| Fri 31 Jul 2009, 8:27 | | AGL - Anglo American Plc - Half Year Financial Report |
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AGL
ANAAL
AGL - Anglo American Plc - Half Year Financial Report
Anglo American plc
(Incorporated in the United Kingdom)
Registration number: 3564138
Share code: AGL
ISIN: GB00B1XZS820
(the "Company")
HALF YEAR FINANCIAL REPORT
for the six months ended 30 June 2009
News Release
Half year financial report
31 July 2009
Anglo American announces further progress on delivery of value
Financial results
- Group operating profit(1) from core operations(2) of $2.1 billion
- Underlying earnings(3) of $1.1 billion and underlying earnings per share of
$0.91
- Profit attributable to equity shareholders down 31% at $3.0 billion
- Net debt(4) of $11.3 billion at 30 June 2009
- Committed undrawn bank facilities and cash(5) of over $9 billion at 30 June
2009
Driving operational performance and delivering significant value
- Asset optimisation and procurement programmes delivered more than $450
million of benefits in H1 - expected to deliver over $1 billion in 2009 towards
the $2 billion target in 2011
- Significant cost reductions achieved across the Group and global headcount
reduction ahead of target
- Anglo Platinum - major restructuring completed, one shaft on care and
maintenance and two other high cost shafts under review - 140koz of high cost
production may be removed
- Delivery focused on high quality growth in most attractive commodities
- Development of three key strategic projects on track - Minas-Rio, Los Bronces
and Barro Alto
- Major new discoveries at Los Sulfatos and San Enrique Monolito increase
copper resources(6) by approximately 50%
- Minas-Rio iron ore resource increased to 4.6 billion tonnes
- Near term liquidity addressed - $6.5 billion raised through new financing and
proceeds from sale of residual shareholding in AngloGold Ashanti
- Sale of Hulamin shareholding for approximately $148 million
Further progress on safety
- Safety - further good progress, with changes to safety practices delivering
results:
- Further 19% improvement in Lost Time Injury rates compared to 2008
Appointment of Chairman
? Sir John Parker appointed as Chairman from 1 August 2009, to succeed Sir Mark
Moody-Stuart
HIGHLIGHTS FOR THE SIX MONTHS ENDED
30 6 months ended 6 months ended
JUNE 2009 30 June 2009 30 June 2008
Change
US$ million, except
per share amounts
Group revenue
including associates (7) 11,132 17,915 (37.9)%
Operating profit
including associates
before special items and
remeasurements - core
operations (1)(2) 2,054 5,974 (65.6)%
Operating profit
including associates
before special items and
remeasurements (1) 2,136 6,181 (65.4)%
Underlying earnings (3) 1,096 3,483 (68.5)%
EBITDA (8) 2,985 7,038 (57.6)%
Net cash inflows from
operating activities 1,520 3,822 (60.2)%
Profit for the
financial period
attributable to equity
shareholders 2,970 4,281 (30.6)%
Earnings per share (US$):
Basic earnings per share 2.47 3.56 (30.6)%
Underlying earnings
per share (3) 0.91 2.90 (68.6)%
(1) Operating profit includes attributable share of associates` operating
profit (before attributable share of associates` interest, tax and minority
interests) and is before special items and remeasurements, unless otherwise
stated, see notes 3 and 4 to the Condensed financial statements. For the
definition of special items and remeasurements see note 6 to the Condensed
financial statements.
(2) Operations considered core to the Group are Base Metals, Platinum, Ferrous
Metals` core businesses (Kumba Iron Ore, Scaw Metals, Samancor and Anglo
Ferrous Brazil), Coal, Diamonds, Exploration and Corporate Activities. See page
13 in the Financial review of Group results for a reconciliation of operating
profit from core operations to total operating profit.
(3) See note 9 to the Condensed financial statements for basis of calculation
of underlying earnings.
(4) Net debt excludes hedges but includes the net debt in disposal groups. See
note 12 to the condensed financial statements.
(5) After taking account of commercial paper maturing throughout 2009 of $0.4
billion.
(6) Resources excluding reserves.
(7) Includes the Group`s attributable share of associates` revenue of $1,840
million (six months ended 30 June 2008: $3,384 million). See note 3 to the
Condensed financial statements.
(8) EBITDA is operating profit before special items, remeasurements,
depreciation and amortisation in subsidiaries and joint ventures and includes
attributable share of EBITDA of associates. See note 14 to the Condensed
financial statements.
Cynthia Carroll, Chief Executive, said, "We took early and decisive action in
order to respond effectively to the global economic downturn; we have focused
on driving operational performance, preserved capital through halving our
planned capital expenditure for the year, scaled back higher cost production
and growth plans in platinum and coal and suspended dividend payments. As
expected, the market environment has been challenging in the first half of 2009
and Anglo American`s performance was impacted by the sharp declines in
commodity prices against the prior year and anticipated reductions in volumes,
partially offset by exchange rate benefits compared to the first half of 2008.
The Group achieved operating profit for the first half year of $2.1 billion and
underlying earnings of $1.1 billion, with good operational performances
delivered by the businesses.
During this period we have also continued to make significant progress on the
delivery of all our key strategic initiatives. I am pleased that we are on
track with our asset optimisation and procurement programmes, generating
combined benefits of over $450 million in the first half and we are now
expecting to deliver over $1 billion for the full year, towards our target of
$2 billion by 2011. We are now well advanced through both efficiency programmes
and have greater visibility on the significant improvements being embedded
across the organisation. We are also ahead of plan towards our global headcount
reduction, with a reduction of 15,405 already achieved out of a total reduction
of 19,000 planned for the year.
At Anglo Platinum, we have made excellent progress with our major restructuring
of the business, creating a management and operating structure which enables
far greater production flexibility and scope for cost control and improved
productivity. As a result, we have taken the decision to place one shaft on
care and maintenance and are reviewing two further high cost shafts. We are
also already seeing the early benefits of the restructuring, with cash
operating costs per equivalent refined platinum ounce falling by 6.4% compared
to the second half of 2008 and mining productivity improved by 12%. Cost
reductions have been achieved across the Group, including cash costs at our
Australian coal business down 14% and operating and production costs savings at
De Beers in excess of 50%.
Anglo American has established a portfolio of world class operating assets and
development projects. Our clear strategy is to deploy capital towards those
commodities that deliver long term, through-the-cycle returns. Our world class,
multi-billion tonne Minas-Rio iron ore project in Brazil is progressing well
and is on track for first production in the second quarter of 2012 to produce
26.5 Mtpa of high quality product in the first phase, transforming Anglo
American`s position in the highly attractive seaborne iron ore market, with a
unique footprint in South Africa and Brazil. Minas-Rio is expected to be
amongst the lowest cost iron ore mines in the industry, generating a
substantial cash margin and, with a dedicated logistics infrastructure, there
is potential to further develop the ore body into one of the largest iron ore
mines in the world.
Our two other major projects are also progressing well; once it reaches full
capacity, the Tier 1 Los Bronces mine in Chile is expected to be the fifth
largest copper mine in the world following its expansion in 2011; and our low
cost nickel project in Brazil, Barro Alto, is on track for first production in
early 2011. These well timed projects exemplify the high quality and low cost
position of our organic growth pipeline that we are in the process of
delivering for the benefit of our shareholders. In terms of production, our
$17 billion pipeline of approved projects is expected to deliver organic
growth of one third by 2013. Furthermore, we have today announced two very
significant and high quality new discoveries at Los Sulfatos and San Enrique
Monolito in our Los Bronces district in Chile, which together have increased
our copper resources (excluding reserves) by approximately 50%.
We also successfully addressed our near term liquidity in the first half,
raising $6.5 billion of funding, including two over-subscribed bond issues and
the sale of our residual shareholding in AngloGold Ashanti. In combination with
the tough but necessary decisions we took around capital expenditure,
production scheduling and dividends, this positions the Group well to carry us
through the downturn and enables us to preserve the development of our key
strategic growth projects, a key value driver for shareholders.
Over the last two years, our safety record has been transformed. We have had a
major improvement in our lost time injury (LTI) frequency rate, with a 19%
improvement on our 2008 level which itself showed a 17% improvement. Around the
Group, there have been some outstanding safety achievements that we should
recognise; Kumba`s Thabazimbi iron ore mine has not had an LTI since 2007 and
has been fatality free for seven years, while the Isibonelo colliery has seen
over 600 days without a single lost time incident and has been fatality free
since 2005. In terms of fatalities, 83% of our operations were fatality free in
the first half of the year, though any loss of life is totally unacceptable and
we continue to make Zero Harm a priority.
Looking forward, after a rate of market decline that has been unprecedented, we
expect demand to remain soft in the near term until OECD countries begin to
recover materially. China continues to grow strongly and is key to demand,
particularly for iron ore, copper and platinum. While we have seen some
recovery in metals prices, macro economic indicators are mixed and the economic
outlook remains uncertain in the near term; however, the fundamentals for the
medium to longer term remain highly attractive.
Finally, I am delighted that the Board has appointed Sir John Parker as the new
Chairman of Anglo American. Sir John succeeds Sir Mark Moody-Stuart who has
chaired the Group for seven years. On behalf of the Board and all our employees
around the world, I would like to thank Sir Mark for his invaluable leadership
and tireless contribution over the past seven years and we wish him well. I
welcome Sir John and look forward to sharing the benefits of his expertise as
we enter a period of significant value creation for Anglo American`s
shareholders. Anglo is a focused and responsible global mining company with a
portfolio of high quality assets in the most attractive commodity markets, with
significant cost-advantaged projects in development. Through the actions we
have taken across the Group, Anglo is well positioned to capitalise on the next
phase of economic growth."
Review of 2009
Financial results
Anglo American`s first half underlying earnings were $1.1 billion, down from
$3.5 billion in the first half of 2008 with operating profit of $2.1 billion,
down from $6.2 billion, due to a significant decline in realised prices and
lower global demand. Kumba Iron Ore reported higher operating profit than the
first six months of 2008, although Ferrous Metals` profit declined due to price
and demand constraints at Samancor and Scaw Metals. Platinum operating profit
declined despite higher sales volumes, due to higher than normal refined stocks
at the start of the period and higher production levels following the
disruptions to production in the comparable period of 2008, the benefit of
which is offset by price decline. Higher prices and cost saving initiatives in
Coal partially offset the expected fall in sales volumes driven by weak
customer demand. Base Metals` operating profit was impacted by lower prices and
Industrial Minerals suffered from falling demand in the UK and European
construction sectors.
Base Metals generated an operating profit of $695 million, down 72% due to
lower metal prices, partially offset by lower input costs.
Ferrous Metals reported an operating profit from core operations of $802
million, down 36%. Kumba Iron Ore reported operating profit of $742 million, a
10% increase on the first half of 2008 due to strong sales volumes to China,
despite lower prices. This was offset by Samancor, down 84% to $79 million, due
to lower manganese ore and alloy sales volumes and prices and Scaw Metals`
operating profit of $71 million, down 41% due to a fall in global steel demand.
Coal reported an operating profit of $720 million, down 2%, with higher
realised metallurgical coal prices, benefits from asset optimisation and a cost
reduction programme in Australia, offset by lower sales volumes.
Platinum reported an operating profit of $8 million, down 99%, due to
significantly lower platinum group metal and nickel prices, partially offset by
higher production and sales volumes as well as a weaker rand than the first
half of 2008.
Diamonds recorded an attributable profit of $4 million, down 99%, due to total
revenues being 54% lower than the first half of 2008 with reduced demand for
rough diamonds from Sightholders reducing DTC sales by 57%, partially offset by
significant cost reductions.
Industrial Minerals` operating profit fell 83% to $27 million, with continued
difficult trading in the UK and, increasingly, in its international markets.
Production
Record production at Kumba Iron Ore was achieved due to additional production
from the Sishen Mine jig plant. Platinum production volumes from equivalent
refined production have increased due to the commissioning of a new
concentrator at Mogalakwena in 2008, normalisation of production at Rustenburg
following the rehabilitation of the Turffontein shaft and at Amandelbult,
following the January 2008 flooding.
Nickel production increased despite a run-out at Loma, as the period was free
from industrial action. Copper production was down in total despite higher
production at Collahuasi due to additional pipeline capacity, as this was more
than offset by lower ore grades and recoveries, and hardness of ore bodies.
Coal production increased in South Africa due to improved water management at
the opencast operations and improved electricity supply compared with Eskom
load shedding experienced in 2008. Australian production was reduced in
response to falling demand from global steel producers.
Capital structure
Net debt, excluding hedges, increased by $292 million since 31 December 2008 to
$11,335 million at 30 June 2009. This reflects the proceeds from the disposal
of the Group`s residual interest in the shares of AngloGold Ashanti for $1,770
million and cash inflows from operations of $1,676 million, offset by $2,140
million of capital investment in the Group`s long life assets, shareholder
loans to De Beers of $225 million, income tax paid of $510 million, as well as
exchange losses on rand denominated debt.
Dividends
The resumption of the payment of a dividend to shareholders remains a key
priority for the board. This will be considered against the background of the
overall market environment, the Group`s capital requirements, as well as the
future earnings and cash performance of the business as a whole.
Delivering value through operational excellence
Anglo American has made significant progress towards its $2 billion target from
its asset optimisation and supply chain initiatives, already delivering more
than $450 million in the first half of the year and is expected to deliver over
$1 billion for the full year 2009.
Asset optimisation is expected to deliver approximately $700 million of value
for the full year 2009, towards its $1 billion target in 2011, of which $335
million was delivered in the first half. Asset optimisation is a formalised
process across the Group, with nominated representatives in all mines, rigorous
internal and external benchmarking and specific targets for every mine and
business, all directed towards unlocking value from existing assets through
cost and productivity improvements. Specific improvements have included a
doubling of first hour tonnage at the Sishen iron ore mine, achieved through
improved shift transitions and reducing coal losses at the Dawson coal mine in
Australia. There is a multitude of such improvements across Anglo American`s
businesses which are already generating significant value.
The implementation of Anglo American`s global supply chain and shared services
initiatives has delivered savings of $131 million in the first half of the
year, with $330 million expected to be delivered in the full year, towards a
targeted $1 billion of savings in 2011. The Group is leveraging its global
scale to deliver cost savings across the supply chain, taking a holistic
approach and forming strategic global partnerships with key suppliers, such as
BP and Shell for fuels and lubricants, on which Anglo American spends some $800
million annually. By consolidating the number of different suppliers,
significant savings are being achieved; for example through consolidating the
number of conveyor system suppliers from over 100 to six.
In February, the Group announced a global headcount reduction of 19,000 to be
achieved by the end of 2009. Reductions are ahead of plan and have reached
15,405.
Anglo Platinum has the leading resource position in the platinum industry, with
a 37% share of global production. The global downturn in the automotive sector
has particularly impacted the platinum industry, with jewellery sales to China
providing relief, and, following the completion of the business` restructuring,
Anglo Platinum is focused on driving value from its operations through a series
of decisive cost and efficiency initiatives. The Rustenburg and Amandelbult
mines have been divided into smaller operating units of five and two operations
respectively to enable greater operational flexibility, resulting in
Rustenburg`s Bleskop shaft having been put on care and maintenance, with two
other high cost shafts under review. These efforts will improve the cost of our
Rustenburg mines and effectively move them from the fourth quartile to third
quartile on the cost curve. It should be noted that although a total of
140,000oz of high cost production is under review and is likely to be stopped,
the intention is to make up this shortfall by increasing production from more
efficient mines. Early benefits have already been noted, with headcount reduced
by 8,903 against a target for the full year of 10,000 and cash operating costs
per equivalent refined platinum ounce reduced by 6.4% against the second half
of 2008.
At De Beers, which experienced extremely difficult trading conditions in the
fourth quarter of 2008 and the first quarter of 2009, a successful
restructuring has taken place with aggressive cost reductions achieved, with
operating costs reduced by over 50% following a number of production holidays
in the first half, and a 23% reduction in the workforce implemented as
production was brought in line with demand. Diamond Sight sales have improved
steadily during the first half of the year and production has increased to keep
pace with demand. Anglo American`s leading positions in the platinum and
diamond markets point to a leveraged recovery with attractive returns when the
global economy returns to more normalised conditions.
Driving high quality growth
The most attractive commodities
Anglo American has a clear strategy of deploying its capital in those
commodities that deliver long term, through-the-cycle returns for its
shareholders, and which have strong fundamentals with the tightest demand and
supply balances and most attractive risk-return profiles.
? Demand fundamentals for Anglo American`s core commodities are very
favourable. For instance, China has a structural deficit of Anglo American`s
core commodities, particularly for iron ore and copper.
? Anglo American has leading positions in commodities where there is limited
availability of new supply sources, given the scarcity of attractive, large
scale projects and capital constraints. Such characteristics are typical of the
platinum, diamond and iron ore industries, for example.
? Anglo American benefits from being positioned in commodities that have
attractive industry cost structures, which drive both profitability and
stability of production.
Anglo American has developed a portfolio of world-class operating assets and
development projects focused on those commodities with the most attractive
risk-return profile. The majority of Anglo American`s capital is employed in
platinum, iron ore and copper, commodities that have generated the most
attractive average returns on invested capital for companies focused on those
commodities.
A world class asset portfolio
Anglo American has a world-class portfolio of assets in terms of scale,
expansion potential and cost position.
? Within its portfolio of world-class assets, Anglo American owns seven Tier
1(a) assets, being among the largest and highest quality producing mines of
their respective commodities, characterised by expandable resource bases and
attractive industry cost positions.
? Anglo American has an extensive resource base concentrated in established
mining jurisdictions, which is expected to continue to deliver attractive
growth options from mine life extensions, brownfield expansions and greenfield
projects. Across its core mining portfolio, comprising platinum, iron ore,
copper, coal and nickel, Anglo American mines have sufficient resources to
support current production levels for at least 20 years.
? Furthermore, Anglo American`s attractive cost curve position allows for
stable production and sustainable margins, as the marginal supply reaction to
price variation is minimal for first and second quartile producers. This
attractive cost position enhances Anglo American`s profitability over the cycle
in its core commodity markets.
(a): A Tier 1 asset is defined as a large, expandable, long life mine (>20
years) with favourable mineralogy and geographic location and in the lower half
of the cost curve.
Developing three world class projects
Anglo American has a $17 billion pipeline of approved projects across the most
structurally attractive commodities of platinum, iron ore and copper, in
addition to making targeted high quality investments in nickel. The decision to
preserve the development of its three key near term strategic growth projects
during the economic downturn positions the Group to capitalise on the next
phase of global economic growth. The three projects are all well placed on
their respective industry cost curves, have long resource lives and are on
track to enter production from 2011 onwards, in what is expected to be a
growing commodity demand environment.
The acquisition of the Minas-Rio iron ore project in Brazil represented a
unique opportunity to gain control of a multi-billion tonne resource in the
highly attractive seaborne iron ore market with the benefit of an integrated
logistics system. The first phase of the project has progressed significantly.
Anglo American has obtained a series of important licences since acquisition in
August 2008 and the overall licensing process is on track. The construction of
the port at Acu is well advanced and the earthworks for the beneficiation plant
and pipeline are progressing towards first production in the second quarter of
2012, with ramp-up to 26.5 Mtpa. Due to the size of the ore body and the
dedicated logistics infrastructure, Minas-Rio has considerable expansion
potential, with planning underway to increase production in a second phase to
80 Mtpa. Since the acquisition of Minas-Rio, Anglo American has undertaken
considerable geological work to increase confidence in the resource estimates,
resulting in the increase of resources from 1.2 billion tonnes at the time of
acquisition in 2007 to 4.6 billion tonnes, a nearly fourfold increase, with
further resource potential. The beneficiation test work performed to date has
produced excellent results, with pilot sample iron grade (Fe) above 69%. The
anticipated product Fe grade over the life of the mine is expected to be above
68%, with extremely low alumina, silica and phosphorus contaminants. With such
quality characteristics, Minas-Rio pellet feed will rank as a top quality
product. Across Anglo American`s iron ore interests, the Group has the
potential to increase iron ore production to in excess of 150 Mtpa within 10
years.
Anglo American`s 100% owned Los Bronces copper mine is well advanced with its
expansion project with first production in the fourth quarter of 2011 and is
expected to increase production from the fourth quarter of 2012 to an average
of 400ktpa over the first ten years of full production. At peak production
levels, Los Bronces is expected to be the fifth largest producing copper mine
in the world, with reserves that support a mine life of 30 years. Resource and
mineralisation studies carried out by Anglo American`s technical teams support
further potential expansion. In addition to the Group`s attractive copper
growth options in other established mining jurisdictions, in Peru and the US,
Anglo American has announced two very significant and high quality new
discoveries at Los Sulfatos and San Enrique Monolito close to its Los Bronces
mine in Chile. These two new copper prospects together increase the Group`s
copper resources (excluding reserves) by approximately 50%.
The Barro Alto nickel project is on track, with the overall development two
thirds complete, towards start up in the first quarter of 2011. This project,
which has further potential from an extensive resource base, leverages an
existing operation and proven technology and will produce an average 36 ktpa of
nickel in full production with a cost position in the lower half of the curve.
Unlocking further value from the portfolio
Since the beginning of the year, further progress has been made to focus the
Group on its core mining portfolio. Anglo American disposed of its residual
16.2% shareholding in AngloGold Ashanti during the first quarter of the year,
realising total proceeds of $1,770 million.
In line with Anglo American`s strategic commitment to focus on its core mining
operations, Anglo American sold its 44.9% shareholding in Hulamin in July,
realising a total consideration of approximately $148 million.
The Tarmac group remains non-core to Anglo American, it continues to be managed
to maximise shareholder value, though a sale is not expected in the current
economic conditions. Following completion of the company`s restructuring,
Tarmac has accelerated existing cost savings programmes and is well positioned
to reap the benefits of investments made in recent years in the growth
economies of Oman and Qatar.
Outlook
The global economic downturn had a profound effect on all commodity prices in
the second half of 2008 and early 2009. In the second quarter of 2009, prices
for a number of commodities strengthened, particularly for copper, nickel and
spot iron ore, recovering from their low points and providing some signs of an
improvement in demand. While such price recovery offers grounds for increased
optimism, the overall economic situation remains fragile. Global GDP growth is
forecast by the IMF to decline by 1.4% in 2009, with major contractions in
industrialised countries being partly offset by growth in the emerging and
developing economies, with China forecast to grow at above 7.5%.
The long term fundamentals for the mining industry remain very robust from both
the demand and supply sides. The industry has seen curtailment of many high
cost operations in nickel, iron ore and coking coal, while the difficult
financing conditions are expected to continue to impact the funding and timing
of many potential new mines and expansions, constraining supply as economic
growth returns. In terms of demand, whilst China is expected to support both
near and long term demand growth for bulk commodities and base metals, the
recovery of the OECD countries, stimulated further by government spending
programmes in many major economies, will be an important factor, with
particular upside for platinum group metals.
For further information, please contact:
United Kingdom
James Wyatt-Tilby, Media Relations
Tel: +44 (0)20 7968 8759
Caroline Metcalfe, Investor Relations
Tel: +44 (0)20 7968 2192
Leisha Wemyss, Investor Relations
Tel: +44 (0)20 7968 8607
South Africa
Anna Poulter, Investor Relations
Tel: +27 (0)11 638 2079
Pranill Ramchander, Media Relations
Tel: +27 (0)11 638 2592
Anglo American plc is one of the world`s largest mining groups. With its
subsidiaries, joint ventures and associates, it is a global leader in platinum
group metals and diamonds, with significant interests in coal, base and ferrous
metals, as well as an industrial minerals business. The Group is geographically
diverse, with operations in Africa, Europe, South and North America, Australia
and Asia. (www.angloamerican.co.uk)
Webcast of presentation:
A live webcast of the interim results presentation, starting at 10.00am UK time
on 31 July, can be accessed through the Anglo American website at
www.angloamerican.co.uk.
Note: Throughout this results announcement, `$` denotes United States dollars
and `cents` refers to United States cents; operating profit includes
attributable share of associates` operating profit, is before special items and
remeasurements, unless otherwise stated; special items and remeasurements are
defined in note 6. Underlying earnings unless otherwise stated is calculated as
set out in note 9 to the Condensed financial statements. EBITDA is operating
profit before special items and remeasurements, depreciation and amortisation
in subsidiaries and joint ventures and includes attributable share of EBITDA of
associates. EBITDA is reconciled to `Total profit from operations and
associates` in note 14 to the Condensed financial statements and to `Cash
inflows from operations` in note 14. Tonnes are metric tons, `Mt` denotes
million tonnes and `kt` denotes thousand tonnes unless otherwise stated.
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.
Forward-looking statements
This announcement includes forward-looking statements. All statements other
than statements of historical facts included in this announcement, including,
without limitation, those regarding Anglo American`s financial position,
business and acquisition strategy, plans and objectives of management for
future operations (including development plans and objectives relating to Anglo
American`s products, production forecasts and reserve and resource positions),
are forward-looking statements. Such forward-looking statements involve known
and unknown risks, uncertainties and other factors which may cause the actual
results, performance or achievements of Anglo American, or industry results, to
be materially different from any future results, performance or achievements
expressed or implied by such forward-looking statements.
