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Western Areas Limited - Financial Report
Western Areas Limited
Registration number 1959/003209/06
Incorporated in the Republic of South Africa
Isin: ZAE000016549
SHARE CODE: WAR
Quarterly results ended 30 September 2002
- Resolution of JCI loan
- South Deep approaches completion
- Gold production increased by 19% to
51,952 ounces
- Recovered grade increased to 6,83 g/t
- Hedgebook restructuring completed
- 7% increase
in tonnes milled
CONSOLIDATED INCOME STATEMENT
US$ Million
Year Year to Quarter Quarter
ended date ended ended
31.12.01 30.09.02 30.06.02 30.09.02
Group Company Company Company
audited Unaudited Unaudited Unaudited
Revenue from gold at spot 47.9 41.8 12.8 15.8
Costs and other expenses (39.9) (30.2) (9.5) (12.4)
Production costs (33.8) (27.1) (8.3) (11.3)
Non-cash items (6.1) (3.1) (1.2) (1.1)
Profit from gold 8.0 11.6 3.3 3.4
Plus 13.7 4.6 2.0 0.3
Sundry revenue 3.4 0.4 - 0.1
Net interest receipts 10.3 4.2 2.0 0.2
Less (6.6) (3.0) (1.1) (0.9)
Administration costs and
amortisation of corporate
assets (5.7) (3.1) (1.1) (0.9)
Exploration and new business (0.3) 0.1 - -
Prestea mine closure costs (0.6) - - -
Operating profit before
derivative transactions and
non-recurring costs 15.1 13.2 4.2 2.8
Less (4.5) (27.3) (4.4) (16.2)
Net amortised premiums on put
and call options (1.9) (28.6) (8.3) (12.8)
Hedging profit/(loss) 0.7 (3.1) (1.1) 0.1
Exchange (loss)/profit (3.3) 4.4 5.0 (3.5)
(Loss)/profit before non-recurring
costs 10.6 (14.1) (0.2) (13.4)
Hedgebook closure costs - (55.1) - (57.0)
Non-recurring income/(costs) (4.3) 0.9 1.1 -
(Loss)/profit before taxation 6.3 (68.3) 0.9 (70.4)
Taxation (2.2) 31.5 (0.4) 32.3
Normal taxation (1.0) (1.2) (0.6) -
Deferred taxation (1.2) 32.7 0.2 32.3
Attributable to outside
shareholders (0.3) - - -
Attributable (loss)/profit after
taxation 3.8 (36.8) 0.5 (38.1)
Headline (loss)/earnings
per share - cents 4 (3) - (3)
(Loss)/earnings per share - cents 4 (35) - (36)
Number of shares in issue
(million) 105.4 105.4 105.4 105.4
R Million
Year Year to Quarter Quarter
ended date ended ended
31.12.01 30.09.02 30.06.02 30.09.02
Group Company Company Company
Notes audited Unaudited Unaudited Unaudited
Revenue from gold at spot 163.7 140.4 450.1 414.2
Costs and other expenses (128.8) (104.9) (325.2) (345.2)
Production costs (117.2) (91.3) (291.7) (292.2)
Non-cash items (11.6) (13.6) (33.5) (53.0)
Profit from gold 34.9 35.5 124.9 69.0
Plus 2.4 22.6 49.2 118.0
Sundry revenue 0.7 0.3 4.1 29.3
Net interest receipts 1.7 22.3 45.1 88.7
Less (8.6) (12.5) (32.0) (57.1)
Administration costs and
amortisation of corporate assets (8.6) (12.5) (32.9) (49.5)
Exploration and new business - - 0.9 (2.8)
Prestea mine closure costs - - - (4.8)
Operating profit before
derivative transactions and
non-recurring costs 28.7 45.6 142.1 129.9
Less (168.0) (48.5) (293.6) (38.8)
Net amortised premiums on put
and call options 2 (132.8) (90.5) (307.4) (16.6)
Hedging profit/(loss) 2 1.1 (12.2) (32.9) 6.2
Exchange (loss)/profit 2 (36.3) 54.2 46.7 (28.4)
(Loss)/profit before non-recurring
costs (139.3) (2.9) (151.5) 91.1
Hedgebook closure costs (592.5) - (592.5) -
Non-recurring income/(costs) 3 - 12.1 9.7 (37.4)
(Loss)/profit before taxation (731.8) 9.2 (734.3) 53.7
Taxation 335.5 (3.5) 338.3 (18.4)
Normal taxation - (6.3) (13.4) (8.4)
Deferred taxation 335.5 2.8 351.7 (10.0)
Attributable to outside shareholders - - - (2.3)
Attributable (loss)/profit after
taxation (396.3) 5.7 (396.0) 33.0
Headline (loss)/earnings
per share - cents (27) (2) (33) 31
(Loss)/earnings per share - cents (376) 5 (376) 34
Number of shares in issue (million) 105.4 105.4 105.4 105.4
Notes:
1. Barnato Exploration Limited has been accounted for on the cost method, in
anticipation of its sale to JCI Limited in the near future.
