions and lower depreciation charges of $7 million
following asset impairments that were made last year. A feature of the period
was the upturn in the housing market, which contributed to a 3% upturn in
volumes in the market for blocks. Notwithstanding a series of unplanned
outages, cement production at Buxton was marginally ahead of 2006. The mortar
business has been successful in responding to customer needs with a refocused
product and service offering and is also benefiting from recent investments in
plant and technology.
Excluding the favourable effects of currency movements, Tarmac International`s
operating profit rose by 80%, reflecting ongoing portfolio improvements and
higher demand in milder weather conditions. The Polish, German and Czech
Republic businesses posted significant improvements due to strong market demand
in mild weather and the divestment of underperforming businesses.
The business in France increased its operating profit by 17%, in part
reflecting the positive contribution of bolt-on acquisitions. Operating profit
in the Middle East also climbed by 17% as the Shawkah Quarry in the United Arab
Emirates, which was commissioned in 2006, raised output.
These favourable results offset the adverse impact of high input costs and
demand weakness in Spain, where operating profit fell by 44%.
Tarmac achieved cost savings of $41 million from a range of performance
improvement measures that commenced in 2006. The company is now also starting
to see the benefits of the portfolio restructuring that took place last year,
allowing it to concentrate on delivering shareholder value across a more
focused range of activities.
Tarmac plans to drive further efficiencies, and accelerate and extend its
performance improvement programme for the remainder of the year.
Paper and Packaging
6 months 6 months
30 June 30 June
$ million 2007 2006
Operating profit 324 212
Packaging 195 128
Business Paper 105 56
Other 24 28
EBITDA 560 435
Net operating assets 7,200 6,671
Capital expenditure including biological assets 212 287
Share of Group operating profit (%) 6 5
Share of Group net operating assets (%) 24 25
Mondi experienced a substantial improvement in performance, with operating
profit up 53% to $324 million. There was a significant pick-up in the trading
environment, particularly in Mondi Packaging, with price increases achieved
across all major paper grades. Mondi Business Paper has also benefited from
better operability of PM31 in Merebank, South Africa, complemented by modest
increases in uncoated woodfree paper pricing. These positive developments were
partially offset by significant cost inflation in fibre costs (wood, pulp and
recycled fibre) as a result of Chinese fibre demand and alternative uses for
wood in Europe.
Mondi Packaging`s operating profit increased by 52% to $195 million. At the
corrugated business, the strong containerboard price trends and demand growth
evidenced in the second half of 2006 continued into 2007. Positive market
fundamentals continue to be complemented by an improvement in the downstream
corrugated converting operations following restructuring in 2006.
The bag business also recorded rising kraft paper prices and volumes. Mondi
Packaging delivered $46 million in cost savings and profit improvement
initiatives in the period.
Mondi Business Paper`s profit was 88% higher at $105 million. This was driven
by a much better performance in South Africa following the resolution of
operational difficulties at PM31 in Merebank. The uncoated woodfree paper price
improvements were offset to some extent by higher pulp input costs at the
non-integrated mills, further impacted by higher energy, chemical and wood
costs. These direct input-cost increases were partly compensated by further
cost savings and profit improvement initiatives of $50 million. Uncoated
woodfree production was 7.2% higher than a year ago at continuing operations.
Total pulp production was 10% higher as the recently commissioned RB720 pulp
line at Richards Bay operated at higher levels.
Consolidated income statement
for the six months ended 30 June 2007
Before Special
special items and
items and remeasu-
remeasu- rements
rements (note 6)
6 months 6 months 6 months
ended ended ended
US$ million Note 30.06.07 30.06.07 30.06.07
Group revenue 3 16,946 - 16,946
Total operating costs (12,129) 16 (12,113)
Operating profit from
subsidiaries and
joint ventures 3 4,817 16 4,833
Net profit on disposals 6 - 294 294
Share of net income
from associates 3 373 (4) 369
Total profit from operations
and associates 5,190 306 5,496
Investment income 342 37 379
Interest expense (426) (16) (442)
Net finance costs 7 (84) 21 (63)
Profit before tax 5,106 327 5,433
Income tax (expense)/income 8 (1,521) (39) (1,560)
Profit for the financial period 3,585 288 3,873
Attributable to: 527 (33) 494
Minority interests
Equity shareholders
of the Company 4 3,058 321 3,379
Earnings per share (US$)
Basic 9 2.41
Diluted 9 2.38
Dividends
Proposed ordinary dividend
per share (US cents) 38.0
Proposed ordinary dividend
(US$ million) 523(1)
Proposed special dividend per share
(US cents) -
Proposed special dividend (US$ million) -
Ordinary dividends paid during the
period per share (US cents) 75.0
Ordinary dividends paid during the
period (US$ million) 1,058
Special dividends paid during the
period per share (US cents) -
Special dividends paid during the
period (US$ million) -
Before Special
special items and
items and remeasu-
remeasu- rements
rements (note 6)
6 months 6 months 6 months
ended ended ended
US$ million 30.06.06 30.06.06 30.06.06
Group revenue 16,175 - 16,175
Total operating costs (12,169) (854) (13,023)
Operating profit from subsidiaries and
joint ventures 4,006 (854) 3,152
Net profit on disposals - 927 927
Share of net income from associates 313 56 369
Total profit from operations and
associates 4,319 129 4,448
Investment income 307 64 371
Interest expense (395) (51) (446)
Net finance costs (88) 13 (75)
Profit before tax 4,231 142 4,373
Income tax (expense)/income (1,318) 116 (1,202)
Profit for the financial period 2,913 258 3,171
Attributable to: 411 (183) 228
Minority interests
Equity shareholders of the Company 2,502 441 2,943
Earnings per share (US$)
Basic 2.00
Diluted 1.94
Dividends
Proposed ordinary dividend per share
(US cents) 33.0
Proposed ordinary dividend (US$
million) 484
Proposed special dividend per share
(US cents) 67.0
Proposed special dividend (US$ million) 983
Ordinary dividends paid during the
period per share (US cents) 62.0
Ordinary dividends paid during the
period (US$ million) 918
Special dividends paid during the
period per share (US cents) 33.0
Special dividends paid during the
period (US$ million) 488
Before Special
special items and
items and remeasu-
remeasu- rements
rements (note 6)
Year Year Year
ended ended ended
US$ million 31.12.06 31.12.06 31.12.06
Group revenue 33,072 - 33,072
Total operating costs (24,330) (868) (25,198)
Operating profit from subsidiaries and
joint ventures 8,742 (868) 7,874
Net profit on disposals - 1,168 1,168
Share of net income from associates 582 103 685
Total profit from operations and
associates 9,324 403 9,727
Investment income 609 57 666
Interest expense (774) (57) (831)
Net finance costs (165) - (165)
Profit before tax 9,159 403 9,562
Income tax (expense)/income (2,763) 123 (2,640)
Profit for the financial period 6,396 526 6,922
Attributable to: 925 (189) 736
Minority interests
Equity shareholders of the Company 5,471 715 6,186
Earnings per share (US$)
Basic 4.21
Diluted 4.12
Dividends
Proposed ordinary dividend per share
(US cents) 75.0
Proposed ordinary dividend
(US$ million) 1,107
Proposed special dividend per share
(US cents) -
Proposed special dividend (US$ million) -
Ordinary dividends paid during the
period per share (US cents) 95.0
Ordinary dividends paid during the
period (US$ million) 1,391
Special dividends paid during the
period per share (US cents) 100.0
Special dividends paid during the
period (US$ million) 1,448
(1) Based on shares in issue at 30 June 2007 and therefore excludes the
impact of the share consolidation referred to in note 18.
Underlying earnings and underlying earnings per share are set out in note 9.
Consolidated balance sheet
as at 30 June 2007
As at As at As at
US$ million Note 30.06.07 30.06.06 31.12.06
Intangible assets 2,184 2,056 2,134
Tangible assets 23,992 21,848 23,498
Biological assets 299 314 324
Environmental rehabilitation
trusts 215 166 197
Investments in associates 5,338 4,620 4,780
Financial asset investments 2,150 710 1,973
Deferred tax assets 449 280 372
Other financial assets
(derivatives) 9 98 -
Other non-current assets 263 115 173
Total non-current assets 34,899 30,207 33,451
Inventories 2,992 2,836 2,974
Trade and other receivables 5,554 5,347 5,312
Current tax assets 236 170 225
Current financial asset
investments - 2 -
Other current financial assets
(derivatives) 388 253 329
Cash and cash equivalents 12 2,962 2,638 3,004
Total current assets 12,132 11,246 11,844
Assets classified as held for
sale 17 366 2,498 1,188
Total assets 47,397 43,951 46,483
Short term borrowings 12 (3,427) (1,710) (2,028)
Trade and other payables (5,046) (4,550) (5,040)
Short term provisions (117) (50) (62)
Current tax liabilities (1,198) (1,187) (1,453)
Other current financial
liabilities (derivatives) (403) (336) (216)
Total current liabilities (10,191) (7,833) (8,799)
Medium and long term borrowings 12 (4,884) (3,310) (4,220)
Retirement benefit obligations (661) (755) (775)
Other financial liabilities
(derivatives) (139) (358) (304)
Deferred tax liabilities (3,916) (3,472) (3,687)
Provisions (983) (934) (1,024)
Total non-current liabilities (10,583) (8,829) (10,010)
Liabilities directly associated
with assets classified as held
for sale 17 (100) (1,184) (547)
Total liabilities (20,874) (17,846) (19,356)
Net assets 26,523 26,105 27,127
Equity
Called-up share capital 10 771 765 771
Share premium account 11 2,713 2,474 2,713
Other reserves 1,492 82 1,049
Retained earnings 11 19,189 20,202 19,738
Equity attributable to equity
shareholders of the Company 24,165 23,523 24,271
Minority interests 11 2,358 2,582 2,856
Total equity 26,523 26,105 27,127
The interim financial information was approved by the Board of directors
on 2 August 2007.
Consolidated cash flow statement
for the six months ended 30 June 2007
6 months 6 months Year
ended ended ended
US$ million Note 30.06.07 30.06.06 31.12.06
Cash inflows from operations 12 5,096 4,060 10,057
Dividends from associates 163 100 276
Dividends from financial asset
investments 1 3 12
Income tax paid (1,582) (874) (2,035)
Net cash inflows from operating
activities 3,678 3,289 8,310
Cash flows from investing
activities
Acquisition of subsidiaries,
net of cash and cash
equivalents acquired 15 (63) (215) (286)
Investment in associates - (4) (11)
Investment in joint ventures - - (7)
Purchase of tangible assets 14 (1,790) (1,466) (3,686)
Investment in biological assets 14 (26) (33) (64)
Purchase of financial asset
investments (10) (11) (40)
Loans granted to related parties - - (72)
Interest received and other
investment income 114 122 240
Disposal of subsidiaries, net
of cash and cash equivalents
disposed 16 238 882 1,520
Sale of interests in joint
ventures - - 2
Sale of interests in associates 70 - 40
Repayment of loans and capital
from associates 25 394 394
Proceeds from disposal of
tangible assets 28 58 124
Proceeds from sale of financial
asset investments 160 70 80
Other investing activities (37) 13 (39)
Net cash used in investing
activities (1,291) (190) (1,805)
Cash flows from financing
activities
Cash inflow from current
financial asset investments - - 5
Issue of shares by subsidiaries
to minority interests - 48 71
Sale of treasury shares to
employees 82 191 259
Purchase of treasury shares (3,100) (1,560) (3,922)
Interest paid (243) (256) (426)
Dividends paid to minority
interests (417) (193) (383)
Dividends paid to Company
shareholders (1,068) (1,453) (2,888)
Receipt/(repayment) of short
term borrowings 262 (251) 197
Receipt/(repayment) of medium
and long term borrowings 2,034 (70) 386
Capital element of finance
leases - (14) (16)
Other financing activities 16 42 42
Net cash used in financing
activities (2,434) (3,516) (6,675)
Net decrease in cash and cash
equivalents (47) (417) (170)
Cash and cash equivalents at
start of period 2,980 3,319 3,319
Cash movements in the period (47) (417) (170)
Effects of changes in foreign
exchange rates (39) (213) (169)
Cash and cash equivalents at
end of period 12 2,894 2,689 2,980
Consolidated statement of recognised income and expense
for the six months ended 30 June 2007
6 months 6 months Year
ended ended ended
US$ million 30.06.07 30.06.06 31.12.06
Net gains on revaluation of available
for sale investments 306 116 492
Impairment of available for sale investments - - (13)
Loss on cash flow hedges (88) (344) (502)
Loss on cash flow hedges - associates (9) (174) (117)
Exchange gains/(losses) on translation of
foreign operations 225 (1,113) (439)
Actuarial net gains on post retirement benefit
schemes 140 54 102
Actuarial net gains on post retirement benefit
schemes - associates - - 3
Deferred tax (40) 121 60
Net income/(expense) recognised directly in
equity 534 (1,340) (414)
Transferred to income statement: sale of
available for sale investments (82) (31) (27)
Transferred to income statement: impairment of
available for sale investments - - 13
Transferred to income statement: cash flow
hedges 94 2 148
Transferred to income statement: cash flow
hedges - associates 9 - -
Transferred to income statement: exchange
differences on disposal of foreign operations (25) 11 9
Tax on items transferred from equity (2) - (33)
Total transferred to/(from) equity (6) (18) 110
Profit for the period 3,873 3,171 6,922
Total recognised income and expense for the
period 4,401 1,813 6,618
Attributable to:
Minority interests 511 (8) 603
Equity shareholders of the Company 3,890 1,821 6,015
Reconciliation from EBITDA to cash inflows from operations
for the six months ended 30 June 2007
6 months ended 6 months ended Year ended
US$ million 30.06.07 30.06.06 31.12.06
EBITDA(1) 6,554 5,856 12,197
Share of operating profit
of associates before
special items and
remeasurements (635) (557) (1,090)
Depreciation and
amortisation in associates (195) (130) (329)
Share-based payment charges 41 47 189
Fair value gains before
special items and
remeasurements (35) (120) (152)
Additional pension
contributions - (232) (232)
Provisions (2) 31 11
Increase in inventories (215) (295) (377)
Increase in operating
receivables (532) (698) (625)
Increase in operating
payables 134 197 470
Other adjustments (19) (39) (5)
Cash inflows from
operations 5,096 4,060 10,057
(1) EBITDA is operating profit before special items, remeasurements,
depreciation and amortisation in subsidiaries and joint ventures and share of
EBITDA of associates:
6 months ended 6 months ended Year ended
US$ million 30.06.07 30.06.06 31.12.06
Operating profit including
associates` operating
profit before special
items and
remeasurements(2) 5,452 4,563 9,832
Depreciation and
amortisation
Subsidiaries and joint
ventures 907 1,163 2,036
Associates 195 130 329
EBITDA 6,554 5,856 12,197
(2) `Operating profit including associates` operating profit before special
items and remeasurements` is reconciled to `Profit for the financial period`
in note 3.
Notes to financial information
1. General information
The financial information for the year ended 31 December 2006 does not
constitute statutory accounts as defined in section 240 of the Companies Act
1985. This information was derived from the statutory accounts for the year
ended 31 December 2006, a copy of which has been delivered to the Registrar of
Companies. The auditors` report on those accounts was unqualified and did not
contain a statement under section 237 (2) or (3) of the Companies Act 1985.
Investors should consider non-GAAP financial measures in addition to, and not
as a substitute for or as superior to, measures of financial performance
reported in accordance with International Financial Reporting Standards
(IFRSs). The IFRS results reflect all items that affect reported performance
and therefore it is important to consider the IFRS measures alongside the
non-GAAP measures. Reconciliations of key non-GAAP data to directly comparable
GAAP financial measures are presented in notes 3, 4, 9 and 13 to this report.
2. Basis of preparation
These interim consolidated financial statements (the interim financial
statements) are for the six months ended 30 June 2007 and have been prepared in
accordance with IFRSs adopted for use by the European Union, including
International Accounting Standard (IAS) 34 Interim Financial Reporting. The
interim financial statements have been prepared under the historical cost
convention as modified by the recording of pension assets and liabilities and
revaluation of biological assets and certain financial instruments.
The accounting policies applied are consistent with those adopted and disclosed
in the Group`s annual financial statements for the year ended 31 December 2006,
with the exception of adopting the amendment to IAS 23 Borrowing Costs as at 1
January 2007. This has not had a material impact on the Group.
3. Segmental information
Based on risks and returns the directors consider that the primary reporting
format is by business segment and the secondary reporting format is by
geographical segment.
The analysis of associates` revenue by business segment is provided here for
completeness and consistency.
In 2007 Copebras has been reclassified from Industrial Minerals to Base Metals
to align with internal management reporting. As such, the comparative data has
been restated accordingly.
On 20 April 2006 the Group completed the sale of 19.7 million ordinary shares
held in AngloGold Ashanti Limited for cash of $978 million. This, together with
the Group`s non-participation in the issue of additional ordinary shares by
AngloGold Ashanti, diluted the Group`s percentage investment from 50.9% to
41.8%. Subsequent dilution in our investment reduced the holding to 41.6% at 30
June 2007.
As a result of this, the Group is no longer considered to `control` AngloGold
Ashanti and therefore the investment is now reflected in the Group accounts on
an equity accounted basis. This change in accounting treatment is effective
from the date of sale and therefore the prior period includes AngloGold
Ashanti`s 100% contribution to profit for the period 1 January to 20 April 2006
and the appropriate share of associate`s profit for the period after 20 April
2006 until the period end.