Such forward-looking statements are based on numerous assumptions regarding
Anglo American`s present and future business strategies and the environment in
which Anglo American will operate in the future. Important factors that could
cause Anglo American`s actual results, performance or achievements to differ
materially from those in the forward-looking statements include, among others,
levels of actual production during any period, levels of global demand and
commodity market prices, mineral resource exploration and development
capabilities, recovery rates and other operational capabilities, the
availability of mining and processing equipment, the ability to produce and
transport products profitably, the impact of foreign currency exchange rates on
market prices and operating costs, the availability of sufficient credit, the
effects of inflation, political uncertainty and economic conditions in relevant
areas of the world, the actions of competitors, activities by governmental
authorities such as changes in taxation or safety, health, environmental or
other types of regulation in the countries where Anglo American operates,
conflicts over land and resource ownership rights and such other risk factors
identified in Anglo American`s most recent Annual Report. Forward-looking
statements should, therefore, be construed in light of such risk factors and
undue reliance should not be placed on forward-looking statements. These
forward-looking statements speak only as of the date of this announcement.
Anglo American expressly disclaims any obligation or undertaking (except as
required by applicable law, the City Code on Takeovers and Mergers (the
"Takeover Code"), the UK Listing Rules, the Disclosure and Transparency Rules
of the Financial Services Authority, the Listings Requirements of the
securities exchange of the JSE Limited in South Africa, the SWX Swiss Exchange,
the Botswana Stock Exchange and the Namibian Stock Exchange and any other
applicable regulations) to release publicly any updates or revisions to any
forward-looking statement contained herein to reflect any change in Anglo
American`s expectations with regard thereto or any change in events, conditions
or circumstances on which any such statement is based.
Nothing in this announcement should be interpreted to mean that future earnings
per share of Anglo American will necessarily match or exceed its historical
published earnings per share.
Certain statistical and other information about Anglo American included in this
announcement is sourced from publicly available third party sources. As such it
presents the views of those third parties, but may not necessarily correspond
to the views held by Anglo American.
Financial review of Group results
Group operating profit was $2,136 million, with operating profit from core
operations of $2,054 million, 66% lower than 2008. The decrease in operating
profit was driven by a significant decline in realised prices compared to the
first six months of 2008. The average platinum market price in the first six
months of 2009 was 43% lower than the same period of 2008, with copper
declining 50%, nickel by 57% and zinc by 42%. Iron ore and manganese ore and
alloy prices have also fallen in 2009, with realised metallurgical coal and
Industrial Minerals` products prices offsetting this trend. Dollar exchange
rates have been favourable against the rand, Australian dollar, Brazilian real
and Chilean peso.
Kumba Iron Ore achieved higher operating profit than the first six months of
2008 due to increased export sales volumes to China, although Ferrous Metals
profit declined due to falling manganese ore and alloy volumes and prices
impacting Samancor`s results and lower demand for Scaw Metals products. At
Platinum, higher sales volumes, due to higher production, reduced the impact of
lower prices. As planned, Coal sales volumes were lower and there was a shift
in market demand in Australia to thermal coal, with falling demand from steel
producers for metallurgical coal. In the Base Metals division, significant
metal price reductions resulted in a fall in profits and lower demand for
fertiliser in the Brazilian agricultural sector had a negative impact on the
results of Copebras.
Group underlying earnings were $1,096 million, 69% lower than the first six
months of 2008. Underlying earnings reflect the operational results discussed
above, an increase in net finance costs due to higher interest as the result of
an increase in debt levels. The effective tax rate before special items and
remeasurements, including attributable share of associates tax, of 32% is in
line with prior year.
Group underlying earnings per share were $0.91 compared with $2.90 in 2008. The
weighted average number of shares was in line with 2008.
Underlying earnings 6 months ended 6 months ended
$ million 30 June 2009 30 June 2008
Profit for the financial period
attributable to equity shareholders of
the Company 2,970 4,281
Operating special items including associates 87 26
Operating remeasurements including associates (544) (8)
Net profit on disposals including associates (1,441) (643)
Financing remeasurements including associates:
Foreign exchange loss/(gain) on De Beers
preference shares 17 (18)
Unrealised net loss/(gain) on non-hedge
derivatives related to net debt 60 (182)
Tax remeasurements (309) -
Tax on special items and remeasurements
including associates 178 8
Minority interests on special items and
remeasurements including associates 78 19
Underlying earnings 1,096 3,483
Underlying earnings per share ($) 0.91 2.90
Profit for the financial period after special items and remeasurements
decreased by 31% to $2,970 million, compared to $4,281 million in the
comparable period. The decrease reflects the results discussed above offset by
a gain on operating remeasurements, principally a net unrealised gain on
non-hedge derivatives relating to capital expenditure by Anglo Ferrous Brazil
and Base Metals and a $309 million tax gain in Brazil. Net profit on disposals
including associates were $1,441 million, of which $1,139 million related to
the disposal of the residual holding in AngloGold Ashanti, $247 million for
Anglo Platinum`s disposal of its 50% interest in Booysendal and $42 million on
the sale of 51% of Anglo Platinum`s holding in Lebowa Platinum Mines. This was
offset by a $60 million loss on non-hedge derivatives relating to net debt,
principally losses on embedded interest rate derivatives.
The Group`s results were influenced by a variety of currencies owing to the
geographic diversity of the Group`s operations. In the six months to 30 June
2009, there was a positive exchange variance in underlying earnings of $409
million. Results benefited from all the key exchange rates to which the Group
is exposed weakening against the dollar in the six months to 30 June 2009
compared to the same period in 2008. The six month average exchange rate of the
South African rand of R9.20 compared with R7.66 in 2008, the Australian dollar
was 1.40 compared to 1.08 in 2008, the Brazilian real 2.19 versus 1.70 and the
Chilean peso 586 compared to 467. There was a negative price impact on
underlying earnings of $2,235 million with lower prices across all key products
in the Group with the exception of metallurgical coal and Tarmac`s product
portfolio.
Summary income statement 6 months ended 6 months ended
$ million 30 June 2009 30 June 2008
Operating profit before special items and
remeasurements 1,824 5,121
Operating special items (87) (22)
Operating remeasurements 456 25
Operating profit from subsidiaries and
joint ventures 2,193 5,124
Net profit on disposals 1,442 640
Share of net income from associates(1) 266 658
Total profit from operations and
associates 3,901 6,422
Net finance costs before remeasurements (198) (159)
Financing remeasurements (77) 205
Profit before tax 3,626 6,468
Income tax expense (355) (1,590)
Profit for the financial period 3,271 4,878
Minority interests (301) (597)
Profit for the financial period
attributable to equity shareholders 2,970 4,281
Basic earnings per share ($) 2.47 3.56
Group operating profit including
associates before special items
and remeasurements 2,136 6,181
(1) Operating profit from associates
before special items and remeasurements 312 1,060
Operating special items and
remeasurements (2) 88 (21)
Net (loss)/profit on disposals (2) (1) 3
Net finance income/(costs) (before
remeasurements) 23 (41)
Financing remeasurements (2) - (5)
Income tax expense (after special items
and remeasurements) (137) (313)
Minority interests (after special items
and remeasurements) (19) (25)
Share of net income from associates 266 658
(2) See note 6 to the Condensed financial statements.
Towards the beginning of this document, reference has been made to core
operations. Operations considered core to the Group are Base Metals, Platinum,
Ferrous Metals` core businesses (Kumba Iron Ore, Scaw Metals, Samancor and
Anglo Ferrous Brazil), Coal, Diamonds, Exploration and Corporate Activities.
The table below reconciles operating profit from core operations to Group
operating profit.
Operating profit 6 months ended 6 months ended
$ million 30 June 2009 30 June 2008
Base Metals 695 2,454
Ferrous Metals - core businesses(1) 802 1,252
Coal 720 731
Platinum 8 1,467
Diamonds 4 328
Corporate Activities and Exploration (175) (258)
Operating profit including associates
before special items and
remeasurements - core operations 2,054 5,974
Industrial Minerals 27 163
Ferrous Metals - other businesses(1) 55 44
Operating profit including associates
before special items and
remeasurements 2,136 6,181
Underlying earnings - core operations 1,050 3,314
(1) See the Ferrous Metals and Industries operations review.
Special items and remeasurements
6 months ended 30 June 2009
Excluding
$ million associates Associates Total
Operating special
items (87) - (87)
Operating
remeasurements 456 88 544
Operating special
items and
remeasurements 369 88 457
6 months ended 30 June 2008
Excluding
$ million associates Associates Total
Operating special
items (22) (4) (26)
Operating
remeasurements 25 (17) 8
Operating special
items and
remeasurements 3 (21) (18)
Operating special items, including associates, amounted to a charge of $87
million. This includes Coal and Tarmac restructuring costs and exceptional
costs associated with `One Anglo` initiatives.
Operating remeasurements, including associates, are made up of a net gain of
$625 million on non-hedge derivatives principally related to a net unrealised
gain on derivatives relating to capital expenditure in Anglo Ferrous Brazil and
Los Bronces as well as an unrealised gain on an embedded derivative at Minera
Loma de Niquel. A net loss of $169 million was realised in the period in
respect of these Anglo Ferrous Brazil and Los Bronces derivative portfolios.
Financing remeasurements of $77 million comprise an unrealised net loss of $60
million of non-hedge derivatives related to net debt and a $17 million foreign
exchange loss on retranslating De Beers US dollar preference shares held by a
rand denominated entity.
Net profit on disposals of $1,441 million, including associates, comprises a
profit on the disposal of the residual investment in AngloGold Ashanti of
$1,139 million, $247 million on Anglo Platinum`s disposal of its 50% share in
Booysendal and $42 million relating to the disposal of 51% of Anglo Platinum`s
100% share in Lebowa Platinum Mines.
Net finance costs
Net finance costs excluding net remeasurement loss of $77 million (in the six
months ended 30 June 2008: gain of $205 million), increased to $198 million (in
the six months ended 30 June 2008: $159 million). The increase reflects higher
interest costs due to the increase in debt, offset by an increase in the amount
of interest capitalised.
Tax
6 months ended 30 June 2009
Associates`
Before special
tax and
items and minority Including
remeasurements interests associates
$ million
(unless otherwise stated)
Profit before tax 1,819 142 1,961
Tax (493) (130) (623)
Profit for the financial
period 1,326 12 1,338
Effective tax rate
including associates (%) 31.8
6 months ended 30 June 2008
Associates`
Before special
tax and
items and minority Including
remeasurements interests associates
$ million
(unless otherwise stated)
Profit before tax 5,643 338 5,981
Tax (1,582) (313) (1,895)
Profit for the financial
period 4,061 25 4,086
Effective tax rate
including associates (%) 31.7
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 before special items and remeasurements
included within `Share of net income from associates` for the six months ended
30 June 2009 was $130 million (six months ended 30 June 2008: $313 million).
The effective rate of tax before special items and remeasurements, including
share of associates` tax was 31.8%. This was broadly in line with the
equivalent effective tax rate of 31.7% in the six months ended 30 June 2008.
Balance sheet
Equity attributable to equity shareholders of the Company was $25,081 million
compared with $23,250 million at 31 December 2008. This reflects Group profits,
exchange benefit, an increase in tangible assets from investment in long life
assets in Ferrous Metals and Base Metals, offset by an increase in medium and
long term borrowings.
Cash flow
Net cash inflows from operating activities were $1,520 million compared with
$3,822 million in 2008. EBITDA was $2,985 million, a decrease of 58%.
Proceeds from disposals of financial asset investments totalled $1,988 million,
which included the disposal of the Group`s residual interest in the shares of
AngloGold Ashanti.
Purchases of tangible assets amounted to $2,140 million, an increase of $142
million. The increase is due to investment in the Los Bronces and Barro Alto
projects in Base Metals and the Minas-Rio project in Ferrous Metals, offset by
reductions in Platinum, Coal and Tarmac.
There was a net cash outflow from financing activities of $1,252 million
compared to a cash outflow in 2008 of $933 million. This primarily arose from
the repayment of $4,150 million of short term borrowings offset by receipt of
medium and long term borrowings of $3,636 million.
Liquidity and funding
Net debt, excluding hedges, increased $292 million from 31 December 2008 to
$11,335 million. The increase reflects planned capital expenditure on key long
life projects in Base Metals and Ferrous Metals, shareholder loans to De Beers
and tax paid. This was partly offset by operating cash inflows of $1,676
million and proceeds from the disposal of the investment in AngloGold Ashanti.
Net debt at 30 June 2009 comprised $13,938 million of debt, and $2,603 million
of cash and cash equivalents (net of bank overdrafts). Net debt to total
capital(1) at 30 June 2009 was 33.1%, compared with 37.8% at 31 December 2008.
In April 2009 the Group issued a US bond raising $1.25 billion repayable in
2014 and $0.75 billion in 2019 as well as a convertible bond of $1.7 billion
repayable in 2014.
At 30 June 2009, the Group had undrawn bank facilities of $7.9 billion, cash
deposits of $2.6 billion and Commercial Paper maturing throughout 2009 of $0.4
billion.
The Group`s forecasts and projections, taking account of reasonably possible
changes in trading performance show that the Group will be able to operate
within the level of its current facilities.
(1) 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.
Dividends
The resumption of the payment of a dividend to shareholders remains a key
priority for the board. This will be considered against the background of the
overall market environment, the Group`s capital requirements, as well as the
future earnings and cash performance of the business as a whole.
Related party transactions
Related party transactions are disclosed in note 19 to the Condensed financial
statements.
Principal risks and uncertainties
Anglo American is exposed to a variety of risks and uncertainties which may
have a financial or reputation impact on the Group and which may also impact
the achievement of social, economic and environmental objectives.
The principal risks and uncertainties facing the Group at the year end were set
out in detail in the Operating and financial review section of the Annual
Report 2008, and remain appropriate in 2009. Key headline risks relate to the
following:
? Commodity prices
? Liquidity and counterparty risk
? Currency risk
? Inflation
? Safety, health and environment
? Political, legal and regulatory
? Supplier risk
? Contractors
? Reserves and resources
? Exploration
? Natural events and damage to assets by fire or machinery breakdown
? Employees
? Operational performance and project delivery
? Acquisitions
? Infrastructure
? Community relations
? Joint venture relationships
? Critical accounting judgements and key sources of estimation and uncertainty
The Group is exposed to changes in the economic environment, as with any other
business. This is discussed throughout the Principal risks and uncertainties
section of the Annual Report 2008.
Details of any key risks and uncertainties specific to the period are covered
in the Operations review section.
The Annual Report 2008 is available on the Group`s website
www.angloamerican.co.uk.
Forward looking statements
This half year financial report contains certain forward looking statements
with respect to the financial condition, results, operations and businesses of
the Group. These statements and forecasts involve risk and uncertainty because
they relate to events that depend on circumstances in the future. There are a
number of factors that could cause actual results or developments to differ
from those expressed or implied by these forward looking statements.
Operations review for the six months ended 30 June 2009
In the operations review on the following pages, operating profit includes the
attributable share of associates` operating profit and is before special items
and remeasurements unless otherwise stated. Capital expenditure relates to cash
expenditure on tangible assets.
BASE METALS
$ million 6 months ended 6 months ended
(unless otherwise stated) 30 June 2009 30 June 2008
Operating profit 695 2,454
Copper 651 1,941
Nickel, Niobium, Mineral Sands and
Phosphates 58 425
Zinc 40 149
Other (54) (61)
EBITDA 857 2,623
Net operating assets 6,871 5,666
Capital expenditure 840 554
Share of Group operating profit 33% 40%
Share of Group net operating assets 18% 19%
Anglo Base Metals generated operating profit of $695 million (2008: $2,454
million). This decline was driven by sharply lower metal prices in the first
half of 2009 compared to the same period in 2008, as well as lower fertiliser
prices. Cash cost reductions due to lower prices of key inputs, favourable
exchange rates and cost saving measures have partially offset lower metal
prices. Production of copper and zinc has reduced marginally, while nickel
output has increased.
Markets
Average market
prices (c/lb) 6 months ended 30 June 2009 6 months ended 30 June 2008
Copper 184 368
Nickel 531 1,237
Zinc 60 103
Lead 60 118
Following the sharp price declines across the basket of base metals in the
second half of 2008, base metals prices increased strongly during the first
half of 2009. Comparing 30 June 2009 to 31 December 2008 closing market prices,
copper has increased by 76%, nickel 48% and zinc 39%.
Despite significant supply cutbacks, the extent of the global demand slowdown
was such that base metals markets were in surplus during the first half.
However, prices were driven upwards by increased imports into China, supply
constraints and the dollar, which began to weaken in the second quarter.
Expectations of an eventual renewal of global demand and increased fund flows
have additionally aided prices. Phosphate fertiliser prices were sharply lower
due to reduced demand for fertilisers.
Operating performance
Copper division 6 months ended 30 June 2009 6 months ended 30 June 2008
Operating
profit ($m) 651 1,941
Attributable
production
(tonnes) 316,900 320,700
Collahuasi production on an attributable basis was 109,100 tonnes, 11% higher
than in 2008. This was primarily due to additional concentrate produced at
Patache port as a result of additional pipeline capacity allowing concentrate
re-pumping from the concentrate ponds, partly offset by lower head grades.
Los Bronces production fell by 6% to 110,700 tonnes, as a result of lower
sulphide ore grade. Production at Mantos Blancos was 44,700 tonnes, 7% higher
than 2008, as a result of more mineral processed and marginally higher grades
and recovery.
El Soldado production decreased 29% to 20,900 tonnes, mainly due to lower ore
grades. Mantoverde production was 6% lower at 30,500 tonnes due to the positive
benefit of an inventory drawdown in the prior year.
Chagres production was 63,200 tonnes, 16% lower as a result of lower average
copper grade in concentrates smelted and a scheduled 16.5 days maintenance
shutdown compared to 11.5 days in the same period in 2008.
Nickel, Niobium, Mineral
Sands and Phosphates 6 months ended 30 June 6 months ended 30 June
2009 2008
Operating profit ($m) 58 425
Attributable nickel
production (tonnes) 10,100 9,600
Reduced demand and falling prices in the fertiliser business coupled with lower
nickel prices and operational problems at Loma de NA-quel plant impacted results
during the period.
Loma de Niquel`s output in the first half of the year was interrupted on three
occasions, although production of 5,600 tonnes was 19% higher than the 4,700
tonnes in the prior year. In January, most of the month`s production was lost
while new arrangements were made to deposit smelter slag. In early May, six
days of production were lost following interruption to incoming electrical
power as a result of earthquake damage to the supplier`s sub-station. Electric
furnace No. 2 was shut down in late May after a metal run-out and is not
expected to resume production until rebuilding is completed in the first half
of 2010. Sales of 4,800 tonnes reflected the poor market conditions,
particularly in the first three months of the year, and some congestion at
Venezuelan ports that impeded export revenues. By mid-year, both these
restrictions had eased and sales contracts for the second half match material
available.
Since the cancellation of 13 of its 16 concessions in January 2008, Minera Loma
de Niquel (MLdN) has continued to work with the Venezuelan Ministry of Basic
Industries and Mining to seek a basis for recovery of its rights through
constructive dialogue. Anglo American and MLdN believe that there is a valid
legal basis to reverse the notices of termination and will pursue all
appropriate legal and other remedies and actions to protect their respective
interests both under Venezuelan and international law.
At 30 June 2009, Anglo American`s interest in the book value of MLdN, including
its mineral rights, was $439 million. In the six months ended June 2009, MLdN`s
production and contribution to the Group`s operating profits were respectively
5,600 tonnes of nickel in ferronickel and an operating loss of $5 million.
The average price of nickel in the six months ended 30 June 2009 was 531 c/lb.
At 30 June 2009, the price of nickel was 726 c/lb.
At Codemin, the planned maintenance closure in one reduction furnace was
brought forward in light of weak market conditions thereby lowering production,
but sales were in line with the prior period as finished goods inventory was
reduced. A cost cutting programme reduced cash cost of production for nickel
below $4/lb.
Niobium production was 13% higher than 2008 due to the start-up of the tailings
project during the second half of 2008. Results were positively influenced by
the higher prices obtained from spot sales to China.
Fertiliser demand dropped sharply in the last quarter of 2008 and first quarter
of 2009. As a result, Copebras scaled back production, but has since resumed
fertilizer production at full capacity. Fertiliser demand in Brazil for the
forthcoming planting season is expected to be high. Profitability in the first
half of the year was impacted by lower prices (70% below peak 2008 levels) and
lower sales volumes, which were partially offset by lower raw material costs as
well as lower fixed costs, following cost reduction efforts at both operations.
Zinc division 6 months ended 30 June 2009 6 months ended 30 June 2008
Operating
profit ($m) 40 149
Attributable
zinc production
(tonnes) 169,900 171,100
Attributable
lead production
(tonnes) 31,000 31,800
Skorpion produced 75,700 tonnes of zinc in the first half of 2009 (2008: 68,600
tonnes) as production rates exceeding design capacity were achieved and
maintained.
Black Mountain produced 12,200 tonnes of zinc, and 22,100 tonnes of lead
(15,300 tonnes and 23,600 tonnes respectively, in the first half of 2008). Ore
production from the Deeps Shaft continues to ramp up towards design capacity as
more stopes are developed. Plant throughput was slightly above that of the
prior period despite a breakdown on the ball mill, which resulted in 15 days of
downtime. The lower metal-in-concentrate production for the current period is
primarily due to lower zinc and lead grades, with associated lower recoveries.
Lisheen produced 82,000 tonnes of zinc and 8,900 tonnes of lead in the period
(87,200 tonnes and 8,200 tonnes respectively, in the first half of 2008). Ore
production was negatively impacted by an increasing proportion of secondary and
tertiary stopes in the mine plan, and a breakdown of the SAG mill for 9 days in
January and early February reduced plant throughput.
Projects
The Barro Alto project to develop a 36,000 tpa (average for the life of mine)
nickel operation in Brazil is on track to achieve first production in the first
quarter of 2011 with full production scheduled for the third quarter of 2012.
The project`s safety performance continued strongly, with a LTIFR of 0.04 and
LTISR of 14.0, based on 13.1 million worked man hours to date.
The Los Bronces copper expansion project is progressing according to schedule,
with engineering design planned for completion by the end of 2009 and
commissioning in late 2011. Construction work on the various sites has
progressed according to plan, with bulk earthworks and large scale civil
construction far advanced.
Collahuasi`s expansion up to 170,000 tonnes throughput per day is being
evaluated and commissioning should take place in 2011. As a result of the
significant exploration success at Rosario Oeste, studies are continuing to
target further expansions with the potential to increase production to around 1
million tpa.
The revised feasibility study for the more than 200,000 tpa Quellaveco copper
project in Peru remains on target for completion during the year.
At Mantoverde, a pre-feasibility study is currently underway for a sulphide ore
life extension.
Following the successful $403 million tender for Michiquillay in April 2007,
the focus has been on developing a productive relationship with the local
communities, culminating, in June 2008, in reaching formal agreements with
those communities. As a result, exploration and conceptual studies have now
commenced.
The 50% owned Pebble project is on target for completion of a pre-feasibility
study in 2010. The objective remains to engineer, construct and operate a world
class mine which operates to strict environmental standards and contributes to
the long term development of the Alaskan economy. Engagement with local
communities and a range of external stakeholders has been a priority for the
Alaskan management team and will remain so through the development of the
project into the regulatory permitting process. In addition, the Keystone
Centre is working with Pebble and has established an independent stakeholder
dialogue process. The objective of the process is to address a wide range of
environmental, cultural and socio-economic issues associated with the
development of a modern long life mine and ensure these issues and priorities
are understood and addressed.
Outlook
Production of copper and zinc is forecast to increase marginally in the second
half, with nickel remaining flat despite the closure of a furnace at Loma de
Niquel. The outlook for prices is however still mixed. Stock levels of copper,
nickel and zinc rose sharply early in the year, but strong demand from China,
boosted by industrial and strategic re-stocking, and the effect of price
induced capacity reductions have helped to offset the fall in demand in Europe
and the US and started to bring more balance to the markets.
FERROUS METALS AND INDUSTRIES
$ million 6 months ended 6 months ended
(unless otherwise stated) 30 June 2009 30 June 2008
Operating profit 857 1,296
Kumba Iron Ore 742 677
Anglo Ferrous Brazil (82) (16)
Scaw Metals 71 121
Samancor 79 485
Other (8) (15)
Core businesses 802 1,252
Tongaat-Hulett / Hulamin 55 44
EBITDA 914 1,359
Net operating assets 11,836 5,360
Capital expenditure 447 268
Share of Group operating profit 40% 21%
Share of Group net operating assets 31% 18%
Ferrous Metals generated an operating profit of $857 million, a decrease of 34%
on the same period in 2008, with operating profit from core businesses
decreasing by 36%, mainly due to lower manganese ore and alloy sales volumes
and prices, as well as lower iron ore prices, partially offset by higher export
iron ore sales volumes.
Markets
In the first half there were divergent markets, with steel production in China
remaining at levels similar to the first half of 2008 while, in the rest of the
world, steel production declined by 35% due to a sharp drop in steel demand.
The resulting weaker iron ore demand outside China, mainly in Europe and Japan
together with lower Chinese domestic iron ore production, resulted in a surge
of iron ore imports into China.
Global steel producers, faced with significantly reduced capacity utilisation
rates, have shifted to consuming lower quality iron ore to contain costs. This
has resulted in a decrease in demand for quality lump and niche premium iron
ore. However, there are signs that steel demand outside China may have stopped
declining with recent increases in Purchasing Managers Index (`PMI`) measures
in Japan and Europe.
Operating performance
Kumba Iron Ore reported operating profit of $742 million, an increase of 10% on
2008, mainly due to higher export sales volumes into China and a weaker rand
exchange rate in the first half of 2009 compared to 2008, partially offset by
lower average prices from export sales volumes. Despite the lower average
prices, Kumba Iron Ore maintained a strong operating profit margin of 56%, down
2%, through cost management and a weaker rand. Total iron ore production
increased 12% to 19.1 million tonnes and export sales volumes from Sishen Mine
increased 29% to 17.1 million tonnes. This was mainly due to the additional
production delivered by the Sishen Mine`s jig plant, which continues to ramp
up. Kumba Iron Ore remains on schedule to achieve an annualised rate of 13 Mtpa
from the jig plant during the fourth quarter of 2009. Finished product
stockpiles decreased to 4.6 million tonnes, 1.2 million tonnes below the 2008
closing levels.
