| Tue 6 May 2003, 8:44 | | Results For The Quarter Ended 31 March 2003 |
|
ARMgold -
AFRICAN RAINBOW MINERALS GOLD LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1997/015869/06)
Share Code: AOD ISIN: ZAE000039244
("ARMgold" or "the Company")
RESULTS FOR THE QUARTER ENDED 31 MARCH 2003
INDICATORS FOR THE QUARTER
* Armgold/Harmony Merger
* Acquisition of effective 34,5% stake in Avmin Limited
* Gold production of 7 667 kilograms (246 499 ounces) in line with projection
for the quarter
* Cash operating cost of R68 096/kg (US$259/oz)
* Cash operating margin of 27%
* Cash operating income of R196,4 million (US$24,1 million)
* Headline earnings of 126 cps (US$15cps)
EXECUTIVE CHAIRMAN"S REVIEW
"It was a mixed quarter for ARMgold. From an operational perspective, gold
produced was in line with our stated production profile. However, the sound
operational performance was negated by a strong performance of the Rand against
the Dollar.
That said, ARMgold"s objective to become internationally competitive through
strategic acquisitions and organic growth, has been realised through the merger
with Harmony, the acquisition of Anglo Plc"s shares in Avmin and the
announcement of another growth project. Because ARMgold is a highly flexible,
flat organisation we are able to respond very quickly to changing circumstances
and, accordingly, are re-evaluating our own structures and operations to meet
the market circumstances."
* ARMgold/Harmony merger
* ARMgold and Harmony announced a merger of the two Companies that will create
the fifth largest gold producer in the world, producing approximately
4,1 million ounces of gold per annum.
- The merger will create the largest gold producer in South Africa.
- The merged Company will be recognised as a role model in the industry and
the country and will truly be representative of the new South Africa.
* Acquisition - Avmin
- The formation of a new Joint Venture with Harmony and the acquisition of
Anglo Plc"s 34,5% stake in Avmin, by the Joint Venture, provides the
Company with a foothold in Avgold.
This Company owns one of the remaining long-term ore bodies in South Africa.
- The transaction will be funded from current cash resources.
- Premium at time of negotiation on the market share price was approximately
30%.
- Closure of this transaction took place on 30 April 2003.
* ARMgold is continuing with its organic growth projects
- The Board has approved the re-commissioning of the Phakisa Project
(previously Tshepong South Mine), with the planned capital expenditure of
R550 million (US$69,6 million) over the next three years.
- Nyala Shaft Project has commenced; and
- Tshepong Deepening Project is ahead of plan
* Accident frequency rates improved quarter on quarter, however, we regret to
report that three ARMgold employees and one Freegold employee died as a
result of work related incidents. Our sincerest condolences are extended to
their families, friends and colleagues.
BASIS OF ACCOUNTING
The unaudited results for the quarter and the 15 months have been prepared on
the historical costs basis in accordance with the South African Statements of
Generally Accepted Accounting Practice. The accounting policies are, in all
material respects, consists with the annual financial statements for the year
ended 31 December 2001.
FINANCIAL RESULTS
ABRIDGED INCOME STATEMENT - Rand
15 Months Quarter Quarter
Jan 02 ended ended
to CONSOLIDATED Dec Mar
Mar 03 for the period 2002 2003
Line Unaudited Unaudited Unaudited Variance %
No. R"mill R"mill R"mill R"mill Change
1 4 256,4 Gold revenue 861,7 718,5 (143,2) (17)
2 2 436,5 Cash operating costs 513,4 522,1 (8,7) (2)
3 1 819,9 Cash operating income 348,3 196,4 (151,9) (44)
4 1,1 Post retirement benefits 0,0 0,0 0,0 0
5 25,4 Rehabilitation costs 2,5 6,6 (4,1) (164)
6 152,7 Amortisation 36,0 31,4 4,6 13
7 1 640,7 Operating income 309,9 158,4 (151,5) (48,9)
8 52,1 Corporate expenditure 10,6 14,1 (3,5) (33)
9 0 Tribute expenditure 0,0 0,0 0,0 0
10 1 588,6 Mining income 299,3 144,3 (155,0) (52)