3. Segmental information (continued)
Primary reporting format - by business segment
Segment
revenue(1)
6 months 6 months
ended ended Year ended
US$ million 30.06.07 30.06.06 31.12.06
Subsidiaries and joint ventures
Platinum 3,305 2,623 5,766
Gold - 857 857
Coal 1,296 1,293 2,726
Base Metals 3,435 3,063 6,534
Industrial Minerals 2,242 1,893 3,992
Ferrous Metals and Industries 2,606 2,931 5,973
Paper and Packaging 4,062 3,515 7,224
Exploration - - -
Corporate Activities - - -
Total subsidiaries and joint
ventures 16,946(3) 16,175(3) 33,072(3)
Revenue and net income from
associates
Platinum 76 41 95
Gold 633 245 883
Diamonds 1,531 1,635 3,148
Coal 331 297 607
Industrial Minerals 2 6 17
Ferrous Metals and Industries 281 273 546
Paper and Packaging 49 153 269
Total associates 2,903 2,650 5,565
Total Group operations including
net income from
associates 19,849 18,825 38,637
Net profit on disposals
Total profit from operations and
associates
Segment result before
special items and
remeasurements(2)
6 months 6 months
ended ended Year ended
US$ million 30.06.07 30.06.06 31.12.06
Subsidiaries and joint ventures
Platinum 1,473 914 2,337
Gold - 228 228
Coal 194 227 607
Base Metals 2,165 1,853 3,897
Industrial Minerals 208 151 313
Ferrous Metals and Industries 661 612 1,303
Paper and Packaging 321 205 466
Exploration (55) (66) (132)
Corporate Activities (150) (118) (277)
Total subsidiaries and joint ventures 4,817 4,006 8,742
Revenue and net income from associates
Platinum 28 12 40
Gold 65 38 113
Diamonds 147 143 199
Coal 94 91 185
Industrial Minerals - 1 1
Ferrous Metals and Industries 37 23 38
Paper and Packaging 2 5 6
Total associates 373 313 582
Total Group operations including net
income from associates 5,190 4,319 9,324
Net profit on disposals
Total profit from operations and
associates
Segment result after
special items and
remeasurements(2)
6 months 6 months
ended ended Year ended
US$ million 30.06.07 30.06.06 31.12.06
Subsidiaries and joint ventures
Platinum 1,473 914 2,337
Gold - (142) (142)
Coal 203 103 482
Base Metals 2,165 1,837 3,905
Industrial Minerals 208 (127) 16
Ferrous Metals and Industries 679 618 1,324
Paper and Packaging 311 133 374
Exploration (54) (66) (132)
Corporate Activities (152) (118) (290)
Total subsidiaries and joint ventures 4,833 3,152 7,874
Revenue and net income from associates
Platinum 28 12 40
Gold 46 (2) 72
Diamonds 153 239 337
Coal 94 91 185
Industrial Minerals - 1 1
Ferrous Metals and Industries 46 23 44
Paper and Packaging 2 5 6
Total associates 369 369 685
Total Group operations including net
income from associates 5,202 3,521 8,559
Net profit on disposals 294 927 1,168
Total profit from operations and
associates 5,496 4,448 9,727
(1) By-product revenue credited to Group cost of sales for the six months ended
30 June 2006 and the year ended 31 December 2006 was $34 million and relates to
AngloGold Ashanti`s contribution as a subsidiary; AngloGold Ashanti credit
sales of uranium, silver and acid to cost of sales in accordance with the Gold
Industry Standard on production cost.
(2) Segment result is defined as being segment revenue less segment expense;
that is operating profit and gains and losses from foreign currency derivatives
that have been recycled in the income statement being cash flow hedges of sales
and purchases. In addition `Share of net income from associates` is shown by
segment. There are no material inter-segment transfers or transactions that
would affect the segment result. Special items and remeasurements are set out
in note 6. Associates` operating profit is reconciled to `Share of net income
from associates` as follows:
6 months ended 6 months ended Year ended
US$ million 30.06.07 30.06.06 31.12.06
Operating profit from
associates before special
items and remeasurements 635 557 1,090
Operating special items
and remeasurements (58) (90) (123)
Operating profit from
associates after special
items and remeasurements 577 467 967
Net profit on disposals 25 108 199
Net finance costs (before
remeasurements) (59) (50) (101)
Financing remeasurements 28 20 26
Income tax expense (after
special items and
remeasurements) (173) (166) (368)
Minority interests (after
special items and
remeasurements) (29) (10) (38)
Share of net income from
associates 369 369 685
(3) This represents segment revenue; the Group`s share of associates`
revenue figures are provided for additional information.
3. Segmental information (continued)
Primary reporting format - by business segment (continued)
For information, a segmental analysis of associates` operating profit is set
out below to show operating profit for total Group operations including
associates.
Operating profit before
special items and
remeasurements
6 months 6 months
ended ended Year ended
US$ million 30.06.07 30.06.06 31.12.06
Total subsidiaries and joint ventures 4,817 4,006 8,742
Associates
Platinum 44 20 61
Gold 138 75 239
Diamonds 266 293 463
Coal 126 129 257
Industrial Minerals - 1 2
Ferrous Metals and Industries 58 32 57
Paper and Packaging 3 7 11
Total associates 635 557 1,090
Total Group operations including
operating profit from associates 5,452 4,563 9,832
Operating profit after
special items and
remeasurements
6 months 6 months
ended ended Year ended
US$ million 30.06.07 30.06.06 31.12.06
Total subsidiaries and joint ventures 4,833 3,152 7,874
Associates
Platinum 44 20 61
Gold 89 2 133
Diamonds 257 276 446
Coal 126 129 257
Industrial Minerals - 1 2
Ferrous Metals and Industries 58 32 57
Paper and Packaging 3 7 11
Total associates 577 467 967
Total Group operations including
operating profit from associates 5,410 3,619 8,841
The segment result and associates` operating profit before special items and
remeasurements, as shown above, is reconciled to `Profit for the financial
period` as follows:
6 months ended 6 months ended Year ended
US$ million 30.06.07 30.06.06 31.12.06
Operating profit,
including associates,
before special items and
remeasurements 5,452 4,563 9,832
Operating special items
and remeasurements:
Subsidiaries and joint
ventures 16 (854) (868)
Gold - (370) (370)
Coal 9 (124) (125)
Base Metals - (16) 8
Industrial Minerals - (278) (297)
Ferrous Metals and
Industries 18 6 21
Paper and Packaging (10) (72) (92)
Exploration 1 - -
Corporate Activities (2) - (13)
Associates (58) (90) (123)
Gold (49) (73) (106)
Diamonds (9) (17) (17)
Operating profit,
including associates,
after special items and
remeasurements 5,410 3,619 8,841
Net profit on disposals
Subsidiaries and joint
ventures 294 927 1,168
Associates 25 108 199
Associates` net finance
costs (59) (50) (101)
Associates` financing
remeasurements 28 20 26
Associates` income tax
expense (174) (184) (369)
Associates` tax on special
items and remeasurements 1 18 1
Associates` minority
interests (29) (10) (38)
Total profit from
operations and associates 5,496 4,448 9,727
Net finance costs before
special items and
remeasurements (84) (88) (165)
Financing special items (2) - (4)
Financing remeasurements 23 13 4
Profit before tax 5,433 4,373 9,562
Income tax expense (1,560) (1,202) (2,640)
Profit for the financial
period 3,873 3,171 6,922
3. Segmental information (continued)
Primary reporting format - by business segment (continued)
Primary segment disclosures for segment assets, liabilities and capital
expenditure are as follows:
Segment assets(1)
6 months 6 months Year
ended ended ended
US$ million 30.06.07 30.06.06 31.12.06
Platinum 8,299 7,009 7,721
Gold - - -
Coal 4,257 3,052 3,646
Base Metals 5,633 5,874 5,291
Industrial Minerals 5,547 4,794 5,095
Ferrous Metals and
Industries 2,271 3,163 3,529
Paper and Packaging 8,388 7,717 8,113
Exploration 3 - 1
Corporate Activities 211 221 200
34,609 31,830 33,596
Unallocated:
Investments in
associates 5,338 4,620 4,780
Financial asset
investments 2,150 712 1,973
Deferred tax
assets/(liabilities) 449 280 372
Cash and cash
equivalents 2,962 2,638 3,004
Other financial
assets/(liabilities) -
(derivatives) 397 351 329
Other non-operating
assets/ (liabilities) 1,492 3,520 2,429
Other provisions - - -
Borrowings - - -
47,397 43,951 46,483
Segment liabilities(2)
6 months 6 months Year
ended ended ended
US$ million 30.06.07 30.06.06 31.12.06
Platinum (682) (494) (643)
Gold - -
Coal (877) (853) (784)
Base Metals (696) (679) (692)
Industrial Minerals (901) (748) (902)
Ferrous Metals and
Industries (406) (675) (733)
Paper and Packaging (1,188) (1,046) (1,094)
Exploration - (2) (2)
Corporate Activities (382) (294) (404)
(5,132) (4,791) (5,254)
Unallocated:
Investments in
associates - - -
Financial asset
investments - - -
Deferred tax
assets/(liabilities) (3,916) (3,472) (3,687)
Cash and cash
equivalents - - -
Other financial
assets/(liabilities) -
(derivatives) (542) (694) (520)
Other non-operating
assets/ (liabilities) (2,654) (3,557) (3,308)
Other provisions (319) (312) (339)
Borrowings (8,311) (5,020) (6,248)
(20,874) (17,846) (19,356)
Net segment assets
6 months 6 months Year
ended ended ended
US$ million 30.06.07 30.06.06 31.12.06
Platinum 7,617 6,515 7,078
Gold - - -
Coal 3,380 2,199 2,862
Base Metals 4,937 5,195 4,599
Industrial Minerals 4,646 4,046 4,193
Ferrous Metals and
Industries 1,865 2,488 2,796
Paper and Packaging 7,200 6,671 7,019
Exploration 3 (2) (1)
Corporate Activities (171) (73) (204)
29,477 27,039 28,342
Unallocated:
Investments in
associates 5,338 4,620 4,780
Financial asset
investments 2,150 712 1,973
Deferred tax
assets/(liabilities) (3,467) (3,192) (3,315)
Cash and cash
equivalents 2,962 2,638 3,004
Other financial
assets/(liabilities) -
(derivatives) (145) (343) (191)
Other non-operating
assets/ (liabilities) (1,162) (37) (879)
Other provisions (319) (312) (339)
Borrowings (8,311) (5,020) (6,248)
26,523 26,105 27,127
Capital expenditure(3)
6 months 6 months Year
ended ended ended
US$ million 30.06.07 30.06.06 31.12.06
Platinum 650 286 935
Gold - 196 196
Coal 612 290 789
Base Metals 148 117 315
Industrial Minerals 168 186 385
Ferrous Metals and
Industries 293 298 660
Paper and Packaging 198 333 704
Exploration - - -
Corporate Activities 15 9 29
2,084 1,715 4,013
Unallocated:
Investments in
associates
Financial asset
investments
Deferred tax
assets/(liabilities)
Cash and cash
equivalents
Other financial
assets/(liabilities) -
(derivatives)
Other non-operating
assets/ (liabilities)
Other provisions
Borrowings
(1) Segment assets at 30 June 2007 are operating assets and consist of tangible
assets ($23,992 million), intangible assets ($2,184 million), biological assets
($299 million), environmental rehabilitation trusts ($215 million), inventories
($2,992 million), pension and post retirement healthcare assets ($210 million)
and operating receivables ($4,717 million). Segment assets at 30 June 2006
consist of tangible assets ($21,848 million), intangible assets ($2,056
million), biological assets ($314 million), environmental rehabilitation trusts
($166 million), inventories ($2,836 million), pension and post retirement
healthcare assets ($57 million) and operating receivables ($4,553 million).
Segment assets at 31 December 2006 consist of tangible assets ($23,498
million), intangible assets ($2,134 million), biological assets ($324 million),
environmental rehabilitation trusts ($197 million), inventories ($2,974
million), pension and post retirement healthcare assets ($110 million) and
operating receivables ($4,359 million).
(2) Segment liabilities at 30 June 2007 are operating liabilities and consist
of non-interest bearing current liabilities ($3,691 million), restoration and
decommissioning provisions ($780 million) and provisions for retirement benefit
obligations ($661 million). Segment liabilities at 30 June 2006 consist of
non-interest bearing current liabilities ($3,364 million), restoration and
decommissioning provisions ($672 million) and provisions for retirement benefit
obligations ($755 million). Segment liabilities at 31 December 2006 consist of
non-interest bearing current liabilities ($3,732 million), restoration and
decommissioning provisions ($747 million) and provisions for retirement benefit
obligations ($775 million).
(3) Capital expenditure reflects cash payments and accruals in respect of
additions to tangible assets of $1,794 million (30 June 2006: $1,478 million;
31 December 2006: $3,702 million), intangible assets of $1 million (30 June
2006: $9 million; 31 December 2006: $9 million) and additions resulting from
acquisitions through business combinations of $289 million (30 June 2006: $228
million; 31 December 2006: $302 million).
Other primary segment items included in the income statement are as follows:
Depreciation and amortisation
6 months 6 months
ended ended Year ended
US$ million 30.06.07 30.06.06 31.12.06
Platinum 218 237 444
Gold - 183 183
Coal 100 85 172
Base Metals 165 180 357
Industrial Minerals 119 113 225
Ferrous Metals and Industries 60 137 199
Paper and Packaging 234 218 439
Exploration - - -
Corporate Activities 11 10 17
907 1,163 2,036
(Impairments)/reversal(1)(2)
6 months 6 months
ended ended Year ended
US$ million 30.06.07 30.06.06 31.12.06
Platinum - - -
Gold - - -
Coal 8 (122) (115)
Base Metals - - -
Industrial Minerals - (278) (283)
Ferrous Metals and Industries - 9 11
Paper and Packaging (5) (71) (100)
Exploration - - -
Corporate Activities - - (13)
3 (462) (500)
Other non-cash expense(3)
6 months 6 months
ended ended Year ended
US$ million 30.06.07 30.06.06 31.12.06
Platinum 9(4) 40 72
Gold 27 12 12
Coal 15 13 27
Base Metals 91 42 124
Industrial Minerals 2 16 20
Ferrous Metals and Industries 16 7 37
Paper and Packaging 12 15 21
Exploration 1 1 2
Corporate Activities 23 20 40
178 166 355
(1) See operating special items in note 6.
(2) Amounts include negative goodwill.
(3) Other non-cash expenses include share-based payments and charges in
respect of environmental rehabilitation provisions and other provisions.
(4) Includes the reversal of a share-based payment over provision of
$30 million relating to prior periods.
3. Segmental information (continued)
Secondary reporting format - by geographical segment
The Group`s geographical analysis of revenue, allocated based on the country in
which the customer is located, is as follows. The geographical analysis of the
Group`s attributable revenue from associates is provided for completeness and
consistency.
Revenue
6 months 6 months
ended ended Year ended
US$ million 30.06.07 30.06.06 31.12.06
Subsidiaries and joint ventures
South Africa 2,862 2,930 5,788
Rest of Africa 267 363 607
Europe 8,302 6,943 14,640
North America 777 1,296 2,349
South America 1,398 1,190 2,831
Australia and Asia 3,340 3,453 6,857
Total subsidiaries and joint ventures 16,946 16,175 33,072
Associates(1)
South Africa 501 330 803
Rest of Africa 20 21 45
Europe 1,005 979 2,022
North America 404 265 670
South America 18 17 42
Australia and Asia 955 1,038 1,983
Total associates 2,903 2,650 5,565
Total Group operations including
associates 19,849 18,825 38,637
(1) Amounts in respect of the period ended 30 June 2006 have been restated to
accord with the current period and prior year presentation.
The Group`s geographical analysis of segment assets, liabilities and capital
expenditure, allocated based on where assets and liabilities are located is:
Segment assets
6 months 6 months Year
ended ended ended
US$ million 30.06.07 30.06.06 31.12.06
South Africa 13,557 13,106 14,144
Rest of Africa 550 734 732
Europe 11,869 10,657 11,208
North America 523 307 388
South America 5,065 4,871 4,594
Australia and Asia 3,045 2,155 2,530
34,609 31,830 33,596
Segment liabilities
6 months 6 months Year
ended ended ended
US$ million 30.06.07 30.06.06 31.12.06
South Africa (1,715) (1,792) (2,056)
Rest of Africa (36) (82) (82)
Europe (2,025) (1,655) (1,858)
North America (103) (114) (108)
South America (643) (594) (646)
Australia and Asia (610) (554) (504)
(5,132) (4,791) (5,254)
Net segment assets
6 months 6 months Year
ended ended ended
US$ million 30.06.07 30.06.06 31.12.06
South Africa 11,842 11,314 12,088
Rest of Africa 514 652 650
Europe 9,844 9,002 9,350
North America 420 193 280
South America 4,422 4,277 3,948
Australia and Asia 2,435 1,601 2,026
29,477 27,039 28,342
Capital expenditure
6 months 6 months Year
ended ended ended
US$ million 30.06.07 30.06.06 31.12.06
South Africa 1,083 740 1,935
Rest of Africa 51 58 75
Europe 326 425 927
North America 208 109 202
South America 114 145 301
Australia and Asia 302 238 573
2,084 1,715 4,013
3. Segmental information (continued)
Secondary reporting format - by geographical segment (continued)
Additional disclosure of secondary segmental information by origin (including
attributable revenue and operating profit from associates) is as follows:
Revenue
6 months 6 months
ended ended Year ended
US$ million 30.06.07 30.06.06 31.12.06
Subsidiaries and joint ventures
South Africa 6,815 6,444 13,123
Rest of Africa 287 465 717
Europe 5,857 5,337 11,178
North America 195 201 386
South America 2,981 2,796 5,786
Australia and Asia 811 932 1,882
Total subsidiaries and joint ventures 16,946 16,175 33,072
Associates
South Africa 774 636 1,358
Rest of Africa 1,276 1,158 2,365
Europe 207 380 722
North America 47 6 66
South America 384 290 647
Australia and Asia 215 180 407
Total associates 2,903 2,650 5,565
Total Group operations including
associates 19,849 18,825 38,637
Operating profit
before special items
and remeasurements(1)
6 months 6 months
ended ended Year ended
US$ million 30.06.07 30.06.06 31.12.06
Subsidiaries and joint ventures
South Africa 2,313 1,691 3,969
Rest of Africa 196 94 213
Europe 423 404 844
North America 16 24 26
South America 1,835 1,683 3,423
Australia and Asia 34 110 267
Total subsidiaries and joint ventures 4,817 4,006 8,742
Associates
South Africa 184 119 275
Rest of Africa 221 220 383
Europe 49 71 108
North America 19 3 33
South America 108 95 212
Australia and Asia 54 49 79
Total associates 635 557 1,090
Total Group operations including
associates 5,452 4,563 9,832
Operating profit
after special items
and remeasurements(1)
6 months 6 months
ended ended Year ended
US$ million 30.06.07 30.06.06 31.12.06
Subsidiaries and joint ventures
South Africa 2,310 1,523 3,827
Rest of Africa 188 (102) 16
Europe 423 77 475
North America 41 (14) 3
South America 1,836 1,650 3,390
Australia and Asia 35 18 163
Total subsidiaries and joint ventures 4,833 3,152 7,874
Associates
South Africa 172 90 238
Rest of Africa 201 190 330
Europe 46 71 107
North America 7 (22) 2
South America 109 92 206
Australia and Asia 42 46 84
Total associates 577 467 967
Total Group operations including
associates 5,410 3,619 8,841
(1) Special items and remeasurements are set out in note 6.
