| Wed 13 Mar 2002, 0:00 | | Anglo American plc ('Anglo American') reports a ro |
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ANGLO AMERICAN PLC
JSE Code: AGL
ISIN Code: GB0004901517
News Release
13 March 2002
Anglo American plc ('Anglo American') reports a robust performance for 2001
despite challenging market conditions
Net earnings for 2001 up by 62% to $3,176 million reflecting exceptional
gains arising from the De Beers transaction and the continuing disposal of
non core assets;
After adjusting for disposals and structural changes and despite weaker
prices for most of our products, headline earnings from continuing
businesses increased by 4%, following the successful integration of recent
acquisitions and reflecting strong performances by Platinum, Coal, Gold,
Industrial Minerals and Forest Products;
Headline earnings per share declined 6% reflecting further disposals in
Industries and Financial Services, elimination of the De Beers cross-holding
and cancellation of 10% of the company's shares in issue;
Final dividend of 34 US cents, giving an increased total dividend for 2001
of 49 US cents per ordinary share, an increase of 3% on 2000;
Continued focus on restructuring - elimination of the cross-holding between
Anglo American and De Beers and the increase in Anglo American's interest in
De Beers to 45%;
Operating profit margin before exceptional items increases to 17.1% - record
operating profit in five major businesses;
Further progress on cost savings and efficiency initiatives across the Group
realises $275 million in 2001, containing cost increases to $56 million
(0.4%).
HIGHLIGHTS FOR YEAR ENDED 31 DECEMBER (1)
2001
$ million except per share amounts 2001 2000 Change
Group turnover & share of turnover of 19,282 20,570 (6) %
joint ventures & associates
Total operating profit before 3,300 3,480 (5) %
operating exceptional items
Operating profit before exceptional 17.1% 16.9% -
items : turnover
Total operating profit 2,787 3,214 (13) %
Net earnings for the financial year 3,176 1,957 62 %
Headline earnings for the financial 1,770 2,000 (12) %
year *
Headline earnings - continuing 1,728 1,664 4 %
businesses (2)
Total earnings per share ($) 2.15 1.25 72 %
Headline earnings per share ($) 1.20 1.28 (6) %
Dividend per share (US cents) 49 47.5 3%
Weighted number of shares in issue 1,474 1,567 -
(million)
includes 12 months of De Beers cross-holding and equity earnings
from FirstRand
Headline earnings adjusted for structural changes (De Beers) and
major disposals in Industries and Financial Services
* see note 6 for basis of calculation of headline earnings
Tony Trahar, Chief Executive, said
'The past year was one of substantial progress for Anglo American. We
continued to deliver against our strategy on a number of fronts with the
achievement of enhanced shareholder value as our key objective. The major
milestone was the successful removal of the Anglo American/De Beers cross
holding and the resultant cancellation of 10% of our shares in issue.
In a year characterised by difficult economic conditions and substantially
weaker prices for most commodities, after adjusting for disposals and
restructuring, the Group recorded a 4% increase in headline earnings from
its continuing businesses reflecting strong performances from Platinum,
Coal, Gold, Industrial Minerals and Forest Products. It is pleasing that the
operating profit margin increased: this robust performance demonstrates the
strength of Anglo American's diverse earnings base and the quality of our
assets.
We made substantial progress in further driving down costs and improving
efficiencies across the entire Group. Major initiatives on cost control and
efficiencies yielded significant savings of $275 million and will continue
to be a focus going forward. We have also delivered an impressive
performance in integrating acquisitions into our core businesses.
While there are some signs of economic recovery, at this stage they seem
more encouraging in the United States than in Europe and Japan. The trading
environment for most of our products is likely to remain challenging. The
Group will benefit from its diverse and competitive operations, particularly
in low cost areas of production, and the significant capital projects that
are presently in progress. We will continue to pursue further opportunities
for expansion and growth.'
Review of 2001
Despite difficult economic conditions, 2001 was another year of significant
and continued progress in focusing and growing Anglo American's core
businesses. The elimination of the cross-holding between Anglo American and
De Beers in the first half of the year was a key element to the
restructuring process and has brought substantial benefits to Anglo
American. The major acquisitions made in 2000 in Coal, Industrial Minerals
and Forest Products have been successfully integrated over the last year and
are now making significant earnings contributions.
