| Fri 24 Jul 2009, 8:00 | | AGL - Anglo American plc - News released: Anglo American plc notification: De |
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AGL
ANAAL
AGL - Anglo American plc - News released: Anglo American plc notification: De
Beers Societe Anonyme interim results 2009
Anglo American plc
Incorporated in the United Kingdom
(Registration number: 3564138)
Short name: Anglo
Share code: AGL
ISIN number: GB00B1XZS820
News released: Anglo American plc notification: De Beers Societe Anonyme interim
results 2009
Anglo American plc draws your attention to the 2009 interim results of De Beers
Societe Anonyme announced today.
Dealing Disclosure Requirements
Under the provisions of Rule 8.3 of the Takeover Code (the "Code"), if any
person is, or becomes, "interested" (directly or indirectly) in 1% or more of
any class of "relevant securities" of Anglo American or Xstrata plc ("Xstrata"),
all "dealings" in any "relevant securities" of that company (including by means
of an option in respect of, or a derivative referenced to, any such "relevant
securities") must be publicly disclosed by no later than 3.30 pm (London time)
on the London business day following the date of the relevant transaction. This
requirement will continue until the date on which the offer becomes, or is
declared, unconditional as to acceptances, lapses or is otherwise withdrawn or
on which the "offer period" otherwise ends. If two or more persons act together
pursuant to an agreement or understanding, whether formal or informal, to
acquire an "interest" in "relevant securities" of Anglo American or Xstrata,
they will be deemed to be a single person for the purpose of Rule 8.3.
Under the provisions of Rule 8.1 of the Code, all "dealings" in "relevant
securities" of either Anglo American or Xstrata by Anglo American or Xstrata, or
by any of their respective "associates", must be disclosed by no later than
12.00 noon (London time) on the London business day following the date of the
relevant transaction.
A disclosure table, giving details of the companies in whose "relevant
securities" "dealings" should be disclosed, and the number of such securities in
issue, can be found on the Takeover Panel`s website at
www.thetakeoverpanel.org.uk.
"Interests in securities" arise, in summary, when a person has long economic
exposure, whether absolute or conditional, to changes in the price of
securities. In particular, a person will be treated as having an "interest" by
virtue of the ownership or control of securities, or by virtue of any option in
respect of, or derivative referenced to, securities.
Terms in quotation marks are defined in the Code, which can also be found on the
Takeover Panel`s website. If you are in any doubt as to whether or not you are
required to disclose a "dealing" under Rule 8, you should consult the Panel.
Please find attached the full De Beers press release:
De Beers Societe Anonyme
(Incorporated under the laws of Luxembourg)
Friday, 24 July 2009
INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2009
DECISIVE ACTION STEERS DE BEERS THROUGH ECONOMIC CRISIS
Historically Difficult Trading Conditions Show Significant Improvement in Q2
Financial Summary
US Dollar millions
Q1 Q2 H109 H108
Total sales 400 1 311 1 711 3 740
EBITDA (81) 378 297 831
Net Earnings (186) 189 3 316
Profit before (153) 293 140 662
finance charges and
taxation
Free cash flow (233) 107 (126) 98
Gearing 52.7% 40.0% 40.0% 47.8%
DIRECTORS` COMMENTS
2009 H1 snapshot
- Profit before finance charges and taxation of US$140 million and EBITDA of
US$297 million, in spite of extremely difficult trading conditions,
particularly in the first quarter.
- Sales of rough diamonds by the DTC (including those through joint ventures)
in H1 were US$1.4 billion, 57 per cent lower than H1 2008, due to reduced
purchases by Sightholders as they worked to reduce inventory levels and
increase liquidity in the face of the global economic downturn. After very
difficult trading conditions experienced in Q1, Q2 saw a significant pick-
up in sales with the average Sight more than doubling in Q2 compared with
Q1.
- Overall costs across the group were reduced by more than 50 per cent
compared with last year, as the group focused on cash management and
preservation.
- Safety remains a priority, and De Beers is committed to targeting zero harm
on its operations. The group LTIFR was maintained at 0.19 during the six
month period.
Response to economic downturn
As the global economic crisis worsened during Q4 2008, De Beers forecast
significantly lower sales for 2009 and took decisive steps to ensure the long-
term sustainability of its business. De Beers continues to focus on five key
elements (production levels in line with client demand, cost savings, operating
efficiencies, debt management and stimulation of consumer demand).
Produce In Line with Client Demand
Production in the first half of 2009, at 6.6 million carats, was 73 per cent
lower than the same period last year in response to decreased demand. As
planned, this reduction was focused on Q1, which saw a 91 per cent reduction
year on year to 1.1 million carats. This was as a result of production holidays
taken on the De Beers mines in South Africa and Canada as well as on those of
its joint venture partners in Botswana and Namibia. All but one of the mines in
Botswana has subsequently resumed operations, and group production during Q2 was
5.5 million carats. It is anticipated that carat production for the full year
will be approximately 50 percent that of 2008.