4. Profit for the financial period
The table below analyses the contribution of each business segment to the
Group`s operating profit including operating profit from associates for the
financial period and its underlying earnings, which the directors consider to
be a useful additional measure of the Group`s performance. A reconciliation
from `Profit for the financial period` to `Underlying earnings` is given in
note 9. Group operating profit including operating profit from associates is
reconciled to `Underlying earnings` and `Profit for the financial period
attributable to equity shareholders of the Company` in the table below:
6 months ended 30.06.07
Operating profit Operating profit
before after
US$ million special items and special items and
remeasurements (1) remeasurements
By business segment
Platinum 1,517 1,517
Gold 138 89
Diamonds 266 257
Coal 320 329
Base Metals 2,165 2,165
Industrial Minerals 208 208
Ferrous Metals and Industries 719 737
Paper and Packaging 324 314
Exploration (55) (54)
Corporate Activities (150) (152)
Total/Underlying earnings 5,452 5,410
Underlying earnings adjustments
Profit for the financial period
attributable to equity shareholders
of the Company
Special items and
US$ million remeasurements: Net profit on
operating (2) disposals (2)
By business segment
Platinum - -
Gold 49 -
Diamonds 9 -
Coal (9) -
Base Metals - -
Industrial Minerals - -
Ferrous Metals and Industries (18) -
Paper and Packaging 10 -
Exploration (1) -
Corporate Activities 2 -
Total/Underlying earnings 42 -
Underlying earnings adjustments (42) 319
Profit for the financial period
attributable to equity shareholders
of the Company
Financing special Net interest, tax
US$ million items and and minority
remeasurements (2) interests Total
By business segment
Platinum - (800) 717
Gold - (73) 65
Diamonds - (110) 156
Coal - (76) 244
Base Metals - (661) 1,504
Industrial Minerals - (29) 179
Ferrous Metals and
Industries - (450) 269
Paper and Packaging - (135) 189
Exploration - 5 (50)
Corporate Activities - (65) (215)
Total/Underlying earnings - (2,394) 3,058
Underlying earnings
adjustments 49 (5) 321
Profit for the financial
period
attributable to equity
shareholders
of the Company 3,379
Operating profit Operating profit
before after
US$ million special items and special items and
remeasurements (1) remeasurements
By business segment
Platinum 934 934
Gold 303 (140)
Diamonds 293 276
Coal 356 232
Base Metals 1,853 1,837
Industrial Minerals 152 (126)
Ferrous Metals and Industries 644 650
Paper and Packaging 212 140
Exploration (66) (66)
Corporate Activities (118) (118)
Total/Underlying earnings 4,563 3,619
Underlying earnings adjustments
Profit for the financial period
attributable to equity shareholders
of the Company
Special items and
US$ million remeasurements: Net profit on
operating (2) disposals (2)
By business segment
Platinum - -
Gold 443 -
Diamonds 17 -
Coal 124 -
Base Metals 16 -
Industrial Minerals 278 -
Ferrous Metals and Industries (6) -
Paper and Packaging 72 -
Exploration - -
Corporate Activities - -
Total/Underlying earnings 944 -
Underlying earnings adjustments (944) 1,035
Profit for the financial period
attributable to equity shareholders
of the Company
Financing special Net interest, tax
US$ million items and and minority
remeasurements (2) interests Total
By business segment
Platinum - (442) 492
Gold - (201) 102
Diamonds - (129) 164
Coal - (96) 260
Base Metals - (577) 1,276
Industrial Minerals - (39) 113
Ferrous Metals and
Industries - (351) 293
Paper and Packaging - (92) 120
Exploration - 13 (53)
Corporate Activities - (147) (265)
Total/Underlying earnings - (2,061) 2,502
Underlying earnings
adjustments 33 317 441
Profit for the financial
period
attributable to equity
shareholders
of the Company 2,943
Operating profit Operating profit
before after
US$ million special items and special items and
remeasurements (1) remeasurements
By business segment
Platinum 2,398 2,398
Gold 467 (9)
Diamonds 463 446
Coal 864 739
Base Metals 3,897 3,905
Industrial Minerals 315 18
Ferrous Metals and Industries 1,360 1,381
Paper and Packaging 477 385
Exploration (132) (132)
Corporate Activities (277) (290)
Total/Underlying earnings 9,832 8,841
Underlying earnings adjustments
Special items and
US$ million remeasurements: Net profit on
operating (2) disposals (2)
By business segment
Platinum - -
Gold 476 -
Diamonds 17 -
Coal 125 -
Base Metals (8) -
Industrial Minerals 297 -
Ferrous Metals and Industries (21) -
Paper and Packaging 92 -
Exploration - -
Corporate Activities 13 -
Total/Underlying earnings 991 -
Underlying earnings adjustments (991) 1,367
Profit for the financial period
attributable to equity
shareholders of the Company
Year ended 31.12.06
Financing special Net interest, tax
US$ million items and and minority
remeasurements (2) interests Total
By business segment
Platinum - (1,133) 1,265
Gold - (289) 178
Diamonds - (236) 227
Coal - (224) 640
Base Metals - (1,242) 2,655
Industrial Minerals - (57) 258
Ferrous Metals and
Industries - (777) 583
Paper and Packaging - (203) 274
Exploration - 19 (113)
Corporate Activities - (219) (496)
Total/Underlying earnings - (4,361) 5,471
Underlying earnings
adjustments 26 313 715
Profit for the financial
period
attributable to equity
shareholders of the
Company 6,186
(1) Operating profit includes associates` operating profit which is reconciled
to `Share of net income from associates` in note 3.
(2) Special items and remeasurements are set out in note 6.
5. Exploration expenditure
6 months 6 months Year ended
US$ million ended 30.06.07 ended 30.06.06 31.12.06
By business segment
Platinum 17 15 30
Gold (1) - 16 16
Coal 5 10 24
Base Metals 29 19 53
Ferrous Metals and
Industries 4 6 9
55 66 132
(1) Relating to the period AngloGold Ashanti was held as a subsidiary.
6. Special items and remeasurements
Special items are those items of financial performance that the Group believes
should be separately disclosed on the face of the income statement to assist in
the understanding of the underlying financial performance achieved by the Group
and its businesses. Such items are material by nature or amount to the period`s
results and require separate disclosure in accordance with IAS 1 Presentation
of financial statements paragraph 86. Special items that relate to the
operating performance of the Group are classified as operating special items
and include impairment charges and reversals and other exceptional items,
including significant legal provisions. Non-operating special items include
profits and losses on disposals of investments and businesses.
Remeasurements comprise other items which the Group believes should be reported
separately to aid an understanding of the underlying performance of the Group.
This category includes (i) unrealised gains and losses on `non-hedge`
derivative instruments open at period end and the reversal of the historical
marked to market value of instruments settled in the period, such that the full
realised gain or loss is recorded in underlying earnings in the same period as
the underlying transaction for which such instruments provide an economic, but
not formally designated, hedge and (ii) foreign exchange gains and losses
arising on the retranslation of US dollar denominated De Beers preference
shares held by a rand functional currency subsidiary of the Group.
Remeasurements are defined as operating, non-operating or financing according
to the nature of the underlying expense.
Subsidiaries and joint ventures` special items and remeasurements
Operating special items
6 months 6 months Year ended
ended 30.06.07 ended 30.06.06 31.12.06
US$ million
Impairment of Tarmac
assets and restructuring costs - (278) (278)
Impairment and closure
costs of Dartbrook - (122) (125)
Impairment of Packaging
assets - (72) (80)
Impairment of Business
Paper assets (5) - (24)
Other (1) 10 (17)
Total operating special items (6) (462) (524)
Taxation 2 97 114
Minority interests - 2 2
Net total attributable to
equity shareholders of the
Company (4) (363) (408)
Operating remeasurements
6 months 6 months Year ended
US$ million ended 30.06.07 ended 30.06.06 31.12.06
Unrealised net
gains/(losses) on
non-hedge derivatives 22 (392) (344)
Taxation (7) 46 42
Minority interests - 160 159
Net total attributable to
equity shareholders of the Company 15 (186) (143)
The unrealised net gains on non-hedge derivatives primarily arise at Scaw
Metals, within Ferrous Metals and Industries.
6. Special items and remeasurements (continued)
Profits and (losses) on disposals
6 months 6 months Year ended
US$ million ended 30.06.07 ended 30.06.06 31.12.06
Disposal of remaining
interest in Highveld 140 - 301
Part disposal of Exxaro
(formerly Kumba Resources) 68 - -
Tongaat-Hulett and Hulamin
BEE transactions (68) - -
Part disposal of Mondi
Packaging Paper Swiecie 77 - -
Disposal of Bischof + Klein 26 - -
Part disposal of AngloGold Ashanti - 737 737
Deemed disposal of AngloGold Ashanti - 159 172
Part disposal of Kumba non-iron ore - - (52)
Bakgatla-Ba-Kgafela BEE
transaction - - (84)
Part disposal of Western Areas - 31 31
Disposal of mineral rights
- Anglo American Brazil - 14 14
Disposal of interests in Eyesizwe - - 17
Disposal of Ferroveld joint venture - - 13
Other items 51 (14) 19
Net profit on disposals 294 927 1,168
Taxation (32) (26) (32)
Minority interests 35 - 7
Net total attributable to
equity shareholders of the
Company 297 901 1,143
In May 2007, the Group disposed of the remaining 29.2% shareholding in Highveld
to the Evraz Group SA for $238 million. As such the Group has recorded a profit
on disposal of $140 million.
In April 2007, the Group sold 19 million shares in Exxaro, generating a profit
on disposal of $68 million. A number of the shares sold were subject to an
option granted by Anglo American to Exxaro, whereby Exxaro could buy back 10
million shares at a discount to market value. The remaining shares were sold at
a market related price.
The introduction of broad based black economic empowerment into the
Tongaat-Hulett Group and Hulamin resulted in the recognition of $68 million
associated IFRS2 Share-based Payment charges which arose on the transaction.
To avoid a mandatory offer for Mondi Packaging Paper Swiecie SA being triggered
by Mondi`s demerger from the Group, a 5.3% stake in Swiecie was disposed of for
$90 million resulting in a profit on sale of $77 million.
Financing special items
6 months 6 months Year ended
US$ million ended 30.06.07 ended 30.06.06 31.12.06
Financing special items (2) - (4)
Taxation 8 - -
Minority interests - - -
Net total attributable to
equity shareholders of the
Company 6 - (4)
Financing remeasurements
6 months 6 months Year ended
US$ million ended 30.06.07 ended 30.06.06 31.12.06
Fair value loss on
AngloGold Ashanti
convertible bond - (43) (43)
Foreign exchange gain on
De Beers preference shares 1 44 40
Unrealised net gains on
non-hedge derivatives 22 12 7
Total financing remeasurements 23 13 4
Taxation (10) (1) (1)
Minority interests (2) 21 21
Net total attributable to
equity shareholders of the
Company 11 33 24
The Group holds US dollar preference shares issued by De Beers which are held
in a rand functional currency subsidiary of the Group. These shares are
classified as `non-current investments` and are retranslated at each period
end. As a result, a gain of $1 million (six months ended 30 June 2006: $44
million; year ended 31 December 2006: $40 million) has been included in
financing remeasurements.
6. Special items and remeasurements (continued)
Total special items and remeasurements
6 months 6 months Year ended
US$ million ended 30.06.07 ended 30.06.06 31.12.06
Total special items and
remeasurements before tax
and minority interests 331 86 300
Taxation (39) 116 123
Minority interests 33 183 189
Net total special items
and remeasurements
attributable to equity
shareholders of the
Company 325 385 612
Associates` special items
and remeasurements 6 months 6 months Year ended
US$ million ended 30.06.07 ended 30.06.06 31.12.06
Associates` operating
special items and
remeasurements
Share of De Beers` class
action payment (3) (20) (25)
Unrealised net losses on
non-hedge derivatives (53) (70) (85)
Other impairments and
restructuring costs (2) - (13)
Operating special items
and remeasurements (58) (90) (123)
Associates` profits and
(losses) on disposals
Disposal of interests in
Acerinox 12 - -
Gain on partial sale of De
Beers Consolidated Mines - 105 103
Disposal of Fort a la Corne - - 69
Other items 13 3 27
Net profit on disposals 25 108 199
Associates` financing
remeasurements
Fair value gain on
AngloGold Ashanti
convertible bond 21 12 25
Unrealised net gains on
non-hedge derivatives 7 8 1
Total financing
remeasurements 28 20 26
Total associates` special
items and remeasurements (5) 38 102
Taxation 1 18 1
Minority interests - - -
Net associates` special
items and remeasurements (4) 56 103
Associates` special items and remeasurements
The unrealised net losses on non-hedge derivatives primarily arise within
AngloGold Ashanti.
Associates` profits and losses on disposal
During the six months ended 30 June 2007 Samancor Holdings disposed of its
shareholding in Acerinox, generating a gain of $12 million.
Associates` financing remeasurements
The option element of AngloGold Ashanti`s convertible bond is recorded at fair
value with changes going through the income statement in accordance with IAS 32
Financial Instruments: Disclosure and Presentation and IAS 39 Financial
Instruments: Recognition and Measurement. As a result, a gain of $21 million
(six months ended 30 June 2006: $12 million; year ended 31 December 2006: $25
million) has been included in financing remeasurements.
6. Special items and remeasurements (continued)
Operating special items
and remeasurements 6 months 6 months Year ended
US$ million ended 30.06.07 ended 30.06.06 31.12.06
Operating special items (6) (462) (524)
Operating remeasurements 22 (392) (344)
Total operating special
items and remeasurements
(excluding associates) 16 (854) (868)
Associates` operating
special items (5) (20) (38)
Associates` operating
remeasurements (53) (70) (85)
Total associates`
operating special items
and remeasurements (58) (90) (123)
Total operating special
items and remeasurements
(including associates) (42) (944) (991)
Operating special items
including associates (11) (482) (562)
Operating remeasurements
including associates (31) (462) (429)
Total operating special
items and remeasurements
(including associates) (42) (944) (991)
7. Net finance costs
Finance costs and exchange gains/(losses) are presented net of effective cash
flow hedges for respective interest bearing and foreign currency borrowings.
Fair value gains/(losses) on derivatives, presented below, include the mark to
market value changes of interest rate and currency derivatives designated as
fair value hedges, net of fair value changes in the associated hedged risk; and
fair value changes of non-hedge derivatives of non-operating items.
Before After remeasure- Before
remeasure-ments ments remeasure-ments
US$ million 30.06.07 30.06.07 30.06.06
Investment income
Interest and other
financial income 143 143 128
Expected return on
defined benefit
arrangements 164 164 137
Foreign exchange gains 31 33 32
Dividend income
from financial
asset investments 1 1 5
Fair value gains
on derivatives - 35 -
Other fair value gains 3 3 5
Total investment income 342 379 307
Interest expense
Amortisation
discount relating
to provisions (15) (15) (17)
Bank loans and
overdrafts (182) (182) (148)
Other loans (84) (84) (80)
Interest paid on
convertible bonds - - (4)
Unwinding of
discount on
convertible bonds - - (13)
Interest on
defined benefit
arrangements (149) (149) (129)
Foreign exchange losses (2) (2) (9)
Dividend on
redeemable
preference shares (2) (2) (5)
Fair value losses
on derivatives (1) (8) (2)
Other fair value
losses - (9) (1)
(435) (451) (408)
Less: interest
capitalised 9 9 13
Total interest expense (426) (442) (395)
Net finance costs (84) (63) (88)
After remeasure- Before After remeasure-
ments remeasure-ments ments
US$ million 30.06.06 31.12.06 31.12.06
Investment income
Interest and
other financial income 128 269 269
Expected return
on defined benefit
arrangements 137 265 265
Foreign exchange gains 76 54 94
Dividend income
from financial
asset investments 5 14 14
Fair value gains
on derivatives 20 - 17
Other fair value gains 5 7 7
Total investment income 371 609 666
Interest expense
Amortisation
discount relating
to provisions (17) (39) (39)
Bank loans and
overdrafts (148) (294) (294)
Other loans (80) (122) (122)
Interest paid on
convertible bonds (4) (5) (5)
Unwinding of
discount on
convertible bonds (13) (13) (13)
Interest on
defined benefit
arrangements (129) (274) (274)
Foreign exchange losses (10) (19) (20)
Dividend on
redeemable
preference shares (5) (22) (22)
Fair value losses
on derivatives (9) (2) (11)
Other fair value
losses (44) - (47)
(459) (790) (847)
Less: interest
capitalised 13 16 16
Total interest expense (446) (774) (831)
Net finance costs (75) (165) (165)
The weighted average interest rate applicable to interest on general borrowings
capitalised was 9.8% (six months ended 30 June 2006: 8.1%; year ended 31
December 2006: 8.2%).