Export sales to long term contractual customers for the first three months of
2009 were based on an average 93% increase in the iron ore benchmark price for
the 2008/2009 iron ore year, although it was predominately fine ore that was
sold during this period. Final settlement for the 2009/2010 iron ore year
between Kumba Iron Ore and all its customers has not yet been reached, with
settlement anticipated in the next three months. Kumba Iron Ore was able to
redirect lost export contract volumes from Europe and Japan into China, which
were predominantly sold at spot prices. In preparing its financial results,
Kumba Iron Ore has used a prudent estimate of the expected decrease in iron ore
prices. The exposure is limited to 2.8 million tonnes, which remains subject to
contractual settlement.
Anglo Ferrous Brazil comprises the Group`s effective 100% interest in the
Minas-Rio iron ore project, the effective 70% interest in the AmapA? iron ore
system and the 49% interest in LLX Minas-Rio, the owner of the Port of AAu. The
Amapa iron ore system produced 1.2 million tonnes in the six month period
compared to 0.4 million tonnes in the equivalent period 2008, which was prior
to the Group`s acquisition. It is still in pre-operational phase while ramping
up to design capacity of 6.5 Mtpa. Anglo American, together with its partner at
Amapa, Cliffs Natural Resources Inc., continues to study all aspects of the
mine and ore transportation to achieve design capacity.
Scaw`s operating profit was $71 million, down 41% on the comparative period in
2008. The downturn in the global economy caused a significant decline in demand
for rolled steel products and steel and iron castings in the first half of
2009. Margins remained under pressure as the rate of decline in steel prices
exceeded the decline in the price of key raw material inputs.
The Group`s attributable share of Samancor`s operating profit decreased to $79
million, 84% down on the comparative period, mainly due to lower manganese ore
and alloy sales volumes and prices as a consequence of the decline in global
steel demand.
The Tongaat-Hulett and Hulamin contribution to operating profit increased to
$55 million, up 25% on the comparative period, with Tongaat-Hulett`s Zimbabwean
operations, which were previously accounted for on a dividend basis, now being
consolidated.
Projects
The pace of construction and capex spend at Minas-Rio is dependent upon
receiving a number of environmental licences and other permits. Anglo American
has obtained 30 licences since acquisition in August 2008, up from the 18
licences obtained in the 20 months preceding the acquisition. The key licences
and permits obtained in the first half of 2009 include certain earthmoving and
road construction permits. A total of 16 licences have been issued for the
Minas-Rio project in the six months to June. Key among these have been the
federal permit for land clearance for the mine which allows this year`s planned
earthworks to be commenced and completed, and the approvals of specific
licences for the Port road modifications which will allow the planned
construction of the breakwater in the second half of this year. Anglo American
continues to work with local, state and federal authorities and landowners to
ensure that the timing of licence receipts and land acquisitions does not
further impact the timing of the project, and ensure first iron ore production
commences in the second quarter of 2012. Project development in 2009 to date
has focused on the port and pipeline.
Planned annual capacity of the first phase will be 26.5 Mtpa of iron ore pellet
feed at an anticipated capital cost of $3.6 billion. The pre-feasibility study
for the second phase of the Minas-Rio iron ore project has continued during the
first half of 2009.
The Sishen South project is progressing well with $192 million of capital
expenditure incurred to date, of which $115 million was incurred in the first
six months of 2009. The capital expenditure to date is in line with the plan
and first production remains scheduled for the first half of 2012, ramping up
to full capacity of 9 Mtpa in 2013.
Outlook
The second half of 2009 is expected to remain a challenging period for sales
volumes of iron ore and manganese ore and alloys.
At Kumba Iron Ore, sales volumes to Europe, Japan and South Korea are expected
to remain weak in the short term. The Chinese market remains uncertain, but
Kumba Iron Ore remains cautiously optimistic on its ability to redirect export
sales volumes into China.
At Samancor, the demand outlook for manganese alloys varies between products,
with overall conditions remaining subdued. Samancor will therefore continue to
produce at reduced levels and use stockpiles to meet demand. The demand outlook
for manganese ore remains uncertain, masked by de-stock and stocking
activities.
Demand for Scaw Metals` products is forecast to remain soft in 2009. Increased
demand may be experienced in the latter part of the year as the effects of
customer de-stocking flow through to increased sales.
COAL
$ million
(unless
otherwise
stated) 6 months ended 30 June 2009 6 months ended 30 June 2008
Operating profit 720 731
South Africa 233 369
Australia 334 225
South America 165 157
Canada 2 3
Projects and
corporate (14) (23)
EBITDA 898 900
Net operating
assets 4,693 5,071
Capital
expenditure 228 352
Share of Group
operating profit 34% 12%
Share of Group
net operating assets 12% 17%
Coal delivered an operating profit of $720 million, 2% down on the prior year
with higher realised metallurgical coal prices reflecting the benefit of high
priced contract sales carried over from 2008, more favourable producer country
currencies, benefits from asset optimisation and cost reduction programme in
Australia, offset by lower sales volumes and weaker thermal coal sales prices
from South Africa.
Markets
Metallurgical coal
The global economic slowdown led to a rapid decline in demand for steel, from
the construction and automotive sectors in particular. The steel industry
responded by cutting production of steel and coke, idling blast furnaces and
slowing coke ovens. In response to weak demand, metallurgical coal suppliers
adjusted production.
The price negotiations for 2009 were conducted against this backdrop with the
added complication of carryover tonnage at higher 2008 contract prices. Anglo
Coal has been successful in maintaining the value inherent in the 2008 contract
settlement, although there has been some deferral of carryover tonnage.
Metallurgical coal sales improved in the latter half of the first quarter.
Volumes were maintained through April and May, with growth in sales of all
metallurgical coal products achieved in June as steel mills re-stocked ahead of
anticipated demand recovery. The Japanese, European, Turkish and South American
markets remained subdued during the second quarter, but this was more than
offset by increased metallurgical coal sales into China.
Thermal coal
In Europe the market fundamentals for thermal coal remained strong in early
2009 driven by the cold European winter and gas supply interruptions from
Russia. Subsequently, in response to the global economic downturn, sales into
Europe and North America weakened. This was partially offset by increased sales
of South African thermal coal into India.
In Asia Pacific, the market fundamentals for thermal coal also remained strong
at the beginning of 2009. Driven by the weakness in the metallurgical coal
market, significant volumes of metallurgical coal moved, however, into the
thermal market in the first quarter, depressing seaborne thermal coal pricing.
In the second quarter, thermal coal pricing improved as a result of
strengthening metallurgical coal markets, increasing thermal coal demand,
particularly from China, and rising oil prices.
Prices
Anglo Coal`s weighted average received FOB prices for its metallurgical and
trade thermal coal, from major production areas, are set out in the table
below:
US$ / tonne 6 months ended 30 June
2009
Metallurgical coal 176
Thermal coal - Australia(1) 49
Trade thermal coal - South 50
Africa(2)
Thermal coal - South America(3) 77
US$ / tonne 6 months ended 30 Year ended
June 2008 31
December
2008
Metallurgical coal 148 195
Thermal coal - Australia(1) 40 45
Trade thermal coal - South 61 65
Africa(2)
Thermal coal - South America(3) 72 81
(1) Includes domestic thermal coal.
(2) Excludes Eskom domestic thermal coal.
(3) Derived from financial information supplied by the relevant associates.
Operating performance
South Africa
South Africa delivered operating profit of $233 million, 37% down on the prior
year, despite improve production. This was due to significantly lower export
thermal coal prices, partially offset by the weaker rand. Production of 28.6
million tonnes was 2% higher than the prior year, largely as a result of
improved opencast production and asset optimisation.
Australia
Australia delivered operating profit of $334 million, 48% up on the prior year.
This was mainly due to higher metallurgical coal prices and the weaker
Australian dollar, partially offset by lower sales volumes. In the first
quarter of 2009, a significant restructuring was implemented to reduce costs by
closing high cost mines, reducing the workforce, renegotiating critical supply
contracts, focusing on maintenance practices and restructuring business support
activities. This restructuring has started to deliver significant, sustainable
cost reductions.
Metallurgical coal production of 5.7 million tonnes was 14% lower than the
prior year, in response to significant demand constriction from steel
customers. Thermal coal production at 7.0 million tonnes was 6% lower than the
prior period, also due to weaker demand.
South America
In South America, operating profit of $165 million was 5% higher than the prior
year. CerrejA3n increased its first half attributable operating profit by 13% to
$171 million, principally through the achievement of higher thermal coal prices
and lower input costs arising from the fall in fuel prices. CerrejA3n`s strong
performance was partially offset by Carbones del Guasare where operational,
foreign exchange and labour related issues significantly affected the mining
operations. Attributable coal production in South America of 5.7 million tonnes
was lower by 0.1 million tonnes as a result of the drop in coal production from
Carbones del Guasare`s Paso Diablo mine.
Canada
Peace River Coal completed its transition to Owner Operated Mining in the first
quarter of 2009. Metallurgical coal production of 0.3 million tonnes was
marginally higher than the prior comparative period. Although waste mining
volumes were much improved, mine phasing and geotechnical issues constrained
coal release, negatively impacting unit costs. This, together with sharply
reduced offtake in the first quarter due to global steel market cutbacks,
contributed to a marginal operating profit of $2 million for the period.
Projects
In South Africa the Zondagsfontein thermal coal project continues to progress
well against budget and schedule. The $473 million project will produce 6.6
Mtpa of export and Eskom coal, with first production from the Phola Plant in
June 2009 and first production from the opencast mine expected in the third
quarter of 2009. The MacWest project achieved full production of 2.7 Mtpa in
the first half of 2009.
Outlook
In the near term, thermal and metallurgical coal markets are expected to remain
challenging, with underlying demand trends for metallurgical coal still being
masked by de-stocking and stocking activities. Anglo Coal continues to focus on
improving operational performance, with a particular emphasis on cost reduction
programmes in Australia and South Africa, asset optimisation, capital management
and procurement. Operating margins in the second half of 2009 are expected to
be significantly impacted by weaker realised coal prices and continue to be
sensitive to movements in the rand and Australian dollar.
PLATINUM
$ million
(unless otherwise stated)
6 months ended 30 June 2009 6 months ended 30 June 2008
Operating profit 8 1,467
EBITDA 284 1,714
Net operating assets 11,658 9,369
Capital expenditure 579 697
Share of Group operating profit 0.4% 24%
Share of Group net operating assets 30% 31%
Anglo Platinum`s earnings were lower for the six months ended 30 June 2009, in
line with significantly lower metal prices achieved on all products with the
exception of gold, offset by higher sales volumes, proceeds from the
Amandelbult business interruption insurance claim and a weaker rand against the
dollar.
The average dollar price achieved for platinum was $1,085 per ounce for the
period, 43% down compared to $1,906 in the first half of 2008. The average
prices achieved for palladium and nickel sales for the half year were $212 per
ounce and $5.14 per pound, respectively. The average price achieved on rhodium
sales in the first six months of 2009 was $1,255 per ounce. The overall basket
price achieved was 51% lower at $1,522 per platinum ounce sold.
Markets
The platinum market remained in balance during the first six months of 2009 as
jewellery and investment metal offtake increased, as expected, at lower price
levels and as investor sentiment improved. These increases in demand offset the
depressed autocatalyst and other industrial demand.
The decline in global vehicle production appears to have reached a `floor`,
with vehicle stocks approaching levels deemed appropriate by the automotive
sector for the reduced rate of sales. However, rates of new vehicle sales,
supported by a number of highly successful scrap and tax incentive schemes,
appear higher than initial auto manufacturers forecasts. Vehicle inventories
are expected to reduce below acceptable operating levels during the second half
of 2009, resulting in a probable rebound in vehicle production. The increase in
PGM demand from the automotive segment is likely to be higher than the increase
in vehicle production as Anglo Platinum believes that automaker PGM pipeline
stocks are at or below levels that match anticipated production volumes.
Platinum jewellery sales in China increased by over 400,000 ounces when
compared to the first half of 2008 largely in response to lower platinum prices
but also given the reduced premium over gold. This response highlights the
strength of platinum jewellery branding and the fundamentally different nature
of Chinese platinum jewellery demand as global economic conditions continue to
depress jewellery sales in most western markets.
Operating performance
Equivalent refined platinum production (equivalent ounces are mined ounces
expressed as refined ounces) from the mines managed by Anglo Platinum and its
joint venture partners for the first half of 2009 was 1.244 million ounces, an
increase of 10% when compared to the first half of 2008. While production in
the first half of 2008 was impacted by numerous abnormal events such as
flooding and electricity constraints, production in the first half of 2009 was
managed, in line with our lower annual production target as planned. Anglo
Platinum is pleased with the strong production performance, while implementing
the restructuring, productivity and cost improvement plans. Higher output was
achieved from the new concentrator at Mogalakwena mine, as well as increased
production from the Kroondal and Mototolo mines.
Furnace maintenance at the Polokwane and Waterval smelters was carried out
during the first quarter of 2009. The complete set of furnace lower copper
coolers, in service since 2005, was replaced at the Polokwane smelter. Furnace
number two at Waterval, was shut down for a complete re-build. Both smelters
resumed normal operations during the second quarter of 2009, contributing to
tonnes smelted being 22% higher in the first half of 2009 compared to the first
half of 2008. Higher than normal refined metal stocks at the start of the
period provided the flexibility to carry out furnace maintenance.
Refined platinum production at 1.056 million ounces for the first half of 2009
represents an increase of 6% when compared to the same period in 2008. The
target of 2.4 million ounces of refined platinum production for the full year
remains in place.
The cash operating cost per equivalent refined platinum ounce increased
marginally by 2% compared to the first half of 2008. When compared to the
second half of 2008, the cash operating cost per equivalent refined platinum
ounce reduced by 6.4%.
Projects
The Amandelbult Mainstream Inert Grind projects were successfully handed over
to operations in April 2009.The $80 million MC Plant capacity expansion to
increase the current capacity from 64ktpa Waterval Converter Matte to 75ktpa
remains on schedule for completion in the last quarter of 2009. The $224
million Amandelbult East Upper UG2 project, which will contribute 100,000
ounces of refined platinum per annum by 2012 is on schedule to complete the
planned ore reserve development at the end of 2009. The development of the Unki
mine in Zimbabwe, the Rustenburg Paardekraal 2 shaft replacement project, the
Mainstream Inert Grind projects and the Townlands ore replacement project
continue without delay.
A review of projects as a result of the global economic downturn resulted in
the delay of a number of projects. The $1.6 billion Amandelbult Number 4 Shaft
project has since been delayed by four years and the $1.6 billion Styldrift
Merensky Phase 1 Project has been delayed by 18 months. The Twickenham Platinum
Mine project has been slowed down with completion delayed by two years. At
steady state, the project will contribute an additional 180,000 ounces of
refined platinum from 2018. Both the Number 2 Slag Cleaning Furnace and the
Base Metals Refinery projects have been delayed by 12 months.
Outlook
Given a continuation of robust platinum jewellery sales in China, firm platinum
investment demand and an anticipated increase in demand for platinum from the
autocatalyst sector, Anglo Platinum believes that the platinum price should
find support above $1,200 per ounce during the remainder of the year, and that
the current strength of the rand, which is depressing the rand revenue basket
at present, is of concern. Anglo Platinum continues to target refined platinum
production of 2.4 million ounces but will utilise pipeline inventory as
required to meet market demand. Based on Anglo Platinum`s mining production
forecast, process pipeline stocks and high smelter availability it is likely
that Anglo Platinum could supply up to 2.6 million ounces should market demand
increase during the second half of 2009.
Anglo Platinum will continue to manage costs as a priority by improving
productivity, increasing efficiency and managing the supply chain and
procurement costs. Anglo Platinum expects cost improvements achieved so far to
be sustained and aims to keep the unit cash costs per equivalent refined
platinum ounce for the year at R11,096 per platinum ounce, the same level as in
2008.
DIAMONDS
$ million
(unless otherwise stated) 6 months ended 30 June
6 months ended 30 June 2009 2008
Share of associate`s operating profit 4 328
EBITDA 75 397
Group`s aggregate investment in De Beers 1,640 1,844
Share of Group operating profit 0.2% 5%
The Group`s share of operating profit from De Beers declined to $4 million due
to attributable revenue of $770 million being 54% lower than the first half of
2008 with reduced purchases from Sightholders as they worked to correct
inventory levels and increase liquidity in the face of the world economic
downturn. This has been offset by cost reductions of over 50% compared to the
first half of 2008 as management focuses on cash management and conservation as
well as the benefit of a weaker rand.
Markets
The industry has been severely impacted by the global economic environment
being the most difficult in decades. A result of lower client demand,
inventories of rough diamonds in the cutting centres have been reduced by some
30% from their peaks in 2008, and debt levels associated with these inventories
have reduced to more sustainable levels. In the second quarter 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. Average Sight revenue in the second quarter has more than
doubled that of the first quarter.
Operating performance
De Beers forecast significantly lower sales for 2009 and took decisive steps to
ensure the long term sustainability of the business. In response to lower
revenues, De Beers continue to focus on five key elements being cost savings,
production in line with client demand, operating efficiencies, debt management
and stimulating demand.
De Beers aggressively reduced costs with production and operating cost
reductions of over 50% and lower capital expenditure. In the future reduced
expenditure will position the group to withstand the economic downturn, and
emerge from the recession cash generative, creating the conditions necessary
for recovery.
Carat production on a 100% basis of 6.591 million was 73% lower than the first
half of 2008 as De Beers responded to decreasing demand. As planned, this
reduction was focused in the first quarter, which saw a 91% decrease in
production, achieved by temporary production holidays at De Beers mines in
South Africa and Canada as well as by Joint Venture partners in Botswana.
Second quarter production increased 409% quarter-on-quarter to 5.509 million
carats. Full year production rates are expected to be 50% of 2008 levels.
De Beers has identified efficiencies which have enabled a reduction in the
global workforce (including contractors) by 23% during the first half. These
efficiencies were primarily 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 these efficiencies will be permanent even as the market
trends upwards.
During the first half of 2009 the shareholders provided $500 million in
additional loan funding to De Beers (the Group`s share being $225 million).
Anglo American also reinvested $24 million of dividends received from De Beers.
De Beers has begun discussions with the lending banks regarding the renewal of
its $1.5 billion loan facility, which expires in March 2010. These discussions
are ongoing and management expects to conclude on the outcome during the second
half of 2009.
De Beers is investing in three separate initiatives to turn continued consumer
sentiment into sales. Forevermark has continued to expand in Hong Kong, Macau,
China and Japan. In the US, De Beers is developing its latest Big Idea with
Sightholders and retailers. De Beers is a founder member of a new industry
marketing initiative, the International Diamond Board.
Outlook
Retail demand in the US market remains subdued. As the rate of decline in
demand has slowed however, the second half should see improvement and 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 worldwide reserves at an all time low,
diamonds are likely to become more scarce. As demand grows in emerging markets,
it is expected that sales will outpace forecast diamond supply for many years
to come.
INDUSTRIAL MINERALS
$ million
(unless otherwise stated)
6 months ended 30 June 2009 6 months ended 30 June 2008
Operating profit 27 163
EBITDA 122 291
Net operating assets 3,560 4,574
Capital expenditure 40 118
Share of Group operating profit 1% 3%
Share of Group net operating assets 9% 15%
Tarmac Group operating profit decreased by $136 million compared to the first
half of 2008, with equivalent falls in EBITDA of $169 million and free cash
flow before tax of $41 million.
Markets
This profit decline reflects the continued difficult trading conditions in key
markets such as the UK where demand has fallen by 20-50% and, to a lesser
extent, in the international businesses. Despite these external challenges,
Tarmac maintained its leadership positions in most key products, and
accelerated existing cost saving programmes, particularly in the UK business,
which underwent a significant restructuring in May 2009. Despite a reduction in
activity levels, total cost savings of $48 million were 16% higher, on a
comparable basis, than the first half of 2008. A focus on capital demands and
working capital contributed to a relatively strong cash flow.
Operating performance
UK Quarry Materials(1) proved to be relatively resilient in the face of a
marked decline in demand across its product portfolio. There was no evidence of
any pick-up in UK infrastructure spend. Quarry Materials also focused on
optimising its supply chain and is now also largely self-sufficient in cement.
The decline in the UK housing market, which began in the second quarter of
2008, led to a significant deterioration in volumes of products such as mortar,
blocks and flooring. As a result, the UK Building Products Division saw sales
fall by over 20% compared to the first half of 2008. This is being mitigated by
a vigorous programme of cost base reduction and business improvement. The
business is focused on leveraging the breadth of its product portfolio within
its customer base, now that the restructuring has been completed.
After a strong performance in 2008, the markets in which Tarmac International
operates were markedly weaker than in the first half of 2008. However, Tarmac
is well positioned to reap the benefits of investments made in recent years in
economies that continue to grow, such as Oman and Qatar.
Outlook
The outlook for demand from the construction market in the UK and Europe
remains weak, with no recovery expected in the short term. However, in the
longer term, the fundamental supply and demand outlook remains favourable in
the markets in which Tarmac operates.
(1) Post the UK restructuring, the Lime and Cement business is now included
with the Aggregates business to form UK Quarry Materials.
CONDENSED FINANCIAL STATEMENTS
for the six months ended 30 June 2009
Consolidated income statement
for the six months ended 30 June 2009
6 months ended 30.06.09
Before Special
special items and
items and remeasure-
remeasure- ments
US$ million Note ments (note 6) Total
Group revenue 3 9,292 - 9,292
Total operating costs (7,468) 369 (7,099)
Operating profit from
subsidiaries and joint
ventures 3 1,824 369 2,193
Net profit on disposals 6 - 1,442 1,442
Share of net income from
associates 3 193 73 266
Total profit from operations
and associates 2,017 1,884 3,901
Investment income 253 - 253
Interest expense (404) - (404)
Other financing
(losses)/gains (47) (77) (124)
Net finance (costs)/income 7 (198) (77) (275)
Profit before tax 1,819 1,807 3,626
Income tax expense 8 (493) 138 (355)
Profit for the financial
period 1,326 1,945 3,271
Attributable to:
Minority interests 230 71 301
Equity shareholders of the
Company 4 1,096 1,874 2,970
Earnings per share (US$)
Basic 9 2.47
Diluted 9 2.42
6 months ended 30.06.08
Before Special
special items and
items and remeasure-
remeasure- ments
US$ million Note ments (note 6) Total
Group revenue 3 14,531 - 14,531
Total operating costs (9,410) 3 (9,407)
Operating profit from
subsidiaries and joint
ventures 3 5,121 3 5,124
Net profit on disposals 6 - 640 640
Share of net income from
associates 3 681 (23) 658
Total profit from operations
and associates 5,802 620 6,422
Investment income 300 - 300
Interest expense (356) - (356)
Other financing
(losses)/gains (103) 205 102
Net finance (costs)/income 7 (159) 205 46
Profit before tax 5,643 825 6,468
Income tax expense 8 (1,582) (8) (1,590)
Profit for the financial
period 4,061 817 4,878
Attributable to:
Minority interests 578 19 597
Equity shareholders of the
Company 4 3,483 798 4,281
Earnings per share (US$)
Basic 9 3.56
Diluted 9 3.51
Year ended
31.12.08
Before Special
special items and
items and remeasure-
remeasure- ments
US$ million Note ments (note 6) Total
Group revenue 3 26,311 - 26,311
Total operating costs (18,330) (1,131) (19,461)
Operating profit from
subsidiaries and joint
ventures 3 7,981 (1,131) 6,850
Net profit on disposals 6 - 1,009 1,009
Share of net income from
associates 3 1,303 (190) 1,113
Total profit from
operations and associates 9,284 (312) 8,972
Investment income 589 - 589
Interest expense (850) - (850)
Other financing
(losses)/gains (191) 51 (140)
Net finance (costs)/income 7 (452) 51 (401)
Profit before tax 8,832 (261) 8,571
Income tax expense 8 (2,545) 94 (2,451)
Profit for the financial
period 6,287 (167) 6,120
Attributable to:
Minority interests 1,050 (145) 905
Equity shareholders of the
Company 4 5,237 (22) 5,215
Earnings per share (US$)
Basic 9 4.34
Diluted 9 4.2 9
Underlying earnings and underlying earnings per share are set out in note 9.