Tough trading environment during 2001:
Lower prices were experienced in most major commodities as the global
economic slowdown affected many key markets. Base metals were severely
affected, with average annual copper, nickel and zinc prices declining 13%,
31% and 21% respectively. Platinum Group Metal (PGM) prices also experienced
a decline from the very high levels of 2000 with platinum falling 3% over
the year. The effect of lower commodity prices was offset by weaker
currencies, mainly the South African rand and the Australian dollar, which
lowered local operating costs in US dollar terms by $454 million.
Strong contributions from major acquisitions made in 2000:
Coal reported on the first full year contribution from the Australian coal
assets and the interest in Cerrej'n Zona Norte in Colombia which helped the
division to record a 180% increase in headline earnings;
Industrial Minerals' 11% increase in headline earnings was due to
substantial synergy benefits following the integration of Tarmac and the
continuing programme of cost cutting and price improvements;
in Forest Products, improved productivity and further cost reductions
reflected the successful integration of the European paper and packaging
assets acquired in 2000. Operating profit increased to a record $522
million, although headline earnings were affected by increased debt levels.
Internal growth:
five major gold projects costing $700 million are scheduled to come into
production over the next 3 years;
the $2 billion platinum expansion to 3.5 million ounces per annum by 2006 is
on schedule and two new mines will be commissioned in 2002;
in Colombia, the $500 million expansion project to raise coal production at
Carbones del Cerrej'n to 10 million tonnes a year should commence soon;
expansions and new projects currently underway in Base Metals total $890
million.
Transactions:
Since listing in May 1999, $4.1 billion has been realised from the disposal
of assets. Disposals made in 2001 realised $1.9 billion and include:
interests in FirstRand, SA Breweries, Stanbic, AECI and Shaft Sinkers;
a 12.3% interest in Aracruz for $370 million;
a 7.1% stake in Billiton, acquired as a result of disposing of most of the
Group's interest in FirstRand, for $754 million.
Since May 1999, $7.4 billion has been invested in new businesses. Recent
acquisitions include:
an increase in Anglo American's stake in Anglo Platinum from 50.1% at 2
March 2001 to 59.6% at 1 March 2002;
the outstanding 50% stake in Cerrej'n Zona Norte, the largest producer and
exporter of steam coal in Colombia, as part of a consortium. The initial 50%
stake was acquired by the consortium from Carbocol in December 2000;
Danisco Pack UK's paper and packaging assets, making Mondi Packaging UK the
third largest corrugated packaging company in the UK;
Durox, consolidating Tarmac's leadership of the UK concrete block market;
a 9.6% stake in Kumba Resources with the right to acquire a further 10.5%,
and a 34.9% stake in Avmin for a total of $365 million. The acquisitions,
announced on 12 March 2002, are part of Anglo American's strategic objective
of securing a meaningful interest in the iron ore sector.
Increased focus on cost control including corporate centre:
Increased focus on cost savings and efficiencies across the Group has
realised $275 million this year. Further savings from the restructuring of
corporate offices at the end of 2001 will accrue during 2002.
De Beers deal:
The elimination of the cross-holding with De Beers had been a key strategic
priority since listing in May 1999. The benefits to Anglo American were:
the simplification of its structure and improved transparency;
an increase in Anglo American's interest in De Beers' diamond business to
45%;
a net cash inflow of $998 million plus $701 million preference shares in DB
Investments;
ordinary and preference dividends due of $71 million for first seven months
of the new structure;
an increase in the free float of Anglo American shares from 53% to 91% and
the retention of a full FTSE weighting.
Review of financial results:
Anglo Platinum recorded the largest contribution to headline earnings of
$522 million (29% of Anglo American's total headline earnings) up from
US$500 million in 2000. The increase resulted from an improved operational
performance which led to higher production and sales volumes. Although PGM
prices declined significantly from their historic highs of 2000, the lower
prices were largely offset by the depreciation of the South African rand.
Coal's contribution to headline earnings increased significantly by 180% to
$387 million (22% of Anglo American's total) following the first full year
contribution from the Australian assets and Cerrej'n Zona Norte in Colombia.
The improved performance also reflected higher export prices and some
benefit from the weaker Australian dollar and South African rand.