Financing remeasurements are set out in note 6.
8. Tax on profit on ordinary activities
a) Analysis of charge for the period from continuing operations
US$ million
6 months 6 months Year ended
ended 30.06.07 ended 30.06.06 31.12.06
United Kingdom corporation
tax at 30% 66 28 28
South Africa tax 529 361 894
Other overseas tax 722 773 1,558
Current tax (excluding tax
on special items and
remeasurements) 1,317 1,162 2,480
Total deferred tax
(excluding tax on special
items and remeasurements) 204 156 283
Total tax before special
items and remeasurements 1,521 1,318 2,763
Tax on special items and
remeasurements 39 (116) (123)
Total tax charge 1,560 1,202 2,640
b) Factors affecting tax charge for the period
The effective tax rate for the period of 28.7% (six months ended 30 June 2006:
27.5%; year ended 31 December 2006: 27.6%) is lower than the standard rate of
corporation tax in the United Kingdom (30%).
The differences are explained below:
US$ million
6 months 6 months Year ended
ended 30.06.07 ended 30.06.06 31.12.06
Profit on ordinary
activities before tax 5,433 4,373 9,562
Tax on profit on ordinary
activities calculated at
United Kingdom corporation
tax rate of 30% 1,630 1,312 2,869
Tax effect of net income
from associates (111) (111) (206)
Tax effects of:
Expenses not deductible
for tax purposes
Operating special items
and remeasurements - 113 104
Exploration expenditure 4 10 13
Other non-deductible expenses 51 5 79
Non-taxable income
Profits and losses on
disposals and
remeasurements (61) (255) (317)
Other non-taxable income (88) (73) (66)
Temporary difference
adjustments
Change in UK tax rate (26) - -
Movement in tax losses 18 (49) (80)
Other temporary differences (18) 7 (13)
Other adjustments
South African secondary
tax on companies 90 144 228
Effect of differences
between local and UK rates (9) 74 53
Other adjustments 80 25 (24)
Tax charge for the period 1,560 1,202 2,640
IAS 1 Presentation of Financial Statements requires income from associates to
be presented net of tax on the face of the income statement. The associates`
tax is therefore not included within the Group`s total tax charge.
Associates` tax included within `Share of net income from associates` for the
six months ended 30 June 2007 is $173 million (six months ended 30 June 2006:
$166 million; year ended 31 December 2006: $368 million).
Excluding special items and remeasurements this becomes $174 million (six
months ended 30 June 2006: $184 million; year ended 31 December 2006: $369
million).
The effective rate of taxation before special items and remeasurements
including share of associates` tax for the six months ended 30 June 2007 was
31.9%. This was a decrease from the effective rate of 33.9% in the six months
ended 30 June 2006. In future periods it is expected that the effective tax
rate, including associates` tax, will remain above 30%.
9. Earnings per share
6 months 6 months Year ended
US$ ended 30.06.07 ended 30.06.06 31.12.06
Profit for the financial
period attributable
to equity shareholders
Basic earnings per share 2.41 2.00 4.21
Diluted earnings per share 2.38 1.94 4.12
Headline earnings for the
financial period (1)
Basic earnings per share 2.16 1.56 3.58
Diluted earnings per share 2.14 1.51 3.50
Underlying earnings for
the financial period (1)
Basic earnings per share 2.18 1.70 3.73
Diluted earnings per share 2.16 1.65 3.64
(1) Basic and diluted earnings per share are shown based on headline earnings
which is a JSE Ltd defined performance measure and underlying earnings, which
the directors believe to be a useful additional measure of the Group`s
performance. Both earnings measures are further explained below.
The calculation of the basic and diluted earnings per share is based on the
following data:
6 months 6 months Year ended
US$ million (unless
otherwise stated) ended 30.06.07 ended 30.06.06 31.12.06
Earnings
Basic earnings, being
profit for the financial period
attributable to equity
shareholders 3,379 2,943 6,186
Effect of dilutive
potential ordinary shares
Interest on convertible
bonds (net of tax) - 2 4
Unwinding of discount on
convertible bonds (net of tax) - - 3
Diluted earnings 3,379 2,945 6,193
Number of shares (million)
Basic number of ordinary
shares outstanding (1) 1,400 1,475 1,468
Effect of dilutive
potential ordinary shares (2)
Share options 19 19 23
Convertible bonds - 25 13
Diluted number of ordinary
shares outstanding (1) 1,419 1,519 1,504
(1) Basic and diluted number of ordinary shares outstanding represent the
weighted average for the period. The average number of ordinary shares in issue
excludes the shares held by the employee benefit trust and other Anglo American
shares held by the Group.
(2) Diluted number of ordinary shares is calculated by adjusting the weighted
average number of ordinary shares in issue on the assumption of conversion of
all potentially dilutive ordinary shares.
`Underlying earnings` is an alternative earnings measure, which the directors
believe provides a clearer picture of the underlying financial performance of
the Group`s operations. Underlying earnings is presented after minority
interests and excludes special items and remeasurements (see note 6).
Underlying earnings is distinct from `Headline earnings`, which is a JSE Ltd
defined performance measure.
9. Earnings per share (continued)
The calculation of basic and diluted earnings per share, based on headline and
underlying earnings, uses the following earnings data:
Earnings (US$ million)
6 months 6 months
ended ended Year ended
30.06.07 30.06.06 31.12.06
Profit for the financial period
attributable to equity shareholders 3,379 2,943 6,186
Operating special items 6 462 524
Financing special items 2 - 4
Net profit on disposals (1) (362) (927) (1,202)
Associates` special items (2) (23) (108) (186)
Related tax 27 (71) (57)
Related minority interests 1 (2) (9)
Headline earnings for the financial
period 3,030 2,297 5,260
Operating remeasurements (22) 392 344
Financing remeasurements (23) (13) (4)
Associates` remeasurements 25 50 59
Share of De Beers` legal settlements 3 20 25
IFRS 2 charges on BEE transactions 68 - 34
Minority interests` share of IFRS 2
charges on BEE transactions (36) - -
Related tax 11 (63) (67)
Related minority interests 2 (181) (180)
Underlying earnings for the financial
period 3,058 2,502 5,471
Basic earnings per share (US$)
6 months 6 months
ended ended Year ended
30.06.07 30.06.06 31.12.06
Profit for the financial period
attributable to equity shareholders 2.41 2.00 4.21
Operating special items - 0.31 0.36
Financing special items - - -
Net profit on disposals (1) (0.26) (0.63) (0.81)
Associates` special items (2) (0.02) (0.07) (0.13)
Related tax 0.03 (0.05) (0.04)
Related minority interests - - (0.01)
Headline earnings for the financial
period 2.16 1.56 3.58
Operating remeasurements (0.02) 0.26 0.23
Financing remeasurements (0.02) - -
Associates` remeasurements 0.02 0.03 0.04
Share of De Beers` legal settlements - 0.01 0.02
IFRS 2 charges on BEE transactions 0.06 - 0.02
Minority interests` share of IFRS 2
charges on BEE transactions (0.03) - -
Related tax 0.01 (0.04) (0.04)
Related minority interests - (0.12) (0.12)
Underlying earnings for the financial
period 2.18 1.70 3.73
(1) Excluding associated IFRS 2 charges on BEE transactions.
(2) Excluding share of De Beers` legal settlements.
All outstanding share options and awards are potentially dilutive and have been
included in the calculation of diluted earnings per share. No instruments are
anti-dilutive for the six months ended 30 June 2007 (six months ended 30 June
2006: nil; year ended 31 December 2006: nil).
10. Called-up share capital
As at 30.06.07
Number of
shares US$ million
Authorised
5% cumulative preference
shares of GBP1 each 50,000 -
Ordinary shares of 50 US cents each 2,000,000,000 1,000
Called-up, allotted and fully paid
5% cumulative preference
shares of GBP1 each 50,000 -
Ordinary shares of 50 US cents each 1,541,657,700 771
As at 30.06.06
Number of
shares US$ million
Authorised
5% cumulative preference
shares of GBP1 each 50,000 -
Ordinary shares of 50 US cents each 2,000,000,000 1,000
Called-up, allotted and fully paid
5% cumulative preference
shares of GBP1 each 50,000 -
Ordinary shares of 50 US cents each 1,530,894,824 765
As at 31.12.06
Number of
shares US$ million
Authorised
5% cumulative preference
shares of GBP1 each 50,000 -
Ordinary shares of 50 US cents each 2,000,000,000 1,000
Called-up, allotted and fully paid
5% cumulative preference
shares of GBP1 each 50,000 -
Ordinary shares of 50 US cents each 1,541,653,607 771
In the event of winding up, the holders of the cumulative preference shares
will be entitled to the repayment of a sum equal to the nominal capital paid
up, or credited as paid up, on the cumulative preference shares held by them
and any accrued dividend, whether such dividend has been earned or declared or
not, calculated up to the date of the winding up.
11. Reconciliation of changes in equity
Attributable to equity shareholders of the Company
Total
share Retained
US$ million capital (1) earnings (2)
Balance at 1 January 2006 2,384 19,907
Total recognised income and expense - 2,980
Dividends paid - (1,406)
Dividends paid to minority interests - -
Shares issued and reclassification on
conversion of bond 855 -
Convertible debt reserve transfer to retained
earnings - 87
Share-based payment charges on equity settled
schemes - -
Disposal of businesses - -
Issue of shares to minority interests - -
Share buybacks - (1,585)
Purchase of shares for share schemes - (13)
Issue of shares under employee share schemes - 212
Current tax on exercised employee share awards - 20
Balance at 30 June 2006 3,239 20,202
Total recognised income and expense - 3,276
Dividends paid - (1,433)
Dividends paid to minority interests - -
Shares issued and reclassification on
conversion of bond 245 -
Convertible debt reserve transfer to retained
earnings - 22
Acquisition and disposal of businesses - -
Issue of shares to minority interests - -
Share buybacks - (2,366)
Purchase of shares for share schemes - (6)
Current tax on exercised employee share awards - 14
Share-based payment charges on equity settled
schemes - -
Issue of shares under employee share schemes - 74
IFRS 2 charge arising on BEE transaction - 28
Transfer to legal reserve - (3)
Revaluation reserve arising from acquisition
of minority - -
interests
Conversion of Platinum`s preference shares - (62)
Tax charge directly to equity relating to
transaction with - (8)
shareholders
Tax credit on transactions with equity holders - -
Other - -
Balance at 31 December 2006 3,484 19,738
Total recognised income and expense - 3,480
Dividends paid - (1,058)
Dividends paid to minority interests - -
Acquisition and disposal of businesses - -
Issue of shares to minority interests - -
Share buybacks - (3,066)
Purchase of shares for share schemes - (17)
Share-based payment charges on equity settled
schemes - -
Current tax on exercised employee share awards - 7
Issue of shares under employee share schemes - 64
Group reinvestment of dividends in Platinum - -
Minority conversion of Platinum`s preference
shares - 41
Other - -
Balance at 30 June 2007 3,484 19,189
Attributable to equity shareholders of the Company
Cumulative
Share-based translation
payment adjustment
US$ million reserve reserve
Balance at 1 January 2006 155 339
Total recognised income and expense 9 (946)
Dividends paid - -
Dividends paid to minority interests - -
Shares issued and reclassification on
conversion of bond - -
Convertible debt reserve transfer to retained
earnings - -
Share-based payment charges on equity settled
schemes 47 -
Disposal of businesses - -
Issue of shares to minority interests - -
Share buybacks - -
Purchase of shares for share schemes - -
Issue of shares under employee share schemes (22) -
Current tax on exercised employee share awards - -
Balance at 30 June 2006 189 (607)
Total recognised income and expense (9) 569
Dividends paid - -
Dividends paid to minority interests - -
Shares issued and reclassification on
conversion of bond - -
Convertible debt reserve transfer to retained
earnings - -
Acquisition and disposal of businesses - -
Issue of shares to minority interests - -
Share buybacks - -
Purchase of shares for share schemes - -
Current tax on exercised employee share awards - -
Share-based payment charges on equity settled
schemes 47 -
Issue of shares under employee share schemes (9) -
IFRS 2 charge arising on BEE transaction - -
Transfer to legal reserve - -
Revaluation reserve arising from acquisition of
minority - -
interests
Conversion of Platinum`s preference shares - -
Tax charge directly to equity relating to
transaction with - -
shareholders
Tax credit on transactions with equity holders 29 -
Other - -
Balance at 31 December 2006 247 (38)
Total recognised income and expense - 186
Dividends paid - -
Dividends paid to minority interests - -
Acquisition and disposal of businesses - -
Issue of shares to minority interests - -
Share buybacks - -
Purchase of shares for share schemes - -
Share-based payment charges on equity settled
schemes 80 -
Current tax on exercised employee share awards - -
Issue of shares under employee share schemes (47) -
Group reinvestment of dividends in Platinum - -
Minority conversion of Platinum`s preference
shares - -
Other - -
Balance at 30 June 2007 280 148
Fair value and Minority Total
US$ million other interests equity
Balance at 1 January 2006 836 3,957 27,578
Total recognised income and expense (222) (8) 1,813
Dividends paid - - (1,406)
Dividends paid to minority interests - (193) (193)
Shares issued and reclassification
on conversion of bond (27) - 828
Convertible debt reserve transfer
to retained earnings (87) - -
Share-based payment charges on
equity settled schemes - - 47
Disposal of businesses - (1,186) (1,186)
Issue of shares to minority interests - 12 12
Share buybacks - - (1,585)
Purchase of shares for share schemes - - (13)
Issue of shares under employee
share schemes - - 190
Current tax on exercised employee
share awards - - 20
Balance at 30 June 2006 500 2,582 26,105
Total recognised income and expense 358 611 4,805
Dividends paid - - (1,433)
Dividends paid to minority interests - (190) (190)
Shares issued and reclassification
on conversion of bond (5) - 240
Convertible debt reserve transfer
to retained earnings (22) - -
Acquisition and disposal of businesses - (268) (268)
Issue of shares to minority interests - 25 25
Share buybacks - - (2,366)
Purchase of shares for share schemes - - (6)
Current tax on exercised employee
share awards - - 14
Share-based payment charges on
equity settled schemes - 14 61
Issue of shares under employee share schemes - - 65
IFRS 2 charge arising on BEE transaction - 6 34
Transfer to legal reserve 3 - -
Revaluation reserve arising from
acquisition of minority (4) - (4)
interests
Conversion of Platinum`s preference shares - 62 -
Tax charge directly to equity
relating to transaction with - (3) (11)
shareholders
Tax credit on transactions with
equity holders 10 - 39
Other - 17 17
Balance at 31 December 2006 840 2,856 27,127
Total recognised income and expense 224 511 4,401
Dividends paid - - (1,058)
Dividends paid to minority interests - (417) (417)
Acquisition and disposal of businesses - (651) (651)
Issue of shares to minority interests - 28 28
Share buybacks - - (3,066)
Purchase of shares for share schemes - - (17)
Share-based payment charges on
equity settled schemes - - 80
Current tax on exercised employee share
awards - - 7
Issue of shares under employee
share schemes - - 17
Group reinvestment of dividends in
Platinum - 86 86
Minority conversion of Platinum`s
preference shares - (41) -
Other - (14) (14)
Balance at 30 June 2007 1,064 2,358 26,523
(1) Total share capital comprises called-up share capital $771 million
(30 June 2006: $765 million; 31 December 2006: $771 million) and the share
premium account $2,713 million (30 June 2006: $2,474 million; 31 December 2006:
$2,713 million).
(2) Retained earnings is stated after deducting $7,244 million (30 June 2006:
$1,894 million; 31 December 2006: $4,218 million) of treasury shares.
Treasury shares comprise shares of Anglo American plc held in the employee
benefit trust, own shares held by Anglo American plc and other Group companies
and treasury shares held by Epoch Investment Holdings Limited, Tarl Investments
Holdings Limited and Epoch Two Investment Holdings Limited.