11 159,9 Other income/expenses - net 61,1 56,2 (4,9) (8)
12 1 748,5 Income before taxation 360,4 200,5 (159,9) (44)
13 640,3 Taxation 135,7 74,9 60,8 45
14 1 108,2 Income for the period 224,7 125,6 (99,1) (44)
Adjustments:
- Profit on sale
15 13,8 of mining assets 7,2 5,5 (1,7) (24)
16 1 094,4 Headline earnings 217,5 120,1 (97) (45)
Earnings per share - cents
17 1 329 - Basic earnings 235 131 (104) (44)
18 1 313 - Headline earnings 228 126 (102) (45)
Calculated number of shares in issue
19 83,38 - Weighted average (million) 95,50 95,50 0 0
FINANCIAL RESULTS - Consolidated
ABRIDGED INCOME STATEMENT - Dollar
15 Months Quarter Quarter
Jan 02 ended ended
to CONSOLIDATED Dec Mar
Mar 03 for the period 2002 2003
Line Unaudited Unaudited Unaudited Variance %
No. US$" mill US$" mill US$" mill US$" mill Change
1 427,3 Gold revenue 91,1 88,0 (3,1) (3)
2 244,6 Cash operating costs 54,3 63,9 (9,6) (18)
3 182,7 Cash operating income 36,8 24,1 (12,7) (34)
4 0,1 Post retirement benefits 0 0 0,0 0
5 2,6 Rehabilitation costs 0,3 0,8 (0,5) (206)
6 15,3 Amortisation 3,8 3,9 (0,1) (3)
7 164,7 Operating income 32,8 19,4 (13,4) (41)
8 5,2 Corporate expenditure 1,1 1,7 (0,6) (55)
9 0 Tribute expenditure 0 0 0,0 0
10 159,5 Mining income 31,6 17,7 (13,9) (44)
11 16,0 Other income/expenses - net 6,5 6,9 0,4 6
12 175,4 Income before taxation 38,1 24,6 (13,5) (35)
13 64,3 Taxation 14,3 9,2 5,1 36
14 111,1 Income for the period 23,8 15,4 (8,4) (35)
Adjustments:
- Profit on sale
15 1,4 of mining assets 0,8 0,7 (0,1) (13)
16 109,8 Headline earnings 23,0 14,7 (8,3) (36)
Earnings per share - US cents
17 133 - Basic earnings 25 16 (9) (36)
18 132 - Headline earnings 24 15 (9) (38)
Calculated number of shares in issue
19 83,38 - Weighted average (million) 95,50 95,50 0,00 0
ABRIDGED BALANCE SHEET - Rand
Line CONSOLIDATED Reviewed Unaudited
No. as at 31 Dec 2002 31 Mar 2003
R"mill R"mill
ASSETS
1 Non-current assets 1 604,4 1 570,6
2 Current assets 2 299,9 2 575,6
3 Cash and cash equivalents 2 137,9 2 397,4
4 Other 162,0 178,2
5 TOTAL ASSETS 3 904,3 4 146,3
EQUITY and LIABILITIES
Capital and reserves
Ordinary share capital
6 and share premium 1 132,6 1 132,6
7 Retained earnings 991,2 1 116,7
8 Shareholders" equity 2 123,8 2 249,3
9 Non-current liabilities 746,1 776,6
10 Long-term borrowings 505,4 529,3
Rehabilitation and
11 closure cost obligation 240,7 247,3
12 Current liabilities 1 034,4 1 120,3
13 TOTAL EQUITY AND LIABILITIES 3 904,3 4 146,2
ABRIDGED BALANCE SHEET - Dollar
Line CONSOLIDATED Reviewed Unaudited
No. as at 31 Dec 2002 31 Mar 2003
US$"mill US$"mill
ASSETS
1 Non-current assets 186,8 198,8
2 Current assets 267,7 326,0
3 Cash and cash equivalents 248,9 303,5
4 Other 18,8 22,5
5 TOTAL ASSETS 454,5 524,8
EQUITY AND LIABILITIES
Capital and reserves
Ordinary share capital
6 and share premium 111,5 111,5
7 Retained earnings 106,7 122,1
8 Foreign currency translation reserve 29,0 51,1
9 Shareholders" equity 247,2 284,7
10 Non-current liabilities 86,8 98,3
11 Long-term borrowings 58,8 67,0
12 Rehabilitation and closure cost obligation 28,0 31,3
13 Current liabilities 120,5 141,8
14 TOTAL EQUITY AND LIABILITIES 454,5 524,8
ABRIDGED CASH FLOW STATEMENT- Rand
12 months 15 months Quarter
Jan 01 Jan 02 ended
to to Mar
Dec 01 Mar 03 2003
Line CONSOLIDATED Audited Unaudited Unaudited
No. as at R"mill R"mill R"mill
1 Net cash flow from operating activities 5,3 1 841,7 315,4
2 Net cash flow from investing activities (38,2) (1 192,6) (29,0)
3 Net cash flow from financing activities 0,0 1 630,7 (26,9)
4 Net movement in cash and cash equivalents
(32,9) 2 279,8 259,5
5 Cash and cash equivalents at the
beginning of the period 150,5 117,6 2 137,9
6 Cash and cash equivalents at the end of
the period 117,6 2 397,4 2 397,4
STATEMENT OF CHANGES IN EQUITY - Rand
Line . CONSOLIDATED Audited Reviewed Unaudited
No as at 31 Dec 01 31 Dec 02 31 Mar 03
R"000 R"000 R"000
Share capital
Ordinary shares
1 Balance at beginning of the period 50 50 96
2 Ordinary shares issued during the period 0 46 0
3 Balance at end of the period 50 96 96
