| Wed 14 Mar 2001, 0:00 | | Anglo American - Results |
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ANGLO AMERICAN PLC
14 March 2001
Anglo American plc reports record 53% increase in headline profit for 2000
* Headline profit increased by 53% to US$2,000 million and profit for the year
increased by 26% to US$1,957 million;
* Total operating profit, excluding operating exceptional items of US$266
million, up by 62% to US$3,480 million;
* Acquisitions announced during the year totalled around US$4 billion;
* Expansionary capital expenditure in 2000 totalled US$841 million;
Disposal of non-core assets generated cash proceeds of US$1,278 million; *
* Ongoing focus on cost control, annualised cost savings over the last two
years exceed US$290 million;
* Final dividend of 130 US cents, giving a total dividend for 2000 of 190 US
cents per ordinary share, an increase of 27% on last year.
Tony Trahar, Chief Executive, said "the headline profit of US$2 billion for
2000 represents a record result. It reflects the strength of our business with
strong contributions from Platinum, Diamonds, Coal, and Forest products as well
as the benefits of restructuring and expansion. We continue to focus on cost
control and improving efficiencies across the Group.
Anglo American has enjoyed a second successful year since listing in London and
we have made major progress in delivering on our strategy of growth through
acquisitions and investment; disposal of non-core businesses and seeking to
remove the cross-holding with De Beers."
HIGHLIGHTS FOR YEAR ENDED 31 DECEMBER 2000
US$ million except per
share amounts 2000 1999 Change
Group turnover & share of turnover
of joint ventures & associates 20,570 19,245 +7%
Total operating profit after
operating exceptional items 3,214 2,142 +50%
Profit for the financial year 1,957 1,552 +26%
Headline profit for
the financial year ; 2,000 1,308 +53%
Earnings per share (US$):
Profit for the financial year 5.01 4.03 +24%
Headline profit for the
financial year 5.12 3.40 +51%
Dividend for the year
(US cents per share) 190 150 +27%
* excludes disposal of 15.3% stake in FirstRand
; see note 6 for basis of calculation of headline profit
Review of 2000
2000 has been another year of major change and significant progress for Anglo
American, leading to record results. During the year considerable progress has
been made in realising the goal of becoming a focused global mining and natural
resources group through organic and acquisitive growth and disposal of non-core
interests. In February 2001, Anglo American announced proposals for the
elimination of the cross-holding with De Beers.
Growth through acquisitions totalled around US$4 billion in 2000:
- Tarmac was acquired in March for US$1.1 billion (net of the proceeds received
from the subsequent disposal of Tarmac USA), making Anglo American the leading
producer of aggregates in the UK and providing expansion opportunities in
continental Europe;
- Shell Coal and certain additional coal interests in Australia, Venezuela and
Colombia were purchased for over US$1 billion;
- additional interests were acquired in Frantschach and Neusiedler, Assi Sacks
and Ruzomberok for US$780 million;
- in March, a substantial investment in the Zambian copperbelt was announced
through the acquisition by ZCI of a 65% interest in Konkola Copper Mines.
Expansionary capital expenditure totalled US$841 million. This included
significant expenditure in Gold, Platinum, Coal, Industrial minerals, Base
metals and Forest products. In addition, further developments were announced:
- in May, Anglo Platinum announced a major expansion of its platinum production
to meet growing demand by investing US$2.1 billion to increase annual
production to 3.5 million ounces by 2006;
- AngloGold announced investments of US$400 million in projects in Australia,
Mali and Tanzania;
- the US$454 million Skorpion zinc project in Namibia was approved by the Board
in September; the Lisheen zinc mine in Ireland was officially opened in June
and first nickel production from the Loma de Nmquel mine in Venezuela took
place in December.
Disposals of non-core businesses. Since announcing the intention to widen and
accelerate the programme of disposals of non-core businesses, Anglo American
realised a total of US$1.3 billion in cash during the year. The major disposals
have now been completed and include interests in Industries, Financial
services, Gold and other investments. In December, the exchange of a 15.3%
stake in FirstRand for holdings in mining investments, valued at around US$730
million was announced.
Increased focus on cost control. Over the last two years, annualised cost
savings exceeding US$290 million have been achieved through rationalisation and
restructuring of businesses. During 2000 energy costs increased by US$94
million.
De Beers: on 15 February this year Anglo American announced, in conjunction
with Central Holdings Limited ("CHL") and Debswana Diamond (Proprietary)
Limited ("Debswana"), that a new company, DB Investments ("DBI"), to be owned
by Anglo American (45%), CHL (45%) and Debswana (10%), had reached agreement
with the board of De Beers for a proposal to be made to acquire the public
shareholding in De Beers and to take De Beers private. In terms of the
transaction, all De Beers Linked Unitholders including Anglo American will
receive by way of a scheme of arrangement a pro rata distribution of 130.4
million Anglo American shares held by De Beers, and in addition public Linked
Unitholders will receive further Anglo American shares and cash. The effect is
that each public Linked Unitholder will receive 0.43 Anglo American shares and
US$14.40 in cash, and will be entitled to the final dividend of US$1 per Linked
Unit for the year ended 31 December 2000.
The benefits of the transaction to Anglo American are that it will:
- simplify Anglo American's structure and increase transparency through the
removal of the cross-holding;
- result in a net cash inflow, including dividends received, of US$1,072
million immediately and US$701 million on redemption of the preference shares
in DBI;
- increase Anglo American's interest in De Beers's diamond business to 45%;
- increase the free float of Anglo American shares to approximately 90% and
retain a full FTSE weighting.
The transaction is subject to shareholder and regulatory approvals.
Financial Results - key contributors
Headline profit of US$2,000 million represents a 53% increase over the 1999
results. Major contributions were made by increased prices from platinum group
metals, base and ferrous metals, record diamond sales and strong pulp and paper
markets. The impact of acquisitions in the Forest products, Industrial minerals
and Coal divisions were partially offset by the effect of disposals in the
Industries division.
The largest contributor to headline profit was Anglo Platinum (25% of Anglo
American's total headline profit) increasing its headline profit to US$500
million, from US$200 million in 1999, following significantly higher platinum
and palladium prices during the year. The higher prices more than offset higher
on-mine costs and royalty payments.
Increased diamond sales, driven by the 'Millennium factor' and continued
strength in the US market, led to a record performance by De Beers,
contributing US$321 million to headline profit (16% of Anglo American's total
headline profit) up from US$162 million in 1999.
The impact of acquisitions together with strong pulp and paper markets and
improved productivity helped the Forest products division to record a 55%
increase in headline profit to US$308 million (15% of Anglo American's total
headline profit). Following the acquisition of Assi Sacks in August, Anglo
Forest Products is now