11. Reconciliation of changes in equity (continued)
Fair value and other reserves comprise:
Convertible Available Cash
debt for sale flow hedge
US$ million reserve reserve reserve
Balance at 1 January 2006 131 54 (121)
Total recognised income and expense 9 89 (320)
Reclassification on conversion of bond (27) - -
Convertible debt reserve transfer
to retained earnings (87) - -
Balance at 30 June 2006 26 143 (441)
Total recognised income and expense (9) 348 19
Reclassification on conversion of bond (5) - -
Convertible debt reserve transfer to
retained earnings (22) - -
Transfer to legal reserve - - -
Revaluation reserve arising from
acquisition of minority interests - - -
Tax credit on transaction with
equity holders 10 - -
Balance at 31 December 2006 - 491 (422)
Total recognised income and expense - 218 6
Balance at 30 June 2007 - 709 (416)
Total fair
value and
US$ million Other (1) other reserves
Balance at 1 January 2006 772 836
Total recognised income
and expense - (222)
Reclassification on conversion of bond - (27)
Convertible debt reserve transfer
to retained earnings - (87)
Balance at 30 June 2006 772 500
Total recognised income and expense - 358
Reclassification on conversion of bond - (5)
Convertible debt reserve transfer to
retained earnings - (22)
Transfer to legal reserve 3 3
Revaluation reserve arising from
acquisition of minority interests (4) (4)
Tax credit on transaction with equity holders - 10
Balance at 31 December 2006 771 840
Total recognised income and expense - 224
Balance at 30 June 2007 771 1,064
(1) Other comprises $693 million (30 June 2006: $690 million; 31 December
2006: $693 million) legal reserve and $82 million (30 June 2006: $82 million;
31 December 2006: $82 million) capital redemption reserve, partially offset by
negative revaluation reserve of $4 million (30 June 2006: nil; 31 December
2006: $4 million)12. Consolidated cash flow analysis
a) Reconciliation of profit before tax to cash inflows from operations
6 months 6 months
ended ended
Year ended
US$ million 30.06.07 30.06.06 31.12.06
Profit before tax 5,433 4,373 9,562
Depreciation and amortisation 907 1,163 2,036
Share-based payment charges 41 47 189
Special items and remeasurements of subsidiaries
and joint ventures (331) (86) (300)
Net finance costs before remeasurements 84 88 165
Fair value gains before special items and
remeasurements (35) (120) (152)
Share of net income from associates (369) (369) (685)
Additional pension contributions - (232) (232)
Provisions (2) 31 11
Increase in inventories (215) (295) (377)
Increase in operating receivables (532) (698) (625)
Increase in operating payables 134 197 470
Other adjustments (19) (39) (5)
Cash inflows from operations 5,096 4,060 10,057
b) Reconciliation to the balance sheet
Cash and cash equivalents
As at As at As at
US$ million 30.06.07 30.06.06 31.12.06
Balance sheet
Continuing operations 2,962 2,638 3,004
Disposal groups (2) - 226 63
Bank overdrafts
Continuing operations (68) (175) (87)
Disposal groups (2) - - -
Net debt classification 2,894 2,689 2,980
Short term borrowings (1)
As at As at As at
US$ million 30.06.07 30.06.06 31.12.06
Balance sheet
Continuing operations (3,427) (1,710) (2,028)
Disposal groups (2) - (272) (135)
Bank overdrafts
Continuing operations 68 175 87
Disposal groups (2) - - -
Net debt classification (3,359) (1,807) (2,076)
Medium and long term borrowings
As at As at As at
US$ million 30.06.07 30.06.06 31.12.06
Balance sheet
Continuing operations (4,884) (3,310) (4,220)
Disposal groups (2) - (240) (8)
Bank overdrafts
Continuing operations - - -
Disposal groups (2) - - -
Net debt classification (4,884) (3,550) (4,228)
(1) `Short term borrowings` on the balance sheet include overdrafts which are
included within `Cash and cash equivalents` for net debt.
(2) Disposal group balances are shown as `Assets classified as held for sale`
and `Liabilities associated with assets classified as held for sale` on the
balance sheet.
12. Consolidated cash flow analysis (continued)
c) Movement in net debt
Debt due within
one year
Cash and
US$ million cash
equivalents (1) Carrying value Hedge (2)
Balance at 1 January 2006 3,319 (1,965) 13
Cash flow (417) 251 -
Acquisition and disposal
of businesses - 116 -
Conversion to equity - - -
Unwinding of discount on
convertible debt - - -
Reclassifications - (270) -
Movement in fair value - - 129
Other non-cash movements - - -
Currency movements (213) 61 -
Balance at 30 June 2006 2,689 (1,807) 142
Cash flow 247 (444) -
Acquisition and disposal
of businesses - 108 -
Conversion to equity - 311 -
Unwinding of discount on
convertible debt - - -
Reclassifications - (239) -
Movement in fair value - - (136)
Other non-cash movements - 6 -
Currency movements 44 (11) -
Balance at 31 December
2006 2,980 (2,076) 6
Cash flow (47) (262) -
Acquisition and disposal
of businesses - 362 -
Reclassifications - (1,353) 125
Movement in fair value - - 3
Other non-cash movements - (1) -
Currency movements (39) (29) -
Balance at 30 June 2007 2,894 (3,359) 134
Debt due after
one year
US$ million
Carrying value Hedge (2)
Balance at 1 January 2006 (6,363) -
Cash flow 84 -
Acquisition and disposal of businesses 1,758 -
Conversion to equity 828 -
Unwinding of discount on convertible debt (17) -
Reclassifications 270 -
Movement in fair value 33 (30)
Other non-cash movements - -
Currency movements (143) -
Balance at 30 June 2006 (3,550) (30)
Cash flow (458) -
Acquisition and disposal of businesses (278) -
Conversion to equity (71) -
Unwinding of discount on convertible debt 4 -
Reclassifications 168 -
Movement in fair value (28) 217
Other non-cash movements (13) -
Currency movements (2) -
Balance at 31 December 2006 (4,228) 187
Cash flow (2,034) -
Acquisition and disposal of businesses 21 -
Reclassifications 1,381 (125)
Movement in fair value 33 13
Other non-cash movements 14 -
Currency movements (71) -
Balance at 30 June 2007 (4,884) 75
Current
US$ million financial asset Total
investments net debt
Balance at 1 January 2006 16 (4,980)
Cash flow - (82)
Acquisition and disposal of businesses (9) 1,865
Conversion to equity - 828
Unwinding of discount on convertible debt - (17)
Reclassifications - -
Movement in fair value - 132
Other non-cash movements (6) (6)
Currency movements 1 (294)
Balance at 30 June 2006 2 (2,554)
Cash flow (5) (660)
Acquisition and disposal of businesses 8 (162)
Conversion to equity - 240
Unwinding of discount on convertible debt - 4
Reclassifications - (71)
Movement in fair value - 53
Other non-cash movements (8) (15)
Currency movements 3 34
Balance at 31 December 2006 - (3,131)
Cash flow - (2,343)
Acquisition and disposal of businesses - 383
Reclassifications - 28
Movement in fair value - 49
Other non-cash movements - 13
Currency movements - (139)
Balance at 30 June 2007 - (5,140)
(1) The Group operates in certain countries (principally South Africa and
Venezuela) where the existence of exchange controls may restrict the use of
certain cash balances. These restrictions are not expected to have any material
effect on the Group`s ability to meet its ongoing obligations.
(2) Derivative instruments that have been designated as hedges of assets and
liabilities included in net debt are included above to reflect the true net
debt position of the Group at the period end. These instruments are classified
within other financial assets and liabilities on the balance sheet.
(3) Net debt excluding the impact of hedges is $5,349 million (30 June 2006:
$2,666 million; 31 December 2006: $3,324 million) and consists of cash and cash
equivalents $2,894 million (30 June 2006: $2,689 million; 31 December 2006:
$2,980 million), short term borrowings $3,359 million (30 June 2006: $1,807
million; 31 December 2006: $2,076 million), medium and long term borrowings
$4,884 million (30 June 2006: $3,550 million; 31 December 2006: $4,228 million)
and current financial asset investments nil (30 June 2006: $2 million; 31
December 2006: nil).
13. EBITDA by business segment
6 months ended 6 months ended Year ended
US$ million 30.06.07 30.06.06 31.12.06
By business segment
Platinum 1,737 1,171 2,845
Gold 265 540 843
Diamonds 310 341 541
Coal 442 464 1,082
Base Metals 2,329 2,032 4,255
Industrial Minerals 325 265 539
Ferrous Metals and
Industries 780 783 1,560
Paper and Packaging 560 435 923
Exploration (55) (66) (132)
Corporate Activities (139) (109) (259)
EBITDA 6,554 5,856 12,197
EBITDA is stated before special items and remeasurements and is reconciled to
`Total profit from operations and associates` as follows:
6 months ended 6 months ended Year ended
US$ million 30.06.07 30.06.06 31.12.06
Total profit from
operations and associates 5,496 4,448 9,727
Operating special items and
remeasurements (including
associates) 42 944 991
Net profit on disposals
(including associates) (319) (1,035) (1,367)
Associates` financing
remeasurements (28) (20) (26)
Depreciation and
amortisation: subsidiaries
and joint ventures 907 1,163 2,036
Share of associates` interest, tax,
depreciation, amortisation and
minority interests 456 356 836
EBITDA 6,554 5,856 12,197
14. Capital expenditure on tangible assets and biological assets
6 months ended 6 months ended Year ended
US$ million 30.06.07 30.06.06 31.12.06
Platinum 643 276 923
Gold - 196 196
Coal 443 290 780
Base Metals 148 111 316
Industrial Minerals 105 108 280
Ferrous Metals and
Industries 250 222 581
Paper and Packaging 186 254 581
Other 15 9 29
Purchase of tangible assets 1,790 1,466 3,686
Investment in biological
assets 26 33 64
1,816 1,499 3,750
Capital expenditure shown above comprises cash expenditure on tangible assets
and biological assets. Segmental capital expenditure shown in note 3 also
includes accruals and expenditure on acquisitions and intangible assets and
capitalised interest, but excludes expenditure on biological assets.
15. Business combinations
The Group made no material acquisitions in the six months ended 30 June 2007.
In November 2006, Anglo Coal, Hillsborough Resources and North Energy Mining
Incorporated formed Peace River Coal Partnership, of which Anglo Coal holds a
60% interest. Peace River Coal began production in 2007. The total
consideration was $89 million which consisted of contribution of assets to the
partnership of $59 million and cash paid of $30 million.
In the prior year, the Group also acquired a 100% interest in AltaSteel,
including the remaining 50% of Moly- Cop Canada, on 1 February 2006, for a
total cash consideration of $84 million (including transaction costs).
The carrying value and fair value of the net assets at the date of acquisition
and related net cash outflow are shown below:
Peace
River Coal (1)
Provisional
fair Carrying Other
US$ million value value Fair value
Net assets acquired
Intangible assets - 3 2
Tangible assets 166 70 113
Biological assets - 9 9
Deferred tax assets - - -
Other financial assets
(derivatives) - - -
Other non-current assets 1 - -
Inventories 9 17 17
Trade and other receivables 1 20 20
Cash and cash equivalents 2 5 5
Short term borrowings - (19) (19)
Overdrafts - - -
Trade and other payables (3) (24) (28)
Medium and long term borrowings - (19) (19)
Retirement benefit obligations - - -
Deferred tax liabilities - (1) (12)
Provisions for liabilities and
charges (2) (7) (7)
Other non-current liabilities (12) - -
Minority interests (65) (11) (11)
Revaluation on acquisition of
minority interests - - -
97 43 70
Less: Associate investment
previously recorded - (9)
Less: Fair value of assets
contributed (59) -
Fair value of net assets acquired 38 61
Goodwill arising on acquisitions - 8
Negative goodwill arising on
acquisitions (8) (1)
Total cost of acquisition 30 68
Satisfied by
Net cash acquired - 5
Deferred consideration - -
Net cash paid in prior periods 30 -
Net cash paid - 63
Total fair Total fair Total fair
value value value
6 months 6 months
ended ended Year ended
US$ million 30.06.07 30.06.06 31.12.06
Net assets acquired
Intangible assets 2 - 4
Tangible assets 279 214 257
Biological assets 9 - -
Deferred tax assets - 1 3
Other financial assets
(derivatives) - 35 40
Other non-current assets 1 - 1
Inventories 26 49 71
Trade and other receivables 21 64 82
Cash and cash equivalents 7 9 19
Short term borrowings (19) (31) (36)
Overdrafts - - (20)
Trade and other payables (31) (36) (58)
Medium and long term borrowings (19) (14) (10)
Retirement benefit obligations - - (52)
Deferred tax liabilities (12) (25) (12)
Provisions for liabilities and
charges (9) (46) (23)
Other non-current liabilities (12) - (1)
Minority interests (76) (4) 3
Revaluation on acquisition of
minority interests - - 4
167 216 272
Less: Associate investment
previously recorded (9) - -
Less: Fair value of assets
contributed (59) - -
Fair value of net assets acquired 99 216 272
Goodwill arising on acquisitions 8 14 41
Negative goodwill arising on
acquisitions (9) (3) (10)
Total cost of acquisition 98 227 303
Satisfied by
Net cash acquired 5 9 (1)
Deferred consideration - 3 18
Net cash paid in prior periods 30 - -
Net cash paid 63 215 286
(1) Since 1 January 2007, the operating loss for Peace River Coal was
$2.1 million. There was no profit or loss in the period from its creation to 31
December 2006. There has been no revenue in the period ended 30 June 2007 or in
the period since its creation to 31 December 2006. As the entity was formed as
part of a business combination, there were no carrying values immediately prior
to the combination. Owing to the timing and size of the acquisition,
consolidation into the Group balance sheet only occurred in 2007.
16. Disposals of subsidiaries and businesses
6 months 6 months Year
ended ended ended
US$ million 30.06.07 30.06.06 31.12.06
Net assets disposed
Tangible assets 1,336 6,637 7,925
Other non-current assets 82 892 1,027
Current assets 1,119 2,179 3,115
Current liabilities (882) (2,601) (2,878)
Non-current liabilities (409) (4,242) (4,683)
Net assets 1,246 2,865 4,506
Minority interests (727) (1,101) (1,679)
Group`s share of net assets immediately prior
to disposal 519 1,764 2,827
Less: Retained investments in associates (393) (1,451) (1,451)
Less: Retained financial asset investments - - (370)
Less: Movement in share of assets arising on
deemed disposal - (157) (170)
Add: Purchase price adjustment - - 10
Net assets disposed 126 156 846
Cumulative translation differences recycled
from reserves 25 (11) (9)
Increase in minority share (92) - 220
Losses absorbed by Anglo American 94 - -
Fair value losses arising on transaction 68 - 52
Other 2 - 13
Net gain on disposal 165 890 1,072
Net sale proceeds 388 1,035 2,194
Net cash and cash equivalents disposed (140) (154) (283)
Non-cash proceeds - - (393)
Other - 1 2
Less: Cash proceeds not yet received (10) - -
Net cash inflow on disposals 238 882 1,520
Disposals of subsidiaries and businesses in the six months ended 30 June 2007
Disposals recorded in the six months ended 30 June 2007 principally include the
completion of the disposal of Highveld, disposal of an 18% interest in Scaw
South Africa (Pty) Limited and the dilution of an effective 12% and 6% interest
in Tongaat-Hulett and Hulamin, respectively. Details of these disposals are
included below.
a) Highveld Steel and Vanadium Corporation (Highveld)
On 4 May 2007, the Group announced the disposal of the remaining 29.2%
shareholding in Highveld to the Evraz Group SA (Evraz) for $238 million. Evraz
was granted an option, subject to regulatory approvals, over this stake as part
of the original transaction in which Anglo American sold 49.8% of Highveld to
Evraz and Credit Suisse (in July 2006). Evraz exercised their option on 26
April 2007 following requisite regulatory approvals.
16. Disposals of subsidiaries and businesses (continued)
The net asset position of Highveld at 4 May 2007, together with the resulting
profit on disposal of shares and related net cash inflow are shown below:
US$ million 6 months ended 30.06.07
Tangible assets 335
Other non-current assets 13
Current assets 360
Current liabilities (338)
Non-current liabilities (89)
Net assets 281
Minority interest (211)
Net assets disposed 70
Cumulative translation differences recycled through
reserves 25
Other 3
Net gain on disposal 140
Net sale proceeds 238
Net cash and cash equivalents disposed (56)
Net cash inflow from disposal of Highveld 182
b) Scaw Metals
On 1 March 2007, Scaw announced a black economic empowerment (BEE) transaction
for its South African assets, which has resulted in the formation of a new
company, Scaw South Africa (Pty) Limited (Scaw SA) with effect from 1 January
2007. On 8 March 2007, 18% of the equity of Scaw SA was sold to a BEE
consortium for $2 million. A further 3% equity stake will be purchased by a
broad based women`s group once one has been selected. Therefore ultimately the
BEE consortium will hold 21% of the equity of Scaw SA. A further 5% interest is
held by an employee share ownership plan.
The net asset position at the date of disposal, 1 March 2007, together with the
resulting gain on disposal of shares and related net cash inflow are shown
below:
US$ million 6 months ended 30.06.07
Increase in minority share (92)
94
Losses absorbed by Anglo American (1)
Cash inflow on part disposal of Scaw SA 2
(1) The total gain on part disposal can only be recognised in the income
statement as the minorities` share of the net liabilities not recognised on
this transaction is subsequently settled through the Group`s take-up of the
minorities` share of future Scaw SA profits, in accordance with IAS 27
Consolidated and Separate Financial Statements.
In the period since disposal, the profit realised in this way amounted to $8
million, included as a non operating special item.
c) Tongaat-Hulett Group
In December 2006 the Tongaat-Hulett Group announced the proposed unbundling and
listing of Hulamin and simultaneous introduction of broad based black economic
empowerment (BBBEE) into both companies.
This transaction was effected on 25 June 2007, and empowerment parties acquired
25% of Tongaat-Hulett and 15% of Hulamin`s operations. Anglo American`s voting
rights in the companies accordingly reduced to 37.5% and to 38.4% respectively.
Anglo American commenced equity accounting both Tongaat-Hulett and Hulamin as
of 25 June 2007.
