|
Kumba Resources Limited
(Incorporated In The Republic Of South Africa)
Share Code: KMB ISIN : ZAE000034310 1AAA06FAF37B7489E72184B723FB5B3A
(Registration Number 2000/011076/06)
HARNESSING THE POWER OF THE EARTH
UNAUDITED GROUP INTERIM FINANCIAL RESULTS AND PHYSICAL INFORMATION
For the six months ended 31 December 2002
REVENUE UP 20% TO R3,8 BILLION
EARNINGS REDUCED BY R151 MILLION UNREALISED CURRENCY TRANSLATION LOSS
COMMISSIONING OF EMPANGENI SMELTER ON TRACK
GROUP INCOME STATEMENT
Six months ended Year ended
31 December 30 June
2002 2001 2002
Reviewed Reviewed Audited
Rm Rm Rm
Revenue 3 770 3 149 7 182
Operating expenses (3 068) (2 431) (5 499)
Net operating profit 702 718 1 683
Net financing costs (123) (152) (242)
Share of pre-taxation
income
from equity accounted 30 53 83
investments
Impairment charges (2) (101)
Goodwill amortisation (12) (12) 26
Profit before taxation 595 607 1 449
(Note 2)
Taxation (174) (149) (465)
Profit after taxation 421 458 984
Minority interest 1 1 (8)
Net profit attributable to
ordinary
shareholders 422 459 976
Adjusted for:
- Impairment charges 2 101
- Share of associate`s 13 14 40
goodwill
- Goodwill amortisation 12 12 (26)
- Share of associate`s 12
exceptionals
- Net deficit on disposal
or scrapping
of property, plant and 2 2 4
equipment
- Taxation on adjustments (1) (9)
Headline earnings 450 487 1 098
Ordinary shares (million)
- in issue 297 283 297
- weighted average number 296 274 285
of shares
- diluted weighted average
number of shares 302 276 292
Attributable earnings per
share (cents)
- basic 142,4 167,5 342,5
- diluted 139,9 166,5 334,2
Headline earnings per
share (cents)
- basic 151,8 177,7 385,3
- diluted 149,2 176,6 376,0
Ordinary dividends per 85,0
share (cents)
GROUP BALANCE SHEET
As at As at
31 December 30 June
2002 2001 2002
Reviewed Reviewed Audited
Rm Rm Rm
ASSETS
Non-current assets
Property, plant and 6 052 5 398 5 710
equipment
Intangible assets 12
Goodwill 12 35 23
Investments in associates
and
joint ventures (Note 3)
- listed 985 1 320 1 152
- unlisted 16 15 32
Deferred taxation 529 339 423
Other financial assets 341 394 238
7 947 7 501 7 578
Current assets
Inventories 1 047 870 955
Trade and other receivables 990 967 996
Cash and cash equivalents 967 547 679
Total assets 10 951 9 885 10 208
EQUITY AND LIABILITIES
Capital and reserves
Ordinary shareholders` funds 4 633 4 234 4 816
Minority interest 582 362 487
Non-current liabilities
Interest-bearing borrowings 1 705 1 729 882
Other long-term payables 244 100 178
Non-current provisions 413 392 389
Deferred taxation 1 260 965 1 204
8 837 7 782 7 956
Current liabilities
Trade and other payables 657 672 1 050
Interest-bearing borrowings 1 259 1 182 940
Taxation 166 228 223
Current provisions 32 21 39
Total equity and liabilities 10 951 9 885 10 208
Net debt (Note 4) 1 997 2 364 1 143
Net asset value per share 1 560 1 496 1 622
(cents)
Capital expenditure
- incurred 560 437 1 085
- contracted 483 708 625
- authorised but not 680 1 459 588
contracted
Contingent liabilities 89 48 92
Operating lease commitments 223 135 217
Operating sublease rentals 25 29 27
receivable
GROUP cash flow
Six months ended Year ended
31 December 30 June
2002 2001 2002
Reviewed Reviewed Audited
Rm Rm Rm
Net cash flows from 335 820 2 560
operating activities
Net financing costs (120) (151) (236)
Taxation paid (280) (29) (149)
Dividends paid (252)
Net cash used in investing
activities
- capital expenditure (560) (437) (1 085)
- proceeds from disposal of
property,
plant and equipment 8 9 25
- other (75) (35) (50)
Net cash (outflow)/inflow (944) 177 1 065
Net cash flow from financing
activities
- cash flows from issuance 393
of shares
- unbundling expenses (43) (44)
- borrowings raised/(paid) 1 232 489 (659)
Net increase in cash and 288 623 755
cash equivalents
Cash and cash equivalents
at beginning of period 679 (76) (76)
Cash and cash equivalents at 967 547 679
end of period
GROUP statement of changes in equity
31 December 31 December 30 June
2002 2001 2002
Reviewed Reviewed Audited
Rm Rm Rm
Shareholders` funds on
unbundling from Iscor 1 400 1 400
Opening balance 4 816
Changes in share capital
and premium
- issue of shares 3 3
- share premium 2 328 2 721
- unbundling expenses (43) (44)
Changes in non-
distributable reserves
- discount on acquisition 49
of investment
- currency translation (290) (74) (187)
reserve
- financial instruments (63) 112 (53)
movements
- transfer of equity 28 22 16
accounted earnings
- transfer of insurance 2
reserve
Changes in retained income
- net profit for the period 422 459 976
- transfer of equity (28) (22) (16)
accounted earnings
- transfer of insurance (2)
reserve
- dividends paid (252)
Shareholders` funds at end 4 633 4 234 4 816
of period
NOTES TO THE REVIEWED
FINANCIAL STATEMENTS
1. Basis of preparation
The interim financial results are prepared in accordance with International
Accounting Standard 34 on Interim Financial Reporting and should be read in
conjunction with the 2002 annual financial statements. The accounting policies
adopted are consistent with those applied in the annual financial statements for
the year ended 30 June 2002.