2. The derivative structures in place are based upon options bought and sold.
Option premium income and expenses are amortised to the income statement over
the period of the options. Exchange gains/losses on the premium liability and
cash balances are reflected in the income statement.
3. Non-recurring income for the year to date relates mainly to a revaluation of
the CAWMS liability in the June quarter at the South Deep Mine. It excludes the
profit on sale of Golden Star Resources Limited shares by Barnato Exploration
Limited (refer note 1).
CONSOLIDATED BALANCE SHEET
US$ Million
Year Year to Quarter
ended date ended
31.12.01 30.09.02 30.09.02
Group Company Company
audited Unaudited Unaudited
Non-current assets 352.2 398.3 385.3
Mining assets 217.9 264.4 266.7
Deferred premium costs 130.6 131.4 116.4
Loan to Randfontein Estates Limited 1.6 - -
Other long-term assets 2.1 2.5 2.2
Current assets 148.4 154.7 68.8
Inventories 0.9 2.8 4.0
Receivables 5.3 5.6 5.6
Listed investments 11.2 23.6 17.8
Distribution assets - - 30.6
Loan to JCI Gold Limited -
Western Areas Limited 36.7 45.6 -
Loan to JCI Gold Limited -
Barnato Exploration Limited 2.1 - -
Cash and short-term funds 92.2 77.1 10.8
Total assets 500.6 553.0 454.1
Equity 215.1 247.1 154.0
Shareholders` equity 213.5 247.1 154.0
Outside shareholders` interests 1.6 - -
Non-current liabilities 278.2 295.1 260.3
Deferred taxation 31.9 35.5 2.8
Provision for post-retirement
medical benefits 1.7 0.5 0.5
Provision for environmental
rehabilitation 0.8 1.0 1.0
Option premium payable 111.1 141.1 155.0
Deferred premium income 132.7 116.9 101.0
Current liabilities 7.3 10.8 39.8
Payables and provisions 7.3 10.8 9.2
Shareholders for distribution - - 30.6
Total equity and liabilities 500.6 553.0 454.1
R Million
Year Year to Quarter
ended date ended
31.12.01 30.09.02 30.09.02
Group Company Company
Notes audited Unaudited Unaudited
Non-current assets 4,050.5 4,092.5 4,216.5
Mining assets 2,802.5 2,716.6 2,608.4
Deferred premium costs 1,224.2 1,350.4 1,563.8
Loan to Randfontein Estates Limited - - 19.5
Other long-term assets 23.8 25.4 24.8
Current assets 723.4 1,589.1 1,775.7
Inventories 42.0 28.7 10.3
Receivables 58.7 57.4 63.8
Listed investments 1 187.1 242.1 133.5
Distribution assets 2 321.8 - -
Loan to JCI Gold Limited -
Areas Limited - 468.9 438.5
Loan to JCI Gold Limited -
Barnato Exploration Limited - - 25.5
Cash and short-term funds 113.8 792.0 1,104.1
Total assets 4,773.9 5,681.5 5,992.2
Equity 1,618.4 2,538.5 2,538.5
Shareholders` equity 1,618.4 2,538.5 2,555.9
Outside shareholders` interests - - 18.6
Non-current liabilities 2,737.2 3,032.2 3,329.7
Deferred taxation 29.7 365.1 381.3
Provision for post-retirement
medical benefits 6.4 6.4 20.1
Provision for environmental
rehabilitation 10.3 10.1 9.5
Option premium payable 1,628.5 1,449.2 1,330.8
Deferred premium income 1,062.3 1,201.4 1,588.0
Current liabilities 418.3 110.8 88.0
Payables and provisions 96.5 110.8 88.0
Shareholders for distribution 321.8 - -
Total equity and liabilities 4,773.9 5,681.5 5,992.2
Note:
1. Barnato Exploration Limited has been accounted for on the cost method of
accounting in anticipation of its sale to JCI Limited in the near future.