Share premium
4 Balance at beginning of the period 0 0 1 132 454
5 Share premium raised on issue of shares 0 1 209 973 0
6 Expenses written-off against share premium 0 (77 519) 0
7 Balance at end of the period 0 1 132 454 1 132 454
Retained earnings
8 Balance at beginning of the period 76 142 8 613 991 179
9 Net earnings for the period 132 471 982 584 125 553
10 Dividends paid during the period (200 000) 0 0
11 Capitalisation shares issued 0 (18) 0
12 Balance at end of the period 8 613 991 179 1 116 732
STATEMENT OF CHANGES IN EQUITY - Dollar
CONSOLIDATED Audited Reviewed Unaudited
Line as at 31 Dec 01 31 Dec 02 31 Mar 03
No. US$"000 US$"000 US$"000
Share capital
Ordinary shares
1 Balance at beginning of the period 10 10 14
2 Ordinary shares issued during the period 0 4 0
3 Balance at end of the period 10 14 14
Share premium
4 Balance at beginning of the period 0 0 111 526
5 Share premium raised on issue of shares 0 119 141 0
6 Expenses written-off against share premium 0 (7 615) 0
7 Balance at end of the period 0 111 526 111 526
Retained earnings
8 Balance at beginning of the period 13 196 11 651 106 677
9 Net earnings for the period 15 122 95 028 15 367
10 Dividends paid during the period (16 667) 0 0
11 Capitalisation shares issued 0 (2) 0
12 Balance at end of the period 11 651 106 677 122 044
Foreign currency translation reserve
13 Balance at beginning of the period (3 140) (10 939) 29 015
Exchange differences for
14 the current period (7 799) 39 954 22 123
15 Balance at end of the period (10 939) 29 015 51 138
OPERATING RESULTS- Rand/Metric
15 months Quarter Quarter
Jan 02 ended ended
Line to CONSOLIDATED Dec Mar
No. Mar 03 for the period 2002 2003 Variance %
Unaudited Unaudited Unaudited Change
1 5 647 Ore milled - tonnes "000
2 - underground 1 229 1 134 (95) (8)
2 2 939 - surface 509 674 165 33
3 8 586 - total 1 738 1 808 70 4
4 7,02 Yield - g/tonne
- underground 6,79 6,39 (0,40) (6)
5 0,66 - surface 0,59 0,62 0,04 6
6 4,84 - average 4,98 4,24 (0,74) (15)
7 39 648 Gold produced - kg
- underground 8 349 7 246 (1 103) (13)
8 1 950 - surface 300 421 121 40
9 41 598 - total 8 649 7 667 (982) (11)
10 102 321 Gold price - R/kg 99 634 93 717 (5 917) (6)
11 9,96 Exchange rate - R//US$ 9,46 8,17 (1,29) (14)
Total cash operating
12 284 costs - R/tonne 295 289 6 2
13 58 573 - R/kg 59 357 68 096 (8 739) (15)
Total production
14 62 854 costs - R/kg 63 806 73 054 (9 248) (14)
15 62 880 Total cost of sales - R/kg 63 806 73 054 (9 248) (14)
Capital expenditure
16 133 - R million 31 22 9 30
Productivity per
17 180 employee - g/TEC 182 156 (26) (14)
18 4,5 - m2/TEC 4,7 4,4 (0,3) (7)
19 37 - tonnes/TEC 37 37 0 0
OPERATING RESULTS- Dollar/Imperial
15 months Quarter Quarter
Jan 02 ended ended
Line to CONSOLIDATED Dec Mar
No. Mar 03 for the period 2002 2003 Variance %
Unaudited Unaudited Unaudited Change
1 6 225 Ore milled - tons "000
- underground 1 355 1 250 (105) (8)
2 3 240 - surface 561 743 182 33
3 9 465 - total 1 916 1 993 78 4
4 0,205 Yield-oz/t - underground 0,20 0,19 (0,01) (6)
5 0,019 - surface 0,02 0,02 0,00 6
6 0,141 - average 0,15 0,12 (0,02) (15)
Gold produced-oz"000
7 1 275 - underground 268 233 (35) (13)
8 63 - surface 10 14 4 40
9 1 337 - total 278 246 (32) (11)
10 319 Gold price - US$/oz 328 357 29 9
11 9,96 Exchange rate - R//US$ 9,46 8,17 (1,29) (14)
Total cash operating
12 26 costs - $/ton 28 32 (4) (13)
13 183 - US$/oz 195 259 (64) (33)
14 196 Total production costs - US$/oz 210 278 (68) (33)
15 196 Total cost of sales - US$/oz 210 278 (68) (33)
Capital expenditure
16 13,4 - US$ million 3,3 2,6 1 19
Productivity per
17 5,8 employee - oz/TEC 5,9 5,0 (1) (14)
18 48,3 - ft2/TEC 51,1 47,6 (3) (7)
19 40,8 - t/TEC 40,3 40,6 0 0
Directors: P T Motsepe (Executive Chairman),
A J Wilkens (Chief executive officer), Dr M M M M Bakane-Tuoane*
J G Cockburn* (British), R J Fisher*, L P Fourie, W M Gule, M W King*,
Adv P J Manda*, R A Matube, Adv K D Moroka*, C M L Savage*,
D V Simelane, Dr R V Simelane*, Dr S P Sibisi*, P W Steenkamp,
P Taljaard (*non executive)
"We Do It Better"