Six months ended Year ended
31 December 30 June
2002 2001 2002
Reviewed Reviewed Audited
Rm Rm Rm
2. Profit before taxation is
arrived at after
- depreciation (242) (208) (454)
- financing costs (163) (169) (318)
- interest received 40 17 76
- dividends received 14 47
- net realised foreign
exchange
gains/(losses) on:
currency exchange 9 161 127
differences
revaluation of derivative 46 (80) (51)
instruments
- net unrealised foreign
exchange
gains/(losses) on:
currency exchange (151) 76 (16)
differences
revaluation of derivative 1 (13) 4
instruments
3. Investments
Listed investments
- market value 1 022 1 378 1 340
Unlisted investments
- directors` valuation 60 44 60
4. Net debt
Net debt is calculated as being interest-bearing debt less cash and cash
equivalents. The impact of the increase in net debt on earnings per share was
approximately 12 cents.
5. Related party transactions
During the period the company and its subsidiaries, in the ordinary course of
business, entered into various sale and purchase transactions with associates
and joint ventures. These transactions were subject to terms that are no less
favourable than those arranged with third parties.
6. JSE Securities Exchange requirements
The interim announcement has been prepared in accordance with the listings
requirements of the JSE Securities Exchange South Africa.
7. Corporate Governance
The Group complies in all material respects with the Code of Corporate Practice
and Conduct published in the King Report on Corporate Governance.
8. Auditors` review
The interim results have been reviewed by the company`s auditors, KPMG Inc. The
review opinion is available for inspection at the company`s registered office.
UNAUDITED PHYSICAL INFORMATION
(`000 TONNES)
Three months ended Six months ended Year ended
31 December 30 September 31 December 30 June
2002 2002 2002 2001 2002
IRON ORE
Production 6 822 6 982 13 804 13 567 28 324
Sales
- Export 5 052 5 288 10 339 9 875 19 916
- Domestic 2 167 2 104 4 271 4 354 8 186
Total 7 219 7 392 14 610 14 229 28 102
Coal
Production
- Power station 2 850 3 518 6 368 6 719 13 351
- Coking 558 565 1 122 1 062 2 074
- Other 674 635 1 309 1 447 2 825
Total 4 082 4 718 8 799 9 228 18 250
Sales
- Eskom 2 830 3 537 6 367 6 371 13 198
- Other domestic 963 929 1 889 1 936 3 693
- Export 382 221 604 555 1 172
Total 4 175 4 687 8 860 8 862 18 063
Base Metals
Production
- Zinc metal 29 29 58 54 105
- Zinc concentrate 17 20 37 37 75
- Lead concentrate 5 4 9 14 28
Zinc metal sales
- Export 3 3 6 6 14
- Domestic 23 27 50 47 94
Lead concentrate
sales
- Export 6 6 12 7 25
Heavy Minerals
Production
- Ilmenite 36 7 43 39 44
- Zircon 14 13 28 18 45
- Rutile 6 6 12 7 19
Sales
- Ilmenite 31 31 15 35
- Zircon 22 9 31 7 33
- Rutile 1 1 2 13
COMMENTS
GROUP FINANCIAL RESULTS
Higher iron ore and heavy minerals export volumes together with stronger coal
prices resulted in an increase of 20% in revenue for the half-year compared with
the same period last year.