2. JCI shares and debentures and JCI loan settlement for distribution to
shareholders.
CONSOLIDATED CASH FLOW STATEMENT
US$ Million
Year Year to Quarter Quarter
ended date ended ended
31.12.01 30.09.02 30.06.02 30.09.02
Group Company Company Company
audited Unaudited Unaudited Unaudited
Cash flow (utilised in)/from
operating activities
Cash (utilised in)/from
operations 18.4 (47.0) 2.9 (56.3)
Interest received 1.5 0.9 0.3 0.2
Interest paid (0.4) - - -
Dividends received - 0.1 - 0.1
Taxation paid (9.7) - - -
9.8 (46.0) 3.2 (56.0)
Investing activities
Additions to mining assets
- South Deep (45.3) (30.5) (11.9) (9.9)
Proceeds on disposal of
mining assets 0.4 - - -
Net increase in other
long-term assets 2.4 0.1 - -
Repayment of loan by
JCI Gold Limited 1.4 (0.5) - -
Advances to JCI Gold Limited (10.9) - - -
Repayment of loan by
Durban Roodepoort Deep, Ltd 3.8 - - -
(48.2) (30.9) (11.9) (9.9)
Financing activities
Option premiums received 112.5 - - -
Option premiums paid (8.3) - - -
Exchange gain/(loss) - - - -
104.2 - - -
Net (decrease)/increase in
cash and cash equivalents 65.8 (76.9) (8.7) (65.9)
At beginning of period 37.6 91.0 86.2 77.1
Translation adjustment (11.2) (3.3) (0.4) (0.4)
At end of period 92.2 10.8 77.1 10.8
R Million
Year Year to Quarter Quarter
ended date ended ended
31.12.01 30.09.02 30.06.02 30.09.02
Group Company Company Company
audited Unaudited Unaudited Unaudited
Cash flow (utilised in)/from
operating activities
Cash (utilised in)/from
operations (584.9) 31.6 (505.0) 159.1
Interest received 1.7 3.3 9.3 13.0
Interest paid - - (0.1) (3.5)
Dividends received 0.6 - 0.6 0.4
Taxation paid - - - (83.7)
(582.6) 34.9 (495.2) 85.3
Investing activities
Additions to mining assets
- South Deep (102.9) (130.1) (327.7) (391.4)
Proceeds on disposal of
mining assets - - - 3.8
Net increase in other
long-term assets - - 1.2 20.5
Repayment of loan by
JCI Gold Limited - - (5.0) 11.7
Advances to JCI Gold Limited - - - (94.0)
Repayment of loan by
Durban Roodepoort Deep, Ltd - - - 32.9
(102.9) (130.1) (331.5) (416.5)
Financing activities
Option premiums received - - - 1,242.4
Option premiums paid - - - (91.4)
Exchange gain/(loss) 7.3 (87.3) (148.7) -
7.3 (87.3) (148.7) 1,151.0
Net (decrease)/increase in
cash and cash equivalents (678.2) (182.5) (975.4) 819.8
At beginning of period 792.0 974.5 1,089.2 284.3
Translation adjustment
At end of period 113.8 792.0 113.8 1,104.1
STATEMENT OF CHANGE IN SHAREHOLDERS` EQUITY
Number of Retained
ordinary earnings/
shares issued Share Share (Accumulated
and paid capital premium deficit) Total
Millions Rm Rm Rm Rm
Company
Balance at
31 December 2001 105.4 105.4 2,387.2 45.6 2,538.2
Attributable loss for
the period - - - (396.0) (396.0)
Capital reduction - - (523.8) - (523.8)
Balance at
30 September 2002 105.4 105.4 1,863.4 (350.4) 1,618.4
The drive for total excellence in safety and health continues unabated, however
it is with regret that we report the death of one of the employees at the Joint
Venture during the quarter under review.