Drive Cost Reductions across the Business
De Beers has aggressively reduced operating and production costs, realising
US$612 million in savings compared with last year. Capital expenditure has been
reduced by US$ 241 million over the same period. Going forward, reduced
expenditure will position the group to withstand the economic downturn and, post
recession, emerge cash generative creating the conditions necessary for
recovery.
Enhance Operating Efficiencies
De Beers has identified efficiencies which have enabled a reduction in the
global workforce (including contractors) of 23 per cent. These efficiencies have
been achieved through a de-layering of the organisation, and a reduction in the
activities of the corporate centres. It is anticipated that the majority of the
efficiencies will be permanent, even as the market trends upward.
Manage the Debt
During H1, the shareholders provided US$500 million in additional subordinated
loan funding to De Beers. At 30 June, the total subordinated shareholder loans
due amounted to US$817 million, before IFRS interest adjustments. De Beers has
begun discussions with lending banks regarding the renewal of a US$1.5 billion
term loan facility which expires in March 2010. These discussions are ongoing
and management expects to conclude the outcome during the course of H2. The
profile of De Beers` net debt is as follows:
US Dollar millions
30 June 31
2009 December
2008
Total net debt 4 063 3 800
Shareholders` loans 734 248
Preference shares 107 107
Net bank borrowings 3 222 3 445
Which are repayable
:
- loans within 12 1 500 -
months
- thereafter 1 722 3 445
At the end of June, De Beers` gearing, excluding subordinated shareholders`
loans, was 40% (December 2008: 48.4%). Net cash amounted to US$622 million
(December 2008: US$147 million).
Maximise Demand Opportunities
The trading environment in the rough diamond market was extraordinarily
difficult in Q1 but, during Q2, De Beers began to see positive trends in demand,
sales and price.
As consumer desire for diamonds remains strong, De Beers is investing in three
separate initiatives to turn this sentiment into sales. In the Far East, De
Beers` proprietary diamond brand Forevermark has continued to expand in Hong
Kong, Macau, China and Japan with the result that the brand is now available in
245 doors across Asia. Forevermark is currently being expanded into a further
six cities in China.
In the US, De Beers is currently developing its latest Big Idea concept with
Sightholders and retailers, and the distinct new proposition will be unveiled
later in the year in time for the Christmas retail season. Since 2001, 70 per
cent of the incremental growth in the US retail diamond jewellery market has
come from launching previous Big Ideas, such as Trilogy and Journey.
De Beers is a founding member of a new industry marketing initiative, The
International Diamond Board, which aims to drive demand and protect consumers`
confidence in diamonds.
Outlook
The industry has been severely impacted by the global economic environment being
the most difficult in decades. A result, in part, of De Beers` decision to
reduce production and sales in response to lower client demand, inventories of
rough diamonds in the cutting centres have reduced by some 30 per cent from
their peaks in 2008, and debt levels in the cutting centres have reduced to more
sustainable levels. In Q2 De Beers has seen industry sentiment improve
significantly, while the price of rough diamonds has begun to trend upward.
These are translating into improving sales trends for the DTC.
At the retail level, demand remains subdued in the major US market. As the rate
of decline in demand has slowed, however, the second half should see
improvement. Demand from emerging markets, mainly China and India, remains
positive.
De Beers will continue to take a cautious approach in terms of production, sales
and cost management, while anticipating the continued steady recovery of the
industry. Looking to the medium-term, diamonds have historically performed well
in periods following recessions, with significant price growth seen in almost
every recovery period dating back to before the 1970s. In the long-term, the
fundamentals of the diamond industry remain strong. With no major new diamond
discoveries in more than a decade, and with worldwide reserves at an all time
low, diamonds will become more scarce. As demand grows in emerging markets it is
likely that sales will outpace forecast diamond supply for many years to come.