Consolidated statement of comprehensive income
for the six months ended 30 June 2009
6 months ended 6 months ended Year ended
US$ million Note 30.06.09 30.06.08 31.12.08
Profit for the
financial period 3,271 4,878 6,120
Net gain/(loss)
on revaluation of
available for
sale investments 383 (332) (888)
Net gain/(loss)
on cash flow
hedges 120 (339) (874)
Net (loss)/gain
on cash flow
hedges -
associates (3) 2 4
Net exchange
gain/(loss) on
translation of
foreign
operations 2,432 (1,245) (4,514)
Actuarial net
loss on post
retirement
benefit schemes (105) (185) (129)
Actuarial net
loss on post
retirement
benefit schemes -
associates (1) - (7)
Deferred tax 11 (70) 149 167
Net
income/(expense)
recognised
directly in
equity 2,756 (1,950) (6,241)
Transferred to
income statement:
sale of available
for sale
investments (1,323) (467) (476)
Transferred to
income statement:
cash flow hedges (7) 114 380
Transferred to
initial carrying
amount of hedged
items: cash flow
hedges 32 - 637
Transferred to
income statement:
exchange
differences on
disposal of
foreign
operations (2) - 2
Tax on items
transferred from
equity 11 130 (20) (94)
(1,170) (373) 449
Total transferred
from equity
Total
comprehensive
income for the
financial period 4,857 2,555 328
Attributable to:
Minority interests 539 414 487
Equity
shareholders of
the Company 4,318 2,141 (159)
Consolidated balance sheet
as at 30 June 2009
US$ million Note 30.06.09 30.06.08 31.12.08
Intangible assets 3,108 1,597 3,006
Tangible assets 34,237 26,488 29,545
Environmental rehabilitation
trusts 292 235 244
Investments in associates 4,064 3,694 3,612
Financial asset investments 2,113 3,526 3,115
Trade and other receivables 290 146 94
Deferred tax assets 264 527 258
Other financial assets
(derivatives)(1) 241 351 117
Other non-current assets 133 199 167
Total non-current assets 44,742 36,763 40,158
Inventories 3,165 2,719 2,702
Trade and other receivables 3,232 4,588 2,929
Current tax assets 318 181 471
Other financial assets
(derivatives)(1) 134 136 259
Financial asset investments - - 173
Cash and cash equivalents 12b 2,626 3,316 2,771
Total current assets 9,475 10,940 9,305
Assets classified as held
for sale 17 - 999 275
Total assets 54,217 48,702 49,738
Trade and other payables (4,171) (4,581) (4,770)
Short term borrowings 12b, 13 (3,304) (3,969) (6,784)
Short term provisions (188) (107) (168)
Current tax liabilities (739) (1,064) (804)
(1)
Other financial liabilities
(derivatives) (211) (517) (598)
Total current liabilities (8,613) (10,238) (13,124)
Medium and long term
borrowings 12b, 13 (10,657) (4,765) (7,211)
Retirement benefit
obligations (573) (585) (401)
(1)
Other financial liabilities
(derivatives) (654) (571) (899)
Deferred tax liabilities (4,924) (5,167) (4,555)
Provisions for liabilities
and charges (1,429) (1,231) (1,317)
Other non-current liabilities (410) (662) (395)
Total non-current liabilities (18,647) (12,981) (14,778)
Liabilities directly
associated with assets
classified as held for sale 17 - (312) (80)
Total liabilities (27,260) (23,531) (27,982)
Net assets 26,957 25,171 21,756
Equity
Called-up share capital 10 738 738 738
Share premium account 2,713 2,713 2,713
Other reserves (271) 1,139 (2,057)
Retained earnings 21,901 18,660 18,827
Equity attributable to
equity shareholders of the
Company 25,081 23,250 20,221
Minority interests 1,876 1,921 1,535
Total equity 26,957 25,171 21,756
(1) Comparatives have been adjusted in accordance with IAS 1 Presentation of
Financial Statements - Improvements, as described in note 2.
The Condensed financial statements were approved by the Board of directors on
30 July 2009.
Cynthia Carroll Rene Medori
Chief executive Finance director
Consolidated cash flow statement
for the six months ended 30 June 2009
6 months ended 6 months ended Year ended
US$ million Note 30.06.09 30.06.08 31.12.08
Cash inflows from
operations 12a 1,676 4,831 9,579
Dividends from
associates 340 194 609
Dividends from
financial asset
investments 14 29 50
Income tax paid (510) (1,232) (2,173)
Net cash inflows
from operating
activities 1,520 3,822 8,065
Cash flows from
investing
activities
Acquisition of
subsidiaries, net
of cash and cash
equivalents
acquired(1) 15 (67) (765) (5,887)
Investment in
joint ventures 15 - (607) (609)
Investment in
associates - - (9)
Cash flows from
derivatives
related to
acquisitions - - (661)
Purchase of
tangible assets 3 (2,140) (1,998) (5,146)
Purchase of
financial asset
investments (266) (123) (741)
Investment of
advance received
in anticipation
of disposal(2) - - (281)
Loans granted (62) (52) (108)
Interest received
and other
investment income 141 145 291
Disposal of
subsidiaries, net
of cash and cash
equivalents
disposed 16 1 - 468
Sale of interests
in associates - - 205
Repayment of
loans and capital
by associates 2 - 42
Proceeds from
disposal of
tangible assets 17 12 30
Proceeds from
sale of financial
asset investments 1,988 707 851
Other cash flows
from derivatives
not related to
net debt (172) 86 (166)
Other investing
activities 4 (7) (29)
Net cash used in
investing
activities (554) (2,602) (11,750)
Cash flows from
financing
activities
Issue of shares
by subsidiaries
to minority
interests 40 32 62
Sale of treasury
shares to
employees 21 28 40
Purchase of
treasury shares (63) (418) (710)
Interest paid (421) (307) (741)
Dividends paid to
minority
interests (279) (301) (796)
Dividends paid to
Company
shareholders - (1,030) (1,550)
Net proceeds from
issue of
convertible bond 1,685 - -
Net proceeds from
issue of US bond 1,992 - -
(Repayment)/receipt of
short term borrowings (4,150) (2,019) 1,432
(Repayment)/receipt of medium
and long term borrowings (41) 2,777 5,181
Cash flows from
derivatives
related to net
debt - 380 380
Advance received
in anticipation
of disposal(2) - - 307
Other financing
activities (36) (75) (63)
Net cash (used
in)/inflows from
financing
activities (1,252) (933) 3,542
Net
(decrease)/increa
se in cash and
cash equivalents (286) 287 (143)
Cash and cash
equivalents at
start of period 12c 2,744 3,074 3,074
Cash movements in
the period (286) 287 (143)
Effects of
changes in
foreign exchange
rates 145 (16) (187)
Cash and cash
equivalents at
end of period 12c 2,603 3,345 2,744
(1) Includes amounts paid to acquire minority interests in subsidiaries.
(2) Advance received in the year ended 31 December 2008 in respect of
anticipated disposal of the Group`s 50% interest in the Booysendal joint
venture, invested in unlisted preference shares and an escrow account pending
completion of the transaction which occurred in June 2009. Following completion
of the transaction the preference shares were sold and the proceeds are shown
within `Proceeds from sale of financial asset investments`. A further amount of
$70 million remains in an escrow account pending completion of documentation.
Consolidated statement of changes in equity
for the six months ended 30 June 2009
Share-
Total based
share Retained payment
capital(1) earnings reserve
US$ million
Balance at 1 January 2008 3,451 15,855 262
Total comprehensive income - 4,138 -
Dividends paid - (1,021) -
Dividends paid to minority interests - - -
Acquisition and disposal of businesses
(including issue of shares to
minority interests) - 11 -
Minority conversion of Anglo Platinum`s
preference shares - 6 -
Share buybacks - (337) -
Purchase of shares for share schemes - (63) -
Share-based payment charges on equity
settled schemes - - 67
Issue of shares under employee share
schemes - 60 (69)
Current tax on exercised employee share
schemes - 9 -
Issue/purchase of treasury shares in
subsidiary entities - 2 -
Other - - (17)
Balance at 30 June 2008 3,451 18,660 243
Total comprehensive income - 975 -
Dividends paid - (517) -
Dividends paid to minority interests - - -
Acquisition and disposal of businesses
(including issue of shares to
minority interests) - (5) -
Share buybacks - (258) -
Purchase of shares for share schemes - (25) -
Share-based payment charges on equity
settled schemes - - 79
Issue of shares under employee share
schemes - 37 (1)
Current tax on exercised employee share
schemes - 1 -
Issue/purchase of treasury shares in
subsidiary entities - 4 -
Other - (45) (33)
Balance at 31 December 2008 3,451 18,827 288
Total comprehensive income - 2,895 -
Dividends paid to minority interests - - -
Acquisition and disposal of businesses
(including issue of shares to
minority interests) - - -
Purchase of shares for share schemes - (32) -
Share-based payment charges on equity
settled schemes - - 84
Issue of shares under employee share
schemes - 85 (78)
Current tax on exercised employee share
schemes - (1) -
Issue/purchase of treasury shares in
subsidiary entities - (16) -
Issue of convertible bond - - -
Other - 143 2
Balance at 30 June 2009 3,451 21,901 296
Total equity
Cumulative attributable
translation Fair value to equity
adjustment and other shareholders
reserve reserves(2) of the
US$ million Company
Balance at 1 January 2008 20 2,873 22,461
Total comprehensive income (1,063) (934) 2,141
Dividends paid - - (1,021)
Dividends paid to minority
interests - - -
Acquisition and disposal of
businesses (including issue of
shares to
minority interests) - - 11
Minority conversion of Anglo
Platinum`s preference shares - - 6
Share buybacks - - (337)
Purchase of shares for share
schemes - - (63)
Share-based payment charges on
equity settled schemes - - 67
Issue of shares under employee
share schemes - - (9)
Current tax on exercised
employee share schemes - - 9
Issue/purchase of treasury
shares in subsidiary entities - - 2
Other - - (17)
Balance at 30 June 2008 (1,043) 1,939 23,250
Total comprehensive income (3,034) (241) (2,300)
Dividends paid - - (517)
Dividends paid to minority
interests - - -
Acquisition and disposal of
businesses (including issue of
shares to
minority interests) - - (5)
Share buybacks - - (258)
Purchase of shares for share
schemes - - (25)
Share-based payment charges on
equity settled schemes - - 79
Issue of shares under employee
share schemes - - 36
Current tax on exercised
employee share schemes - - 1
Issue/purchase of treasury
shares in subsidiary entities - - 4
Other - 34 (44)
Balance at 31 December 2008 (4,077) 1,732 20,221
Total comprehensive income 2,191 (768) 4,318
Dividends paid to minority
interests - - -
Acquisition and disposal of
businesses (including issue of
shares to
minority interests) - - -
Purchase of shares for share
schemes - - (32)
Share-based payment charges on
equity settled schemes - - 84
Issue of shares under employee
share schemes - - 7
Current tax on exercised
employee share schemes - - (1)
Issue/purchase of treasury
shares in subsidiary entities - - (16)
Issue of convertible bond - 355 355
Other - - 145
Balance at 30 June 2009 (1,886) 1,319 25,081
Minority Total
US$ million interests equity
Balance at 1 January 2008 1,869 24,330
Total comprehensive income 414 2,555
Dividends paid - (1,021)
Dividends paid to minority interests (301) (301)
Acquisition and disposal of businesses (including
issue of shares to
minority interests) (52) (41)
Minority conversion of Anglo Platinum`s preference
shares (6) -
Share buybacks - (337)
Purchase of shares for share schemes - (63)
Share-based payment charges on equity settled schemes 2 69
Issue of shares under employee share schemes - (9)
Current tax on exercised employee share schemes - 9
Issue/purchase of treasury shares in subsidiary
entities - 2
Other (5) (22)
Balance at 30 June 2008 1,921 25,171
Total comprehensive income 73 (2,227)
Dividends paid - (517)
Dividends paid to minority interests (495) (495)
Acquisition and disposal of businesses (including
issue of shares to
minority interests) 7 2
Share buybacks - (258)
Purchase of shares for share schemes - (25)
Share-based payment charges on equity settled schemes 9 88
Issue of shares under employee share schemes - 36
Current tax on exercised employee share schemes - 1
Issue/purchase of treasury shares in subsidiary
entities - 4
Other 20 (24)
Balance at 31 December 2008 1,535 21,756
Total comprehensive income 539 4,857
Dividends paid to minority interests (279) (279)
Acquisition and disposal of businesses (including
issue of shares to
minority interests) 43 43
Purchase of shares for share schemes - (32)
Share-based payment charges on equity settled schemes 8 92
Issue of shares under employee share schemes - 7
Current tax on exercised employee share schemes - (1)
Issue/purchase of treasury shares in subsidiary
entities (6) (22)
Issue of convertible bond - 355
Other 36 181
Balance at 30 June 2009 1,876 26,957
(1) Total share capital comprises called-up share capital of $738 million (30
June 2008: $738 million; 31 December 2008: $738 million) and the share premium
account of $2,713 million (30 June 2008: $2,713 million; 31 December 2008:
$2,713 million).
(2) For a breakdown of Fair value and other reserves refer to note 11.
Dividends
6 months ended 6 months ended Year ended
30.06.09 30.06.08 31.12.08
Proposed ordinary dividend
per share (US cents) - 44 -
Proposed ordinary dividend
(US$ million) - 530 -
Ordinary dividends paid
during the period per
share (US cents) - 86 130
Ordinary dividends paid
during the period (US$
million) - 1,021 1,538
Notes to the Condensed financial statements
1. General information
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 (IFRS).
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 IFRS
financial measures are presented in notes 3, 4, 9 and 14 to these interim
consolidated financial statements (the Condensed financial statements).
The financial information for the year ended 31 December 2008 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 2008, a copy of which has been delivered to the Registrar of
Companies. The auditors` report on those accounts was unqualified, did not
include a reference to any matters to which the auditors drew attention by way
of emphasis of matter and did not contain a statement under section 237 (2) or
(3) of the Companies Act 1985.
2. Basis of preparation
Condensed financial statements and accounting policies
The Condensed financial statements are for the six months ended 30 June 2009
and have been prepared in accordance with IFRS adopted for use by the European
Union, including International Accounting Standard (IAS) 34 Interim Financial
Reporting and the requirements of the Disclosure and Transparency Rules (DTR)
of the Financial Services Authority (FSA) in the United Kingdom as applicable
to interim financial reporting.
The Condensed financial statements represent a `condensed set of financial
statements` as referred to in the DTR issued by the FSA. Accordingly, they do
not include all of the information required for a full annual financial report
and are to be read in conjunction with the Group`s financial statements for the
year ended 31 December 2008.
The Condensed financial statements have been prepared under the historical cost
convention as modified by the recording of pension assets and liabilities and
certain financial instruments.
The accounting policies applied are consistent with those adopted and disclosed
in the Group`s financial statements for the year ended 31 December 2008, with
the exception of the adoption of IFRS 8 Operating Segments, IAS 1 Presentation
of Financial Statements - Revised and IAS 1 Presentation of Financial
Statements - Improvements.
The adoption of IFRS 8 has resulted in the segmental disclosures previously
required by IAS 14 Segment Reporting being replaced by those required under
IFRS 8. The segments identified in accordance with IFRS 8 have not changed from
those previously identified as `business segments` under IAS 14.
The adoption of the revision to IAS 1 has resulted in the Consolidated
statement of changes in equity being presented as a primary statement
(previously disclosed as a note titled `Reconciliation of changes in equity`)
and disclosure of the tax impact of individual items in the Consolidated
statement of comprehensive income (by way of note). In addition, the Group has
elected to continue to present a separate income statement and statement of
comprehensive income.
The adoption of the improvements to IAS 1 has resulted in non-hedge derivatives
whose expected settlement date is more than one year from the period end being
reclassified from current to non-current and therefore the comparative
information in the Consolidated balance sheet has been adjusted as follows:
30.06.08
Current Non-current
Other financial assets (derivatives)
As previously reported 487 -
Reclassification (351) 351
As reported 136 351
Other financial liabilities (derivatives)
As previously reported (739) (349)
Reclassification 222 (222)
As reported (517) (571)
31.12.08
Current Non-current
Other financial assets (derivatives)
As previously reported 372 4
Reclassification (113) 113
As reported 259 117
Other financial liabilities (derivatives)
As previously reported (1,436) (61)
Reclassification 838 (838)
As reported (598) (899)
31.12.07
Current Non-current
Other financial assets (derivatives)
As previously reported 535 -
Reclassification (160) 160
As reported 375 160
Other financial liabilities (derivatives)
As previously reported (501) (85)
Reclassification 126 (126)
As reported (375) (211)
Going concern
The financial position of the Group, its cash flows, liquidity position and
borrowing facilities are set out in the Financial review of Group results on
pages 11 to 16. The Group`s gross debt at 30 June 2009 was $13.9 billion
(excluding overdrafts), representing a gearing level of 33.1%. Net debt is set
out in note 12 and details of borrowings and facilities are set out in note 13.
Over the last six months the Group has taken a series of measures to strengthen
the balance sheet and provide financial flexibility, principally:
? issued a two tranche bond in the US market totalling $2 billion;
? issued a $1.7 billion convertible bond; and
? generated $1.8 billion of total cash proceeds from the sale of the remaining
investment in AngloGold Ashanti.
At 30 June 2009 the Group had undrawn bank facilities of $7.9 billion, cash
deposits of $2.6 billion and commercial paper maturing throughout the remainder
of 2009 of $0.4 billion. The Group`s only significant debt facility maturing in
the next 18 months is a ?300 million (approximately $500 million) Euro bond
maturing in December 2010. The directors have considered the Group`s cash flow
forecasts for the period to 31 December 2010. The Board is satisfied that the
Group`s forecasts and projections, taking account of reasonably possible
changes in trading performance and the intended refinancing of facilities
maturing, show that the Group will be able to operate within the level of its
current facilities for the foreseeable future. For this reason the Group
continues to adopt the going concern basis (as interpreted by the Guidance on
Going Concern and Financial Reporting for directors of listed companies
registered in the United Kingdom, published in November 1994) in preparing the
Condensed financial statements.
3. Segmental information
The Group`s segments are arranged based on the like nature of the mined
commodity (e.g. base metals) or the ultimate product produced (e.g. ferrous
metals) and each managed segment has a management team that is accountable to
the Chief executive.
The Group`s Executive Committee evaluates the financial performance of the
Group and its segments principally with reference to operating profit before
special items and remeasurements which includes the Group`s attributable share
of associates` operating profit before special items and remeasurements.
Segments predominantly derive revenue as follows - Base Metals: copper, nickel
and zinc; Ferrous Metals and Industries: iron ore, manganese ore and alloys and
carbon steel products; Coal: thermal and metallurgical coal; Platinum:
platinum group metals; Diamonds: rough and polished diamonds and diamond
jewellery; and Industrial Minerals: heavy building materials.
The Corporate Activities and Unallocated Costs segment includes insurance costs.
Revenue(1)
6 months ended 6 months ended Year ended
US$ million 30.06.09 30.06.08 31.12.08
Base Metals 2,039 4,077 5,878
Ferrous Metals and
Industries 2,634 3,286 6,849
Coal 2,423 2,824 6,436
Platinum 1,905 3,605 6,327
Diamonds 770 1,684 3,096
Industrial Minerals 1,361 2,439 4,378
Exploration - - -
Corporate Activities and
Unallocated Costs - - -
Segment measure 11,132 17,915 32,964
Reconciliation:
Less: Associates (1,840) (3,384) (6,653)
Operating special items
and remeasurements - - -
Statutory measure 9,292 14,531 26,311
Operating profit/(loss)(2)
6 months ended 6 months ended Year ended
US$ million 30.06.09 30.06.08 31.12.08
Base Metals 695 2,454 2,505
Ferrous
Metals and
Industries 857 1,296 2,935
Coal 720 731 2,240
Platinum 8 1,467 2,226
Diamonds 4 328 508
Industrial
Minerals 27 163 228
Exploration (70) (98) (212)
Corporate
Activities
and
Unallocate
d Costs (105) (160) (345)
Segment
measure 2,136 6,181 10,085
Reconciliation:
Less:
Associates (312) (1,060) (2,104)
Operating
special
items and
remeasurem
ents 369 3 (1,131)
Statutory
measure 2,193 5,124 6,850
(1) Segment revenue includes the Group`s attributable share of associates`
revenue. This is reconciled to Group revenue from subsidiaries and joint
ventures as presented in the Consolidated income statement.
(2) Segment operating profit is revenue less operating costs before special
items and remeasurements, and includes the Group`s attributable share of
associates` operating profit. This is reconciled to Operating profit from
subsidiaries and joint ventures after special items and remeasurements as
presented in the Consolidated income statement. There are no material
inter-segment transfers or transactions that would affect the segment
presentation.
Other profit measures are as follows:
Associates`
operating profit(1)
6 months ended 6 months ended Year ended
30.06.09 30.06.08 31.12.08
US$ million
Ferrous Metals
and Industries 138 532 1,078
Coal 172 190 498
Platinum (2) 10 20
Diamonds 4 328 508
Industrial
Minerals - - -
312 1,060 2,104
Reconciliation:
Associates` net
finance
income/(costs)
(before
remeasurements) 23 (41) (147)
Associates`
income tax
expense (before
special
items and
remeasurements) (130) (313) (623)
Associates`
minority
interests (before
special items
and
remeasurements) (12) (25) (31)
Associates`
special items and
remeasurements 87 (23) (223)
Associates` tax
on special items
and
remeasurements (7) - 17
Associates`
minority
interests on
special items and
remeasurements (7) - 16
Share of net
income from
associates 266 658 1,113
Associates`
revenue
6 months ended 6 months ended Year ended
30.06.09 30.06.08 31.12.08
US$ million
Ferrous Metals and
Industries 591 1,193 2,394
Coal 469 489 1,117
Platinum 9 17 39
Diamonds 770 1,684 3,096
Industrial Minerals 1 1 7
1,840 3,384 6,653
Reconciliation:
Associates` net finance
income/(costs) (before
remeasurements)
Associates` income tax
expense (before special
items and remeasurements)
Associates` minority
interests (before special
items
and remeasurements)
Associates` special items
and remeasurements
Associates` tax on special
items and
remeasurements
Associates` minority
interests on special items
and
remeasurements
Share of net income from
associates
(1) Associates` operating profit is the Group`s attributable share of
associates` revenue less operating costs before special items and
remeasurements. There are no material inter-segment transfers or transactions
that would affect the segment presentation.
Depreciation and
amortisation(1)
6 months ended 6 months ended Year ended
US$ million 30.06.09 30.06.08 31.12.08
Base Metals 162 168 340
Ferrous Metals and
Industries 42 42 87
Coal 149 145 293
Platinum 276 246 507
Industrial Minerals 95 128 259
Exploration - - -
Corporate Activities
and Unallocated
Costs 10 13 23
734 742 1,509
Other non-cash
expenses(2)
6 months ended 6 months ended Year ended
US$ million 30.06.09 30.06.08 31.12.08
Base Metals (7) 54 113
Ferrous Metals and
Industries 17 16 63
Coal 28 23 110
Platinum 42 (1) 7
Industrial Minerals 13 12 44
Exploration 2 - -
Corporate Activities
and Unallocated Costs 24 24 54
119 128 391
(1) The Group`s attributable share of depreciation and amortisation in
associates is split by segment as follows: Ferrous Metals and Industries $15
million (six months ended 30 June 2008: $21 million;
year ended 31 December 2008: $42 million), Coal $29 million (six months ended
30 June 2008: $24 million; year ended 31 December 2008: $52 million), Platinum
nil (six months ended 30 June 2008:
$1 million; year ended 31 December 2008: $2 million) and Diamonds $71 million
(six months ended 30 June 2008: $69 million; year ended 31 December 2008: $157
million).
(2) Other non-cash expenses include share-based payment charges, fair value
movements relating to cash settled share-based payment scheme provisions and
charges in respect of environmental rehabilitation and other provisions.
Balance sheet measures are as follows:
Capital expenditure(1)
6 months ended 6 months ended Year ended
US$ million 30.06.09 30.06.08 31.12.08
Base Metals 840 554 1,494
Ferrous Metals
and Industries 447 268 831
Coal 228 352 933
Platinum 579 697 1,563
Industrial
Minerals 40 118 301
Exploration - 1 1
Corporate
Activities and
Unallocated
Costs 6 8 23
2,140 1,998 5,146
Reconciliation:
Tangible
assets
acquired
through
business
combinations 15 2,405 7,358
Interest
capitalised 156 96 215
Movement in
tangible asset
accruals (98) 121 365
Intangible
asset
additions 4 71 1,731
Net debt in
disposal
groups
(3) (3) (3)
2,217 4,691 14,815
Net debt(2)
US$ million 30.06.09 30.06.08 31.12.08
Base Metals 239 (1,258) (636)
Ferrous Metals and Industries 1,019 573 1,091
Coal (165) (212) (187)
Platinum 894 950 995
Industrial Minerals (46) (86) (64)
Exploration (1) (1) -
Corporate Activities and Unallocated
Costs 9,395 5,452 9,852
11,335 5,418 11,051
Reconciliation:
Tangible assets acquired through
business
combinations
Interest capitalised
Movement in tangible asset accruals
Intangible asset additions
Net debt in disposal groups - (18) (8)
11,335 5,400 11,043
(1) Capital expenditure is segmented on a cash basis and is reconciled to
balance sheet additions.
(2) Segment net debt excludes net debt in disposal groups. A reconciliation of
net debt to the balance sheet is provided in note 12.
(3) Capital expenditure on an accruals basis and including additions resulting
from acquisitions of interests in subsidiaries and joint ventures is split by
segment as follows: Base Metals $785 million (30 June 2008: $677 million; 31
December 2008: $1,874 million), Ferrous Metals and Industries $444 million (30
June 2008: $1,301 million; 31 December 2008: $7,688 million), Coal $235 million
(30 June 2008: $1,118 million; 31 December 2008: $1,705 million), Platinum $691
million (30 June 2008: $1,312 million; 31 December 2008: $3,026 million),
Industrial Minerals $53 million (30 June 2008:
$273 million; 31 December 2008: $479 million), Exploration nil (30 June 2008:
$1 million; 31 December 2008: $1 million) and Corporate Activities and
Unallocated Costs $9 million (30 June 2008:
$9 million; 31 December 2008: $42 million).