Net operating profit was marginally lower with the impact of the weaker currency
being offset to some extent by an average decrease in iron ore prices of 4% and
a continued record low zinc price of US$ 779 per ton for the past six months. An
average exchange rate of R10,08 to the US dollar was realised on export proceeds
compared with R9,52 for the comparative period. However, the valuation of export
and other US dollar denominated debtors at a substantially stronger spot
exchange rate of R8,64 on 31 December 2002 resulted in an unrealised currency
translation loss of R151 million, negatively affecting net operating income for
the half-year. This compares with an unrealised translation gain of R76 million
for the comparative period at a spot exchange rate of R12,08 which prevailed on
31 December 2001.
The effect of the stronger Rand together with lower iron ore and coal sales
volumes in the quarter ended December 2002 is also reflected in a reduction of
29% in net operating profit compared with the first quarter.
The lower net operating income, a reduction in income from equity accounted
investments of 43% and a higher tax charge, offset to some extent by lower
financing costs, resulted in attributable and headline earnings for the half-
year decreasing by 8% on the comparative period.
Capital expenditure of R560 million, of which R407 million was invested in the
heavy minerals project, together with mainly tax and dividend payments resulted
in a net cash outflow of R944 million for the half-year, and an increase in net
debt to R1 997 million.
SEGMENT RESULTS
Year
Quarter Six months ended
ended ended
31 Dec 30 Sep 31 30 June
December
2002 2002 2002 *2001 2002
Reviewed Unaudited Reviewed Reviewed Audited
Rm Rm Rm Rm Rm
REVENUE
Iron Ore 1 096 1 163 2 259 1 932 4 340
Coal 419 396 815 679 1 489
Base 226 259 485 403 941
metals
Heavy 114 38 152 40 227
minerals
Industrial 21 18 39 27 57
minerals
Other (24) 44 20 68 128
Total 1 852 1 918 3 770 3 149 7 182
NET
OPERATING
PROFIT
Iron Ore 218 299 517 513 1 221
Coal 47 78 125 115 255
Base 21 26 47 22 102
metals
Heavy 18 2 20 54
minerals
Industrial 6 4 10 6 15
minerals
Other (18) 1 (17) 62 36
Total 292 410 702 718 1 683
* The comparative figures have been restated to conform with the 2002 audited
annual results
OPERATIONS
Iron Ore
Stable production and export sales performances were maintained for the past
half-year with export volumes 5% higher than the comparative period. This was
achieved despite inclement weather conditions affecting production and shipments
in the quarter ended December 2002.
Revenue increased by 17% for the half-year. Net operating profit improved only
marginally as a consequence of the significant impact of the valuation of export
debtors at the closing rate for the half-year and higher cost of sales. The
latter consists mainly of increased stripping of overburden, insurance premiums,
other inflation linked cost escalations and higher distribution costs.
Coal
Production for the half-year was 5% lower than the comparative period while
sales volumes were maintained.
Production and sales volumes of power station coal in the quarter ended December
2002 declined some 20% on the first quarter as a result of a generator failure
at the Matimba power station. Exports for the second quarter, however, improved
by 73% on the first quarter, mainly as a result of increased coking coal sales.
Higher sales prices and export volumes resulted in revenue increasing by 20%
compared with the corresponding half-year. The cost of scheduled maintenance
programmes, together with insurance premiums, rehabilitation provisions and
other inflation based cost increases, negatively affected net operating income
which, nevertheless, was 9% higher than the comparative period.
Base Metals
Production and sales volumes of zinc concentrate and metal for the
half-year were maintained at the levels of the comparative period. While lead
concentrate production was lower, export sales for the half-year improved on the
corresponding period last year.
Revenue increased by 20%, and net operating profit by 114% compared with the
same period in the previous year, despite a continued depressed zinc price and
unfavourable treatment charges experienced by smelters as a result of
concentrate shortages. This was as a result of the smelter maintaining its low
cost of production and also a weaker average exchange rate being realised than
for the comparative period.
Heavy Minerals
Revenue was substantially up on the same period last year with a contribution of
R20 million to net operating profit for the half-year.
The continued good operational performance at the Hillendale mine and mineral
separation plant resulted in higher production volumes in the half-year compared
with the comparative period. Export sales of zircon remained strong with
production fully sold. Although market conditions for ilmenite remain depressed,
sales in the quarter ended December 2002 resulted in an increase of 109% for the
half-year compared with the same period last year. Crude ilmenite continues to
be stockpiled for feedstock in the smelter.
Commissioning of the first furnace is still on track for the original scheduled
date of March 2003, despite water damage during the pre-heat of the furnace in
December 2002 necessitating replacement of the refractories. Extensive research
and testing has been done to prevent a recurrence.
Industrial Minerals
Industrial minerals benefited from the improved business climate in both the
steel industry and the construction sector, and increased market penetration.
Revenue increased by 44% and net operating profit by 67% when compared with the
corresponding six months in the previous year.