Although Forest Products reported record operating profits of $522 million,
headline earnings declined by 13% to $267 million (15% of Anglo American's
total) due to substantially higher tax and interest payments and lower
prices. In Europe, improved productivity, further cost reductions and a
steady underlying performance following the successful integration of the
paper and packaging assets acquired last year, offset lower sack paper, pulp
and corrugated packaging prices.
De Beers contributed $234 million to headline earnings (13% of Anglo
American's total) down from $321 million in the previous period, due to the
widely expected fall in demand for rough diamonds following the record sales
achieved in 2000. However, Christmas retail sales figures for 2001 were
stronger than expected.
Industrial Minerals reported an 11% increase in headline earnings to $176
million (10% of Anglo American's total). The improvement was due to
substantial synergy benefits arising from the acquisition of Tarmac and a
continuing programme of cost cutting and price improvements across the
division. This was offset by higher tax charges and lower earnings from
Cleveland Potash which, subject to certain conditions, has been sold. The
second half of the year in particular saw a strong performance as the
benefits of increased infrastructure spending in the UK began to emerge.
AngloGold's contribution to headline earnings of $173 million (10% of Anglo
American's total) was 14% lower than the previous year as a result of
increased finance and tax charges. Total cash costs declined by 16% to $178
per ounce. AngloGold's production declined by 4% to 7 million ounces as a
result of the sale of the Elandsrand and Deelkraal mines in South Africa.
The Ferrous Metals division recorded a 44% decline in headline earnings to
$48 million (3% of Anglo American's total). This was principally a result of
the continued oversupply situation in the world steel industry and declining
prices.
Base Metals reported a headline loss of $2 million. Declining prices and
generally poor markets for base metals were major factors that contributed
to the division's poor performance. Exceptional charges of $488 million were
recorded against certain assets, including a $353 million exceptional charge
attributed to the Konkola Copper Mine operations in Zambia.
The Industries division reported a 55% decline in headline earnings to $45
million, with increased operating profits from Boart offset by lower profits
from Tongaat-Hulett, an operating loss from Terra and further disposals.
Exceptional items
Non-operational exceptional gains amounted to $2,148 million, mainly
comprising the De Beers transaction and the swap of most of the Group's
interest in FirstRand Limited for interests in Billiton Plc and Gold Fields
Limited, the subsequent sale of the interest in Billiton and the sale of
other non-core assets.
Operating exceptional charges amounted to $513 million. These represented
impairments or write downs to the value of $488 million in respect of Base
Metals operations, including ZCI/KCM, the Anaconda nickel operation, Lisheen
zinc mine, Hudson Bay's Ruttan zinc/copper mine and the expensing of
Quellaveco's feasibility costs for the copper project. In addition, a $25
million exceptional charge was recorded in Corporate Activities relating to
the investment in Ivernia West plc.
Taxation
The effective rate of taxation before goodwill amortisation and exceptional
items was 31%. This was an increase over the effective rate of 26% in 2000
and principally reflects higher effective tax rates in Gold and Forest
Products, higher profit contributions from Platinum and Coal and lower
contributions from Industries, Base Metals and Financial Services.
Dividends
The directors recommend a final dividend of 34 US cents per share to be paid
on 15 May 2002. Dividends for the year will amount to 49 US cents per share,
a 3% increase on last year's total dividend. Whether or not this increase
will be reflected in the next interim dividend declaration will depend on
the results and outlook at the time.
Outlook
While there are some signs of economic recovery, at this stage they seem
more encouraging in the United States than in Europe and Japan. The trading
environment for most of our products is likely to remain challenging. The
Group will benefit from its diverse and competitive operations, particularly
in low cost areas of production, and the significant capital projects that
are presently in progress. We will continue to pursue further opportunities
for expansion and growth.
For further information, please contact:
Anglo American - London
Investor Relations
Nick von Schirnding
Tel: +44 (0)20 7698 8540
Media Relations
Kate Aindow
Tel: +44 (0)20 7698 8619
Anglo American - Johannesburg
Investor Relations
Anne Dunn
Tel: +27 11 638 4730
Media Relations
Marion Dixon
Tel: +27 11 638 3001
Anglo American plc website: www.angloamerican.co.uk
Anglo American plc is a global leader in the mining and natural resource
sectors. It has significant and focused interests in gold, platinum,
diamonds, coal, base and ferrous metals, industrial minerals and forest
products, as well as financial and technical strength. The Group is
geographically diverse, with operations in Africa, Europe, South and North
America and Australia. Anglo American represents a powerful world of
resources.
