| Fri 4 May 2001, 0:00 | | Western Areas Limited - Report For The Quarter End |
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WESTERN AREAS LIMITED
REPORT FOR THE quarter ENDED 31 March 2001
* Headline earnings up 18%
* Development improved by 44%
* Cash costs US$201/oz
* Continued improvement in the South Deep
project area
* Value unlocking process reaches advanced stage
CONSOLIDATED income statement
US$ million
Quarter Quarter Year
Ended ended ended
31.03.01 31.12.00 31.12.00
Notes Unaudited Unaudited Unaudited
Revenue from gold 10.3 13.0 47.4
At spot 10.2 13.0 46.6
Hedging profits 0.1 - 0.8
Costs and other expenses (9.1) (9.2) (36.8)
Production costs (7.6) (6.6) (30.9)
Non-cash items (1.5) (2.6) (5.9)
Profit from gold 1.2 3.8 10.6
Plus 3.4 3.6 23.4
Sundry revenue 0.3 0.3 2.8
Net interest income 3.1 3.3 20.6
Less (1.4) (3.1) (12.0)
Net premiums on put and
call options - - (2.8)
Administration costs and
amortisation of
corporate assets (1.1) (2.1) (6.9)
Exploration and new business (0.2) (0.9) (1.0)
Prestea operating loss, mine
closure and
feasibility study costs (0.1) (0.1) (1.3)
Operating profit 3.2 4.3 22.0
Restructuring costs - - (3.3)
Profit before taxation 3.2 4.3 18.7
Taxation (1.3) (3.0) (6.7)
Normal taxation (1.0) (0.9) (6.9)
Deferred taxation (0.3) (2.1) 0.2
Attributable to
outside shareholders - 0.1 0.1
Profit after taxation 1.9 1.4 12.1
Headline earnings per
share - cents 2 2 13
Earnings per share - cents 2 2 12
Number of shares in
issue (million) 105.4 105.4 105.4
R million
Quarter Quarter Year
Ended ended ended
31.03.01 31.12.00 31.12.00
Unaudited Unaudited Unaudited
Revenue from gold 81.0 98.7 329.1
At spot 80.2 98.7 323.4
Hedging profits 0.8 - 5.7
Costs and other expenses (71.2) (69.9) (255.2)
Production costs (59.7) (50.2) (214.0)
Non-cash items (11.5) (19.7) (41.2)
Profit from gold 9.8 28.8 73.9
Plus 27.0 27.5 162.8
Sundry revenue 2.3 2.0 19.7
Net interest income 24.7 25.5 143.1
Less (11.3) (23.3) (83.1)
Net premiums on put and
call options - - (19.6)
Administration costs and
amortisation of
corporate assets (8.8) (15.9) (47.4)
Exploration and new
business (1.5) (6.8) (6.8)
Prestea operating loss,
mine closure and
feasibility study costs (1.0) (0.6) (9.3)
Operating profit 25.5 33.0 153.6
Restructuring costs - - (22.7)
Profit before taxation 25.5 33.0 130.9
Taxation (10.2) (22.5) (46.7)
Normal taxation (7.6) (6.7) (48.2)
Deferred taxation (2.6) (15.8) 1.5
Attributable to outside
shareholders - 1.0 0.4
Profit after taxation 15.3 11.5 84.6
Headline earnings
per share - cents 13 11 90
Earnings per share
- cents 15 11 80
Number of shares in
issue (million) 105.4 105.4 105.4
CONSOLIDATED CASH FLOW STATEMENT
US$ million
Quarter Year
Ended ended
31.03.01 31.12.00
Unaudited Unaudited
Cash flow from operating
activities
Cash from (utilised in)
operations 1.2 (5.4)
Interest paid - (6.0)
Taxation paid (0.8) (1.1)
Net cash generated by/(utilised in)
operating actvities 0.4 (12.5)
Investing activities
Mining assets acquired (7.2) (38.0)
Proceeds on sale of assets - 2.3
Net proceeds on disposal of
Investments 0.2 -
(Increase)/decrease in
long-term advances (0.5) 3.1
(Increase)/decrease in
short-term cash advances - 36.1
Interest received 0.8 14.2
Dividends received - 0.1
Net cash (utilised in)/generated