The following balance sheet segment measures are provided for information:
Segment assets(1)
US$ million 30.06.09 30.06.08 31.12.08
Base Metals 7,877 6,638 6,783
Ferrous Metals and Industries 12,503 5,930 11,823
Coal 6,169 6,331 5,300
Platinum 12,492 10,327 9,713
Industrial Minerals 4,291 5,573 3,935
Exploration 7 7 3
Corporate Activities and
Unallocated Costs 222 237 225
43,561 35,043 37,782
Other assets and liabilities
Investments in associates(3) 4,064 3,694 3,612
Financial asset investments 2,113 3,526 3,288
Deferred tax
assets/(liabilities) 264 527 258
Cash and cash equivalents 2,626 3,316 2,771
Other financial
assets/(liabilities) -
derivatives 375 487 376
Other non-operating
assets/(liabilities) 1,214 2,109 1,651
Other provisions - - -
Borrowings - - -
Net assets 54,217 48,702 49,738
Segment liabilities(2)
US$ million 30.06.09 30.06.08 31.12.08
Base Metals (1,006) (972) (1,309)
Ferrous Metals and
Industries (667) (570) (656)
Coal (1,476) (1,260) (1,338)
Platinum (834) (958) (668)
Industrial Minerals (731) (999) (600)
Exploration (2) (1) (7)
Corporate Activities and
Unallocated Costs (303) (367) (298)
(5,019) (5,127) (4,876)
Other assets and
liabilities
Investments in
associates(3) - - -
Financial asset investments - - -
Deferred tax
assets/(liabilities) (4,924) (5,167) (4,555)
Cash and cash equivalents - - -
Other financial
assets/(liabilities) -
derivatives (865) (1,088) (1,497)
Other non-operating
assets/(liabilities) (1,953) (3,028) (2,515)
Other provisions (538) (387) (544)
Borrowings (13,961) (8,734) (13,995)
Net assets (27,260) (23,531) (27,982)
Net segment assets
US$ million 30.06.09 30.06.08 31.12.08
Base Metals 6,871 5,666 5,474
Ferrous Metals and Industries 11,836 5,360 11,167
Coal 4,693 5,071 3,962
Platinum 11,658 9,369 9,045
Industrial Minerals 3,560 4,574 3,335
Exploration 5 6 (4)
Corporate Activities and
Unallocated Costs (81) (130) (73)
38,542 29,916 32,906
Other assets and liabilities
Investments in associates(3) 4,064 3,694 3,612
Financial asset investments 2,113 3,526 3,288
Deferred tax
assets/(liabilities) (4,660) (4,640) (4,297)
Cash and cash equivalents 2,626 3,316 2,771
Other financial
assets/(liabilities) -
derivatives (490) (601) (1,121)
Other non-operating
assets/(liabilities) (739) (919) (864)
Other provisions (538) (387) (544)
Borrowings (13,961) (8,734) (13,995)
Net assets 26,957 25,171 21,756
(1) Segment assets at 30 June 2009 are operating assets and consist of
intangible assets of $3,108 million (30 June 2008: $1,597 million; 31 December
2008: $3,006 million), tangible assets of $34,237 million (30 June 2008:
$26,488 million; 31 December 2008: $29,545 million), biological assets of $3
million (30 June 2008: $3 million; 31 December 2008: $3 million), environmental
rehabilitation trusts of $292 million (30 June 2008: $235 million; 31 December
2008: $244 million), inventories of $3,165 million (30 June 2008: $2,719
million; 31 December 2008: $2,702 million), retirement benefit assets of $23
million (30 June 2008: $54 million; 31 December 2008: $32 million) and
operating receivables of $2,733 million (30 June 2008: $3,947 million; 31
December 2008:
$2,250 million).
(2) Segment liabilities at 30 June 2009 are operating liabilities and consist
of non-interest bearing current liabilities of $3,367 million (30 June 2008:
$3,591 million; 31 December 2008: $3,534 million), restoration and
decommissioning provisions of $1,079 million (30 June 2008: $951 million; 31
December 2008: $941 million) and retirement benefit obligations of $573 million
(30 June 2008: $585 million; 31 December 2008: $401 million).
(3) Investments in associates is split by segment as follows: Ferrous Metals
and Industries $1,308 million (30 June 2008: $1,020 million; 31 December 2008:
$1,121 million), Coal $808 million (30 June 2008: $769 million; 31 December
2008: $809 million), Platinum $306 million (30 June 2008: $59 million; 31
December 2008: $57 million), Diamonds $1,640 million (30 June 2008: $1,844
million; 31 December 2008: $1,623 million) and Industrial Minerals $2 million
(30 June 2008: $2 million; 31 December 2008: $2 million).
Entity wide information
The Group`s analysis of segment revenue by product (including attributable
share of revenue from associates) is as follows:
6 months ended 6 months ended Year ended
US$ million 30.06.09 30.06.08 31.12.08
Copper 1,403 2,698 3,639
Nickel 215 533 734
Zinc 171 281 467
Iron ore 1,135 990 2,281
Manganese 248 760 1,526
Steel products 732 937 1,927
Coal 2,414 2,816 6,412
Platinum 1,313 2,109 3,570
Palladium 145 286 531
Rhodium 234 721 1,632
Diamonds 770 1,684 3,096
Heavy building materials 1,370 2,445 4,399
Other 982 1,655 2,750
11,132 17,915 32,964
The Group`s geographical analysis of segment revenue (including attributable
share of revenue from associates) allocated based on the country in which the
customer is located, and non-current segment assets, allocated based on the
country in which the assets are located, is as follows:
Revenue
6 months ended 6 months ended Year ended
US$ million 30.06.09 30.06.08 31.12.08
South Africa 1,110 2,187 3,951
Other Africa 102 242 322
United Kingdom (Anglo
American plc`s country of
1,615 2,455 4,672
domicile)
Other Europe 2,230 4,106 7,279
US 194 361 856
Other North America 322 877 1,516
Brazil 288 881 1,423
Chile 480 889 1,398
Venezuela 2 6 8
Other South America 99 90 178
Australia 201 166 344
China 1,555 1,087 1,956
India 493 811 1,599
Japan 1,410 2,383 4,516
Other Asia 1,031 1,374 2,946
11,132 17,915 32,964
Non-current segment assets(1)
US$ million 30.06.09 30.06.08 31.12.08
South Africa 13,874 11,344 11,040
Other Africa 573 383 309
United Kingdom (Anglo American plc`s
country of
2,777 3,491 2,491
domicile)
Other Europe 702 879 712
US 107 49 92
Other North America 454 411 414
Brazil 10,994 4,095 10,468
Chile 3,829 2,981 3,448
Venezuela 454 463 462
Other South America 273 179 206
Australia 3,261 3,769 2,863
China 3 2 3
India - - -
Japan - - -
Other Asia 47 42 46
37,348 28,088 32,554
(1) Non-current segment assets are non-current operating assets and consist of
tangible assets, intangible assets and biological assets.
Segment revenue and operating profit/(loss) before special items and
remeasurements by origin (including attributable share of revenue and operating
profit from associates) has been provided for information:
Revenue
6 months ended 6 months ended Year ended
US$ million 30.06.09 30.06.08 31.12.08
South Africa 4,734 7,003 13,786
Other Africa 720 1,372 2,530
Europe 1,382 2,713 4,805
North America 225 350 705
South America 2,453 4,388 6,743
Australia and Asia 1,618 2,089 4,395
11,132 17,915 32,964
Operating profit/(loss) before special
items and remeasurements
6 months ended 6 months ended Year ended
US$ million 30.06.09 30.06.08 31.12.08
South Africa 974 2,656 5,107
Other Africa 37 303 467
Europe (63) 111 (183)
North America 10 18 (29)
South America 772 2,467 2,985
Australia and Asia 406 626 1,738
2,136 6,181 10,085
The Group`s geographical analysis of segment assets and liabilities, allocated
based on where assets and liabilities are located, has been provided for
information:
Segment assets(1)
US$ million 30.06.09 30.06.08 31.12.08
South Africa 16,952 14,399 13,540
Other Africa 643 433 364
Europe 4,390 5,891 4,045
North America 694 565 629
South America 16,902 9,228 15,688
Australia and Asia 3,980 4,527 3,516
43,561 35,043 37,782
Segment
liabilities
US$ million 30.06.09 30.06.08 31.12.08
South Africa (1,976) (1,971) (1,633)
Other Africa (52) (31) (30)
Europe (1,022) (1,293) (910)
North America (104) (146) (119)
South America (1,085) (965) (1,431)
Australia and Asia (780) (721) (753)
(5,019) (5,127) (4,876)
Net segment
assets
US$ million 30.06.09 30.06.08 31.12.08
South Africa 14,976 12,428 11,907
Other Africa 591 402 334
Europe 3,368 4,598 3,135
North America 590 419 510
South America 15,817 8,263 14,257
Australia and Asia 3,200 3,806 2,763
38,542 29,916 32,906
(1) Investments in associates are not included in segment assets. The
geographical distribution of these investments, based on the location of the
underlying assets, is as follows: South Africa $2,606 million (30 June 2008:
$2,424 million; 31 December 2008: $2,264 million), Other Africa $271 million
(30 June 2008: $198 million; 31 December 2008: $187 million), Europe $(66)
million (30 June 2008: $(25) million; 31 December 2008: $(56) million), North
America $75 million (30 June 2008: $45 million; 31 December 2008: $22 million),
South America $681 million (30 June 2008: $661 million; 31 December 2008:
$686 million) and Australia and Asia $497 million (30 June 2008: $391 million;
31 December 2008: $509 million).
4. Reconciliation of Underlying earnings to Profit for the financial period
attributable to equity shareholders of the Company
The table below analyses the contribution of each segment to the Group`s
operating profit (including attributable share of operating profit from
associates) for the financial period and Underlying earnings, which the
directors consider to be a useful additional measure of the Group`s
performance. A reconciliation from `Profit for the financial period
attributable to equity shareholders of the Company` to `Underlying earnings for
the financial period` is given in note 9.
Operating profit (including attributable share of operating profit from
associates) is reconciled to `Underlying earnings` and `Profit for the
financial period attributable to equity shareholders of the Company` in the
table below:
6 months ended 30.06.09
Operating Operating
profit/(loss) before profit/(loss) after Operating
special items and special items and special items and
remeasurements(1) remeasurements remeasurements(2)
US$
million
By
segment
Base
Metals 695 817 (122)
Ferrous
Metals
and
Industri
es 857 1,161 (304)
Coal 720 700 20
Platinum 8 15 (7)
Diamonds 4 92 (88)
Industrial Minerals 27 7 20
Exploration (70) (70) -
Corporate Activities and
Unallocated Costs (105) (129) 24
Total/Underlying
earnings 2,136 2,593 (457)
Underlying earnings adjustments 457
Profit for the financial period
attributable to equity shareholders
of the Company
Net profit on Financing
disposals(2) remeasurements(2)
US$ million
By segment
Base Metals - -
Ferrous Metals and Industries - -
Coal - -
Platinum - -
Diamonds - -
Industrial Minerals - -
Exploration - -
Corporate Activities and
Unallocated Costs - -
Total/Underlying earnings - -
Underlying earnings adjustments 1,441 (77)
Profit for the financial period
attributable to equity shareholders
of the Company
Net interest, tax
and minority
interests Total
US$ million
By segment
Base Metals (241) 454
Ferrous Metals and Industries (521) 336
Coal (215) 505
Platinum 22 30
Diamonds (71) (67)
Industrial Minerals (9) 18
Exploration 3 (67)
Corporate Activities and
Unallocated Costs (8) (113)
Total/Underlying earnings (1,040) 1,096(3)
Underlying earnings adjustments 53 1,874
Profit for the financial period
attributable to equity shareholders
of the Company 2,970
6 months ended 30.06.08
Operating Operating
profit/(loss) before profit/(loss) after Operating
special items and special items and special items and
remeasurements(1) remeasurements(2) remeasurements
US$ million
By segment
Base Metals 2,454 2,360 94
Ferrous Metals and
Industries 1,296 1,372 (76)
Coal 731 765 (34)
Platinum 1,467 1,467 -
Diamonds 328 315 13
Industrial Minerals 163 162 1
Exploration (98) (94) (4)
Corporate Activities and
Unallocated Costs (160) (184) 24
Total/Underlying earnings 6,181 6,163 18
Underlying earnings adjustments (18)
Profit for the financial period
attributable to equity shareholders
of the Company
Net profit on Financing
disposals(2) remeasurements(2)
US$ million
By segment
Base Metals - -
Ferrous Metals and Industries - -
Coal - -
Platinum - -
Diamonds - -
Industrial Minerals - -
Exploration - -
Corporate Activities and
Unallocated Costs - -
Total/Underlying earnings - -
Underlying earnings adjustments 643 200
Profit for the financial period
attributable to equity shareholders
of the Company
Net interest, tax
and minority
US$ million interests Total
By segment
Base Metals (960) 1,494
Ferrous Metals and Industries (591) 705
Coal (188) 543
Platinum (617) 850
Diamonds (162) 166
Industrial Minerals (24) 139
Exploration 5 (93)
Corporate Activities and
Unallocated Costs (161) (321)
(3)
Total/Underlying earnings (2,698) 3,483
Underlying earnings adjustments (27) 798
Profit for the financial period
attributable to equity shareholders
of the Company 4,281
Year ended 31.12.08
Operating Operating
profit/(loss) before profit/(loss) after Operating
special items and special items and special items and
US$ million remeasurements(1) remeasurements remeasurements(2)
By segment
Base Metals 2,505 2,153 352
Ferrous Metals and
Industries 2,935 2,320 615
Coal 2,240 2,221 19
Platinum 2,226 2,207 19
Diamonds 508 282 226
Industrial Minerals 228 137 91
Exploration (212) (162) (50)
Corporate Activities and
Unallocated Costs (345) (430) 85
Total/Underlying earnings 10,085 8,728 1,357
Underlying earnings adjustments (1,357)
Profit for the financial year
attributable to equity shareholders
of the Company
Net profit on Financing
US$ million disposals(2) remeasurements(2)
By segment
Base Metals - -
Ferrous Metals and Industries - -
Coal - -
Platinum - -
Diamonds - -
Industrial Minerals - -
Exploration - -
Corporate Activities and
Unallocated Costs - -
Total/Underlying earnings - -
Underlying earnings adjustments 1,027 36
Profit for the financial year
attributable to equity shareholders
of the Company
Net interest, tax
and minority
US$ million interests Total
By segment
Base Metals (1,136) 1,369
Ferrous Metals and Industries (1,539) 1,396
Coal (659) 1,581
Platinum (913) 1,313
Diamonds (252) 256
Industrial Minerals (55) 173
Exploration 12 (200)
Corporate Activities and
Unallocated Costs (306) (651)
(3)
Total/Underlying earnings (4,848) 5,237
Underlying earnings adjustments 272 (22)
Profit for the financial year
attributable to equity shareholders
of the Company 5,215
(1) Operating profit includes attributable share of 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.
(3) This represents Underlying earnings for the financial period and is equal
to profit for the financial period attributable to equity shareholders of the
Company before special items and remeasurements.
5. Exploration expenditure
Exploration expenditure is stated before special items.
6 months ended 6 months ended Year ended
US$ million 30.06.09 30.06.08 31.12.08
By segment
Base Metals 45 55 123
Ferrous Metals and
Industries 4 13 18
Coal 11 13 35
Platinum 10 17 36
70 98 212
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. Such items are material by nature or amount to the period`s results
and require separate disclosure in accordance with IAS 1 paragraph 97. 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 financial performance of
the Group. This category includes:
(i) unrealised gains and losses on `non-hedge` derivative instruments open at
period end (in respect of future transactions) and the reversal of the
historical marked to market value of such instruments settled in the period.
The full realised gains or losses are recorded in underlying earnings in the
same period as the underlying transaction for which such instruments provide an
economic, but not formally designated, hedge (if the underlying transaction is
recorded in the balance sheet, e.g. capital expenditure, the realised amount
remains in remeasurements on settlement of the derivative). Such amounts are
classified in the income statement as financing when the underlying exposure is
in respect of net debt and otherwise as operating.
(ii) foreign exchange gains and losses arising on the retranslation of dollar
denominated De Beers preference shares held by a rand functional currency
subsidiary of the Group. This is classified as financing.
(iii) foreign exchange impact arising in US dollar functional currency entities
where tax calculations are generated based on local currency financial
information (and hence deferred tax is susceptible to currency fluctuations).
Such amounts are included within income tax expense.
Subsidiaries and joint ventures` special items and remeasurements
Operating special items
6 months ended 6 months ended Year ended
US$ million 30.06.09 30.06.08 31.12.08
Impairment of Anglo
Ferrous Brazil
transshipping vessel (27) - -
Impairment of Tarmac
assets and restructuring
costs (19) (1) (91)
Impairment of Lisheen - - (78)
Impairment of Black
Mountain - - (62)
Impairment of Coal
Australia assets - - (40)
Reversal of impairment of
Silangan exploration asset - - 45
Costs associated with `One
Anglo` initiatives (39) (24) (72)
Anglo Coal restructuring
costs (18) - -
Provisions for onerous
contracts - - (39)
Costs associated with
proposed sale of Tarmac - - (3)
Other 16 3 (12)
Total operating special
items (87) (22) (352)
Tax 13 4 42
Minority interests 7 - 1
Net total attributable to
equity shareholders of the
Company (67) (18) (309)
Costs associated with `One Anglo` initiatives principally comprise advisory
costs associated with procurement, shared services and information systems.
Operating remeasurements
6 months ended 6 months ended Year ended
US$ million 30.06.09 30.06.08 31.12.08
Net gain/(loss) on
non-hedge derivatives 625 25 (659)
Net realised loss on
derivatives relating to
capital expenditure (169) - (120)
Total operating
remeasurements 456 25 (779)
Tax (142) (6) 252
Minority interests (2) 6 135
Net total attributable to
equity shareholders of the
Company 312 25 (392)
The net gain on non-hedge derivatives principally related to a net unrealised
gain on derivatives relating to capital expenditure held by Anglo Ferrous
Brazil and Los Bronces and an unrealised gain on an embedded derivative at
Minera Loma de NA-quel. A net loss of $169 million was realised in the period in
respect of these Anglo Ferrous Brazil and Los Bronces derivative portfolios.
Profits and (losses) on disposals
6 months ended 6 months ended Year ended
US$ million 30.06.09 30.06.08 31.12.08
Disposal of interest in
AngloGold Ashanti 1,139 - -
Disposal of interest in
Booysendal joint
venture(1) 247 - -
Disposal of interest in
Lebowa Platinum Mines
Limited (1) 42 - -
Disposal of interest in
China Shenhua Energy - 551 551
Disposal of interest in
Minera Santa Rosa SCM - - 142
Disposal of Northam
Platinum Limited - - 101
Copebras property
compensation - 96 96
Disposal of Tarmac Iberia - - 65
Disposal of Namakwa
Sands(1) - - 49
Other 14 (7) 5
Net profit on disposals 1,442 640 1,009
Tax (40) 1 (47)
Minority interests (65) (25) (43)
Net total attributable to
equity shareholders of the
Company 1,337 616 919
(1) See Disposals of subsidiaries and businesses note 16.
During the six months ended 30 June 2009 the Group sold its remaining
investment in AngloGold Ashanti for total proceeds of $1,770 million,
generating a profit on disposal of $1,139 million.
Ministerial approval for the sale of Anglo Platinum`s 50% interest in the
Booysendal joint venture to Mvelaphanda Resources Limited (Mvela) was received
in June 2009. Total consideration was $275 million (excluding transaction and
deal facilitation costs), of which $270 million was received in advance in the
prior year. $70 million of this remains in an escrow account pending
completion of documentation.
The sale of 51% of Anglo Platinum`s holding in Lebowa Platinum Mines Limited
(Lebowa) to Anooraq Resources Corporation (Anooraq) completed on 30 June 2009
for consideration of $336 million (excluding transaction and deal facilitation
costs). The fair value of the consideration was $220 million (excluding
transaction and deal facilitation costs).
Financing remeasurements
6 months ended Year ended
US$ million 6 months ended 30.06.09 30.06.08 31.12.08
Foreign exchange
(loss)/gain on De
Beers preference
shares (17) 18 28
Unrealised net
(loss)/gain on
non-hedge
derivatives
related to net
debt (60) 187 23
Total financing
remeasurements (77) 205 51
Tax (2) (7) -
Net total
attributable to
equity
shareholders of
the Company (79) 198 51
The unrealised net loss on non-hedge derivatives related to net debt
principally comprises an unrealised loss on an embedded interest rate
derivative.
Tax remeasurements
6 months ended 6 months ended Year ended
US$ million 30.06.09 30.06.08 31.12.08
Foreign currency
translation of deferred
tax balances 309 - (153)
Minority interests (11) - 52
Net total attributable to
equity shareholders of the
Company 298 - (101)
Total special items and remeasurements
6 months ended 6 months ended Year ended
US$ million 30.06.09 30.06.08 31.12.08
Total special items and
remeasurements before tax
and minority interests 1,734 848 (71)
Tax remeasurements 309 - (153)
Tax on special items and
remeasurements (171) (8) 247
Minority interests (71) (19) 145
Net total special items
and remeasurements
attributable to equity
shareholders of the
Company 1,801 821 168
Associates` operating special items and remeasurements
6 months ended 6 months ended Year ended
US$ million 30.06.09 30.06.08 31.12.08
Unrealised net gain/(loss)
on non-hedge derivatives 88 (17) (101)
Impairment of De Beers`
businesses - - (79)
Share of De Beers`
restructuring costs - - (37)
Share of De Beers` class
action payment and related
costs - (2) (3)
Other impairments - (2) (6)
Total associates`
operating special items
and remeasurements 88 (21) (226)
Tax (7) - 17
Minority interests (7) - 16
Net total associates`
operating special items
and remeasurements 74 (21) (193)
Associates` profits and (losses) on disposals
6 months ended 6 months ended Year ended
US$ million 30.06.09 30.06.08 31.12.08
Disposal of interests in W
illiamson, Cullinan and
Koffiefontein - - 15
Other (1) 3 3
Associates` net
(loss)/profit on disposals (1) 3 18
Associates` financing remeasurements
6 months ended 6 months ended Year ended
US$ million 30.06.09 30.06.08 31.12.08
Unrealised net loss on
non-hedge derivatives
related to net debt - (5) (15)
Total associates`
financing remeasurements - (5) (15)
Total associates` special items and remeasurements
6 months ended 6 months ended Year ended
US$ million 30.06.09 30.06.08 31.12.08
Total associates` special
items and remeasurements
before tax and minority
interests 87 (23) (223)
Tax (7) - 17
Minority interests (7) - 16
Net total associates`
special items and
remeasurements 73 (23) (190)
Operating special items and remeasurements
6 months ended 6 months ended Year ended
US$ million 30.06.09 30.06.08 31.12.08
Operating special items (87) (22) (352)
Operating remeasurements 456 25 (779)
Total operating special
items and remeasurements
(excluding associates) 369 3 (1,131)
Associates` operating
special items - (4) (125)
Associates` operating
remeasurements 88 (17) (101)
Total associates`
operating special items
and remeasurements 88 (21) (226)
Total operating special
items and remeasurements
(including associates) 457 (18) (1,357)
Operating special items
(including associates) (87) (26) (477)
Operating remeasurements
(including associates) 544 8 (880)
Total operating special
items and remeasurements
(including associates) 457 (18) (1,357)
7. Net finance (costs)/income
Finance costs and exchange gains/(losses) are presented net of effective cash
flow hedges for respective interest bearing and foreign currency borrowings.
The weighted average interest rate applicable to interest on general borrowings
capitalised was 8.7% (six months ended 30 June 2008: 12.6%; year ended 31
December 2008: 12.0%). Financing remeasurements are set out in note 6.
6 months ended 30.06.09
Before After
remeasure- remeasure-
US$ million ments ments
Investment income
Interest and other financial income 164 164
Expected return on defined benefit arrangements 75 75
Dividend income from financial asset investments 14 14
Total investment income 253 253
Interest expense
Amortisation of discount relating to provisions (17) (17)
Interest and other finance expense (441) (441)
Interest paid on convertible bond (10) (10)
Unwinding of discount on convertible bond (8) (8)
Interest on defined benefit arrangements (84) (84)
Dividend on redeemable preference shares - -
(560) (560)
Less: interest capitalised 156 156
Total interest expense (404) (404)
Other financing (losses)/gains
Net foreign exchange losses (31) (48)
Fair value (losses)/gains on derivatives - (60)
Net fair value (losses)/gains on fair value hedges (6) (6)
Other net fair value losses (10) (10)
Total other financing (losses)/gains (47) (124)
Net finance (costs)/income (198) (275)
6 months ended 30.06.08
Before After
remeasure- remeasure-
US$ million ments ments
Investment income
Interest and other financial income 156 156
Expected return on defined benefit arrangements 115 115
Dividend income from financial asset investments 29 29
Total investment income 300 300
Interest expense
Amortisation of discount relating to provisions (16) (16)
Interest and other finance expense (322) (322)
Interest paid on convertible bond - -
Unwinding of discount on convertible bond - -
Interest on defined benefit arrangements (108) (108)
Dividend on redeemable preference shares (6) (6)
(452) (452)
Less: interest capitalised 96 96
Total interest expense (356) (356)
Other financing (losses)/gains
Net foreign exchange losses (81) (63)
Fair value (losses)/gains on derivatives - 187
Net fair value (losses)/gains on fair value hedges 6 6
Other net fair value losses (28) (28)
Total other financing (losses)/gains (103) 102
Net finance (costs)/income (159) 46
Year ended 31.12.08
Before After
remeasure- remeasure-
US$ million ments ments
Investment income
Interest and other financial income 324 324
Expected return on defined benefit arrangements 215 215
Dividend income from financial asset investments 50 50
Total investment income 589 589
Interest expense
Amortisation of discount relating to provisions (33) (33)
Interest and other finance expense (815) (815)
Interest paid on convertible bond - -
Unwinding of discount on convertible bond - -
Interest on defined benefit arrangements (201) (201)
Dividend on redeemable preference shares (16) (16)
(1,065) (1,065)
Less: interest capitalised 215 215
Total interest expense (850) (850)
Other financing (losses)/gains
Net foreign exchange losses (173) (145)
Fair value (losses)/gains on derivatives (2) 21
Net fair value (losses)/gains on fair value hedges 2 2
Other net fair value losses (18) (18)
Total other financing (losses)/gains (191) (140)
Net finance (costs)/income (452) (401)
8. Tax on profit on ordinary activities
a) Analysis of charge for the period
6 months ended 6 months ended Year ended
US$ million 30.06.09 30.06.08 31.12.08
United Kingdom corporation
tax at 28% 7 - -
United Kingdom corporation
tax at 28.5% - 25 18
South Africa tax 276 438 840
Other overseas tax 281 966 1,155
Prior year adjustments (31) (15) (78)
Current tax (excluding
special items and
remeasurements tax) 533 1,414 1,935
Deferred tax (excluding
special items and
remeasurements tax) (40) 168 610
Tax (excluding special
items and remeasurements
tax) 493 1,582 2,545
Special items and
remeasurements tax (138) 8 (94)
Income tax expense 355 1,590 2,451
b) Factors affecting tax charge for the period
The effective tax rate for the period of 9.8% (six months ended 30 June 2008:
24.6%; year ended 31 December 2008: 28.6%) is lower than the applicable
standard rate of corporation tax for 2009 in the United Kingdom (28%) (2008:
28.5%).