Operational review
Platinum
$ million 2001 2000
Total operating profit 1,345 1,336
Headline earnings 522 500
Net operating assets 1,847 1,327
Capital expenditure 391 272
Share of headline earnings (%) 29 25
Share of group net operating assets (%) 13 8
Anglo Platinum's contribution to headline earnings of $522 million was 4%
higher than in 2000, following higher sales volumes and lower dollar costs.
World supplies of platinum rose by an estimated 5% to 5.58 million ounces as
expansions in South Africa came on stream. Demand for platinum also rose by
some 5% and the market was in deficit for the third consecutive year.
Jewellery demand dipped by 11%, with record demand in China not quite
compensating for declines in Japan and the United States.
Net demand for platinum from the autocatalyst sector increased 25%. High
prices for palladium at the beginning of 2001, coupled with irregular
Russian supplies, triggered a move to platinum by auto manufacturers to
reduce their reliance on palladium.
Anglo Platinum's planned expansion to 3.5 million annual ounces of refined
platinum by the end of 2006 is on track. Two new mines will be commissioned
in 2002 - the Waterval mine at Rustenburg, and the Maandagshoek mine, a
joint venture with a black empowerment consortium.
After the considerable reduction in Platinum Group Metal market prices in
the second half of last year, platinum and palladium have established more
stable trading ranges. The profitability of Anglo Platinum's individual
operations remains closely hinged to the South African rand/dollar exchange
rate.
Gold
$ million 2001 2000
Total operating profit before 443 410
exceptional items
Headline earnings 173 201
Net operating assets 2,086 2,667
Capital expenditure 243 240
Share of headline earnings (%) 10 10
Share of group net operating assets (%) 14 17
In 2001, AngloGold's contribution to headline earnings was $173 million, 14%
lower than the year before as a result of higher finance and tax charges.
Attributable production declined by 4% to 7 million ounces as a result of
the sale of Elandsrand and Deelkraal in South Africa. This was partially
offset by a 137% increase in production from the rest of Africa region, with
Geita and Morila included for the full year and Yatela producing its first
gold. Despite the overall fall in production, improvements in cost control
and productivity, assisted by the depreciation of the South African rand,
resulted in total cash costs reducing by 16% to $178 per ounce. The gold
price received was 7% lower at $286 per ounce.
In November, AngloGold announced that it would sell its Free State assets to
black-empowerment group African Rainbow Minerals and Harmony Gold Mining for
$183 million plus recoupment tax, thereby reducing its South African
operations to seven. The sale will lower total cash costs for the company's
worldwide assets by 4%.
In 2002, AngloGold expects to produce approximately 5.8 million ounces of
gold at an average cash cost of $154 per ounce. The company has five major
capital projects in development that are coming into production over the
next three years at a cost of $700 million.
Diamonds
$ million 2001 2000
Total operating profit 373 491
Headline earnings 234 321
Share of headline earnings (%) 13 16
De Beers' contribution to headline earnings amounted to $234 million for the
year. In 2001, sales of rough diamonds by De Beers' marketing arm, the
Diamond Trading Company (DTC), at $4.4 billion, were 21.5% lower than the
record $5.6 billion achieved in 2000. The economic uncertainty surrounding a
weakening economy and excess stocks of polished diamonds was aggravated by
the 11 September terrorist attacks. However, Christmas season retail sales
of diamond jewellery were above expectations, and global diamond retail
sales in 2001 were around 5% down.
The DTC is making progress with its 'Supplier of Choice' strategy, for which
final approval of the DTC's distribution system is awaited from the European
Commission.
In December, De Beers and the Russian diamond producer Alrosa signed a new
five year $4 billion trade agreement (which awaits clearance by the European
Commission).
Although stocks of rough diamonds in the cutting centres and polished
diamonds in the pipeline have reduced, the DTC's 2002 sales prospects will
depend on the timing and extent of any recovery in the world economy and the
level of polished stocks that the trade pipeline will be confident to carry.
Rough diamond demand at the first two sights in 2002 has been encouraging.