De Beers announces interim results as follows:
De Beers Societe Anonyme
Consolidated Income Statement
for the half-year ended 30 June 2009
(Abridged)
US Dollar millions
Half-year Half-year Year
30 June 30 June 31
2009 2008 December
2008
1 711 3 740 6 888
Total sales (Note 1)
Less: cost of sales 1 588 2 967 5 525
Gross profit 123 773 1 363
Less: operating costs (Note 2) 153 410 817
Operating (loss) profit (30) 363 546
Add:
Trade investment income 99 305 583
Foreign exchange (losses) gains 71 (6) (306)
Profit before finance charges 140 662 823
and taxation
Less: net finance charges (Note 98 100 240
3)
Profit before taxation 42 562 583
Less: taxation 48 231 304
(Loss) Profit after taxation (6) 331 279
Less: interests of outside 15 47 55
shareholder in subsidiaries
(21) 284 224
Own (loss) earnings
Add: share of retained income of 24 39 70
joint ventures
Net earnings before once-off 3 323 294
items
Once-off items (Note 4) (7) (204)
Net earnings 3 316 90
Underlying (loss) earnings (Note (164) 350 515
5)
EBITDA 297 831 1 222
Consolidated Balance Sheet
30 June 2009
(Abridged)
US Dollar millions
30 June 30 June 31
2009 2008 December
2008
Share capital and reserves 2 586 3 047 2 408
Interests of outside 257 326 220
shareholders
Total shareholders` equity 2 843 3 373 2 628
Shareholders` loans 734 91 248
Other net interest bearing debt* 3 329 4 008 3 552
Other non-current liabilities 680 824 665
7 586 8 296 7 093
Fixed assets 3 342 3 746 3 100
Other non-current assets and 3 051 3 219 2 933
investments
Net current assets 1 193 1 331 1 060
7 586 8 296 7 093
*Other net interest bearing debt includes short-term borrowings and is net of
cash
De Beers Societe Anonyme
Summary of cash flows
for the half-year ended 30 June 2009
US Dollar millions
6 Months 6 Months Year
30 June 30 June 31
2009 2008 December
2008
Cash (consumed by) available (31) 455 700
from operating activities
Less: investing activities
Fixed assets - stay-in-business 67 97 204
- expansion 19 230 199
Investments 9 30 39
95 357 442
Free cash flow (126) 98 258
Less: financing activities
Ordinary dividends (including 74 135 358
payments to outside
shareholders)
Cash flow (200) (37) (100)
Add (Deduct):
Shareholder advances 500 248
Movements attributable to (77) (5) 357
changes in exchange rates
Decrease (Increase) in net 223 (42) 505
interest bearing debt
Notes
1. Total sales of natural rough 1 429 3 288 5 930
diamonds (including joint
ventures)
2. Operating costs include:
- Exploration, research and 45 133 232
development
- Sorting and marketing 52 105 266
- Group technical services 56 172 319
and corporate overheads
153 410 817
3. Net finance charges include 5 8 16
preference dividends amounting to
4. Once-off items comprise:
Costs in respect of a class 7 7
action settlement agreement
Net costs in respect of 21
restructuring
Impairment in respect of 176
goodwill attributable to the
Element
Six and DBDJ business
7 204
5. Underlying (loss) earnings* is
calculated as follows:
Net earnings before once-off 3 323 294
items
Adjusted for special items
and re-measurements:
Asset disposals net of 1 (4) 1
impairment and restructuring
charges
Re-measurement gains on (168) 31 220
financial instruments
Underlying (loss) earnings (164) 350 515
* Underlying (loss) earnings comprise net earnings attributable to shareholders
adjusted for the effect of any once-off or special items and re-measurements,
less any tax and minority interests. Special items include closure costs,
exceptional legal provisions and profits and losses on the disposal of or
impairments of assets. Special items which are considered to be significant
relative to the results are categorised as being once-off. Re-measurements are
recorded in underlying earnings in the same period as the underlying transaction
against which these instruments provide an economic, but not formally
designated, hedge.
De Beers Societe Anonyme
Other information
US Dollar millions
6 Months 6 Months Year
30 June 30 June 31
2009 2008 December
2008
Exchange rates
US$ / ZAR average 9.00 7.49 7.75
US$ / ZAR period end 8.09 8.09 9.28
US$ / C$ average 1.20 1.00 1.08
US$ / C$ period end 1.13 0.98 1.23
Ordinary dividends paid
2008 - Interim 77 77
- Special Interim 88 88
- Final 53
Production summary
Tons Treated 000`s:
DBCM 4 559 11 358 21 832
Debswana 4 003 17 147 41 012
De Beers Canada 1 272 902 2 690
Namdeb 1 029 9 119 16 922
Williamson Diamonds 1 233 2 154
10 863 39 759 84 610
Carats recovered 000`s
DBCM 1 655 6 373 11 960
Debswana 3 915 16 171 32 276
De Beers Canada 636 616 1 640
Namdeb 385 998 2 122
Williamson Diamonds 68 134
6 591 24 226 48 132
Contacts:
De Beers London:
Lynette Gould +44 20 7 430 3509 / +44 (0) 7740 393 260
De Beers South Africa
Tom Tweedy +27 11 374 7173 / +27 (0) 83 308 0083
De Beers Botswana
Chipo Morapedi +267 361 5205 / +267 715 4662
Visit the official De Beers group website for more information on the Company
and where you can view and download a selection of images - www.debeersgroup.com
.
24 July 2009
Sponsor:
UBS South Africa (Pty) Ltd
Date: 24/07/2009 08:00:14 Produced by the JSE SENS Department.
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