However, in accordance with SIC 12 Consolidation - Special Purpose Entities,
Tongaat-Hulett and Hulamin are required to consolidate the entities housing the
empowerment interests (as they supplied significant funding to these parties to
effect the transaction). This has the effect, in accounting terms, of
cancelling the shares issued to these parties. As a result, Anglo American has
equity accounted 49.8% and 44.9% of Tongaat-Hulett and Hulamin respectively.
Therefore from 25 June 2007 Anglo American ceased to account for Tongaat-Hulett
and Hulamin as subsidiaries and began accounting for them as associates under
the equity method.
16. Disposals of subsidiaries and businesses (continued)
The net asset position at the date of disposal, together with the
reclassification to investments in associates and related net cash outflow are
shown below:
6 months ended
US$ million 30.06.07
Tangible assets 959
Other non-current assets 49
Current assets 709
Current liabilities (490)
Non-current liabilities (305)
Net assets 922
Minority interest (529)
Group`s share of Tongaat-Hulett and Hulamin`s net assets
immediately prior to disposal 393
Less: Retained investments in associates immediately after
disposal (1) (393)
Net assets disposed -
Fair value loss arising on transaction 68
Net loss on disposal (68)
Net sale proceeds -
Net cash and cash equivalents disposed (84)
Net cash outflow from partial disposal of Tongaat-Hulett and
Hulamin (84)
(1) This relates to investments in associates of $176 million and $217 million
in Tongaat-Hulett and Hulamin, respectively.
d) Disposals of subsidiaries and businesses in the year ended 31 December 2006
Significant disposals recorded during the year ended 31 December 2006 are
summarised below. For details of these disposals refer to the 31 December 2006
annual report.
AngloGold Ashanti
On 20 April 2006 the Group completed the sale of 19.7 million ordinary shares
held in AngloGold Ashanti Limited for cash of $978 million. This, together with
the Group`s non-participation in the issue of additional ordinary shares,
throughout the year, by AngloGold Ashanti, diluted the Group`s percentage
investment from 50.9% to 41.7%. With effect from that date, the Group ceased to
account for AngloGold Ashanti as a subsidiary and began accounting for it as an
associate under the equity method.
Kumba (non-iron ore)
In November 2006 the Kumba Resources BEE transaction was effected. Kumba Iron
Ore was accordingly unbundled from Kumba Resources (leaving the non-iron ore
operations) which was renamed Exxaro. The Group retained a 64% interest in
Kumba Iron Ore. The Group disposed of part of its investment in Exxaro through
a share buyback and sale of shares. The Group retained an interest of 23% in
Exxaro over which it does not exercise significant influence and accordingly
this has been held as an available for sale financial asset since 28 November
2006. This interest has subsequently reduced to 18%.
Highveld Steel and Vanadium Corporation (Highveld)
In July 2006, the Group disposed of Anglo American`s 79% stake in Highveld to
Evraz Group SA and Credit Suisse for a total consideration of $678 million.
Following the disposal of the initial 49.8%, for which Anglo American received
$412 million, and subject to certain regulatory approvals Evraz had an option
to acquire Anglo American`s remaining 29.2% stake in Highveld for $266 million.
This amount was to be reduced by any dividends paid by Highveld prior to Anglo
American selling its remaining shares. Anglo American and Credit Suisse agreed
that Anglo American would retain the voting rights in respect of the shares
acquired by Credit Suisse until such time as Anglo American disposed of all its
shares in Highveld. As a result, the Group continued to consolidate Highveld
(while recording an increased minority interest) until the final disposal on 4
May 2007.
16. Disposals of subsidiaries and businesses (continued)
Anglo Platinum`s Rustenburg Platinum Mines
On 8 November 2006, Anglo Platinum announced the conclusion of the BEE
transaction with the Bakgatla-Ba-Kgafela (Bakgatla) traditional community. In
terms of this transaction the Bakgatla acquired a 15% interest in Anglo
Platinum`s Rustenburg Platinum Mines` Union section mining and concentrating
business and interests in prospecting rights of the Rooderand 46 JQ, portion 2
and Magazynskraal 3 JQ properties. The agreements became unconditional on 1
December 2006.
17. Disposal groups and non-current assets held for sale
Net assets relating to Highveld, which were previously classified as held for
sale at 31 December 2006, were disposed of on 4 May 2007 as disclosed in note
16. Net assets relating to Kumba (non-iron ore), which were classified as held
for sale at 30 June 2006, were disposed of on 28 November 2006 as disclosed in
note 16.
The following assets and liabilities relating to disposal groups were
classified as held for sale. The Group expects to complete the sale of these
businesses within 12 months of the period end.
6 months ended 30.06.07
Namakwa
US$ million Sands Other Total
Intangible assets 3 - 3
Tangible assets 295 - 295
Biological assets - - -
Environmental rehabilitation trusts 2 - 2
Investments in associates - - -
Financial asset investments - - -
Deferred tax assets - - -
Other non-current assets 1 - 1
Total non-current assets 301 - 301
Inventories 40 - 40
Trade and other receivables 25 - 25
Other current financial assets - - -
Cash and cash equivalents - - -
Total current assets 65 - 65
Total assets 366 - 366
Short term borrowings - - -
Trade and other payables (17) - (17)
Other current financial liabilities - - -
Short term provisions - - -
Total current liabilities (17) - (17)
Medium and long term borrowings - - -
Provisions for liabilities and charges (5) - (5)
Deferred tax liabilities (75) - (75)
Retirement benefit obligations (3) - (3)
Total non-current liabilities (83) - (83)
Total liabilities (100) - (100)
Net assets 266 - 266
6 months ended 30.06.06
Kumba
(non-iron
US$ million ore) Highveld Other Total
Intangible assets 11 - - 11
Tangible assets 1,222 232 36 1,490
Biological assets 4 - - 4
Environmental rehabilitation
trusts 23 - - 23
Investments in associates 20 - - 20
Financial asset investments 23 15 1 39
Deferred tax assets 57 - - 57
Other non-current assets - - - -
Total non-current assets 1,360 247 37 1,644
Inventories 161 119 17 297
Trade and other receivables 177 127 19 323
Other current financial assets 6 2 - 8
Cash and cash equivalents 141 80 5 226
Total current assets 485 328 41 854
Total assets 1,845 575 78 2,498
Short term borrowings (163) (109) - (272)
Trade and other payables (148) (171) (19) (338)
Other current financial
liabilities (2) (5) - (7)
Short term provisions (2) (3) - (5)
Total current liabilities (315) (288) (19) (622)
Medium and long term borrowings (233) (5) (2) (240)
Provisions for liabilities and
charges (87) (14) (3) (104)
Deferred tax liabilities (182) (23) - (205)
Retirement benefit obligations - (13) - (13)
Total non-current liabilities (502) (55) (5) (562)
Total liabilities (817) (343) (24) (1,184)
Net assets 1,028 232 54 1,314
Year ended 31.12.06
Namakwa
US$ million Highveld Sands Other Total
Intangible assets - 2 4 6
Tangible assets 322 278 42 642
Biological assets - - 16 16
Environmental rehabilitation trusts - 2 - 2
Investments in associates - - 47 47
Financial asset investments 15 - 5 20
Deferred tax assets - - - -
Other non-current assets - 1 - 1
Total non-current assets 337 283 114 734
Inventories 116 38 12 166
Trade and other receivables 160 41 24 225
Other current financial assets - - - -
Cash and cash equivalents 60 - 3 63
Total current assets 336 79 39 454
Total assets 673 362 153 1,188
Short term borrowings (134) - (1) (135)
Trade and other payables (166) (21) (46) (233)
Other current financial liabilities (4) - - (4)
Short term provisions - - - -
Total current liabilities (304) (21) (47) (372)
Medium and long term borrowings (3) - (5) (8)
Provisions for liabilities and
charges (23) (5) (2) (30)
Deferred tax liabilities (43) (72) (4) (119)
Retirement benefit obligations (15) (3) - (18)
Total non-current liabilities (84) (80) (11) (175)
Total liabilities (388) (101) (58) (547)
Net assets 285 261 95 641
The net carrying amount of assets and associated liabilities reclassified as
held for sale during the period was written down by nil (30 June 2006: nil; 31
December 2006: $28 million, after tax).
18. Effect of demerger with Mondi
On 2 July 2007 the Paper and Packaging business was demerged from the Anglo
American Group by way of a dividend in specie paid to the Anglo American plc
shareholders. As the demerger took place after the period end, and by way of
dividend, the effect is not reflected in the financial information for the
period to 30 June 2007. However, if the demerger had taken place on 30 June
2007 the pro forma continuing operations of the Group before special items and
remeasurements would have been as follows:
Group results (before special items and
remeasurements) before demerger
6 months 6 months
ended ended Year ended
US$ million 30.06.07 30.06.06 31.12.06
Group revenue 16,946 16,175 33,072
Total operating costs (12,129) (12,169) (24,330)
Operating profit from
subsidiaries and joint
ventures 4,817 4,006 8,742
Share of net income from
associates 373 313 582
Total profit from operations
and associates 5,190 4,319 9,324
Net finance costs (84) (88) (165)
Profit before tax 5,106 4,231 9,159
Income tax expense (1,521) (1,318) (2,763)
Profit for the financial period 3,585 2,913 6,396
Underlying operating profit (1) 5,452 4,563 9,832
EBITDA 6,554 5,856 12,197
Net segment assets 29,477 27,039 28,342
Capital expenditure (2) 1,790 1,466 3,686
Underlying earnings 3,058 2,502 5,471
Headline earnings 3,030 2,297 5,260
Paper and Packaging results (before special
items and remeasurements)(3)
6 months 6 months
ended ended Year ended
US$ million 30.06.07 30.06.06 31.12.06
Group revenue 4,062 3,515 7,224
Total operating costs (3,741) (3,310) (6,758)
Operating profit from
subsidiaries and joint
ventures 321 205 466
Share of net income from
associates 2 5 6
Total profit from operations
and associates 323 210 472
Net finance costs (40) (38) (56)
Profit before tax 283 172 416
Income tax expense (81) (51) (117)
Profit for the financial period 202 121 299
Underlying operating profit (1) 324 212 477
EBITDA 560 435 923
Net segment assets 7,200 6,671 7,019
Capital expenditure (2) 186 254 581
Underlying earnings 167 94 235
Headline earnings 171 97 243
Group results (before special items and
remeasurements) excluding Paper and Packaging
6 months 6 months
ended ended Year ended
US$ million 30.06.07 30.06.06 31.12.06
Group revenue 12,884 12,660 25,848
Total operating costs (8,388) (8,859) (17,572)
Operating profit from
subsidiaries and joint
ventures 4,496 3,801 8,276
Share of net income from
associates 371 308 576
Total profit from operations
and associates 4,867 4,109 8,852
Net finance costs (44) (50) (109)
Profit before tax 4,823 4,059 8,743
Income tax expense (1,440) (1,267) (2,646)
Profit for the financial period 3,383 2,792 6,097
Underlying operating profit (1) 5,128 4,351 9,355
EBITDA 5,994 5,421 11,274
Net segment assets 22,277 20,368 21,323
Capital expenditure (2) 1,604 1,212 3,105
Underlying earnings 2,891 2,408 5,236
Headline earnings 2,859 2,200 5,017
(1) Underlying operating profit includes associates` operating profit before
special items and remeasurements and is the same as `Total Group operations
including operating profit from associates`.
(2) Capital expenditure relates to cash expenditure on tangible assets and
excludes biological assets. Paper and Packaging spent $26 million of cash on
biological assets in the six months ended 30 June 2007 (six months ended 30
June 2006: $33 million; year ended 31 December 2006: $63 million).
(3) These results include intercompany interest expense of $22 million
(six months ended 30 June 2006: $26 million; year ended 31 December 2006: $39
million), which from the Group`s perspective would be external after the Paper
and Packaging demerger.
Going forward the weighted average number of ordinary shares and earnings per
share of the Group will be impacted by the Anglo American share consolidation
which, on 2 July 2007, resulted in 100 existing Anglo American ordinary shares
being exchanged for 91 new Anglo American ordinary shares.
In accordance with IAS 33 Earnings per Share, the share consolidation will only
impact the calculation of the weighted average number of shares following the
date of the consolidation. However, if both the demerger and the share
consolidation had occurred at the beginning of the period the Group`s
underlying EPS would have been $2.27 per share (30 June 2006: $1.79; 31
December 2006: $3.92). On the same basis, headline EPS would have been $2.24
(30 June 2006: $1.64; 31 December 2006: $3.76).
19. Contingent liabilities and contingent assets
There have been no significant changes in contingent liabilities from those
reported at 31 December 2006.
The Group is subject to various claims which arise in the ordinary course of
business. Having taken appropriate legal advice, the Group believes that the
likelihood of a material liability arising is remote.
At 30 June 2007, contingent liabilities comprise aggregate amounts of $298
million (30 June 2006: $86 million;
31 December 2006: $214 million) in respect of loans and performance guarantees
given to banks and other third parties.
There were no significant contingent assets in the Group at 30 June 2007, 30
June 2006 or 31 December 2006.
20. Related party transactions
The Group has related party relationships with its subsidiaries, associates and
joint ventures.
At 30 June 2007, Anglo American holds $175 million (30 June 2006: $175 million;
31 December 2006: $175 million) of 10% non-cumulative redeemable preference
shares in DB Investments, the holding company of De Beers Societe Anonyme.
The Company and its subsidiaries, in the ordinary course of business, enter
into various sales, purchase and service transactions with joint ventures and
associates and others in which the Group has a material interest.
These transactions are under terms that are no less favourable than those
arranged with third parties. These transactions are not considered to be
significant.
Dividends received from associates during the period totalled $163 million (30
June 2006: $100 million; 31 December 2006: $276 million), as disclosed in the
`Consolidated cash flow statement`.
The directors of the Company and their immediate relatives control 3% (30 June
2006: 4%; 31 December 2006: 3%) of the voting shares of the Company.
On 29 June 2007, the Group entered into a contract to sell the freehold
property and all fixtures and fittings of a property owned by the Group to Mr A
J Trahar, formerly Group Chief Executive, for total consideration of
GBP6,991,800
($14,026,943). This transaction was carried out at full market value and the
proceeds were received by the Group following completion.
21. Events occurring after the period end
Demerger of the Mondi group and share consolidation
On 2 July 2007, Mondi was demerged from the Group by way of a dividend in
specie. At the same time, the Group completed a share consolidation which
resulted in shareholders receiving 91 new Anglo American ordinary shares for
every 100 existing Anglo American ordinary shares held.
Details of the effect of this demerger are included in note 18.
Acquisition of 49% interest in MMX Minas-Rio iron ore project
On 18 July 2007, Anglo American completed its acquisition of a 49% interest in
the MMX Minas-Rio integrated iron ore project in Brazil (Minas-Rio). Minas-Rio
comprises a number of iron ore deposits in the State of Minas Gerais, slurry
pipelines and an ongoing project for the development of an iron ore terminal in
the state of Rio de Janeiro.
The acquisition was affected through the purchase of a 30% interest in the
project companies - MMX Minas-Rio Mineracao S.A. and LLX Minas-Rio Logistica
S.A. - from Centennial Asset Mining Fund LLC and the subscription for shares in
the project companies equivalent to a 19% interest. The total acquisition cost
was $1.6 billion, including $0.4 million cash acquired.
Anglo American will account for its 49% interest in Minas-Rio as a joint
venture entity and, hence, will proportionately consolidate it with effect from
18 July 2007.
Expansion into Alaska
On 1 August 2007, Anglo American announced the acquisition of a 50% stake in
the Pebble Project in south western Alaska with a planned phased investment of
$1.425 billion to take the mine to production.
Anlgo American`s partners in this deal are Northern Dynasty Minerals, part of
the Hunter Dickinson group, who have been exploring at Pebble since 2002.
INDEPENDENT REVIEW REPORT TO ANGLO AMERICAN PLC
Introduction
We have been instructed by the Company to review the financial information for
the six months ended 30 June 2007 which comprises the consolidated income
statement, the consolidated balance sheet, the consolidated cash flow
statement, the consolidated statement of recognised income and expense, the
reconciliation from EBITDA to cash inflows from operations and related notes 1
to 21. We have read the other information contained in the interim report and
considered whether it contains any apparent misstatements or material
inconsistencies with the financial information.
This report is made solely to the Company in accordance with Bulletin 1999/4
issued by the Auditing Practices Board. Our work has been undertaken so that we
might state to the Company those matters we are required to state to them in an
independent review report and for no other purpose. To the fullest extent
permitted by law, we do not accept or assume responsibility to anyone other
than the Company, for our review work, for this report, or for the conclusions
we have formed.
Directors` responsibilities
The interim report, including the financial information contained therein, is
the responsibility of, and has been approved by, the directors. The directors
are responsible for preparing the interim report in accordance with the Listing
Rules of the Financial Services Authority and the requirements of IAS 34
Interim Financial Reporting, which require that the accounting policies and
presentation applied to the interim figures are consistent with those applied
in preparing the preceding annual accounts except where any changes, and the
reasons for them, are disclosed.
Review work performed
We conducted our review in accordance with the guidance contained in Bulletin
1999/4 issued by the Auditing Practices Board for use in the United Kingdom. A
review consists principally of making enquiries of Group management and
applying analytical procedures to the financial information and underlying
financial data and, based thereon, assessing whether the accounting policies
and presentation have been consistently applied unless otherwise disclosed. A
review excludes audit procedures such as tests of controls and verification of
assets, liabilities and transactions. It is substantially less in scope than an
audit performed in accordance with International Standards on Auditing (UK and
Ireland) and therefore provides a lower level of assurance than an audit.