Forest products
$ million 2001 2000
Total operating profit 522 458
Europe 330 221
South Africa 185 202
Brazil 7 35
Headline earnings 267 308
Net operating assets 2,700 3,054
Capital expenditure 283 126
Share of headline earnings (%) 15 15
Share of group net operating assets (%) 18 19
Forest Products total headline earnings for 2001 were $267 million, a 13%
decrease on 2000. Mondi Europe's operating profit was 49% higher at $330
million, partly attributable to the incorporation of the Assi Sack and SCP
Ruzomberok businesses acquired in 2000. Mondi South Africa's operating
profit declined by 8% to $185 million in a subdued market.
The graphic paper sector reported healthy growth in operating profit. In the
white paper business, SCP Ruzomberok strengthened the 100% owned Neusiedler
group's European market position. Newsprint enjoyed a significant
improvement in operating margins. Frantschach (70% held) achieved
significant cost reductions to compensate for volume and margin pressure in
Industrial Packaging.
A recovery in the corrugated packaging sector took place during the first
six months. In September, Danisco Pack UK's corrugated assets were acquired,
providing significant synergy benefits.
In South Africa, 2001 was a tough year for pulp as production declined and
prices remained under pressure. However, the Paper and Cartonboard Divisions
achieved profit growth, while the Forests Division and Mondipak contained
costs to hold profits under difficult trading conditions.
In October, Mondi Brazil disposed of its interest in Aracruz Celulose for
$370 million, realising a profit of $114 million on the sale.
2002 is expected to be a challenging year. In Europe, where the corrugated
packaging industry is still relatively fragmented, Mondi has several
projects and plans under consideration. In January 2002 Mondi announced a
Euro 367 million bid for La Rochette the outcome of which is still pending.
In March 2002, the go-ahead was given for a $210 million rebuild and
expansion project at Ruzomberok and Mondi Europe announced the acquisition
of a further 68.5% stake (taking its shareholding to 88%) in Syktyvkar, the
low cost Russian paper producer, for $252 million.
Coal
$ million 2001 2000
Total operating profit/(loss) 493 169
South Africa 271 136
Australia 173 35
South America 49 (2)
Headline earnings 387 138
Net operating assets 1,373 1,580
Capital expenditure 93 45
Share of headline earnings (%) 22 7
Share of group net operating assets (%) 9 10
In 2001, headline earnings for Coal were $387 million, a 180% increase on
the previous period. Total coal sales rose by 12.6 million tonnes to 77.4
million tonnes. At the South African operations, despite lower sales,
operating profit doubled to $271 million, assisted by the depreciating South
African rand.
The Australian operations increased operating profit fivefold to $173
million, 2001 marking their first full year under Anglo Coal management.
Results were improved by the acquisition of minority interests to secure
full ownership of Capcoal (previously German Creek) and increased equity in
Dartbrook.
Attributable operating profit from the South American operations was $49
million compared with a loss of $2 million in the previous year. In an
important move to consolidate the Carbones del Cerrej'n (CdelC) and Cerrej'n
Zona Norte (CZN) operations in Colombia, the Anglo Coal/BHP
Billiton/Glencore consortium has acquired 100% ownership of CZN. The $500
million expansion project to raise output at CdelC to 10 million tonnes a
year should commence soon.
The metallurgical coal market, particularly hard coking coal, remained firm
throughout the year. Thermal coal demand and prices were bolstered during
the first half by the US energy crisis. However, a dramatic increase in coal
exports from China contributed to second-half price softening. Although
Chinese export volume growth is expected to slow in 2002, China will remain
a material influence on thermal export price levels. Despite the steel
industry's difficulties worldwide, the outlook for coking coal is reasonably
robust.
Industrial minerals
$ million 2001 2000
Total operating profit 201 150
UK 156 107
Europe 23 21
Brazil 22 22
Headline earnings 176 159
Net operating assets 3,246 3,196
Capital expenditure 205 186
Share of headline earnings (%) 10 8
Share of group net operating assets (%) 22 20
Headline earnings for Industrial Minerals increased 11% to $176 million in
2001. The improvement was attributable to synergy benefits arising from the
acquisition of the Tarmac Group, price improvements and a cost cutting
programme.
In the United Kingdom, benefits from increased infrastructure spending were
felt towards the year end and the aggregates, asphalt and ready-mixed
concrete product businesses improved significantly after a poor start to the
year.
The Spanish operations nearly doubled operating profit, but the other
continental European operations encountered weak markets.
