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(the "Company")
JSE Code: AGL
ISIN Code: GB0004901517
News Release
De Beers SA today reported headline earnings for the 6 months to 30 June 2002 of
US$ 308 million.
Headline earnings for Anglo American are arrived at by taking Anglo American's
equity interest in DB Investments plus the 10% preference shares which Anglo
American holds in De Beers SA.
Anglo American will therefore report headline earnings for the 6 months to 30
June 2002 from its investment in De Beers of US$ 166 million.
The above figures are unaudited.
De Beers Societe Anonyme
(incorporated under the laws of Luxembourg)
Monday, 12 August 2002
INTERIM RESULTS
FOR THE SIX MONTHS ENDED 30 JUNE 2002
The diamond industry began the year in a positive mood following better than
expected Christmas season retail sales of diamond jewellery, a significant
reduction in inventory of polished diamonds held by the retail trade during 2001
and cautious optimism for recovery in the global economy in 2002. Restocking
by the retail trade in the first half of the year meant that polished demand
from the cutting centres was above underlying retail demand in the consumer
markets. As a result, polished stocks financed by the cutting centres reduced
over the period from about $4,1 billion to $3,4 billion. Clients of the DTC,
the marketing arm of De Beers, benefited from receiving consistent assortments
of rough diamonds at competitive prices which facilitated further investment in
marketing.
Against that background, there was strong demand for rough diamonds throughout
the period and sales by the DTC for the first six months of 2002 totalled $2 842
million, 8,5 per cent higher than the equivalent period in 2001. Prospects for
the remainder of the year will depend on the state of the global economy and
consumer confidence, particularly in the USA, which will determine consumer
offtake and the level of stock the trade is prepared to hold.
De Beers made further good progress with the European Commission on its Supplier
of Choice strategy and anticipates a favourable outcome during the second half
of the year.
The new five year $4 billion trade agreement between De Beers and the Russian
diamond producer, Alrosa, was formally notified in February to the European
Commission for clearance. Both parties are committed to engaging constructively
with the Commission to address any concerns it might raise.
In February, De Beers signed a Heads of Agreement with Mvelaphanda Diamonds
(Proprietary) Limited, a black empowerment company, on a joint venture
committing both parties to grass roots (early stages) exploration for new world-
class diamond deposits in the northern part of South Africa. The joint venture
agreement was finalised and signed in July.
De Beers has expressed its concern to the South African Government over the lack
of certainty and clarity in a number of the provisions of the new Minerals
Development Bill. Further, De Beers hopes that the consultative process proposed
by Government, which will lead to a new Mining Charter, will confirm the
fundamental principles governing industry transformation to which Government and
the industry have committed themselves.
De Beers announces interim results as follows:
De Beers Societe Anonyme
Consolidated Income Statement
for the half-year ended 30 June 2002
(Abridged and unaudited)
US Dollar millions
6 months to Pro forma Pro forma
30 June 6 months to 12 months
2002 30 June to
2001 31
December
2001
Diamond sales
-DTC 2 842 2 619 4 454
-Other 197 238 413
Trade investment and 305 338 639
other income
3 344 3 195 5 506
Deduct:
Cost of sales 2 518 2 278 3 839
Depreciation and 114 65 198
amortisation (Note 2)
Sorting and marketing 198 193 453
Exploration and research 47 64 130
Corporate expenses (Note 18 32 39
3)
Net diamond account 449 563 847
Add:
Investment income 7 8
Surplus on realisation of 2 64 94
fixed assets and
investments
451 634 949
Deduct:
Net interest paid 76 (17) 65
(received)
Costs related to 24 154 110
reorganisation and
restructuring
Net income before 351 497 774
taxation and income from
AA plc
Taxation 115 182 280
Net income after taxation 236 315 494
but before income from AA
plc
Attributable to outside 6 10 8
shareholders in
subsidiaries
Own earnings before 230 305 486
income from AA plc
Share of retained income 31 31 6
of joint ventures
Total net earnings before 261 336 492
income from AA plc
Income from AA plc:
- dividends 165 156
- share of retained 132 128
income
Total net earnings 261 633 776
Headline earnings before 308 401 509
income from AA plc
Income from AA plc 343 328
Headline earnings 308 744 837
Cash available from 1 144 733 638
operating activities
De Beers Socit Anonyme (DBsa) (formerly DB Investments) acquired 100%
ownership of De Beers Consolidated Mines Limited (DBCM) and De Beers Centenary
AG (DBCAG) on 8 June 2001. Accordingly, the comparative results for De Beers
shown above have been prepared on a pro forma basis to include the results of
DBCM and DBCAG for the full six months ended 30 June 2001 and twelve months
ended 31 December 2001.
Consolidated Balance Sheet
30 June 2002
(Abridged and unaudited)
US Dollar millions
30 June 30 June 31
2002 2001 December
2001
3 784 3 813 3 578
Shareholders' interests
Outside shareholders' 89 80 83
interests
3 873 3 893 3 661
Provisions for liabilities 252 226 224
and charges
Net interest bearing debt 2 081 3 264 3 152
(Note 4)
6 206 7 383 7 037
Fixed assets 4 284 4 414 4 340
Investments and loans 25 455 42
Diamond stocks and other 1 897 2 514 2 655
net assets
6 206 7 383 7 037
Notes and Comments
1. The pro forma results of prior periods have been presented so as to
highlight the impact of income from Anglo American plc (AA plc) included
therein.
2. Amortisation in respect of the goodwill arising on the acquisition of DBCM
and DBCAG by DBsa amounting to $72 million has been expensed in the current
period. $11 million was expensed in the same period last year and $83 million in
the full year.
3. The implementation of the Group's strategic plan has resulted in a business
focus entirely on diamond mining and trading activities. Accordingly recurring
corporate expenses have been charged to the diamond account - comparatives have
been restated to reflect this change.
Cash has been offset against interest bearing debt.
The first repayment of $355 million on the $3 550 million Senior Debt facility
was made on 29 March 2002. The $1 billion revolving facility was not utilised
during the period under review.
Contacts:
De Beers London:
Lynette Hori +44 20 7430 3509/+44 7740 393260
De Beers South Africa
Tracey Peterson +27 11 374 7388/+27 83 408 7173
Pride Mogorosi +27 11 374 7155
Visit the official De Beers Group website for more information on the company
and where you can view and download a selection of images -
www.debeersgroup.com. As an additional resource for images, please visit
www.newscast-online.com.
12 August 2002
Date: 12/08/2002 10:09:03 AM Produced by the JSE SENS Department
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