The reconciling items are:
6 months ended 6 months ended Year ended
US$ million 30.06.09 30.06.08(1) 31.12.08
Profit on ordinary
activities before tax 3,626 6,468 8,571
Tax on profit on ordinary
activities calculated at
United Kingdom corporation
tax rate of 28% 1,015 - -
Tax on profit on ordinary
activities calculated at
United Kingdom corporation
tax rate of 28.5% - 1,843 2,443
Tax effect of share of net
income from associates (74) (188) (317)
Tax effects of:
Special items and
remeasurements
Operating special items
and remeasurements 26 1 28
Profits and losses on
disposals and financing
remeasurements (340) (235) (255)
Tax remeasurements (309) - 153
Items not
taxable/deductible for tax
purposes
Exploration expenditure 13 7 20
Non-taxable/deductible net
foreign exchange
(gain)/loss (4) 4 28
Non-taxable/deductible net
interest (income)/expense (10) (4) 10
Other non-deductible
expenses 30 55 127
Other non-taxable income (13) (32) (78)
Temporary difference
adjustments
Changes in tax rates - (84) (84)
Movements in tax losses 49 - 38
Enhanced tax depreciation - - (26)
Other temporary differences 10 (10) 42
Other adjustments
Secondary tax on companies
and dividend withholding
taxes 53 395 634
Effect of differences
between local and United
Kingdom rates (49) (173) (181)
Prior year adjustments to
current tax (31) (15) (78)
Other adjustments (11) 26 (53)
Income tax expense 355 1,590 2,451
(1) Comparatives have been reclassified to align with current presentation.
IAS 1 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 income tax expense. Associates` tax included within `Share of net
income from associates` for the six months ended 30 June 2009 is $137 million
(six months ended 30 June 2008: $313 million; year ended 31 December 2008: $606
million). Excluding special items and remeasurements this becomes $130 million
(six months ended 30 June 2008: $313 million; year ended 31 December 2008: $623
million).
The effective rate of tax before special items and remeasurements including
attributable share of associates` tax for the six months ended 30 June 2009 was
31.8%. This was broadly in line with the equivalent effective rate of 31.7% in
the six months ended 30 June 2008. In future periods it is expected that the
effective tax rate, including associates` tax, will remain above the United
Kingdom statutory tax rate.
9. Earnings per share
6 months Year
6 months ended ended ended
US$ 30.06.09 30.06.08 31.12.08
Profit for the financial period
attributable to equity
shareholders of the Company
Basic earnings per share 2.47 3.56 4.34
Diluted earnings per share 2.42 3.51 4.29
Headline earnings for the
financial period(1)
Basic earnings per share 1.37 3.04 3.78
Diluted earnings per share 1.34 3.00 3.74
Underlying earnings for the
financial period(1)
Basic earnings per share 0.91 2.90 4.36
Diluted earnings per share 0.90 2.85 4.31
(1) Basic and diluted earnings per share are shown based on Headline earnings,
a Johannesburg stock exchange (JSE Limited) defined performance measure, and
Underlying earnings, which the directors consider to be a useful additional
measure of the Group`s performance. Both earnings measures are further
explained below.
The calculation of basic and diluted earnings per share is based on the
following data:
6 months ended 6 months ended Year ended
US$ million (unless
otherwise stated) 30.06.09 30.06.08 31.12.08
Basic and diluted earnings
Profit for the financial
period attributable to
equity shareholders of the
Company 2,970 4,281 5,215
Effect of dilutive
potential ordinary shares
Interest paid on
convertible bond (net of
tax) 7 - -
Unwinding of discount on
convertible bond (net of
tax) 6 - -
Diluted earnings 2,983 4,281 5,215
Number of shares (million)
Basic number of ordinary
shares outstanding(1) 1,201 1,203 1,202
Effect of dilutive
potential ordinary
shares(2)
Share options and awards 14 17 13
Convertible bond 18 - -
Diluted number of ordinary
shares outstanding(1) 1,233 1,220 1,215
(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 shares held by employee benefit trusts and Anglo American plc shares
held by Group companies.
(2) Diluted earnings per share is calculated by adjusting the weighted average
number of ordinary shares in issue on the assumption of conversion of all
potentially dilutive ordinary shares.
All outstanding share options and awards are potentially dilutive and
have been included in the calculation of diluted earnings per share. In
all periods presented no instruments are anti-dilutive.
In 2008 share buybacks took place which had an impact on the weighted average
number of ordinary shares at 30 June 2008 and 31 December 2008.
In April 2009 the Group issued a $1.7 billion convertible bond. The convertible
bond has a coupon of 4%, a conversion price of ?18.6370 and unless redeemed,
converted or cancelled, will mature in 2014. The Group will have the option to
call the convertible bond after the first three years subject to certain
conditions.
Underlying earnings is an alternative earnings measure, which the directors
believe provides a clearer picture of the underlying financial performance of
the Group`s operations. Underlying earnings is presented after minority
interests and excludes special items and remeasurements (see note 6).
Underlying earnings is distinct from `Headline earnings`, which is a JSE
Limited defined performance measure.
The calculation of basic and diluted earnings per share, based on Headline and
Underlying earnings, uses the following earnings data:
Earnings (US$ million)
6 months 6 months Year
ended ended ended
30.06.09 30.06.08 31.12.08
Profit for the financial period
attributable to equity shareholders of
the Company 2,970 4,281 5,215
Operating special items 16 (2) 209
Operating special items - tax - - (27)
Operating special items - minority
interests (7) - (1)
Net profit on disposals (1,442) (640) (1,009)
Net profit on disposals - tax 40 (1) 47
Net profit on disposals - minority
interests 65 25 43
Associates` special items 1 (1) 67
Associates` special items - tax - - (1)
Associates` special items - minority
interests - - (2)
Headline earnings for the financial
period 1,643 3,662 4,541
Operating special items(1) 71 24 143
Operating special items - tax (13) (4) (15)
Operating remeasurements (456) (25) 779
Operating remeasurements - tax 142 6 (252)
Operating remeasurements - minority
interests 2 (6) (135)
Financing remeasurements 77 (205) (51)
Financing remeasurements - tax 2 7 -
Tax remeasurements (309) - 153
Tax remeasurements - minority interests 11 - (52)
Associates` special items(2) - 2 40
Associates` special items - tax - - (7)
Associates` special items - minority
interests - - (5)
Associates` remeasurements (88) 22 116
Associates` remeasurements - tax 7 - (9)
Associates` remeasurements - minority
interests 7 - (9)
Underlying earnings for the financial
period 1,096 3,483 5,237
Basic earnings per share (US$)
6 months 6 months Year
ended ended ended
30.06.09 30.06.08 31.12.08
Profit for the financial period
attributable to equity shareholders of
the Company 2.47 3.56 4.34
Operating special items 0.01 - 0.17
Operating special items - tax - - (0.02)
Operating special items - minority
interests - - -
Net profit on disposals (1.20) (0.54) (0.84)
Net profit on disposals - tax 0.03 - 0.04
Net profit on disposals - minority
interests 0.06 0.02 0.04
Associates` special items - - 0.05
Associates` special items - tax - - -
Associates` special items - minority
interests - - -
Headline earnings for the financial
period 1.37 3.04 3.78
Operating special items(1) 0.06 0.02 0.12
Operating special items - tax (0.01) - (0.01)
Operating remeasurements (0.38) (0.02) 0.65
Operating remeasurements - tax 0.12 - (0.21)
Operating remeasurements - minority
interests - - (0.11)
Financing remeasurements 0.07 (0.17) (0.04)
Financing remeasurements - tax - 0.01 -
Tax remeasurements (0.26) - 0.12
Tax remeasurements - minority interests 0.01 - (0.04)
Associates` special items(2) - - 0.03
Associates` special items - tax - - (0.01)
Associates` special items - minority
interests - - -
Associates` remeasurements (0.07) 0.02 0.10
Associates` remeasurements - tax - - (0.01)
Associates` remeasurements - minority
interests - - (0.01)
Underlying earnings for the financial
period 0.91 2.90 4.36
(1) Six months ended 30 June 2009 includes costs associated with `One Anglo`
initiatives and restructuring costs in Tarmac and Anglo Coal. Six months ended
30 June 2008 includes costs associated with `One Anglo` initiatives. Year ended
31 December 2008 includes costs associated with `One Anglo` initiatives, Tarmac
restructuring costs and costs associated with proposed sale of Tarmac as well
as provisions for onerous contracts.
(2) Includes restructuring costs and legal settlements.
10. Called-up share capital
30.06.09
Number of US$
shares million
Authorised:
5% cumulative preference shares of ?1
each 50,000 -
Ordinary shares of 54-86/91 US cents each 1,820,000,000 1,000
1,000
Called-up, allotted and fully paid:
5% cumulative preference shares of ?1
each 50,000 -
Ordinary shares of 54-86/91 US cents each 1,342,924,336 738
738
30.06.08
Number of US$
shares million
Authorised:
5% cumulative preference shares of ?1
each 50,000 -
Ordinary shares of 54-86/91 US cents each 1,820,000,000 1,000
1,000
Called-up, allotted and fully paid:
5% cumulative preference shares of ?1
each 50,000 -
Ordinary shares of 54-86/91 US cents each 1,342,915,273 738
738
31.12.08
Number of US$
shares million
Authorised:
5% cumulative preference shares of ?1
each 50,000 -
Ordinary shares of 54-86/91 US cents each 1,820,000,000 1,000
1,000
Called-up, allotted and fully paid:
5% cumulative preference shares of ?1
each 50,000 -
Ordinary shares of 54-86/91 US cents each 1,342,919,020 738
738
In the six months ended 30 June 2009, 5,316 ordinary shares of 5486/91 US cents
each were allotted to certain non- executive directors by subscription of their
after tax directors` fees (six months ended 30 June 2008: 3,376 ordinary
shares; year ended 31 December 2008: 7,123 ordinary shares).
In the six months ended 30 June 2009, nil ordinary shares of 5486/91 US cents
each were purchased by the Company and held in treasury (six months ended 30
June 2008: nil ordinary shares; year ended 31 December 2008: 5,649,992 ordinary
shares).
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. Consolidated equity analysis
Fair value and other reserves comprise:
Convertible Available for Cash flow
US$ million debt reserve sale reserve hedge reserve
Balance at 1 January 2008 - 2,373 (304)
Total comprehensive income - (785) (149)
Balance at 30 June 2008 - 1,588 (453)
Total comprehensive income - (500) 259
Other - - -
Balance at 31 December 2008 - 1,088 (194)
Total comprehensive income - (881) 113
Issue of convertible bond 355 - -
Balance at 30 June 2009 355 207 (81)
Total fair value
US$ million Other reserves(1) and other reserves
Balance at 1 January 2008 804 2,873
Total comprehensive income - (934)
Balance at 30 June 2008 804 1,939
Total comprehensive income - (241)
Other 34 34
Balance at 31 December 2008 838 1,732
Total comprehensive income - (768)
Issue of convertible bond - 355
Balance at 30 June 2009 838 1,319
(1) Other reserves comprise a legal reserve of $689 million (30 June 2008: $689
million; 31 December 2008: $689 million), a revaluation reserve of $34 million
(30 June 2008: nil; 31 December 2008: $34 million) and a capital redemption
reserve of $115 million (30 June 2008: $115 million; 31 December 2008: $115
million).
An analysis of Deferred tax and Tax on items transferred from equity by
individual related item of recognised income and expense presented in the
Consolidated statement of comprehensive income is presented below:
6 months ended 6 months ended Year ended
US$ million 30.06.09 30.06.08 31.12.08
Deferred tax
Revaluation of available
for sale investments (77) 14 79
Cash flow hedges (24) 95 56
Actuarial net loss on post
retirement benefit schemes 31 40 32
Net deferred tax
recognised directly in
equity (70) 149 167
Tax on items transferred
from equity
Transferred to income
statement: sale of
available for sale
investments 136 - -
Transferred to income
statement: cash flow
hedges 2 (20) (94)
Transferred to initial
carrying amount of hedged
items: cash flow hedges (8) - -
Net tax on total
transferred from equity 130 (20) (94)
12. Consolidated cash flow analysis
a) Reconciliation of profit before tax to cash inflows from operations
6 months ended 6 months ended Year ended
US$ million 30.06.09 30.06.08 31.12.08
Profit before tax 3,626 6,468 8,571
Depreciation and
amortisation 734 742 1,509
Share-based payment charges 117 108 155
Net profit on disposals (1,442) (640) (1,009)
Remeasurements (379) (230) 728
Non-cash element of
operating special items 18 18 284
Net finance costs before
remeasurements 198 159 452
Share of net income from
associates (266) (658) (1,113)
Provisions (33) (67) 46
Increase in inventories (37) (524) (999)
(Increase)/decrease in
operating receivables (202) (1,162) 80
(Decrease)/increase in
operating payables (597) 624 896
Other adjustments (61) (7) (21)
Cash inflows from
operations 1,676 4,831 9,579
b) Reconciliation to the balance sheet
Cash and cash equivalents(1)
US$ million 30.06.09 30.06.08 31.12.08
Balance sheet 2,626 3,316 2,771
Balance sheet - disposal groups(2) - 52 8
Bank overdrafts (23) (23) (35)
Net debt classifications 2,603 3,345 2,744
Short term borrowings
US$ million 30.06.09 30.06.08 31.12.08
Balance sheet (3,304) (3,969) (6,784)
Balance sheet - disposal groups(2) - (34) -
Bank overdrafts 23 23 35
Net debt classifications (3,281) (3,980) (6,749)
Medium and long term borrowings
US$ million 30.06.09 30.06.08 31.12.08
Balance sheet (10,657) (4,765) (7,211)
Balance sheet - disposal groups(2) - - -
Bank overdrafts - - -
Net debt classifications (10,657) (4,765) (7,211)
(1) `Short term borrowings` on the balance sheet include overdrafts which are
included within cash and cash equivalents in determining net debt.
(2) Disposal group balances are shown within `Assets classified as held for
sale` and `Liabilities directly associated with assets classified as held for
sale` on the balance sheet.
c) Movement in net debt
Cash and Debt due
cash within
equivalents(1) one year
US$ million
Balance at 1 January 2008 3,074 (5,909)
Cash flow 287 2,019
Acquisition of businesses - (9)
Reclassifications - (133)
Movement in fair value - (11)
Other non-cash movements - -
Currency movements (16) 63
Balance at 30 June 2008 3,345 (3,980)
(430) (3,451)
Cash flow
Acquisition of businesses - (200)
Reclassifications - 323
Movement in fair value - -
Other non-cash movements - -
Currency movements (171) 559
Balance at 31 December 2008 2,744 (6,749)
Cash flow(4) (286) 4,150
Unwinding of discount on convertible bond - -
Equity component of convertible bond - -
Reclassifications - (412)
Movement in fair value - -
Other non-cash movements - (1)
Currency movements 145 (269)
Balance at 30 June 2009 2,603 (3,281)
Debt due Current
after financial asset
one year investments(2)
US$ million
Balance at 1 January 2008 (2,404) -
Cash flow (2,777) -
Acquisition of businesses (85) -
Reclassifications 133 -
Movement in fair value 183 -
Other non-cash movements 5 -
Currency movements 180 -
Balance at 30 June 2008 (4,765) -
(2,404) 210
Cash flow
Acquisition of businesses (376) -
Reclassifications (323) -
Movement in fair value (359) -
Other non-cash movements (20) -
Currency movements 1,036 (37)
Balance at 31 December 2008 (7,211) 173
Cash flow(4) (3,636) (200)
Unwinding of discount on convertible bond (8) -
Equity component of convertible bond 355 -
Reclassifications 412 -
Movement in fair value 45 -
Other non-cash movements (31) -
Currency movements (583) 27
Balance at 30 June 2009 (10,657) -
Net debt
excluding
hedges Hedges(3)
US$ million
Balance at 1 January 2008 (5,239) 388
Cash flow (471) (380)
Acquisition of businesses (94) -
Reclassifications - -
Movement in fair value 172 (79)
Other non-cash movements 5 -
Currency movements 227 -
Balance at 30 June 2008 (5,400) (71)
(6,075) -
Cash flow
Acquisition of businesses (576) -
Reclassifications - -
Movement in fair value (359) (226)
Other non-cash movements (20) -
Currency movements 1,387 -
Balance at 31 December 2008 (11,043) (297)
Cash flow(4) 28 -
Unwinding of discount on convertible bond (8) -
Equity component of convertible bond 355 -
Reclassifications - -
Movement in fair value 45 30
Other non-cash movements (32) -
Currency movements (680) -
Balance at 30 June 2009 (11,335) (267)
Total net debt
including
hedges
US$ million
Balance at 1 January 2008 (4,851)
Cash flow (851)
Acquisition of businesses (94)
Reclassifications -
Movement in fair value 93
Other non-cash movements 5
Currency movements 227
Balance at 30 June 2008 (5,471)
(6,075)
Cash flow
Acquisition of businesses (576)
Reclassifications -
Movement in fair value (585)
Other non-cash movements (20)
Currency movements 1,387
Balance at 31 December 2008 (11,340)
Cash flow(4) 28
Unwinding of discount on convertible bond (8)
Equity component of convertible bond 355
Reclassifications -
Movement in fair value 75
Other non-cash movements (32)
Currency movements (680)
Balance at 30 June 2009 (11,602)
(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 a material
effect on the Group`s ability to meet its ongoing obligations.
(2) Relates to amounts invested in unlisted preference shares (guaranteed by
Nedbank Limited and Nedbank Group Limited) pending completion of the disposal
of the Group`s 50% interest in the Booysendal joint venture. This amount was
received upon completion of the transaction in June 2009.
(3) Derivative instruments that provide an economic hedge of assets and
liabilities in net debt are included above to reflect the true net debt
position of the Group at the period end. These consist of net current
derivative liabilities of $27 million (30 June 2008: $83 million net assets; 31
December 2008: $437 million net liabilities) and net non-current derivative
liabilities of $240 million (30 June 2008: $154 million net liabilities; 31
December 2008: $140 million net assets) which are classified within other
financial assets and other financial liabilities respectively on the balance
sheet.
(4) The issue of the convertible bond had a net impact on debt due after one
year of $1,330 million due to the conversion feature of $355 million which is
presented separately in equity.
13. Financial liabilities analysis
An analysis of borrowings is set out below:
30.06.09
Due Due
within after
one one
US$ million year(1) year Total
Secured
Bank loans and overdrafts 380 441 821
Obligations under finance leases 5 10 15
Other loans - 2 2
385 453 838
Unsecured
Bank loans and overdrafts 2,363 3,636 5,999
Bonds issued under EMTN
programme 92 2,757 2,849
US bond - 1,948 1,948
Convertible bond(2) - 1,338 1,338
Commercial paper 419 - 419
Obligations under finance leases 2 7 9
Other loans 43 518 561
2,919 10,204 13,123
Total 3,304 10,657 13,961
31.12.08
Due Due
within after
one one Total
US$ million year year
Secured
Bank loans and overdrafts 346 678 1,024
Obligations under finance leases 12 56 68
Other loans - - -
358 734 1,092
Unsecured
Bank loans and overdrafts 5,114 3,335 8,449
Bonds issued under EMTN
programme 154 2,679 2,833
US bond - - -
Convertible bond(2) - - -
Commercial paper 1,116 - 1,116
Obligations under finance leases 4 13 17
Other loans 38 450 488
6,426 6,477 12,903
Total 6,784 7,211 13,995
(1) Bank loans and overdrafts due within one year include short term borrowings
under long term committed facilities of $0.9 billion (31 December 2008: $2.8
billion).
(2) Represents the fair value of the debt component of the convertible bond at
the date of issue adjusted for unwind of discount. The fair value of the equity
conversion feature is presented in equity (refer to the Consolidated statement
of changes in equity).
The Group had the following undrawn committed borrowing facilities at the
period end:
US$ million 30.06.09 31.12.08
Expiry date
Within one year(1) 1,838 2,994
Greater than one year, less than two years 1,376 5
Greater than two years, less than five years 4,490 3,081
Greater than five years 199 25
7,903 6,105
(1) Includes undrawn rand facilities equivalent to $1.5 billion (31 December
2008: $0.9 billion) in respect of a series of facilities with 364 day
maturities which roll automatically on a daily basis, unless notice is served.
In addition, the Group has a dedicated, committed financing facility for
Minas-Rio of $1.2 billion, available subject to certain disbursement
conditions.
The Group also had a $2 billion European Commercial Paper Programme established
in October 2004. Drawings of $28 million were made at 30 June 2009 (31 December
2008: $304 million). The Group also had a Rand 20 billion South African Medium
Term Note Programme, established in November 2007, on which total drawings of
Rand 3,230 million ($417 million) were made at 30 June 2009 (31 December 2008:
Rand 7,273 million ($782 million)). Of this drawing Rand 3,030 million ($391
million) was issued as commercial paper (31 December 2008: Rand 7,074 million
($761 million)).
Since 31 December 2008 the Group has raised $2 billion in the US market
pursuant to Rule 144A and Regulation S of the Securities Act 1933 and $1.7
billion through the issue of a convertible bond. The US offering comprised
$1,250 million 9.375% senior notes due in 2014 and $750 million 9.375% senior
notes due in 2019. The convertible bond has a coupon of 4%, a conversion price
of ?18.6370 and unless redeemed, converted or cancelled, will mature in 2014.
The Group will have the option to call the convertible bond after the first
three years subject to certain conditions. The proceeds from the sale of
AngloGold Ashanti (refer to note 6) and bonds have been used to prepay the $3
billion revolving bank facility which was due to mature in December 2009, fund
capital expenditure and repay other short term debt owing on Group facilities.
In the year ended 31 December 2008 the Group issued $2,404 million of bonds
under the EMTN programme. All notes are guaranteed by Anglo American plc.
14. EBITDA by segment
6 months ended 6 months ended Year ended
US$ million 30.06.09 30.06.08 31.12.08
By segment
Base Metals 857 2,623 2,845
Ferrous Metals and
Industries 914 1,359 3,064
Coal 898 900 2,585
Platinum 284 1,714 2,732
Diamonds 75 397 665
Industrial Minerals 122 291 487
Exploration (70) (98) (212)
Corporate Activities and
Unallocated Costs (95) (148) (319)
EBITDA 2,985 7,038 11,847
EBITDA is stated before special items and remeasurements and is reconciled to
operating profit, including attributable share of associates, before special
items and remeasurements and to `Total profit from operations and associates`
as follows:
US$ million 6 months ended 6 months ended Year ended
30.06.09 30.06.08 31.12.08
Total profit from
operations and associates 3,901 6,422 8,972
Operating special items
and remeasurements
(including associates) (457) 18 1,357
Net profit on disposals
(including associates) (1,441) (643) (1,027)
Associates` financing
remeasurements - 5 15
Share of associates`
interest, tax and minority
interests 133 379 768
Operating profit,
including associates,
before special items and
remeasurements 2,136 6,181 10,085
Depreciation and
amortisation: subsidiaries
and joint ventures 734 742 1,509
Depreciation and
amortisation: associates 115 115 253
EBITDA 2,985 7,038 11,847
EBITDA is reconciled to `Cash inflows from operations` as follows:
6 months ended 6 months ended Year ended
US$ million 30.06.09 30.06.08 31.12.08
EBITDA 2,985 7,038 11,847
Share of operating profit
of associates before
special items and
remeasurements (312) (1,060) (2,104)
Cash element of operating
special items (69) (4) (68)
Depreciation and
amortisation in associates (115) (115) (253)
Share-based payment charges 117 108 155
Provisions (33) (67) 46
Increase in inventories (37) (524) (999)
(Increase)/decrease in
operating receivables (202) (1,162) 80
(Decrease)/increase in
operating payables (597) 624 896
Other adjustments (61) (7) (21)
Cash inflows from
operations 1,676 4,831 9,579
15. Acquisitions
Acquisition of subsidiaries
The Group made no material acquisitions of subsidiaries in the six months ended
30 June 2009.
In the six months ended 30 June 2009 provisional fair value principally
includes provisional adjustments to the fair value of assets acquired and
liabilities assumed in the Anglo Ferrous Brazil SA acquisition, including the
recognition of provisions in respect of certain power arrangements.