In Brazil, Copebr s improved earnings slightly. The new fertiliser plant is
scheduled for completion before the end of the year.
Several acquisitions were made in Poland and France, particularly in
concrete products. In January 2002, Tarmac consolidated its leadership of
the UK concrete block market through the acquisition of aircrete-blocks
supplier Durox. An agreement was announced in November for the sale of
Cleveland Potash, subject to various conditions.
Tarmac expects growth and increased profitability in 2002 in the UK on the
back of further infrastructure investment, although the introduction of the
aggregates levy may result in some distortion to demand. In continental
Europe, benefits will flow from recent acquisitions, but the outlook remains
mixed.
Ferrous metals
$ million 2001 2000
Total operating profit/(loss) 77 127
Highveld Steel 6 22
Scaw Metals 31 30
Samancor Group 19 57
Catalao 22 15
Other (1) 3
Headline earnings 48 86
Net operating assets 220 390
Capital expenditure 28 32
Share of headline earnings (%) 3 4
Share of group net operating assets (%) 1 2
In 2001, headline earnings for the Ferrous Metals division were $48 million
compared with $86 million in 2000. World steel consumption remained at low
levels in line with prior years, with weak prices for carbon and stainless
steel, vanadium and chrome.
Sales were buoyant in South Africa, though exports were weak, with volumes
and dollar prices of carbon steel and vanadium below prior year levels. At
Columbus, decreased prices for stainless steel led to a lower operating
profit of $2 million. Highveld Steel reported lower operating profit of $6
million.
Scaw Metals' operating profit was 3% higher than the prior year at $31
million, despite slightly lower volumes.
In 40% held Samancor, ferromanganese profits were steady, with volumes and
prices being maintained despite reduced global steel production. Reduced
stainless steel demand, however, led to losses in the ferrochrome division.
At Catalao in Brazil, volumes increased and operating profit rose from $15
million to $22 million. With effect from 1 January 2002, management of the
Catalao business was transferred to the Base Metals division.
It is likely that 2002 will be a difficult year. Although the steel market
appears to have bottomed out, prices are expected to remain at low levels,
with some relief towards year end.
On 12 March 2002, Anglo American announced the acquisition of a 9.6% stake
in Kumba Resources with the right to acquire a further 10.5%, and a 34.9%
stake in Avmin for a total of $365 million as part of its strategic
objective of securing a meaningful interest in the iron ore sector. Anglo
American intends working with Kumba, Avmin, the South African Government and
appropriate black economic empowerment groupings to realise the full growth
potential of the Kalahari iron ore resource as well as to help unlock the
significant synergies that exist and facilitate meaningful black economic
empowerment.
Base metals
$ million 2001 2000
Total operating (loss)/profit before (22) 196
exceptional items
Copper 2 173
Zinc (57) (5)
Nickel 19 40
Namakwa Sands/other 14 (12)
Exceptional Items (488) (237)
Total operating loss after exceptional (510) (41)
items
Headline (loss)/ earnings (2) 132
Net operating assets 1,977 2,102
Capital expenditure 446 410
Share of headline earnings (%) - 7
Share of group net operating assets (%) 13 13
Reflecting very depressed metals prices, Base Metals recorded a headline
loss of $2 million for 2001. Demand weakened as the world economy turned
downward, while meaningful price-induced cutbacks and mine closures only
materialised towards year end. Copper, nickel and zinc's annual average
prices declined by 13%, 31% and 21% respectively. The division recorded an
operating loss, before exceptional charges, of $22 million.
Attributable copper production rose 12% to 534,000 tonnes, with increases at
Hudson Bay, Mantos Blancos and Collahuasi.
Attributable nickel production increased by 91% to 27,000 tonnes, as Loma de
N!quel started to ramp up production and with higher output at Bindura
Nickel. Anaconda saw continued poor production performance.
Attributable zinc production was 17% higher at 166,000 tonnes. Hudson Bay
enjoyed a much improved second half, while the Lisheen mine ramped up to
full production by year end.
Namakwa Sands experienced production improvements and reported higher
profits.
In October 2001, Konkola Copper Mines (KCM), in which Anglo American has an
indirect 33% interest, announced that, given the weaker outlook for copper
and cobalt prices and its inability to raise the required project finance,
it was unable to proceed with the Konkola Deep Mining Project (KDMP). In
January 2002, Anglo American announced that in the absence of KDMP project
finance further investment in KCM could not be justified beyond the amount
committed at the time of vesting. A Shareholders Steering Committee is
currently evaluating future options for KCM.