by investing activities (6.7) 17.8
Financing activities
Cash distribution - (87.4)
Repayment of long-term
borrowings - (4.3)
Net cash utilised in
financing activities - (91.7)
Net cash utilised (6.3) (86.4)
Opening balance of cash
and cash equivalents 37.6 143.5
Translation adjustment (2.0) (19.5)
Closing balance of cash and
cash equivalents 29.3 37.6
R million
Quarter Year
ended ended
31.03.01 31.12.00
Unaudited Unaudited
Cash flow from operating
activities
Cash from (utilised in)
operations 9.9 (37.7)
Interest paid - (41.9)
Taxation paid (6.5) (7.4)
Net cash generated by/(utilised in)
operating actvities 3.4 (87.0)
Investing activities
Mining assets acquired (56.2) (263.7)
Proceeds on sale of assets - 15.8
Net proceeds on disposal of
Investments 1.7 -
(Increase)/decrease in
long-term advances (4.1) 21.8
(Increase)/decrease in
short-term cash advances - 250.6
Interest received 6.3 98.8
Dividends received - 0.4
Net cash (utilised in)/generated
by investing activities (52.3) 123.7
Financing activities
Cash distribution - (606.0)
Repayment of long-term borrowings - (30.0)
Net cash utilised in
financing activities - (636.0)
Net cash utilised (48.9) (599.3)
Opening balance of cash
and cash equivalents 284.3 883.6
Translation adjustment
Closing balance of cash and
cash equivalents 235.4 284.3
CONSOLIDATED BALANCE SHEET
US$ million
Quarter ended Year ended
31.03.2001 31.12.2000
Notes Unaudited Unaudited
Capital employed
Shareholders' equity 319.9 337.8
Outside shareholders'
interests 2.2 2.3
Deferred taxation 49.8 52.6
Long-term liabilities 2.3 2.4
374.2 395.1
Represented by
Mining assets 288.5 300.6
Unlisted investments 0.2 0.3
Long-term advances 8.2 8.1
Net current assets 77.3 86.1
Current assets 93.8 105.3
Inventories 1.6 1.8
Receivables 4.3 10.8
Loan to JCI Gold Ltd 1 41.8 38.0
Short-term cash advances 2 16.8 17.1
Cash and short term funds 29.3 37.6
Current liabilities 16.5 19.2
Payables and provisions 16.5 19.2
374.2 395.1
R million
Quarter ended Year ended
31.03.2001 31.12.2000
Notes Unaudited Unaudited
Capital employed
Shareholders' equity 2 569.2 2 553.9
Outside shareholders'
interests 17.4 17.4
Deferred taxation 400.3 397.7
Long-term liabilities 18.3 18.3
3 005.2 2 987.3
Represented by
Mining assets 2 317.3 2 272.9
Unlisted investments 1.9 2.2
Long-term advances 65.7 61.6
Net current assets 620.3 650.6
Current assets 753.2 796.0
Inventories 13.0 13.6
Receivables 34.2 81.4
Loan to JCI Gold Ltd 1 336.1 287.2
Short-term cash
advances 2 134.5 129.5
Cash and short term
funds 235.4 284.3
Current liabilities 132.9 145.4
Payables and provisions 132.9 145.4
3 005.2 2 987.3
Notes:
1. The loan to JCI Gold Ltd is repayable on 30 June 2001, is secured by a
pledge of marketable securities and carries interest at prime plus 1.5%.
Amounts owing to Western Areas for expenses incurred relating to the
proposed group restructuring in the previous year were incorporated into the
JCI Gold Ltd Loan. These amounts were previously disclosed under Receivables.
2. Short-term cash advances included the following :-
Durban Roodepoort Deep, Ltd R134.5 million The advance to Durban Roodepoort
Deep, Ltd carries interest at prime plus 1% and is secured by a pledge of
marketable securities with a current market value of R91 million, and is
repayable on 30 June 2001.