Accordingly, we do not express an audit opinion on the financial information.
Review conclusion
On the basis of our review we are not aware of any material modifications that
should be made to the financial information as presented for the six months
ended 30 June 2007.
Deloitte & Touche LLP
Chartered Accountants
London
2 August 2007
Production statistics
The figures below include the entire output of consolidated entities and the
Group`s share of joint ventures, joint arrangements and associates where
applicable, except for Collahuasi in Base Metals and De Beers which is quoted
on a 100% basis.
6 months ended 6 months ended Year ended
30.06.07 30.06.06 31.12.06
Anglo Platinum (troy ounces) (1)(2)
Platinum 1,217,400 1,368,800 2,863,900
Palladium 676,100 743,400 1,563,000
Rhodium 163,700 150,000 331,700
2,057,200 2,262,200 4,758,600
Nickel (tonnes) (3) 10,300 10,900 21,700
Copper (tonnes) (3) 6,100 5,600 11,400
Gold 51,400 51,300 115,400
AngloGold Ashanti (gold in troy
ounces) (1)(4)
South Africa 477,300 965,200 1,506,500
Argentina 42,400 87,700 128,900
Australia 123,500 152,200 260,900
Brazil 77,600 116,200 193,200
Ghana 109,300 238,700 359,200
Guinea 57,000 88,300 146,400
Mali 87,100 208,900 318,400
Namibia 16,500 34,300 51,500
Tanzania 66,400 123,800 187,900
USA 55,100 100,100 164,300
1,112,200 2,115,400 3,317,200
De Beers (diamonds recovered -
carats)
100% basis (Anglo American 45%)
Debswana 16,407,000 16,227,000 34,293,000
Namdeb 1,184,000 1,006,000 2,084,800
De Beers Consolidated Mines 7,567,000 7,369,000 14,568,900
Williamson 116,000 84,000 189,400
25,274,000 24,686,000 51,136,100
Anglo Coal (tonnes)
South Africa
Eskom 16,963,700 16,141,000 34,821,200
Trade - Thermal 11,501,500 10,331,500 22,754,000
Trade - Metallurgical 952,400 723,200 1,768,200
29,417,600 27,195,700 59,343,400
Australia (5)
Thermal 6,783,700 7,381,100 15,258,400
Metallurgical 4,884,300 3,965,700 9,195,600
11,668,000 11,346,800 24,454,000
South America
Thermal 5,288,400 5,501,000 11,008,900
Total 46,374,000 44,043,500 94,806,300
Anglo Coal (tonnes)
South Africa
Bank 51,900 196,400 477,600
Greenside 1,591,000 1,151,300 2,778,100
Goedehoop 4,056,400 3,869,800 8,534,500
Isibonelo 2,612,500 1,683,500 4,020,100
Kriel 5,830,600 5,805,300 12,318,400
Kleinkopje 1,845,900 1,792,500 3,898,400
Landau 1,885,300 2,000,200 4,102,400
New Denmark 2,768,900 2,591,200 5,508,500
New Vaal 8,056,000 7,451,600 16,275,000
Nooitgedacht 283,300 361,000 711,000
Mafube 435,800 292,900 719,400
29,417,600 27,195,700 59,343,400
(1) See the published results of Anglo Platinum Limited, Northam Platinum
Limited and AngloGold Ashanti Limited for further analysis of production
information.
(2) Includes Anglo Platinum`s 22.5% share of Northam Platinum Limited`s
production.
(3) Also disclosed within total attributable Nickel and Copper production.
(4) Gold production for AngloGold Ashanti reflects 100% of that company`s
production to 20 April 2006 and 41.7% of production to 31 December 2006 and
41.6% thereafter.
(5) 2006 excludes production at Dartbrook which closed in that year.
Production for Dartbrook was 62,100 tonnes for the six months ended 30 June
2006 and 792,000 tonnes for the year ended 31 December 2006.
Production statistics (continued)
6 months ended
30.06.07
Anglo Coal
(tonnes)
(continued)
Australia
Callide 4,678,200
Drayton 1,547,900
German Creek 1,884,600
Jellinbah East 458,500
Moranbah 1,544,700
Dawson Complex 1,554,100
11,668,000
South America
Carbones del
Guasare 612,400
Carbones del
CerrejA3n 4,676,000
5,288,400
Total 46,374,000
Anglo Base
Metals
Copper (1)
Collahuasi
100% basis
(Anglo American
44%)
Ore mined tonnes 31,190,000
Ore processed Oxide tonnes 3,689,600
Sulphide tonnes 20,033,900
Ore grade
processed Oxide % Cu 0.8
Sulphide % Cu 0.9
Production Copper concentrate dmt 548,900
Copper cathode tonnes 29,500
Copper in concentrate tonnes 160,600
Total copper
production for
Collahuasi tonnes 190,100
Minera Sur Andes
Los Bronces mine
Ore mined tonnes 11,811,000
Marginal ore
mined tonnes 18,857,800
Las Tortolas
concentrator Ore processed tonnes 10,875,000
Ore grade processed % Cu 0.9
Average recovery % 85.5
Production Copper concentrate dmt 291,500
Copper cathode tonnes 23,500
Copper in concentrate tonnes 88,900
Total tonnes 112,400
El Soldado mine
Ore mined Open pit - ore mined tonnes 3,169,700
Open pit - marginal ore mined tonnes 47,200
Underground (sulphide) tonnes 808,300
Total tonnes 4,025,200
Ore processed Oxide tonnes 366,800
Sulphide tonnes 3,744,500
Ore grade
processed Oxide % Cu 1.6
Sulphide % Cu 1.1
Production Copper concentrate dmt 114,400
Copper cathode tonnes 3,900
Copper in concentrate tonnes 31,900
Total tonnes 35,800
6 months ended
30.06.06
Anglo Coal
(tonnes)
(continued)
Australia
Callide 4,592,800
Drayton 1,877,900
German Creek 1,668,300
Jellinbah
East 459,900
Moranbah 1,264,600
Dawson
Complex 1,483,300
11,346,800
South America
Carbones del
Guasare 754,100
Carbones del
CerrejA3n 4,746,900
5,501,000
Total 44,043,500
Anglo Base
Metals
Copper (1)
Collahuasi
100% basis
(Anglo
American
44%)
Ore mined tonnes 20,758,000
Ore
processed Oxide tonnes 2,884,000
Sulphide tonnes 18,375,000
Ore grade
processed Oxide % Cu 1.0
Sulphide % Cu 1.1
Production Copper concentrate dmt 610,000
Copper cathode tonnes 29,800
Copper in concentrate tonnes 176,800
Total copper
production
for
Collahuasi tonnes 206,600
Minera Sur
Andes
Los Bronces
mine
Ore mined tonnes 11,355,000
Marginal ore
mined tonnes 14,258,000
Las Tortolas
concentrator Ore processed tonnes 9,564,000
Ore grade processed % Cu 1.0
Average recovery % 88.2
Production Copper concentrate dmt 257,400
Copper cathode tonnes 20,700
Copper in concentrate tonnes 83,000
Total tonnes 103,700
El Soldado
mine
Ore mined Open pit - ore mined tonnes 2,689,000
Open pit - marginal ore mined tonnes 63,000
Underground (sulphide) tonnes 1,060,000
Total tonnes 3,812,000
Ore
processed Oxide tonnes 309,000
Sulphide tonnes 3,726,000
Ore grade
processed Oxide % Cu 1.3
Sulphide % Cu 1.0
Production Copper concentrate dmt 98,600
Copper cathode tonnes 2,800
Copper in concentrate tonnes 29,100
Total tonnes 31,900
Year ended
31.12.06
Anglo Coal
(tonnes)
(continued)
Australia
Callide 9,816,100
Drayton 4,136,300
German Creek 3,165,400
Jellinbah East 887,400
Moranbah 2,928,500
Dawson Complex 3,520,300
24,454,000
South America
Carbones del
Guasare 1,531,700
Carbones del
CerrejA3n 9,477,200
11,008,900
Total 94,806,300
Anglo Base Metals
Copper (1)
Collahuasi
100% basis
(Anglo American
44%)
Ore mined tonnes 45,843,300
Ore processed Oxide tonnes 6,390,300
Sulphide tonnes 41,347,700
Ore grade
processed Oxide % Cu 1.0
Sulphide % Cu 1.0
Production Copper concentrate dmt 1,312,400
Copper cathode tonnes 59,800
Copper in concentrate tonnes 380,200
Total copper
production for
Collahuasi tonnes 440,000
Minera Sur Andes
Los Bronces mine
Ore mined tonnes 22,346,200
Marginal ore
mined tonnes 35,538,000
Las Tortolas
concentrator Ore processed tonnes 20,514,700
Ore grade processed % Cu 1.0
Average recovery % 88.1
Production Copper concentrate dmt 555,900
Copper cathode tonnes 42,500
Copper in concentrate tonnes 183,500
Total tonnes 226,000
El Soldado mine
Ore mined Open pit - ore mined tonnes 5,812,300
Open pit - marginal ore mine d tonnes 110,800
Underground (sulphide) tonnes 2,028,600
Total tonnes 7,951,700
Ore processed Oxide tonnes 654,200
Sulphide tonnes 7,527,700
Ore grade
processed Oxide % Cu 1.4
Sulphide % Cu 1.0
Production Copper concentrate dmt 222,900
Copper cathode tonnes 6,500
Copper in concentrate tonnes 62,200
Total tonnes 68,700
(1) Copper production figures exclude Palabora.
Production statistics (continued)
6 months ended
30.06.07
Anglo Base Metals
(continued)
Chagres Smelter
Copper concentrate
smelted tonnes 84,500
Production Copper blister/anodes tonnes 82,700
Acid tonnes 245,300
Total copper
production for the
Minera Sur Andes
group
tonnes 148,200
Mantos Blancos
Mantos Blancos mine
Ore processed Oxide tonnes 2,260,400
Sulphide tonnes 1,924,900
Marginal ore mined tonnes 2,258,600
Ore grade
processed Oxide % Cu (soluble) 0.7
Sulphide % Cu (insoluble) 1.1
Marginal ore % Cu (soluble) 0.3
Production Copper concentrate dmt 51,900
Copper cathode tonnes 26,000
Copper in concentrate tonnes 19,700
Total tonnes 45,700
Mantoverde mine
Ore processed Oxide tonnes 4,427,500
Marginal ore tonnes 3,155,300
Ore grade
processed Oxide % Cu (soluble) 0.7
Marginal ore % Cu (soluble) 0.4
Production Copper cathode tonnes 29,600
Black Mountain tonnes 1,200
Total Anglo Base
Metals copper
production tonnes 308,300
Anglo Platinum
copper production
Production (1) tonnes 6,100
Total attributable
copper production tonnes 314,400
Nickel, Niobium,
Mineral Sands and
Phosphates
Nickel
Codemin
Ore mined tonnes 237,000
Ore processed tonnes 250,800
Ore grade processed % Ni 2.1
Production tonnes 4,700
Loma de Niquel
Ore mined tonnes 614,200
Ore processed tonnes 581,600
Ore grade processed % Ni 1.6
Production tonnes 8,200
Total Anglo Base
Metals nickel
production 12,900
Anglo Platinum
nickel production (1)
Production tonnes 10,300
Total attributable
nickel production tonnes 23,200
Niobium
Catalao
Ore mined tonnes 298,500
Ore processed tonnes 409,600
Ore grade processed Kg Nb/tonne 10.8
Production tonnes 2,300
6 months ended
30.06.06
Anglo Base Metals
(continued)
Chagres Smelter
Copper concentrate
smelted tonnes 92,300
Production Copper blister/anodes tonnes 89,900
Acid tonnes 256,900
Total copper
production for the
Minera Sur Andes
group
tonnes 135,600
Mantos Blancos
Mantos Blancos mine
Ore processed Oxide tonnes 2,264,000
Sulphide tonnes 1,939,000
Marginal ore mined tonnes 2,655,000
Ore grade
processed Oxide % Cu (soluble) 0.8
Sulphide % Cu (insoluble) 1.1
Marginal ore % Cu (soluble) 0.3
Production Copper concentrate dmt 56,600
Copper cathode tonnes 23,100
Copper in concentrate tonnes 19,400
Total tonnes 42,500
Mantoverde mine
Ore processed Oxide tonnes 4,655,000
Marginal ore tonnes 2,400,000
Ore grade
processed Oxide % Cu (soluble) 0.7
Marginal ore % Cu (soluble) 0.4
Production Copper cathode tonnes 29,200
Black Mountain tonnes 1,800
Total Anglo Base
Metals copper
production tonnes 300,000
Anglo Platinum
copper production
Production (1) tonnes 5,600
Total attributable
copper production tonnes 305,600
Nickel, Niobium,
Mineral Sands and
Phosphates
Nickel
Codemin
Ore mined tonnes 194,400
Ore processed tonnes 256,700
Ore grade processed % Ni 2.1
Production tonnes 4,900
Loma de Niquel
Ore mined tonnes 695,000
Ore processed tonnes 620,400
Ore grade processed % Ni 1.6
Production tonnes 8,800
Total Anglo Base
Metals nickel
production 13,700
Anglo Platinum
nickel production (1)
Production tonnes 10,900
Total attributable
nickel production tonnes 24,600
Niobium
Catalo
Ore mined tonnes 278,900
Ore processed tonnes 398,000
Ore grade processed Kg Nb/tonne 10.8
Production tonnes 2,200
Year ended
31.12.06
Anglo Base Metals
(continued)
Chagres Smelter
Copper concentrate
smelted tonnes 183,200
Production Copper blister/anodes tonnes 173,400
Acid tonnes 499,200
Total copper
production for the
Minera Sur Andes
group
tonnes 294,700
Mantos Blancos
Mantos Blancos mine
Ore processed Oxide tonnes 4,533,800
Sulphide tonnes 3,979,800
Marginal ore mined tonnes 6,307,300
Ore grade
processed Oxide % Cu (soluble) 0.8
Sulphide % Cu (insoluble) 1.1
Marginal ore % Cu (soluble) 0.8
Production Copper concentrate dmt 123,800
Copper cathode tonnes 49,100
Copper in concentrate tonnes 42,600
Total tonnes 91,700
Mantoverde mine
Ore processed Oxide tonnes 9,502,300
Marginal ore tonnes 4,879,900
Ore grade
processed Oxide % Cu (soluble) 0.7
Marginal ore % Cu (soluble) 0.3
Production Copper cathode tonnes 60,300
Black Mountain tonnes 3,400
Total Anglo Base
Metals copper
production tonnes 643,800
Anglo Platinum
copper production
Production (1) tonnes 11,400
Total attributable
copper production tonnes 655,200
Nickel, Niobium,
Mineral Sands and
Phosphates
Nickel
Codemin
Ore mined tonnes 487,600
Ore processed tonnes 518,600
Ore grade processed % Ni 2.1
Production tonnes 9,800
Loma de Niquel
Ore mined tonnes 1,324,300
Ore processed tonnes 1,205,000
Ore grade processed % Ni 1.6
Production tonnes 16,600
Total Anglo Base
Metals nickel
production 26,400
Anglo Platinum
nickel production (1)
Production tonnes 21,700
Total attributable
nickel production tonnes 48,100
Niobium
Catalao
Ore mined tonnes 795,400
Ore processed tonnes 813,900
Ore grade processed Kg Nb/tonne 10.9
Production tonnes 4,700
(1) Includes Anglo Platinum`s share of Northam production.