The immediate focus of Base Metals is improving performance at under-
performing operations and the development of a world-class suite of assets.
Industries
$ million 2001 2000
Total operating profit/(loss) 114 272
AECI - 60
Tongaat-Hulett 112 126
Boart 30 28
Terra (23) 27
Other (5) 31
Headline earnings 45 99
Net operating assets 884 1,317
Capital expenditure 65 163
Share of headline earnings (%) 3 5
Share of group net operating assets (%) 6 8
In Industries, headline earnings of $45 million were down from $99 million
in 2000. This reduction was primarily due to the programme of disposals in
2000 and to a lesser extent this year. Further progress was made in 2001.
The majority of the remaining interests in AECI and SA Breweries were sold
for $179 million, resulting in a profit of $108 million. The Group's
interest in Shaft Sinkers was sold with effect from 1 January 2002.
Tongaat-Hulett's operating profits were lower at $112 million. During the
year the Corobrick and Textiles divisions were sold. The sugar division's
performance was similar to the prior year.
Boart Longyear's operating profit increased to $30 million from $28 million
in the prior year. Sales volumes were marginally lower, mainly due to the
disposal of non-core businesses. Costs were well contained as a result of
previous restructuring initiatives. Demand in South Africa was boosted by
development work in the platinum mines.
The Group's 49% share of Terra's operating loss incurred was $23 million
compared with a profit of $27 million in 2000. Weak fertilizer demand and
high natural gas prices adversely affected operating costs.
Balance sheet
Total shareholders' funds were US$13,426 million compared with US$15,544
million at 31 December 2000. The decrease was primarily due to the fall in
the value of the South African rand and the effect of the De Beers
transaction.
Net debt was US$2,018 million, a decrease of US$1,572 million from 2000. The
decrease was due to the proceeds from the De Beers transaction, the sale of
the Group's interest in Billiton and the sale of other non-core investments.
Net debt to total capital at 31 December 2001 was 11.6% compared with 16.5%
in 2000.
Cash flow
Cash inflow from operations was US$3,539 million compared with US$2,959
million in 2000. This inflow was after a US$138 million increase in working
capital. Depreciation and amortisation, which increased by US$118 million,
are analysed below.
Analysis of depreciation by business segment
US$ million 2001 2000
Platinum 77 60
Gold 157 186
Forest products 193 111
Coal 108 59
Industrial minerals 136 113
Ferrous metals 25 26
Base metals 130 122
Industries 46 95
Other 9 10
881 782
Analysis of goodwill amortisation by business segment
US$ million 2001 2000
Platinum 16 17
Gold 30 27
Diamonds 34 6
Forest products 11 19
Coal 8 6
Industrial minerals 42 44
Ferrous metals 1 -
Base metals 1 (3)
Industries 1 7
Other 21 23
165 146
Capital expenditure of US$1,787 million was US$276 million higher than for
2000. An analysis is set out below.
Analysis of capital expenditure by business segment
US$ million 2001 2000
Platinum 391 272
Gold 243 240
Forest products 283 126
Coal 93 45
Industrial minerals 205 186
Ferrous metals 28 32
Base metals 446 410
Industries 65 163
Other 33 37
1,787 1,511
Sale of other financial assets and associates generated US$2,701 million,
which included the proceeds from the De Beers' transaction and the sale of
Billiton shares. This was partially offset by the acquisition of Anglo
Platinum shares, increasing the Group's ownership from 50.2% at the 2000
year end to 57.9% at 31 December 2001.
