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Kumba Resources - Unaudited Consolidated Net Operating Profit And Physical
Results For The Quarter Ended 31 March 2003
Kumba Resources Limited
(Incorporated in the Republic of South Africa)
Share code: KMB ISIN : ZAE4034310
(Registration number 2000/011076/06)
("Kumba" or the "company")
Harnessing the power of the earth
UNAUDITED CONSOLIDATED NET OPERATING PROFIT AND PHYSICAL RESULTS FOR THE QUARTER
ENDED 31 MARCH 2003
COMMENTS
GROUP RESULTS
The substantial strengthening of the rand, together with lower iron ore prices
and the continued severely depressed market for zinc, had a major adverse impact
on operating profit for the third quarter. Net operating profit for the nine
months was 22% lower than that of the same period last year.
An average exchange rate of R8,57 to the US dollar was realised for the past
quarter on export proceeds compared with R11,30 for the comparative period while
iron ore prices were on average 4% lower.
As a consequence of Kumba having increased its shareholding in Ticor Limited to
50,12% towards the end of the quarter, Ticor, which has been equity accounted up
to 31 March 2003, will be consolidated from 1 April 2003.
OPERATIONS
Iron Ore
Although stable production levels were maintained for the quarter, production
was 9% lower than the comparative period in which record performances were
achieved.
The negative impact of the stronger realised exchange rate and lower iron ore
prices was to some extent offset by improved sales volumes.
Coal
Production and sales volumes for the year to date were marginally lower than the
corresponding period as a result of a major generator failure at the Matimba
power station, which affected the sales volumes from the Grootegeluk mine.
Lower sales volumes and export prices for the quarter were offset by stronger
domestic prices, consequently revenue decreased marginally compared with the
comparative period. Net operating profit for both the quarter and the nine
months, however, showed an improvement on the comparative periods.
Base Metals
Although production levels at the zinc smelter were maintained, sales volumes
for the quarter declined due to softer demand. In contrast, production and sales
volumes of zinc and lead concentrate at the Rosh Pinah mine showed a marked
improvement due to higher grades and better recoveries.
The combination of record low zinc prices and lower sales together with the
stronger rand resulted in an average zinc price of R6 477 per ton for the
quarter, which was 29% lower than the comparative period. Consequently, the
business unit recorded an operating loss for the quarter despite the smelter"s
low cost of production.
Heavy Minerals
Production and sales tonnages for the nine months were significantly higher than
the corresponding period, despite being lower for the quarter compared with the
same period last year. The lower production and sales tonnages together with a
stronger rand resulted in an operating loss for the quarter.
Crude ilmenite continues to be stockpiled for feedstock to the smelter.
Commissioning of the first furnace of the smelter commenced at the end of the
quarter as originally planned and will ramp-up to full production over the next
18 months. Construction of the second furnace is progressing according to
schedule.
Industrial Minerals
Industrial Minerals continued to benefit from the improved business climate in
both the steel industry and the construction sector resulting in improved
revenue and net operating profit.
OUTLOOK
Stable operational performance is expected to be maintained for the remainder of
the financial year. However, despite this and the group"s ongoing focus on cost
containment, the continued strength of the rand relative to the US dollar will
have a significant negative impact on earnings for the last quarter.
2002/03 2001/02*
Third 9 months Third 9 months
quarter cumulative quarter cumulative
REVENUE (Rm)
Iron ore 982 3 241 1 109 3 041
Coal 408 1 223 418 1 097
Base metals 171 655 259 662
Heavy minerals 66 219 76 117
Industrial 18 57 14 41
minerals
Other 4 22 23 91
Total 1 649 5 417 1 899 5 049
NET OPERATING
PROFIT/(LOSS)
(Rm)
Iron ore 178 695 366 879
Coal 82 207 79 194
Base metals (15) 32 44 66
Heavy minerals (9) 11 25 25
Industrial 5 15 4 10
minerals
Other (4) (22) (33) 29
Total 237 938 485 1 203
*The
comparative
figures have
been restated
to conform
with the 2002
audited annual
results
Included in
net operating
profit are:
Net realised
foreign
exchange
gains/(losses)
on:
Currency (118) (108) 51 205
exchange
differences
Revaluation 43 89 (3) (83)
of derivative
instruments
Net unrealised
foreign
exchange
gains/(losses)
on:
Currency 45 (106) (41) 35
exchange
differences
Revaluation 17 18 33 20
of derivative
instruments
PHYSICAL
RESULTS ("000
tons)
IRON ORE
Production 6 978 20 783 7 678 21 245
Sales
- Export 5 144 15 483 4 577 14 452
- Domestic 2 270 6 541 2 055 6 408
Total 7 414 22 024 6 632 20 860
COAL
Production
- Power 3 239 9 608 3 107 9 827
station
- Coking 549 1 671 567 1 628
- Other 699 2 007 728 2 175
Total 4 487 13 286 4 402 13 630
Sales
- Eskom 3 042 9 410 3 255 9 627
- Other 956 2 844 941 2 877
domestic
- Export 298 902 330 885
Total 4 296 13 156 4 526 13 389
BASE METALS
Production
- Zinc metal 27 85 27 81
- Zinc 26 63 20 56
concentrate
- Lead 8 16 6 20
concentrate
Zinc metal
sales
- Domestic 19 69 22 69
- Export 3 9 5 11
Lead
concentrate
sales
- Export 6 18 5 12
HEAVY MINERALS
Production
- Ilmenite 18 61 6 39
- Zircon 12 40 14 32
- Rutile 3 15 6 13
Sales
- Ilmenite 10 41 10 16
- Zircon 11 42 16 22
- Rutile 7 9 1 1
24 April 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.
Kumba Resources Limited
Registration number 2000/011076/06
SHARE CODE KMB
ISIN CODE ZAE000034310
Registered office Kumba Resources Limited
Roger Dyason Road, Pretoria
West, Pretoria, 0002
Postal Address PO Box 9229, Pretoria, 0001,
South Africa
Transfer secretaries Computershare Investor
Services Limited
2nd Floor, Edura House, 70
Marshall Street,
Johannesburg, 2001
PO Box 61051, Marshalltown,
2107
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
Corporate Affairs Pat Mdoda (+27 12 307 4553)
Investor Relations Trevor Arran (+27 12 307
3292)
This report is available at Kumba Resources" worldwide
website at: www.kumbaresources.com
Sponsor
JP Morgan
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