BUSINESS DEVELOPMENT
Iron Ore: The potential benefits of consolidating the iron ore assets in the
Northern Cape continue to be actively promoted with all the relevant
stakeholders.
The technical feasibility study for the development of Sishen South with a
production capacity of approximately 8,5 million tonnes per year of iron ore has
been completed. It is presently being subjected to a value engineering process
to optimise the project while an investigation of an appropriate capital
structure and participation by historically disadvantaged South African (HDSA)
groups has commenced.
Value engineering studies in relation to the Hope Downs iron ore project in
Western Australia are continuing together with an evaluation of funding options.
Coal: Agreement has been reached between Kumba Coal and Eyesizwe Coal to develop
the Kalbasfontein project for the production of one million tonnes per year of
high-grade export coal jointly. The development of the project is linked to the
commencement of construction of the phase V expansion of the Richards Bay Coal
Terminal.
Base Metals: Negotiations for participating in the expansion of the Hongye Zinc
refinery in China have progressed satisfactorily and funding arrangements are
currently being finalised. Kumba`s participation in the project will be 60%
representing an investment of Chinese Yuan 92 million (R96 million).
The exploration programme in the area surrounding the Rosh Pinah zinc mine is
indicating promising results and target areas are being drilled.
Mining Charter
Kumba is well positioned to meet the requirements of the recently announced
scorecard. Strategies are in place for conversion of the group`s mineral rights,
human resources development and meaningful HDSA participation in projects and
other developments.
Prospects
As stated in the announcement of the group`s results for the financial year
ended 30 June 2002, despite stable operational performance, the exchange rate
will have a significant impact on the group`s results. Given the current
consensus forecast exchange rates varying between R8,35 and R9,50 to the US
dollar for the second half-year, earnings for the current financial year will be
lower than last year.
The uncertainty in the recovery of the world economy other than in China also
does not augur well for a marked improvement in commodity prices. An expected
increase in iron ore prices from April 2003 may to some extent offset this and
the effect of the forecast stronger currency.
Dividend
Dividends are considered annually in August and are based on the full year`s
results taking cognisance of the capital structure of the group and the
realisation of growth projects.
Chairman
Ms Dawn Marole has been appointed chairman following the retirement of Mr Hans
Smith on 19 November 2002. The Board expresses its sincere appreciation to Mr
Smith for his guidance and leadership during the unbundling process of the group
from Iscor Limited and its first year as a separate listed entity. We wish him a
well-deserved retirement.
The Board welcomes Ms Marole and pledges its support to her in her new role.
On behalf of the Board.
MLD Marole (Chairman)
Dr CJ Fauconnier (Chief Executive)
DJ van Staden (Executive Director, Finance)
25 February 2003
If you have any queries regarding Kumba Resources or your Kumba Resources
shares, please call the Kumba ShareCare line toll free on 0800 006 709 or +27 11
775 3430 if calling from outside South Africa.
This report is available at Kumba Resources` world wide website at:
www.kumbaresources.com
Kumba Resources Limited
Registration number 2000/011076/06
SHARE CODE KMB
ISIN CODE: ZAE000034310 1AAA06FAF37B7489E72184B723FB5B3A
Registered office Kumba Resources Limited
Roger Dyason Road
Pretoria West, Pretoria, 0002
Postal Address PO Box 9229
Pretoria, 0001, South Africa
Tel no +27 12 307 5000
Fax no +27 12 307 4080
Transfer secretaries Computershare Investor Services Limited
2nd Floor, Edura House, 70 Marshall Street
Johannesburg, 2001
PO Box 61051, Marshalltown
Directors
MLD Marole (Chairman), Dr CJ Fauconnier*
(Chief Executive), TL de Beer,
JJ Geldenhuys, GS Gouws, MJ Kilbride*,
Dr D Konar, CF Meintjes*, AJ Morgan,
SA Nkosi, CML Savage, Prof NS Segal,
F Titi, DJ van Staden*, RG Wadley* *Executive
Company Secretary MS Viljoen
Investor Relations Trevor Arran (+27 12 307 3292)
Corporate Affairs Pat Mdoda (+27 12 307 4553)
Date: 27/02/2003 07:00:01 AM Supplied by www.sharenet.co.za
Produced by the JSE SENS Department
| Profile Group (Pty) Ltd. has taken care in preparing all information on this website, but does not accept any liability for errors or out-of-date information. | |||||||||||||
| Other Profile Group sites: FundsData Online (unit trust data) | Profile Group corporate site | |||||||||||||
| [ Terms of Use | Privacy Policy | PAIA manual | FAQs/Help | Site Map | © Copyright Reserved 2026 ] | |||||||||||||
|
|||||||||||||