Exchange rates against the US dollar
Average 2001 2000
South African rand 8.62 6.91
Pound sterling 0.69 0.66
Euro 1.12 1.08
Australian dollar 1.93 1.72
Year end
South African rand 11.96 7.58
Pound sterling 0.69 0.67
Euro 1.12 1.06
Australian dollar 1.96 1.80
Consolidated profit and loss account
for the year ended 31 December 2001
Before Exceptio Before Except
nal ional
exceptio items exceptio items
nal nal
items (note 7) items (note
7)
US$ million Not 2001 2001 2001 2000 2000 2000
e
Group and 2 19,282 - 19,282 20,570 - 20,570
share of
turnover of
joint ventures
and associates
Less: Joint 2 (1,109) - (1,109) (1,590) - (1,590)
ventures'
turnover
Associates' 2 (3,387) - (3,387) (4,156) - (4,156)
turnover
Group turnover 2 14,786 - 14,786 14,824 - 14,824
- subsidiaries
Operating (12,138) (498) (12,636) (12,456) (33) (12,489
costs )
Group 2 2,648 (498) 2,150 2,368 (33) 2,335
operating
profit -
subsidiaries
Share of 2 193 (15) 178 282 (123) 159
operating
profit of
joint ventures
Share of 2 459 - 459 830 (110) 720
operating
profit of
associates
Total 2 3,300 (513) 2,787 3,480 (266) 3,214
operating
profit
Profit on 7 - 2,148 2,148 - 402 402
disposal of
fixed assets
Costs of 7 - - - - (79) (79)
fundamental
reorganisation
Profit on 3 3,300 1,635 4,935 3,480 57 3,537
ordinary
activities
before
interest
Investment 799 - 799 1,057 - 1,057
income
Interest (669) - (669) (749) - (749)
payable
Profit on 3,430 1,635 5,065 3,788 57 3,845
ordinary
activities
before
taxation
Tax on profit 5 (1,102) (147) (1,249) (1,005) - (1,005)
on ordinary
activities
Profit on 2,328 1,488 3,816 2,783 57 2,840
ordinary
activities
after taxation
Equity (704) 64 (640) (917) 34 (883)
minority
interests
Profit for the 3 1,624 1,552 3,176 1,866 91 1,957
financial year
Equity (690) - (690) (742) - (742)
dividends to
shareholders -
paid and
proposed
Retained 934 1,552 2,486 1,124 91 1,215
profit for the
financial year
Headline 6 1,770 2,000
earnings for
the financial
year
Basic earnings
per share
(US$)(1) :
Profit for the 6 2.15 1.25
financial year
Headline 6 1.20 1.28
earnings for
the financial
year
Diluted
earnings per
share
(US$)(1):
Profit for the 2.13 1.23
financial year
Headline 1.19 1.26
earnings for
the financial
year
Dividend per 49 47.5
share (US
cents)(1) :
Basic number 1,474 1,567
of shares
outstanding(2)
(million)
Diluted number 1,491 1,588
of shares
outstanding(2)
(million)
(1) The comparative figures for 2000 for earnings and dividend per share
statistics, and numbers of shares outstanding, have been restated to reflect
the three-for-one bonus issue in May 2001.
(2) Basic and diluted number of shares outstanding represent the weighted
average for the year.
All amounts included above relate to continuing operations.
Consolidated balance sheet
as at 31 December 2001
US$ million 2001 2000
Fixed assets
Intangible assets 2,068 2,462
Tangible assets 10,770 11,819
Investments in joint ventures: 1,580 1,483
Share of gross assets 2,977 2,891
Share of gross liabilities (1,397) (1,408)
Investments in associates 2,438 4,856
Other financial assets 1,527 1,621
18,383 22,241
Current assets
Stocks 1,383 1,748
Debtors 2,817 3,222
Current asset investments 2,003 2,344
Cash at bank and in hand 915 1,061
7,118 8,375
Short term borrowings (2,301) (3,398)
Other current liabilities (3,936) (4,027)
Net current assets 881 950
Total assets less current liabilities 19,264 23,191
Long term liabilities (2,635) (3,597)
Provisions for liabilities and charges (1,261) (1,404)
Equity minority interests (1,942) (2,646)
Net assets 13,426 15,544
Capital and reserves
Called up share capital 734 204
Share premium account 1,203 1,815
Merger reserve 636 2,424
Other reserves 716 927
Profit and loss account 10,137 10,174
Total shareholders' funds (equity) 13,426 15,544
Consolidated cash flow statement
for the year ended 31 December 2001
US$ million No 2001 2000
te
Net cash inflow from operating activities 8 3,539 2,959
Expenditure relating to fundamental (23) (44)
reorganisation
Dividends from joint ventures and 258 258
associates
Returns on investments and servicing of
finance
Interest received and other financial 419 348
income
Interest paid (430) (501)
Dividends received from fixed asset 74 68
investments