Production statistics (continued)
6 months ended 30.06.07
Anglo Base Metals
(continued)
Mineral Sands
Namakwa Sands
Ore mined tonnes 8,740,900
Production Ilmenite tonnes 140,500
Rutile tonnes 10,200
Zircon tonnes 48,000
Smelter production Slag tapped tonnes 73,700
Iron tapped tonnes 50,500
Phosphates
Copebras
Sodium tripolyphosphate tonnes 30,100
Phosphates tonnes 494,300
Zinc and Lead
Black Mountain
Ore mined tonnes 518,100
Ore processed tonnes 565,000
Ore grade processed Zinc % Zn 3.6
Lead % Pb 3.8
Copper % Cu 0.3
Production Zinc in concentrate tonnes 14,900
Lead in concentrate tonnes 21,400
Copper in concentrate tonnes 1,200
Lisheen
Ore mined tonnes 800,100
Ore processed tonnes 747,100
Ore grade processed Zinc % Zn 11.7
Lead % Pb 1.8
Production Zinc in concentrate tonnes 79,000
Lead in concentrate tonnes 9,000
Skorpion
Ore mined tonnes 667,100
Ore processed tonnes 675,100
Ore grade processed Zinc % Zn 11.7
Production Zinc tonnes 74,600
Total attributable zinc
production tonnes 168,500
Total attributable lead
production tonnes 30,400
Anglo Industrial Minerals
Aggregates tonnes 46,965,300
Lime products tonnes 750,400
Concrete m 3 4,460,600
6 months ended 30.06.06
Anglo Base Metals
(continued)
Mineral Sands
Namakwa Sands
Ore mined tonnes 8,700,000
Production Ilmenite tonnes 164,600
Rutile tonnes 14,000
Zircon tonnes 64,300
Smelter production Slag tapped tonnes 81,200
Iron tapped tonnes 52,700
Phosphates
Copebras
Sodium tripolyphosphate tonnes 36,900
Phosphates tonnes 399,600
Zinc and Lead
Black Mountain
Ore mined tonnes 759,000
Ore processed tonnes 715,000
Ore grade processed Zinc % Zn 3.2
Lead % Pb 3.9
Copper % Cu 0.4
Production Zinc in concentrate tonnes 15,200
Lead in concentrate tonnes 21,200
Copper in concentrate tonnes 1,800
Lisheen
Ore mined tonnes 749,000
Ore processed tonnes 716,000
Ore grade processed Zinc % Zn 12.3
Lead % Pb 2.3
Production Zinc in concentrate tonnes 79,600
Lead in concentrate tonnes 12,000
Skorpion
Ore mined tonnes 679,100
Ore processed tonnes 668,000
Ore grade processed Zinc % Zn 12.3
Production Zinc tonnes 75,000
Total attributable zinc
production tonnes 169,800
Total attributable lead
production tonnes 33,200
Anglo Industrial Minerals
Aggregates tonnes 44,166,200
Lime products tonnes 746,900
Concrete m 3 4,162,100
Year ended 31.12.06
Anglo Base Metals
(continued)
Mineral Sands
Namakwa Sands
Ore mined tonnes 17,382,700
Production Ilmenite tonnes 272,200
Rutile tonnes 28,200
Zircon tonnes 128,400
Smelter production Slag tapped tonnes 133,900
Iron tapped tonnes 88,900
Phosphates
Copebras
Sodium tripolyphosphate tonnes 71,100
Phosphates tonnes 901,500
Zinc and Lead
Black Mountain
Ore mined tonnes 1,544,500
Ore processed tonnes 1,403,800
Ore grade processed Zinc % Zn 3.4
Lead % Pb 4.1
Copper % Cu 0.4
Production Zinc in concentrate tonnes 34,100
Lead in concentrate tonnes 48,300
Copper in concentrate tonnes 3,400
Lisheen
Ore mined tonnes 1,605,900
Ore processed tonnes 1,527,600
Ore grade processed Zinc % Zn 12.3
Lead % Pb 2.1
Production Zinc in concentrate tonnes 170,700
Lead in concentrate tonnes 23,100
Skorpion
Ore mined tonnes 1,456,500
Ore processed tonnes 1,311,800
Ore grade processed Zinc % Zn 11.8
Production Zinc tonnes 129,900
Total attributable zinc
production tonnes 334,700
Total attributable lead
production tonnes 71,400
Anglo Industrial Minerals
Aggregates tonnes 92,268,200
Lime products tonnes 1,428,900
Concrete m 3 8,526,800
Production statistics (continued)
6 months ended 6 months ended Year ended
30.06.07 30.06.06 31.12.06
Anglo Ferrous Metals
and Industries
Kumba Iron Ore Limited
Lump tonnes 9,161,000 9,236,000 18,639,800
Fines tonnes 6,434,000 6,093,000 12,470,300
Total iron ore 15,595,000 15,329,000 31,110,100
Scaw Metals
Rolled products tonnes 233,000 205,100 409,000
Cast products tonnes 94,000 74,800 166,900
Grinding media tonnes 206,000 228,800 481,800
Samancor
Manganese ore mtu m 59 32 109
Manganese alloys tonnes 136,000 93,600 256,300
Tongaat-Hulett
Sugar tonnes 272,000 371,600 722,200
Aluminium tonnes 104,700 99,200 203,300
Starch and glucose tonnes 287,000 272,800 573,100
Anglo Paper and
Packaging
Mondi Packaging
Packaging papers tonnes 1,480,557 1,409,946 2,894,700
Corrugated board and
boxes mm 2 985 1,071 2,103
Paper sacks m units 1,910 1,799 3,606
Coating and release
liners mm 2 1,549 1,186 2,360
Pulp - external tonnes 91,834 89,025 180,200
Mondi Business Paper
Uncoated wood free
paper tonnes 1,039,145 1,015,481 2,012,300
Newsprint tonnes 99,738 92,056 187,100
Pulp - external tonnes 84,563 52,221 114,100
Wood chips green
metric
tonnes 362,089 475,665 886,600
Mondi Packaging South
Africa
Packaging papers tonnes 141,339 149,078 369,300
Corrugated board and
boxes mm 2 171 142 328
Newsprint Joint
Ventures and other
Newsprint
(attributable share) tonnes 156,103 162,065 320,900
Aylesford tonnes 94,354 100,272 196,865
Shanduka tonnes 61,749 61,793 124,012
Reconciliation of subsidiaries` and associates` reported earnings to the
underlying earnings included in the consolidated financial statements
For the six months ended 30 June 2007
Note only key reported lines are reconciled
AngloGold Ashanti Limited US$ million
IFRS adjusted headline earnings (US$ equivalent of published) 180
Share of earnings not attributable to Anglo American plc`s
shareholding (106)
Depreciation on assets fair valued on acquisition (net of tax) (9)
Contribution to Anglo American plc underlying earnings 65
Anglo Platinum Limited US$ million
IFRS headline earnings (US$ equivalent of published) 963
Exploration 17
Exchange rate difference 2
Other adjustments (3)
979
Minority interest (247)
Depreciation on assets fair valued on acquisition (net of tax) (15)
Contribution to Anglo American plc underlying earnings 717
Mondi plc US$ million
IFRS headline earnings (US$ equivalent of published) 153
Intercompany interest adjustment 40
Other adjustments (4)
Contribution to Anglo American plc underlying earnings 189
DB Investments (DBI) US$ million
De Beers underlying earnings (100%) 324
Difference in IAS 19 accounting policy 2
De Beers underlying earnings - Anglo American plc basis (100%) 326
Anglo American plc`s 45% ordinary share interest 147
Income from preference shares 9
Contribution to Anglo American plc underlying earnings 156
Kumba Iron Ore Limited US$ million
IFRS headline earnings (US$ equivalent of published) 220
Exploration 4
224
Minority interest (79)
Depreciation on assets fair valued on acquisition (net of tax) (4)
Contribution to Anglo American plc underlying earnings 141
The Tongaat-Hulett Group Limited (THG) US$ million
IFRS headline loss (US$ equivalent of published) (22)
IFRS2 charge and unbundling cost (1) 47
25
Minority interest (12)
13
Add Anglo American plc`s share of Hulett Aluminium 2
Contribution to Anglo American plc underlying earnings 15
(1) In terms of the THG BEE transaction, THG issued shares comprising an
interest of 18% to a cane-grower BEE Special Purpose Vehicle (SPV) and an
infrastructure BEE SPV. The BEE cost in respect thereof is calculated in
accordance with IFRS2 Share-based Payment and amounts to $45 million. This,
together with relevant unbundling transaction costs, are excluded from Anglo
American plc`s `Underlying earnings` on the basis that these once-off costs are
associated with the THG empowerment transaction and, thus, are not
representative of the ongoing earnings generation of the Group. The costs,
however, are included in THG`s `Headline earnings` as defined by the JSE Ltd.
Exchange rates and commodity prices
6 months ended 6 months ended Year ended
US$ exchange rates 30.06.07 30.06.06 31.12.06
Average spot prices for
the period
South African rand 7.16 6.31 6.77
Sterling 0.51 0.56 0.54
Euro 0.75 0.81 0.80
Australian dollar 1.24 1.35 1.33
Chilean peso 534 527 530
Closing spot prices
South African rand 7.05 7.15 7.00
Sterling 0.50 0.54 0.51
Euro 0.74 0.78 0.76
Australian dollar 1.18 1.35 1.27
Chilean peso 527 539 533
6 months ended 6 months ended Year ended
Commodity prices 30.06.07 30.06.06 31.12.06
Average market prices for
the period
Gold - US$/oz 658 590 604
Platinum - US$/oz 1,238 1,111 1,142
Palladium - US$/oz 355 318 321
Rhodium - US$/oz 6,064 4,222 4,571
Copper - US cents/lb 307 275 305
Nickel - US cents/lb 2,024 787 1,095
Zinc - US cents/lb 162 125 148
Lead - US cents/lb 90 53 58
European eucalyptus pulp
price (CIF) - US$/tonne 678 617 638
Summary by business segment
Revenue (1)
6 months 6 months Year 6 months
ended ended ended ended
US$ million 30.06.07 30.06.06 31.12.06 30.06.07
Platinum 3,381 2,664 5,861 1,737
Diamonds 1,531 1,635 3,148 310
Coal 1,627 1,590 3,333 442
South Africa 676 673 1,394 207
Australia 653 656 1,398 111
South America 298 261 541 135
Projects and corporate - - - (11)
Base Metals (4) 3,435 3,063 6,534 2,329
Copper 2,127 2,238 4,537 1,527
Collahuasi 561 715 1,442 441
Minera Sur Andes (5) 1,100 1,115 2,219 801
Mantos Blancos (5) 466 408 876 287
Other - - - (2)
Nickel, Niobium, Mineral
Sands and Phosphates 794 430 1,081 463
Codemin 193 81 219 153
Loma de Niquel 292 133 334 224
Catalao 52 31 66 29
Namakwa Sands 83 89 180 19
Copebras 174 96 282 38
Zinc 514 395 916 382
Black Mountain 85 64 148 51
Lisheen 184 156 396 127
Skorpion 245 175 372 204
Other - - - (43)
Industrial Minerals 2,244 1,899 4,009 325
Ferrous Metals and
Industries 2,887 3,204 6,519 780
Kumba 758 1,127 2,259 432
Highveld Steel 369 522 1,023 108
Scaw Metals 691 597 1,233 99
Samancor Group 265 215 425 57
Tongaat-Hulett 801 740 1,572 87
Other 3 3 7 (3)
Paper and Packaging 4,111 3,668 7,493 560
Mondi Packaging 2,296 2,005 4,132 316
Mondi Business Paper 1,204 1,113 2,215 198
Other 611 550 1,146 46
Gold 633 1,102 1,740 265
Exploration - - - (55)
Corporate - - - (139)
19,849 18,825 38,637 6,554
EBITDA (2) Operating profit/(loss) (3)
6 months Year 6 months 6 months
ended ended ended ended
US$ million 30.06.06 31.12.06 30.06.07 30.06.06
Platinum 1,171 2,845 1,517 934
Diamonds 341 541 266 293
Coal 464 1,082 320 356
South Africa 177 437 178 148
Australia 159 397 38 102
South America 132 271 115 110
Projects and corporate (4) (23) (11) (4)
Base Metals (4) 2,032 4,255 2,165 1,853
Copper 1,637 3,238 1,428 1,536
Collahuasi 537 1,037 411 503
Minera Sur Andes (5) 832 1,640 748 783
Mantos Blancos (5) 269 563 271 251
Other (1) (2) (2) (1)
Nickel, Niobium, Mineral
Sands and Phosphates 177 492 436 140
Codemin 42 144 149 38
Loma de Niquel 85 229 214 74
Catalao 14 26 28 13
Namakwa Sands 26 52 19 16
Copebras 10 41 26 (1)
Zinc 250 588 345 208
Black Mountain 13 42 46 7
Lisheen 109 280 119 101
Skorpion 128 266 180 100
Other (32) (63) (44) (31)
Industrial Minerals 265 539 208 152
Ferrous Metals and
Industries 783 1,560 719 644
Kumba 457 879 409 378
Highveld Steel 112 247 108 95
Scaw Metals 87 188 84 74
Samancor Group 26 51 57 26
Tongaat-Hulett 107 207 65 78
Other (6) (12) (4) (7)
Paper and Packaging 435 923 324 212
Mondi Packaging 245 528 195 128
Mondi Business Paper 140 297 105 56
Other 50 98 24 28
Gold 540 843 138 303
Exploration (66) (132) (55) (66)
Corporate (109) (259) (150) (118)
5,856 12,197 5,452 4,563
Underlying earnings/(loss)
Year 6 months 6 months Year
ended ended ended ended
US$ million 31.12.06 30.06.07 30.06.06 31.12.06
Platinum 2,398 717 492 1,265
Diamonds 463 156 164 227
Coal 864 244 260 640
South Africa 380 130 108 279
Australia 279 34 74 216
South America 227 86 79 163
Projects and corporate (22) (6) (1) (18)
Base Metals (4) 3,897 1,504 1,276 2,655
Copper 3,019 931 993 1,908
Collahuasi 962 276 324 586
Minera Sur Andes (5) 1,533 482 501 996
Mantos Blancos (5) 526 175 166 328
Other (2) (2) 2 (2)
Nickel, Niobium, Mineral
Sands and Phosphates 426 303 97 278
Codemin 136 115 36 96
Loma de Niquel 209 137 50 134
Catalao 25 25 1 15
Namakwa Sands 35 12 11 25
Copebras 21 14 (1) 8
Zinc 516 312 214 525
Black Mountain 31 35 10 38
Lisheen 265 94 113 287
Skorpion 220 183 91 200
Other (64) (42) (28) (56)
Industrial Minerals 315 179 113 258
Ferrous Metals and
Industries 1,360 269 293 583
Kumba 778 141 147 302
Highveld Steel 230 18 48 79
Scaw Metals 160 52 51 106
Samancor Group 52 42 21 38
Tongaat-Hulett 154 15 31 55
Other (14) 1 (5) 3
Paper and Packaging 477 189 120 274
Mondi Packaging 287 137 88 208
Mondi Business Paper 130 62 20 51
Other 60 (10) 12 15
Gold 467 65 102 178
Exploration (132) (50) (53) (113)
Corporate (277) (215) (265) (496)
9,832 3,058 2,502 5,471
(1) Revenue includes the Group`s share of revenue of joint ventures and
associates. Base Metals` revenue is shown after deduction of treatment charges
and refining charges (TC/RCs).
(2) EBITDA is operating profit before special items, remeasurements,
depreciation and amortisation in subsidiaries and joint ventures and share of
EBITDA of associates.
(3) Operating profit includes operating profit before special items and
remeasurements from subsidiaries and joint ventures and share of operating
profit (before interest, tax, minority interests, special items and
remeasurements) of associates.
(4) Copebras has been reclassified from Industrial Minerals to Base Metals to
align with internal management reporting. As such the comparative data has been
restated accordingly.
(5) Revenue in 2007 and 2006 includes intercompany sales between Mantos
Blancos and Minera Sur Andes. The external revenue in 2007 is $1,093 million
(30 June 2006: $1,187 million; 31 December 2006: $2,372 million) for Minera Sur
Andes and $473 million (30 June 2006: $336 million; 31 December 2006: $723
million) for Mantos Blancos.
ANGLO AMERICAN plc
(Incorporated in England and Wales - Registered number 3564138)
(the `Company`)
Notice of Interim Dividend
(Dividend No. 17)
Notice is hereby given that an interim dividend on the Company`s ordinary share
capital in respect of the year to 31 December 2007 will be paid as follows:
Amount (United States currency) 38 cents per ordinary share (note 1)
Amount (South African currency) R2.7054 per ordinary share
Last day to effect removal of shares
between the UK and SA registers Thursday 2 August 2007
Last day to trade on the JSE Limited
(`JSE`) to qualify for dividend Friday 17 August 2007
Ex-dividend on the JSE from the
commencement of trading on Monday 20 August 2007
Ex-dividend on the London Stock
Exchange from the commencement of trading on Wednesday 22 August 2007
Record date (applicable to both the
United Kingdom principal register
and South African branch register) Friday 24 August 2007
Currency conversion US$:GBP/ rates announced on Wednesday 29 August 2007
Removal of shares between the UK and
SA registers permissible from Wednesday 29 August 2007
Last day for receipt of Dividend
Reinvestment Plan (`DRIP`) Mandate Forms by
Central Securities Depository
Participants (`CSDPs`) (notes 3,4 and 5) Wednesday 29 August 2007
Last day for receipt of DRIP Mandate Forms
by the UK Registrars or the South
African Transfer Secretaries (notes 3,4 and 5) Thursday 30 August 2007
Dividend warrants posted Wednesday 19 September 2007
Payment date of dividend Thursday 20 September 2007
Notes
1. Shareholders on the United Kingdom register of members with an address in
the United Kingdom will be paid in pounds sterling and those with an address in
a country in the European Union which has adopted the euro, will be paid in
euros. Such shareholders may, however, elect to be paid their dividends in US
dollars provided the UK Registrars receive such election by Friday 24 August
2007. Shareholders with an address elsewhere will be paid in US dollars except
those registered on the South African branch register who will be paid in South
African rand. The currency conversion rates and the amounts per share in pounds
sterling/euros will be announced on Wednesday 29 August 2007.
2. Dematerialisation and rematerialisation of registered share certificates in
South Africa will not be effected by CSDPs during the period from Monday 20
August 2007 to Friday 24 August 2007 (both days inclusive).
3. Those shareholders who already participate in the DRIP need not complete a
DRIP mandate form for each dividend as such forms provide an on- going
authority to participate in the DRIP until cancelled in writing. Shareholders
who wish to participate in the DRIP should obtain a mandate form from the UK
Registrars, the South African Transfer Secretaries or, in the case of those who
hold their shares through the STRATE system, their CSDP.
4.In terms of the DRIP, and subject to the purchase of shares in the open
market, share certificates/CREST notifications are expected to be mailed and
CSDP investor accounts credited/updated on Friday 5 October 2007.
5. Copies of the terms and conditions of the DRIP are available from the UK
Registrars or the South African Transfer Secretaries.
By order of the Board
N Jordan
Secretary
2 August 2007
Registered office
20 Carlton House Terrace
London
SW 1Y 5AN
England
UK Registrars
Lloyds TSB Registrars
The Causeway
Worthing
West Sussex
BN99 6DA
England
South African Transfer Secretaries
Link Market Services
South Africa (Pty) Limited
11 Diagonal Street
Johannesburg 2001
PO Box 4844, Johannesburg 2000
South Africa
Sponsor: J.P.Morgan Equities Limited
Date: 03/08/2007 08:00:09 Produced by the JSE SENS Department.
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