Highlights for the quarter include:
- Gold produced rose 19% to 51,952 ounces.
- An increase in tonnes milled of 7% to 237,000 tonnes.
- An increase of 11% in recovered grade to 6.83 g/t.
As a result of these positive performances in production, revenue from gold
increased 16% from R140.4 million to R163.7 million.
Despite the significant improvement in gold revenue, the profit from gold
decreased marginally by 2% to R34.9 million. This decrease can be attributed to
an increase in cash costs for the quarter of 28% to R72,525 per kilogram. This
quarter reflects the implementation of the annual wage increase for labour and
several cost inclusions that are under review between the company and Placer
Dome S.A. The costs increase trend is under close management scrutiny and a
reversal is expected in the quarter ahead.
The restructuring of the hedge book as announced in the June Quarterly Results
pertaining to 1,5 million ounces of committed gold in terms of forwards and sold
options, lease rate swaps on 480,000 ounces and currrency forwards on US$102
million have been closed out at a total cost of US$57 million.
The distribution of JCI shares and debentures held by WAL and the settlement of
the JCI Gold loan of R469 million were approved at the general meetings held on
17 October 2002. The settlement of the loan and the anticipated distributions in
terms of Section 90 of the Companies Act have resulted in a decrease in
shareholders` equity, an increase in current liabilities in anticipation of the
distribution and a decrease in interest received for the quarter.
The sale of Barnato Exploration Limited ("Barnex"), by way of a scheme of
arrangement, is progressing well. It is anticipated that the transaction will be
approved and concluded in the near future, after which the purchase
consideration for the sale of Barnex will also be distributed to WAL
shareholders.
The company is 10 months away from commissioning the South Deep project and has
sufficient resources to meet the obligations with respect to project development
expenditure.
RB Kebble JF Brownrigg
Chief Executive Officer Managing Director
Johannesburg
7 November 2002
WESTERN AREAS LIMITED
Registration Number 1959/003209/06
Incorporated in the Republic of South Africa
Share code: WAR
ISIN: ZAE000016549
PO Box 61719, Marshalltown, 2107
Telephone: +27 (11) 688-5000
Fax: +27 (11) 834-9195
Office of South African Transfer Secretaries - Computershare Investor Services
Limited - PO Box 1053, Johannesburg, 2001 - Office of UK Transfer Secretaries -
Capita IRG Plc - Balfour House, - 390/398 High Road, Ilford, Essex, - IG1 1NQ
Investor Relations - George Poole - Telephone: +27 (11) 688-5000 - Fax: +27 (11)
836-3757 - email: gpoole@jci.co.za or Leanda Visagie - Telephone: +27 (11) 688-
5000 - Fax: +27 (11) 834-5086 - email: lvisagie@jci.co.za
Date: 08/11/2002 11:41:04 AM Produced by the JSE SENS Department
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