The carrying value and fair value of the net assets at the date of acquisition
of a controlling interest and related net cash outflows are shown below. The
fair values presented are provisional and will be finalised when the final fair
values arising from the fair value assessments are confirmed.
6 months ended 6 months ended Year ended
30.06.09 30.06.08 31.12.08
Total Total Total
carrying provisional Total provisional
US$ million value fair value fair value fair value
Net assets
acquired
Tangible
assets 1 (4) 55 997
Other
non-current
assets - - 1 109
Current
assets 2 4 62 457
Current
liabilities (1) (8) (29) (314)
Non-current
liabilities - (11) (46) (547)
Minority
interests - - - (230)
2 (19) 43 472
Add: Value
attributable
to reserves
and
resources
acquired,
net of
deferred
tax(1) 21 83 1,649
Fair value
of net
assets
acquired 2 126 2,121
Goodwill
arising on
acquisitions 2 70 1,610
Total cost
of
acquisitions 4 196 3,731
Satisfied by
Net cash
acquired - 9 255
Net cash
paid(2) 4 187 3,476
(1) Represents the Group`s share of value (implicit in the transaction) of
reserves and resources, capitalised within tangible assets.
(2) Represents net cash paid to acquire a controlling interest and therefore
excludes $63 million paid to acquire minority interests in existing
subsidiaries (six months ended 30 June 2008: $578 million;
year ended 31 December 2008: $2,411 million). In the six months ended 30 June
2009 this principally related to Anglo Ferrous Brazil SA (six months ended 30
June 2008: Anglo Platinum Limited; year ended 31 December 2008: Anglo Ferrous
Brazil SA and Anglo Platinum Limited). When totalled with net cash paid to
acquire control, the net cash paid for acquisition of subsidiaries in the six
months ended 30 June 2009 is $67 million (six months ended 30 June 2008: $765
million; year ended 31 December 2008: $5,887 million).
In the six months ended 30 June 2008 the Group purchased 3,833,029 shares and
in the year ended 31 December 2008 7,941,964 shares in Anglo Platinum Limited
for total consideration of $617 million and $1,108 million, respectively. The
cash paid in the six months ended 30 June 2008 was $578 million and in the year
ended 31 December 2008 was $1,113 million. At 30 June 2009 the Group`s
shareholding in Anglo Platinum Limited was 79.8% (30 June 2008: 77.9%;
31 December 2008: 79.6%). The increase in the Group`s shareholding since year
end is due to treasury shares purchased by Anglo Platinum in the period.
On 5 August 2008 the Group acquired a 63.3% shareholding in Anglo Ferrous
Brazil SA, which holds a 51% interest in the Minas-Rio iron ore project
(Minas-Rio) and a 70% interest in the Amapa iron ore system (Amapa) at a price
of R$28.147 ($18.056) per share. At that time the Group committed to extend the
offer to the minority shareholders of Anglo Ferrous Brazil SA. This offer was
formally made on 31 October 2008 and remained open through the first quarter of
2009, resulting in a Group shareholding in Anglo Ferrous Brazil SA at 30 June
2009 of 99.9% (31 December 2008: 98.9%).
Total cash paid to acquire a controlling interest was $3.5 billion. In 2008, a
further $2.0 billion (including cash settlement of a related derivative
instrument ($0.7 billion)) was paid to acquire minority interests. In the six
months ended 30 June 2009 $43 million cash was paid to acquire further minority
interests. These transactions followed on from the acquisition in 2007 of a 49%
interest in each of Minas-Rio and LLX Minas-Rio, which owns the Port of AAu. As
a result of these transactions the Group`s effective shareholding in each of
the operating entities at 30 June 2009 was 100% in Minas-Rio, 49% in LLX
Minas-Rio and 70% in Amapa (31 December 2008: 99.4% in Minas-Rio, 49% in LLX
Minas-Rio and 69.2% in Amapa).
Acquisition of material joint ventures
The Group made no material acquisitions of joint ventures in the six months
ended 30 June 2009 (six months ended 30 June 2008: one; year ended 31 December
2008: one).
The total fair value of the net assets at the date of acquisition and related
net cash outflow for prior period material joint venture acquisitions are shown
below:
6 months ended Year ended
US$ million 30.06.08(1) 31.12.08(1)
Net assets acquired
Tangible assets
Value attributable to reserves and resources
acquired 1,569 835
Other tangible assets 108 108
Other non-current assets 13 -
Current assets 41 41
Current liabilities (37) (37)
Non-current liabilities (486) (97)
Fair value of net assets acquired and total
cost of acquisitions 1,208 850
Satisfied by
Net cash acquired 1 1
Deferred consideration 600 242
Net cash paid(2) 607 607
(1) Relates to the acquisition of Foxleigh and fair value adjustments on the
acquisition of a 49% interest in Minas-Rio (which took place in 2007). During
2008 further consideration of $284 million (which is contingent on certain
criteria being met) was recognised in respect of the acquisition of a 49%
interest in Minas-Rio. This was reduced from the $600 million recognised in the
six months ended 30 June 2008, as a result of a change in the assumptions with
regards to payment and purchase of an additional interest in Minas-Rio,
together with an adjustment to the net deferred tax liability recognised to
reflect the future tax benefit from cash payments made on acquisition. These
adjustments resulted in amendments to the `Value attributable to reserves and
resources acquired` and deferred tax in the acquisition balance sheet.
(2) In the year ended 31 December 2008 there was further net cash paid of $2
million for other joint venture acquisitions. This resulted in total net cash
paid for investments in joint ventures in the year ended 31 December 2008 of
$609 million.
On 29 February 2008 Anglo Coal Australia completed the acquisition of a 70%
interest in the Foxleigh joint venture in Queensland, Australia. The total cost
of acquisition was $606 million. The Group has proportionately consolidated 70%
of Foxleigh from 29 February 2008.
16. Disposals of subsidiaries and businesses
During the six months ended 30 June 2009 the Group disposed of a 50% interest
in the Booysendal joint venture and a 51% interest in Lebowa (and certain other
joint venture projects). The disposal of Booysendal to Mvela took place on 24
June 2009. Total consideration was $275 million (excluding transaction and deal
facilitation costs), of which $270 million was received in advance in the prior
year (invested in unlisted preference shares and an escrow account).
Upon completion of the transaction the preference shares were sold whilst $70
million remains in an escrow account pending completion of documentation. The
disposal of Lebowa to Anooraq was completed on 30 June 2009 for total
consideration of $336 million (excluding transaction and deal facilitation
costs). The fair value of the consideration was $220 million (excluding
transaction and deal facilitation costs). At 30 June 2009 the Group held a 49%
interest in Lebowa and commenced equity accounting for Lebowa from that date.
These transactions were part of previously announced black economic empowerment
deals. There were no other disposals in the period.
6 months ended Year ended
US$ million 30.06.09 31.12.08
Net assets disposed
Tangible assets 336 479
Other non-current assets - 43
Current assets 11 210
Current liabilities (24) (83)
Non-current liabilities (64) (113)
Net assets 259 536(1)
Minority interests - (116)
Group`s share of net assets immediately prior
to disposal 259 420
Less: Retained investments in associates (125) -
Net assets disposed 134 420
Cumulative translation differences recycled
from reserves - (2)
Net gain on disposals 289 119
Net sale proceeds 423 537
Proceeds received in prior period(2) (270) -
Non-cash consideration(3) (186) -
Proceeds received after period end (39) -
Costs accrued 31 4
Deal facilitation charges 41 -
Deferred consideration - (56)
Net cash and cash equivalents disposed (9) (4)
Realised foreign exchange - (13)
Net cash (outflow)/inflow from disposals (9)(4) 468
(1) Includes net assets of $79 million no longer consolidated following loss of
control of a subsidiary.
(2) A portion of the proceeds were invested in unlisted preference shares when
received. Following completion of the transaction these were sold and $200
million is included in the Consolidated cash flow statement within
`Proceeds from sale of financial asset investments`.
(3) Represents preference shares in Anooraq and Plateau Resources
(Proprietary) Limited.
(4) Net cash of $10 million has been received in the six months ended 30 June
2009 in respect of deferred consideration for disposals in 2008. This
resulted in a total net cash inflow of $1 million from disposals of
subsidiaries and businesses in the six months ended 30 June 2009.
In the six months ended 30 June 2008 there were no disposals of subsidiaries
and businesses. In the year ended 31 December 2008 Namakwa Sands was the only
material disposal of a business. On 1 October 2008 Namakwa Sands was sold to
Exxaro Resources Limited for consideration of $330 million including deferred
consideration. On 3 November 2008 as part of the same transaction, the Group
completed the sale of a 26% interest in both the Black Mountain zinc, lead and
copper operation and the Gamsberg zinc project for consideration of $23
million. For further details of the disposal of Namakwa Sands refer to the
Group`s financial statements for the year ended 31 December 2008.
17. Disposal groups and non-current assets held for sale
There were no assets and liabilities in disposal groups or non-current assets
classified as held for sale at 30 June 2009.
Platinum disposal groups (including Booysendal and Lebowa), which were
previously classified as held for sale at 30 June 2008 and 31 December 2008,
were disposed of in June 2009. Tarmac Iberia SAU and Namakwa Sands, which were
previously classified as held for sale at 30 June 2008, were disposed of in
August 2008 and October 2008 respectively. Refer to note 16 for more details on
the Platinum disposals and the disposal of Namakwa Sands.
The following assets and liabilities relating to disposal groups were
classified as held for sale at 30 June 2008 and 31 December 2008.
US$ million 30.06.08(1) 31.12.08(1)
Intangible assets 35 -
Tangible assets 654 257
Investments in associates 55 -
Other non-current assets 14 2
Total non-current assets 758 259
Inventories 71 -
Trade and other receivables 118 8
Cash and cash equivalents 52 8
Total current assets 241 16
Total assets 999 275
Trade and other payables (113) (21)
Short term borrowings (34) -
Other current liabilities (3) -
Total current liabilities (150) (21)
Retirement benefit obligations (4) -
Deferred tax liabilities (149) (56)
Provisions for liabilities and
charges (9) (3)
Total non-current liabilities (162) (59)
Total liabilities (312) (80)
Net assets 687 195
(1) Disposal groups at 30 June 2008 related to Tarmac Iberia SAU, Namakwa Sands
and Platinum disposal groups. Disposal groups at 31 December 2008 related to
Platinum disposal groups.
The net carrying amount of assets and associated liabilities classified as held
for sale was not written down in any of the periods.
18. Contingent liabilities and contingent assets
i) Contingent liabilities
The Group is subject to various claims which arise in the ordinary course of
business. Additionally, and as set out in the 2007 demerger agreement, Anglo
American and Mondi have agreed to indemnify each other, subject to certain
limitations, against certain liabilities. Having taken appropriate legal
advice, the Group believes that the likelihood of a material liability arising
is remote. At 30 June 2009 contingent liabilities in respect of the Group`s
subsidiaries comprise aggregate amounts of $508 million (30 June 2008: $590
million; 31 December 2008: $548 million) in respect of loans and performance
guarantees given to banks and other third parties and are primarily in respect
of environmental restoration and decommissioning obligations.
No contingent liabilities were secured on the assets of the Group at 30 June
2009, 30 June 2008 or 31 December 2008.
ii) Contingent assets
There were no significant contingent assets in the Group at 30 June 2009, 30
June 2008 or 31 December 2008.
iii) Other
Minera Loma de NA-quel
In January 2008 Minera Loma de NA-quel (MLdN) was notified of the intention of
the Venezuelan Ministry of Basic Industries and Mining (MIBAM) to cancel 13 of
its exploration and exploitation concessions due to MLdN`s alleged failure to
fulfil certain conditions of the concessions. These concessions do not include
the concessions where the current mining operations and metallurgical
facilities are located. MLdN believes that it has complied with the conditions
of these concessions and has lodged administrative appeals against the notices
of termination and is waiting for a response from MIBAM. MLdN may in the future
undertake further appeals, including with Venezuela`s Supreme Court, if MIBAM`s
ruling does not adequately protect its interests.
18. Contingent liabilities and contingent assets (continued)
Anglo American and MLdN continue to strive to resolve the matter by way of
constructive dialogue; however, Anglo American and MLdN believe that there is a
valid legal basis to reverse the notices of termination and will pursue all
appropriate legal and other remedies and actions to protect their respective
interests both under Venezuelan and international law. As such, Anglo American
anticipates restoration of these concessions and renewal of those that expire
in 2012. As a result, the Group continues to consolidate MLdN and no impairment
has been recorded as at 30 June 2009.
At 30 June 2009 the Group`s interest in the book value of MLdN, including its
mineral rights, was $439 million (30 June 2008: $571 million; 31 December 2008:
$443 million), as included in the Group`s balance sheet. In the six months to
30 June 2009 MLdN`s contribution to Group operating profit was a loss of $5
million (six months ended 30 June 2008:
profit of $67 million; year ended 31 December 2008: profit of $30 million).
Anglo American Sur
Anglo American inherited a 1978 agreement with Codelco, the Chilean state
mining company, when it acquired Disputada de Las Condes (since renamed Anglo
American Sur) in 2002. The agreement grants Codelco the right, subject to
certain conditions and limitations, to acquire up to a 49% minority interest in
Anglo American Sur, the wholly owned Group company that owns the Los Bronces
and El Soldado copper mines and the Chagres smelter. These conditions include
limiting the window for exercising the right to once every three years in the
month of January until January 2027. The right was not exercised in 2009. The
calculations of the price at which Codelco can exercise its right are complex
and confidential but do, inter alia, take account of company profitability over
a five year period.
19. Related party transactions
The Group has a related party relationship with its subsidiaries, associates
and joint ventures.
At 30 June 2009 the Group held $88 million (30 June 2008: $131 million; 31
December 2008: $88 million) of 10% non- cumulative redeemable preference shares
in DB Investments, the holding company of De Beers Societe Anonyme.
In the year ended 31 December 2008 it was agreed that the dividends declared by
De Beers to the Group and the other shareholders in De Beers would be exchanged
for loan obligations. The total amount of dividends exchanged amounted to $118
million in the year ended 31 December 2008. This total has increased during
2009 by $24 million. The loans are subordinated and are interest free for two
years at which point they become interest bearing in line with market rates at
the dates of the initial reinvestment.
In April 2009 the shareholders of De Beers provided an additional loan to De
Beers, proportionate to their shareholdings, totalling $500 million. Anglo
American holds a 45% interest and therefore provided a loan of $225 million.
The loan is interest free for two years, at which point it reverts to a rate of
interest equal to LIBOR plus 700 basis points until April 2016 and then,
provided all interest payments are up to date, reduces to LIBOR plus 300 basis
points. In the event of a rights issue or share issue by De Beers, the Group
would have the option to use its loan to subscribe for ordinary shares at the
issue price determined at the time of the relevant issue. The loan is
subordinated in favour of third party lenders and preference shareholders
(including Anglo American) and is repayable after 10 years. These loans are
included in Financial asset investments.
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 $340 million
(six months ended 30 June 2008: $194 million; year ended 31 December 2008:
$609 million), as disclosed in the Consolidated cash flow statement.
At 30 June 2009 the directors of the Company and their immediate relatives
controlled 3% (30 June 2008: 3%; 31 December 2008: 3%) of the voting shares of
the Company.
20. Events occurring after the period end
Since 30 June 2009 the Group has disposed of its shareholding in Hulamin
Limited (Hulamin). The Group sold 96.8 million Hulamin shares, at a price of
Rand 12 per share, realising a total consideration of approximately $148
million.
Responsibility statements
We confirm that to the best of our knowledge:
(a) the Condensed financial statements have been prepared in accordance with
IAS 34 Interim Financial Reporting;
(b) the Half year financial report includes a fair review of the information
required by DTR 4.2.7 R (being an indication of important events that have
occurred during the first six months of the financial year, and their impact on
the Half year financial report and a description of the principal risks and
uncertainties for the remaining six months of the financial year); and
(c) the Half year financial report includes a fair review of the information
required by DTR 4.2.8 R (being disclosure of related party transactions that
have taken place in the first six months of the current financial year and that
have materially affected the financial position or the performance of the Group
during that period and any changes in the related party transactions described
in the last annual report that could have a material effect on the financial
position or performance of the Group in the first six months of the current
financial year).
By order of the Board
Cynthia Carroll Rene Medori
Chief executive Finance director
INDEPENDENT REVIEW REPORT TO ANGLO AMERICAN PLC
We have been engaged by the Company to review the Condensed financial
statements in the Half year financial report for the six months ended 30 June
2009 which comprises the Consolidated income statement, the Consolidated
statement of comprehensive income, the Consolidated balance sheet, the
Consolidated cash flow statement, the Consolidated statement of changes in
equity and related notes 1 to 20. We have read the other information contained
in the Half year financial report and considered whether it contains any
apparent misstatements or material inconsistencies with the information in the
Condensed financial statements.
This report is made solely to the Company in accordance with International
Standard on Review Engagements (UK and Ireland) 2410 "Review of Interim
Financial Information Performed by the Independent Auditor of the Entity"
issued by the Auditing Practices Board for use in the United Kingdom (ISRE
2410). 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 Half year financial report is the responsibility of, and has been approved
by, the directors. The directors are responsible for preparing the Half year
financial report in accordance with the Disclosure and Transparency Rules of
the United Kingdom`s Financial Services Authority.
As disclosed in note 2, the annual financial statements of the Group are
prepared in accordance with IFRSs as adopted by the European Union. The
Condensed financial statements included in this Half year financial report has
been prepared in accordance with International Accounting Standard 34, Interim
Financial Reporting (IAS 34), as adopted by the European Union.
Our responsibility
Our responsibility is to express to the Company a conclusion on the Condensed
financial statements in the Half year financial report based on our review.
Scope of Review
We conducted our review in accordance with ISRE 2410 (UK and Ireland) issued by
the Auditing Practices Board. A review of interim financial information
consists of making inquiries, primarily of persons responsible for financial
and accounting matters, and applying analytical and other review procedures. A
review is substantially less in scope than an audit conducted in accordance
with International Standards on Auditing (UK and Ireland) and consequently does
not enable us to obtain assurance that we would become aware of all significant
matters that might be identified in an audit.
Accordingly, we do not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to
believe that the Condensed financial statements in the Half year financial
report for the six months ended 30 June 2009 is not prepared, in all material
respects, in accordance with IAS 34 as adopted by the European Union and the
Disclosure and Transparency Rules of the United Kingdom`s Financial Services
Authority.
Deloitte LLP
Chartered Accountants and Statutory Auditors
London
30 July 2009
Production statistics
The figures below include the entire output of consolidated entities and the
Group`s attributable share of joint ventures, joint arrangements and associates
where applicable, except for Collahuasi in Base Metals and De Beers which are
quoted on a 100% basis.
Year ended
6 months ended 30.06.09 6 months ended 30.06.08 31.12.08
Anglo
Platinum
(troy ounces)
(1)(2)
Platinum 1,056,400 1,001,100 2,386,600
Palladium 596,700 546,600 1,318,800
Rhodium 163,900 116,900 299,300
1,817,000 1,664,600 4,004,700
Nickel
(tonnes)(3) 8,700 7,400 15,500
Copper
(tonnes)(3) 4,900 4,400 8,800
Gold 44,100 37,800 78,500
Anglo Coal (tonnes)
South Africa
Eskom 17,376,500 17,000,000 36,158,100
Trade - Thermal 11,009,600 10,490,300 22,286,800
Trade - Metallur
gical 189,500 463,000 971,900
Australia 28,575,600 27,953,300 59,416,800
Thermal 6,950,100 7,423,600 14,696,300
Metallurgical 5,669,300 6,576,400 13,144,900
South America 12,619,400 14,000,000 27,841,200
Thermal 5,650,700 5,766,800 11,484,500
Canada
Thermal - 122,900 140,100
Metallurgical 330,500 302,100 632,300
330,500 425,000 772,400
Total 47,176,200 48,145,100 99,514,900
Anglo
Coal (tonnes)
South Africa
Greenside 1,547,900 1,591,400 3,401,100
Goedehoop 3,416,800 3,668,000 7,449,400
Isibonelo 2,453,400 2,325,000 5,152,100
Kriel 5,211,000 4,867,200 10,344,400
Kleinkopje 2,267,100 1,907,400 4,545,600
Landau 2,139,100 1,883,100 4,089,300
New Denmark 1,810,000 2,752,000 5,272,500
New Vaal 8,584,900 8,072,800 17,034,400
Nooitgedacht 249,700 237,000 454,600
Mafube 895,700 649,400 1,673,400
Australia 28,575,600 27,953,300 59,416,800
Callide 4,386,500 4,841,400 9,582,700
Drayton 1,824,300 1,727,000 3,711,500
German
Creek
(Capcoal) 1,725,400 2,756,000 5,621,900
Jellinbah East 845,800 508,200 1,033,900
Moranbah 1,410,800 1,881,600 3,181,500
Dawson
Complex 1,687,100 1,833,000 3,537,200
Foxleigh 739,500 452,800 1,172,500
South
America 12,619,400 14,000,000 27,841,200
Carbones del
Guasare 299,000 598,600 1,074,200
Carbones del
Cerrejon 5,351,700 5,168,200 10,410,300
Canada 5,650,700 5,766,800 11,484,500
Peace
River
Coal 330,500 425,000 772,400
Total 47,176,200 48,145,100 99,514,900
(1) See the published results of Anglo Platinum Limited for further analysis of
production information.
(2) Northam Platinum Limited was transferred to a disposal group in September
2007.
Production information excludes Northam Platinum Limited. Northam Platinum
Limited was sold on 20 August 2008.
(3) Also disclosed within total attributable nickel and copper production.