COMMENTS
Although the performance of the Joint Venture exceeded that for the same
quarter of the previous year, there was a significant decrease in gold output
over the previous quarter (-16%). Gold revenue reduced from R98.7 million to
R81 million as a result of the shortfall in gold output and the decrease in
gold price received to R67 732 per kilogram.
Tons milled were severely affected by the following:
* The extended Christmas and New Year break reduced the available working
days.
* An electrical fire in the main cable duct feeding the entire South Shaft
section halted production for five days. An insurance claim has been lodged.
* Industrial unrest in the form of a total stayaway by the workers
affiliated to the National Union of Mineworkers disrupted operations for four
days at the end of the quarter. The parties resolved their differences
satisfactorily.
* The trackless mining build-up in the two new sections was delayed by
various problems, which have subsequently been resolved.
The recovered grade was also affected by the delay in the trackless section,
however total development for the quarter increased by 44%.
Cash costs increased to US$201 per ounce as a result of a 19% increase in
production costs over the previous quarter. On a comparable basis production
costs were 9% higher due to the abovementioned problems.
Despite a major reduction in non-cash cost items and a significant drop in
other costs, the operating profit decreased to R25.5 million (R33 million). A
lower tax provision improved profit after tax to R15.3 million.
Capital expenditure for the quarter totalled
R56.2 million. The South Deep project progressed well with the Ventilation
Shaft commencing to hoist waste rock. This will alleviate the pressure on the
old South Shaft significantly. The Main Shaft was delayed by the need to spend
additional time on 110 level when bad ground conditions were encountered.
Shareholders are reminded that the Company has published a cautionary notice
regarding negotiations, which have reached an advanced stage.
RB Kebble J F Brownrigg
Chief Executive Officer Managing Director
Johannesburg
4 May 2001
WESTERN AREAS LIMITED
Registration Number 1959/003209/06
Incorporated in the Republic of South Africa
PO Box 61719, Marshalltown 2107
Telephone: +27 (11) 688-5000
Facsimile: +27 (11) 838-3393
www.westernareas.co.za
Investor and media relations: For further information contact Kathy du Plessis
on:Tel: +27 (11) 728-4701,
Fax: +27 (11) 728-2547 * e-mail:westernareas@dpapr.com
For further information call
John Brownrigg on +27(11) 688 5076 or
Mobile (0) 83 653 4043
WESTERN AREAS INCREASES EARNINGS AS SOUTH DEEP PROJECT PROCEEDS APACE
Johannesburg, 4 May 2001 - Western Areas boosted headline earnings by 18%
to 15.3 cents per share in the March quarter, a period also marked by continued
steady progress on its South Deep joint venture development project.
The R5 billion project, designed to exploit the world's single largest gold
reserve, is now less than two years away from full commissioning. Upon
completion it will be a major low-cost, long-life producer with an annual gold
output of some 800 000 ounces.
Managing director John Brownrigg said today development had again proceeded
satisfactorily during the past quarter. Hoisting of rock through the
Ventilation Shaft had now started, which would ease pressure on the old South
Shaft significantly. He noted that in spite of the scale of the work and the
speed with which it was being completed, the project had thus far been
fatality-free, an achievement for which the development team merited
considerable credit.
Meanwhile the South Deep mining operation produced
38 000 ounces of gold at a cash cost of US$201 per ounce during the March
quarter. Gold output was down only 16% on that of the previous quarter in spite
of the extended holiday period, a four-day stayaway by NUM-affiliated workers
and some since-resolved technical difficulties. While revenue from gold was
lower at R81 million (December: R98.7 million), net profit improved from R11.5
million to R15.3 million thanks to a lower tax provision.
The Company issued a cautionary announcement last week that negotiations to
unlock shareholder value had reached an advanced stage.
Issued by du Plessis Associates on behalf of Western Areas Limited.
dPA contact Kathy du Plessis on: westernareas@dpapr.com,
Tel : +27 11 728 4701, or cell : +27 (0) 83 266 5847
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