6 months ended
30.06.09
Anglo Base Metals
Copper
Collahuasi
100% basis (Anglo American 44%)
Ore mined tonnes 28,750,800
Ore processed Oxide tonnes 3,743,300
Sulphide tonnes 22,166,400
Ore grade processed Oxide % Cu 0.6
Sulphide % Cu 1.1
Production Copper concentrate dry metric tonnes 836,600
Copper cathode tonnes 21,700
Copper in concentrate tonnes 226,200
Total copper production for Collahuasi tonnes 247,900
Anglo American Sur
Los Bronces mine
Ore mined tonnes 10,191,300
Marginal ore mined tonnes 10,717,400
Las Tortolas
concentrator Ore processed tonnes 1,015,200
Ore grade processed % Cu 1.0
Average recovery % 83.7
Production Copper concentrate dry metric tonnes 330,800
Copper cathode tonnes 24,000
Copper in concentrate tonnes 86,700
Total tonnes 110,700
El Soldado mine
Ore mined Open pit - ore mined tonnes 3,769,000
Open pit - marginal ore mined tonnes 12,700
Underground (sulphide) tonnes 747,500
Total tonnes 4,529,200
Ore processed Oxide tonnes 640,700
Sulphide tonnes 3,714,200
Ore grade processed Oxide % Cu 0.7
Sulphide % Cu 0.7
Production Copper concentrate dry metric tonnes 75,900
Copper cathode tonnes 2,000
Copper in concentrate tonnes 18,900
Total tonnes 20,900
Chagres Smelter
Copper concentrate smelted tonnes 64,600
Production Copper blister/anodes tonnes 63,200
Acid tonnes 222,200
Total copper production for Anglo American Sur tonnes 131,600
Anglo American Norte
Mantos Blancos mine
Ore processed Oxide tonnes 2,172,500
Sulphide tonnes 2,192,900
Marginal ore mined tonnes 1,640,000
Ore grade processed Oxide % Cu (soluble) 0.6
Sulphide % Cu (insoluble) 1.2
Marginal ore % Cu (soluble) 0.3
Production Copper concentrate dry metric tonnes 69,000
Copper cathode tonnes 21,500
Copper in concentrate tonnes 23,200
Total tonnes 44,700
Mantoverde mine
Ore processed Oxide tonnes 4,769,800
Marginal ore tonnes 2,296,200
Ore grade processed Oxide % Cu (soluble) 0.7
Marginal ore % Cu (soluble) 0.3
Production Copper cathode tonnes 30,500
Total copper production for Anglo American Norte tonnes 75,200
Black Mountain tonnes 1,000
Total Anglo Base Metals copper production tonnes 316,900
Anglo Platinum copper production
Production (1) tonnes 4,900
Total attributable copper production tonnes 321,800
6 months ended
30.06.08
Anglo Base Metals
Copper
Collahuasi
100% basis (Anglo American 44%)
Ore mined tonnes 26,311,600
Ore processed Oxide tonnes 3,596,800
Sulphide tonnes 21,492,900
Ore grade processed Oxide % Cu 0.7
Sulphide % Cu 1.1
Production Copper concentrate dry metric tonnes 737,100
Copper cathode tonnes 25,300
Copper in concentrate tonnes 198,500
Total copper production for Collahuasi tonnes 223,800
Anglo American Sur
Los Bronces mine
Ore mined tonnes 10,850,900
Marginal ore mined tonnes 18,768,800
Las Tortolas
concentrator Ore processed tonnes 9,682,900
Ore grade processed % Cu 1.1
Average recovery % 86.4
Production Copper concentrate dry metric tonnes 322,200
Copper cathode tonnes 22,800
Copper in concentrate tonnes 94,500
Total tonnes 117,300
El Soldado mine
Ore mined Open pit - ore mined tonnes 2,812,700
Open pit - marginal ore mined tonnes 21,700
Underground (sulphide) tonnes 624,500
Total tonnes 3,458,900
Ore processed Oxide tonnes 391,500
Sulphide tonnes 3,457,300
Ore grade processed Oxide % Cu 1.4
Sulphide % Cu 1.0
Production Copper concentrate dry metric tonnes 103,100
Copper cathode tonnes 3,500
Copper in concentrate tonnes 26,100
Total tonnes 29,600
Chagres Smelter
Copper concentrate smelted tonnes 76,300
Production Copper blister/anodes tonnes 75,000
Acid tonnes 239,900
Total copper production for Anglo American Sur tonnes 146,900
Anglo American Norte
Mantos Blancos mine
Ore processed Oxide tonnes 2,362,100
Sulphide tonnes 2,098,200
Marginal ore mined tonnes 2,062,300
Ore grade processed Oxide % Cu (soluble) 0.7
Sulphide % Cu (insoluble) 1.1
Marginal ore % Cu (soluble) 0.3
Production Copper concentrate dry metric tonnes 57,000
Copper cathode tonnes 20,200
Copper in concentrate tonnes 21,500
Total tonnes 41,700
Mantoverde mine
Ore processed Oxide tonnes 4,714,100
Marginal ore tonnes 1,977,700
Ore grade processed Oxide % Cu (soluble) 0.7
Marginal ore % Cu (soluble) 0.4
Production Copper cathode tonnes 32,300
Total copper production for Anglo American Norte tonnes 74,000
Black Mountain tonnes 1,300
Total Anglo Base Metals copper production tonnes 320,700
Anglo Platinum copper production
Production (1) tonnes 4,400
Total attributable copper production tonnes 325,100
Year ended
31.12.08
Anglo Base Metals
Copper
Collahuasi
100% basis (Anglo American 44%)
Ore mined tonnes 57,699,800
Ore processed Oxide tonnes 7,317,400
Sulphide tonnes 42,377,400
Ore grade processed Oxide % Cu 0.6
Sulphide % Cu 1.1
Production Copper concentrate dry metric tonnes 1,574,000
Copper cathode tonnes 49,400
Copper in concentrate tonnes 415,000
Total copper production for Collahuasi tonnes 464,400
Anglo American Sur
Los Bronces mine
Ore mined tonnes 21,045,100
Marginal ore mined tonnes 36,008,900
Las Tortolas
concentrator Ore processed tonnes 20,012,700
Ore grade processed % Cu 1.1
Average recovery % 84.9
Production Copper concentrate dry metric tonnes 677,900
Copper cathode tonnes 45,800
Copper in concentrate tonnes 190,000
Total tonnes 235,800
El Soldado mine
Ore mined Open pit - ore mined tonnes 5,305,800
Open pit - marginal ore mined tonnes 21,700
Underground (sulphide) tonnes 1,312,700
Total tonnes 6,640,200
Ore processed Oxide tonnes 821,800
Sulphide tonnes 7,179,700
Ore grade processed Oxide % Cu 1.3
Sulphide % Cu 0.8
Production Copper concentrate dry metric tonnes 174,100
Copper cathode tonnes 6,700
Copper in concentrate tonnes 43,100
Total tonnes 49,800
Chagres Smelter
Copper concentrate smelted tonnes 148,400
Production Copper blister/anodes tonnes 146,100
Acid tonnes 486,100
Total copper production for Anglo American Sur tonnes 285,600
Anglo American Norte
Mantos Blancos mine
Ore processed Oxide tonnes 4,694,800
Sulphide tonnes 4,311,100
Marginal ore mined tonnes 5,003,000
Ore grade processed Oxide % Cu (soluble) 0.7
Sulphide % Cu (insoluble) 1.2
Marginal ore % Cu (soluble) 0.3
Production Copper concentrate dry metric tonnes 132,300
Copper cathode tonnes 39,600
Copper in concentrate tonnes 46,800
Total tonnes 86,400
Mantoverde mine
Ore processed Oxide tonnes 9,556,900
Marginal ore tonnes 4,300,400
Ore grade processed Oxide % Cu (soluble) 0.7
Marginal ore % Cu (soluble) 0.4
Production Copper cathode tonnes 62,500
Total copper production for Anglo American Norte tonnes 148,900
Black Mountain tonnes 2,500
Total Anglo Base Metals copper production tonnes 641,300
Anglo Platinum copper production
Production (1) tonnes 8,800
Total attributable copper production tonnes 650,100
(1) Northam Platinum Limited was transferred to a disposal group in September
2007. Production information excludes Northam Platinum Limited. Northam
Platinum Limited was sold on 20 August 2008.
6 months ended
30.06.09
Anglo Base Metals (continued)
Nickel, Niobium, Mineral Sands and Phosphates
Nickel
Codemin
Ore mined tonnes 235,200
Ore processed tonnes 247,600
Ore grade processed % Ni 2.0
Production tonnes 4,500
Loma de Niquel
Ore mined tonnes 508,500
Ore processed tonnes 373,100
Ore grade processed % Ni 1.6
Production tonnes 5,600
Total Anglo Base Metals nickel production tonnes 10,100
Anglo Platinum nickel production
Production (1) tonnes 8,700
Total attributable nickel production tonnes 18,800
Niobium
Catalao
Ore mined tonnes 376,300
Ore processed tonnes 404,800
Ore grade processed Kg Nb/tonne 10.6
Production tonnes 2,600
Phosphates
Copebras
Sodium tripolyphosphate tonnes -
Phosphates tonnes 319,900
Zinc and Lead
Black Mountain
Ore mined tonnes 602,300
Ore processed tonnes 616,900
Ore grade processed
Zinc % Zn 2.6
Lead % Pb 3.9
Copper % Cu 0.3
Production Zinc in concentrate tonnes 12,200
Lead in concentrate tonnes 22,100
Copper in concentrate tonnes 1,100
Lisheen
Ore mined tonnes 759,300
Ore processed tonnes 726,300
Ore grade processed
Zinc % Zn 12.5
Lead % Pb 1.8
Production Zinc in concentrate tonnes 82,000
Lead in concentrate tonnes 8,900
Skorpion
Ore mined tonnes 733,000
Ore processed tonnes 709,600
Ore grade processed
Zinc % Zn 11.7
Production Zinc tonnes 75,700
Total attributable zinc production tonnes 169,900
Total attributable lead production tonnes 31,000
Anglo Ferrous Metals and Industries
Kumba Iron Ore
Lump tonnes 11,671,000
Fines tonnes 7,476,000
Amapa (2)
Sinter feed tonnes 191,000
Pellet feed tonnes 990,000
Total iron ore production tonnes 20,328,000
Scaw Metals
South Africa - Steel Products tonnes 343,000
International - Steel Products tonnes 377,000
Samancor (3)
Manganese ore tonnes 493,000
Manganese alloys (4) tonnes 52,000
6 months ended
30.06.08
Anglo Base Metals (continued)
Nickel, Niobium, Mineral Sands and Phosphates
Nickel
Codemin
Ore mined tonnes 180,300
Ore processed tonnes 258,800
Ore grade processed % Ni 2.1
Production tonnes 4,900
Loma de Niquel
Ore mined tonnes 368,800
Ore processed tonnes 290,300
Ore grade processed % Ni 1.6
Production tonnes 4,700
Total Anglo Base Metals nickel production tonnes 9,600
Anglo Platinum nickel production
Production (1) tonnes 7,400
Total attributable nickel production tonnes 17,000
Niobium
Catalao
Ore mined tonnes 181,500
Ore processed tonnes 420,400
Ore grade processed Kg Nb/tonne 10.5
Production tonnes 2,300
Phosphates
Copebras
Sodium tripolyphosphate tonnes 10,200
Phosphates tonnes 505,900
Zinc and Lead
Black Mountain
Ore mined tonnes 623,900
Ore processed tonnes 609,500
Ore grade processed
Zinc % Zn 3.1
Lead % Pb 4.3
Copper % Cu 0.4
Production Zinc in concentrate tonnes 15,300
Lead in concentrate tonnes 23,600
Copper in concentrate tonnes 1,300
Lisheen
Ore mined tonnes 777,100
Ore processed tonnes 761,300
Ore grade processed
Zinc % Zn 12.5
Lead % Pb 1.7
Production Zinc in concentrate tonnes 87,200
Lead in concentrate tonnes 8,200
Skorpion
Ore mined tonnes 637,600
Ore processed tonnes 629,300
Ore grade processed
Zinc % Zn 11.9
Production Zinc tonnes 68,600
Total attributable zinc production tonnes 171,100
Total attributable lead production tonnes 31,800
Anglo Ferrous Metals and Industries
Kumba Iron Ore
Lump tonnes 10,180,000
Fines tonnes 6,883,000
Amapa (2)
Sinter feed tonnes -
Pellet feed tonnes -
Total iron ore production tonnes 17,063,000
Scaw Metals
South Africa - Steel Products tonnes 417,000
International - Steel Products tonnes 434,000
Samancor (3)
Manganese ore tonnes 1,407,000
Manganese alloys (4) tonnes 153,000
Year ended
31.12.08
Anglo Base Metals (continued)
Nickel, Niobium, Mineral Sands and Phosphates
Nickel
Codemin
Ore mined tonnes 498,400
Ore processed tonnes 475,900
Ore grade processed % Ni 2.1
Production tonnes 9,100
Loma de Niquel
Ore mined tonnes 811,000
Ore processed tonnes 676,800
Ore grade processed % Ni 1.6
Production tonnes 10,900
Total Anglo Base Metals nickel production tonnes 20,000
Anglo Platinum nickel production
Production (1) tonnes 15,500
Total attributable nickel production tonnes 35,500
Niobium
Catalao
Ore mined tonnes 768,100
Ore processed tonnes 818,100
Ore grade processed Kg Nb/tonne 11.1
Production tonnes 4,600
Phosphates
Copebras
Sodium tripolyphosphate tonnes 10,200
Phosphates tonnes 982,100
Zinc and Lead
Black Mountain
Ore mined tonnes 1,199,800
Ore processed tonnes 1,204,800
Ore grade processed
Zinc % Zn 3.0
Lead % Pb 4.2
Copper % Cu 0.4
Production
Zinc in concentrate tonnes 27,900
Lead in concentrate tonnes 47,000
Copper in concentrate tonnes 2,500
Lisheen
Ore mined tonnes 1,561,900
Ore processed tonnes 1,516,900
Ore grade processed
Zinc % Zn 12.1
Lead % Pb 1.6
Production
Zinc in concentrate tonnes 167,200
Lead in concentrate tonnes 15,900
Skorpion
Ore mined tonnes 1,390,400
Ore processed tonnes 1,333,300
Ore grade processed
Zinc % Zn 11.7
Production
Zinc tonnes 145,400
Total attributable zinc production tonnes 340,500
Total attributable lead production tonnes 62,900
Anglo Ferrous Metals and Industries
Kumba Iron Ore
Lump tonnes 22,042,000
Fines tonnes 14,657,000
Amapa (2)
Sinter feed tonnes 128,000
Pellet feed tonnes 584,000
Total iron ore production tonnes 37,411,000
Scaw Metals
South Africa - Steel Products tonnes 771,000
International - Steel Products tonnes 879,000
Samancor (3)
Manganese ore tonnes 2,704,000
Manganese alloys (4) tonnes 306,000
(1) Northam Platinum Limited was transferred to a disposal group in September
2007. Production information excludes Northam Platinum Limited. Northam
Platinum Limited was sold on 20 August 2008.
(2) Production from Amapa is included from 5 August 2008. Amapa is not
currently in commercial production. Until commercial production is reached all
revenue and related costs are being capitalised. Amapa production for full year
2008 was 1.2 Mt.
(3) Saleable production.
(4) Production includes Medium Carbon Ferro Manganese.
6 months ended 6 months ended Year ended
30.06.09 30.06.08 31.12.08
De Beers
(diamonds recovered - carats)
100% basis
(Anglo American 45%)
Debswana 3,915,000 16,171,000 32,276,000
Namdeb 385,000 998,000 2,122,000
De Beers
Consolidated
Mines 1,655,000 6,373,000 11,960,000
Williamson (1) - 68,000 134,000
Canada 636,000 616,000 1,640,000
Anglo 6,591,000 24,226,000 48,132,000
Industrial
Minerals
Aggregates tonnes 34,449,700 48,073,000 93,095,000
Lime products tonnes 585,700 712,000 1,353,000
Concrete m3 1,770,700 3,840,000 6,312,000
(1) Williamson was disposed of on 10 November 2008.
Quarterly production statistics (1)
June 2009 March 2009 December 2008
Anglo Platinum (2)
Platinum (troy ounces) 652,400 404,000 842,300
Palladium (troy ounces) 361,600 235,100 450,500
Rhodium (troy ounces) 90,100 73,800 107,100
Nickel (tonnes) 5,400 3,300 4,100
Anglo Coal (tonnes)
Eskom 8,938,400 8,438,100 9,465,900
Thermal 12,539,700 11,070,700 12,247,300
Metallurgical 3,476,100 2,713,200 3,955,200
Anglo Base Metals (tonnes)
Copper 165,900 151,000 172,000
Nickel 5,600 4,500 4,800
Zinc 87,100 82,800 82,900
Lead 16,400 14,600 14,400
Anglo Ferrous Metals and
Industries (tonnes)
Iron ore (3) 10,336,000 9,992,000 10,098,000
South Africa Steel Products 164,000 179,000 167,000
International Steel Products 158,000 219,000 215,000
Manganese ore (4) 200,000 293,000 565,000
Manganese alloys (4)(5) 10,000 42,000 72,000
De Beers (diamonds recovered -
carats) 100% basis (Anglo
American 45%)
Diamonds 5,509,000 1,082,000 10,795,000
Quarter ended % Change
June Q09 v June Q09 v
September 2008 June 2008 March Q09 June Q08
Anglo Platinum (2)
Platinum (troy
ounces) 543,200 572,500 61% 14%
Palladium (troy
ounces) 321,700 300,800 54% 20%
Rhodium (troy
ounces) 75,300 59,400 22% 52%
Nickel (tonnes) 4,000 3,700 64% 46%
Anglo Coal (tonnes)
Eskom 9,692,200 8,637,000 6% 3%
Thermal 12,377,600 12,819,800 13% (2)%
Metallurgical 3,631,600 4,389,300 28% (21)%
Anglo Base
Metals (tonnes)
Copper 148,600 161,000 10% 3%
Nickel 5,600 5,000 24% 12%
Zinc 86,500 88,200 5% (1)%
Lead 16,700 14,700 12% 12%
Anglo Ferrous
Metals and
Industries
(tonnes)
Iron ore (3) 10,250,000 8,873,000 3% 16%
South Africa
Steel Products 187,000 211,000 (8)% (22)%
International
Steel Products 230,000 221,000 (28)% (29)%
Manganese ore (4) 732,000 741,000 (32)% (73)%
Manganese
alloys (4)(5) 81,000 76,000 (76)% (87)%
De Beers
(diamonds
recovered - carats)
100% basis
(Anglo American 45%)
Diamonds 13,111,000 12,452,000 409% (56)%
(1) Excludes Anglo Industrial Minerals.
(2) Northam Platinum Limited was transferred to a disposal group in September
2007. Production information excludes Northam Platinum Limited. Northam
Platinum Limited was sold on 20 August 2008.
(3) Production from Amapa is included from 5 August 2008. Amapa is not
currently in commercial production. Until commercial production is reached, all
revenue and related costs are being capitalised. Amapa production for full year
2008 was 1.2 Mt.
(4) Saleable production.
(5) Production includes Medium Carbon Ferro Manganese.
Reconciliation of subsidiaries` and associates` reported earnings to the
Underlying earnings included in the Condensed financial statements
for the six months ended 30 June 2009
Note only key reported lines are reconciled
Anglo Platinum Limited
6 months ended 6 months ended Year ended
US$ million 30.06.09 30.06.08 31.12.08
IFRS headline earnings
(US$ equivalent of
published) 44 1,102 1,607
Exploration 10 17 36
Exchange rate difference (1) (7) 64
Operating remeasurements
(net of tax) - - 17
Other adjustments 1 (2) (2)
54 1,110 1,722
Minority interests (11) (251) (376)
Elimination of
intercompany interest 26 (1) 8
Depreciation on assets
fair valued on acquisition
(net of tax) (39) (8) (41)
Contribution to Anglo
American plc underlying
earnings 30 850 1,313
DB Investments
6 months ended 6 months ended Year ended
US$ million 30.06.09 30.06.08 31.12.08
De Beers underlying
earnings (100%) (164) 350 515
Difference in IAS 19
accounting policy 4 1 18
De Beers underlying
earnings - Anglo American
plc basis (100%) (160) 351 533
Anglo American plc`s 45%
ordinary share interest (72) 158 240
Income from preference
shares 5 8 13
Other - - 3
Contribution to Anglo
American plc underlying
earnings (67) 166 256
Kumba Iron Ore Limited (KIO)
6 months ended 6 months ended Year ended
US$ million 30.06.09 30.06.08 31.12.08
IFRS headline earnings
(US$ equivalent of
published) (1) 379 368 872
Exploration 1 3 8
Other adjustments (1) 14 12
379 385 892
Minority interests (138) (142) (328)
Elimination of
intercompany interest (8) 5 -
Depreciation on assets
fair valued on acquisition
(net of tax) (3) (1) (6)
Contribution to Anglo
American plc underlying
earnings 230 247 558
(1) KIO IFRS headline earnings for the six months ended 30 June 2009 assume a
minority interest of 20% in KIO`s underlying mining assets (six months ended 30
June 2008: 20%; year ended 31 December 2008: 20%).
Exchange rates and commodity prices
6 months ended 6 months ended Year ended
US$ exchange rates 30.06.09 30.06.08 31.12.08
Average prices for the
period
Rand 9.20 7.66 8.27
Sterling 0.67 0.51 0.54
Euro 0.75 0.65 0.68
Australian dollar 1.40 1.08 1.17
Chilean peso 586 467 524
Brazilian real 2.19 1.70 1.84
Closing spot prices
Rand 7.74 7.83 9.30
Sterling 0.61 0.50 0.69
Euro 0.71 0.63 0.72
Australian dollar 1.24 1.04 1.44
Chilean peso 532 527 637
Brazilian real 1.96 1.59 2.33
6 months ended 6 months ended Year ended
Commodity prices 30.06.09 30.06.08 31.12.08
Average market prices for the period
Platinum (1) US$/oz 1,103 1,947 1,585
Palladium (1) US$/oz 218 443 355
Rhodium (1) US$/oz 1,291 8,860 6,564
Copper(2) US cents/lb 184 368 315
Nickel(2) US cents/lb 531 1,237 953
Zinc(2) US cents/lb 60 103 85
Lead (2) US cents/lb 60 118 95
Period end spot prices
Platinum (1) US$/oz 1,204 2,075 922
Palladium (1) US$/oz 253 475 186
Rhodium (1) US$/oz 1,450 9,725 1,250
Copper(2) US cents/lb 232 398 132
Nickel(2) US cents/lb 726 983 490
Zinc(2) US cents/lb 71 85 51
Lead (2) US cents/lb 78 79 43
(1) Source: Johnson Matthey.
(2) Source: LME daily prices.
Summary by business operations
Revenue (1)
6 months 6 months Year
ended ended ended
US$ million 30.06.09 30.06.08 31.12.08
Base Metals (4) 2,039 4,077 5,878
Copper 1,472 2,843 3,907
Collahuasi 493 899 1,134
Anglo American Sur 656 1,419 1,965
Anglo American Norte 323 525 808
Other - - -
Nickel, Niobium, Mineral
Sands and Phosphates 345 869 1,381
Codemin 62 148 198
Loma de Niquel 51 162 210
Catalao 81 63 141
Copebras 151 385 655
Namakwa Sands - 111 177
Zinc 222 365 590
Black Mountain 49 78 115
Lisheen 69 133 196
Skorpion 104 154 279
Other - - -
Ferrous Metals and
Industries 2,634 3,286 6,849
Kumba Iron Ore 1,328 1,176 2,573
Anglo Ferrous Brazil - - -
Scaw Metals 738 937 1,927
Samancor 248 760 1,526
Tongaat-Hulett/Hulamin 318 410 817
Other 2 3 6
Coal 2,423 2,824 6,436
South Africa 833 1,131 2,210
Australia 1,139 1,198 3,119
South America 403 427 947
Canada 40 63 139
Projects and corporate 8 5 21
Platinum 1,905 3,605 6,327
Diamonds 770 1,684 3,096
Industrial Minerals 1,361 2,439 4,378
Exploration - - -
Corporate Activities and
Unallocated Costs - - -
11,132 17,915 32,964
EBITDA (2)
6 months 6 months Year
ended ended ended
US$ million 30.06.09 30.06.08 31.12.08
Base Metals (4) 857 2,623 2,845
Copper 760 2,041 2,226
Collahuasi 321 717 682
Anglo American Sur 301 1,049 1,265
Anglo American Norte 142 279 288
Other (4) (4) (9)
Nickel, Niobium, Mineral
Sands and Phosphates 86 457 563
Codemin 11 118 132
Loma de Niquel 4 76 48
Catalao 54 35 80
Copebras 17 189 244
Namakwa Sands - 39 59
Zinc 64 185 209
Black Mountain 12 45 37
Lisheen 17 46 40
Skorpion 35 94 132
Other (53) (60) (153)
Ferrous Metals and
Industries 914 1,359 3,064
Kumba Iron Ore 768 701 1,667
Anglo Ferrous Brazil (85) (16) (4)
Scaw Metals 89 138 309
Samancor 89 496 998
Tongaat-Hulett/Hulamin 60 55 115
Other (7) (15) (21)
Coal 898 900 2,585
South Africa 277 405 814
Australia 435 330 1,353
South America 190 181 446
Canada 8 7 15
Projects and corporate (12) (23) (43)
Platinum 284 1,714 2,732
Diamonds 75 397 665
Industrial Minerals 122 291 487
Exploration (70) (98) (212)
Corporate Activities and
Unallocated Costs (95) (148) (319)
2,985 7,038 11,847
Operating profit/(loss)(3)
6 months 6 months Year
ended ended ended
US$ million 30.06.09 30.06.08 31.12.08
Base Metals (4) 695 2,454 2,505
Copper 651 1,941 2,017
Collahuasi 287 684 613
Anglo American Sur 243 998 1,157
Anglo American Norte 125 263 255
Other (4) (4) (8)
Nickel, Niobium, Mineral
Sands and Phosphates 58 425 507
Codemin 7 113 123
Loma de Niquel (5) 67 30
Catalao 51 34 78
Copebras 5 172 217
Namakwa Sands - 39 59
Zinc 40 149 136
Black Mountain 12 40 26
Lisheen 17 37 22
Skorpion 11 72 88
Other (54) (61) (155)
Ferrous Metals and
Industries 857 1,296 2,935
Kumba Iron Ore 742 677 1,618
Anglo Ferrous Brazil (82) (16) (8)
Scaw Metals 71 121 274
Samancor 79 485 980
Tongaat-Hulett/Hulamin 55 44 92
Other (8) (15) (21)
Coal 720 731 2,240
South Africa 233 369 736
Australia 334 225 1,144
South America 165 157 396
Canada 2 3 8
Projects and corporate (14) (23) (44)
Platinum 8 1,467 2,226
Diamonds 4 328 508
Industrial Minerals 27 163 228
Exploration (70) (98) (212)
Corporate Activities and
Unallocated Costs (105) (160) (345)
2,136 6,181 10,085
Underlying earnings
6 months 6 months Year
ended ended ended
US$ million 30.06.09 30.06.08 31.12.08
Base Metals (4) 454 1,494 1,369
Copper 431 1,204 1,171
Collahuasi 215 450 367
Anglo American Sur 141 602 699
Anglo American Norte 79 156 113
Other (4) (4) (8)
Nickel, Niobium, Mineral
Sands and Phosphates 39 229 218
Codemin 7 76 94
Loma de Niquel (18) 1 (97)
Catalao 39 32 70
Copebras 11 89 105
Namakwa Sands - 31 46
Zinc 44 124 128
Black Mountain 12 28 28
Lisheen 18 28 15
Skorpion 14 68 85
Other (60) (63) (148)
Ferrous Metals and
Industries 336 705 1,396
Kumba Iron Ore 230 247 558
Anglo Ferrous Brazil (94) 11 (30)
Scaw Metals 40 72 165
Samancor 133 354 658
Tongaat-Hulett/Hulamin 28 30 53
Other (1) (9) (8)
Coal 505 543 1,581
South Africa 167 268 543
Australia 237 168 797
South America 113 112 257
Canada 2 5 11
Projects and corporate (14) (10) (27)
Platinum 30 850 1,313
Diamonds (67) 166 256
Industrial Minerals 18 139 173
Exploration (67) (93) (200)
Corporate Activities and
Unallocated Costs (113) (321) (651)
1,096 3,483 5,237
(1) Revenue includes the Group`s attributable share of revenue of joint
ventures and associates. Base Metals` revenue is shown after deduction of
treatment and refining charges (TC/RCs).
(2) EBITDA is operating profit before special items, remeasurements,
depreciation and amortisation in subsidiaries and joint ventures and includes
attributable share of EBITDA of associates.
(3) Operating profit includes operating profit before special items and
remeasurements from subsidiaries and joint ventures and attributable share of
operating profit (before interest, tax, minority interests, special items and
remeasurements) of associates.
(4) Operations are grouped according to primary product produced.
Sponsor: UBS South Africa (Pty) Ltd
Date: 31/07/2009 08:27:01 Produced by the JSE SENS Department.
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