| Wed 7 May 2003, 17:37 | | Financial Report |
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Western Areas Limited -
Western Areas Limited
Registration number 1959/003209/06
Incorporated in the Republic of South Africa
ISIN: ZAE000016549 SHARE CODE: WAR
INVESTING IN PROSPERITY
Quarterly results ended 31 March 2003
* Total production costs decreased by 9%
* Project commissioning on target
* Recovered grade increased by 3%
* Tonnes milled affected by underground fire and extended holiday break
PRODUCTION AND UNIT RESULTS
IMPERIAL
Year Quarter Quarter
Ended ended ended
31.12.02 31.12.02 31.03.03
Ore milled, (000) tons 995 263 231
Yield oz/ton 0.198 0.206 0.214
Gold produced oz 197,420 54,104 49,322
Gold sold oz 195,297 58,364 44,072
Cash costs US$/oz 196 218 263
Total production costs US$/oz 226 274 289
Gold price achieved US$/oz 291 318 298
Capital expenditure US$m 42 11 12
Capital commitment at
end of period US$m 25 25 25
METRIC
Quarter Quarter Year
ended ended ended
31.03.03 31.12.02 31.12.02
Ore milled, (000) tonnes 210 238 905
Yield g/tonne 7.30 7.08 6.79
Gold produced kg 1,534 1,682 6,141
Gold sold kg 1,369 1,814 6,075
Cash costs R/kg 70,445 67,826 66,070
Total production costs R/kg 77,380 85,125 76,262
Gold price achieved R/kg 79,839 98,830 98,189
Capital expenditure Rm 98 105 437
Capital commitment at
end of period Rm 208 214 214
ABRIDGED INCOME STATEMENT
Quarters ended Year ended
31.03.03 31.12.02 31.12.02
Unaudited Unaudited Audited
Notes Rm Rm Rm
Gold revenue 109.3 179.3 596.5
Total production costs (118.7) (143.2) (468.4)
Production costs - cash (108.2) (114.1) (405.8)
Production costs - non cash (10.5) (29.1) (62.6)
Operating (loss)/profit from gold (9.4) 36.1 128.1
Sundry revenue 1 68.6 11.1 111.6
Operating profit before derivative 54.2 29.4 190.9
Derivative transaction income/(costs) 82.1 209.3 (51.2)
Profit/(loss) before taxation 136.1 239.5 (461.8)
Attributable profit/(loss) after taxation 95.6 152.3 (280.5)
Headline earnings/(loss) per share 6 79 145 (289)
Earnings/(loss) per share 91 145 (266)
Number of issued shares (million) 105.4 105.4 105.4
ABRIDGED BALANCE SHEET
Quarter ended Year ended
31.03.02 31.12.02
Unaudited Audited
Notes Rm Rm
ASSETS
Mining assets 4 3,055.1 2,976.3
Deferred premium costs 1,077.7 1,148.8
Listed investments 2/3 167.5 61.5
Cash and cash equivalents 41.6 76.4
Other assets 243.6 228.5
EQUITY AND LIABILITIES
Shareholders" equity 3 1,541.6 1,751.9
Outside shareholders" equity 24.7 22.5
Deferred taxation (148.4) 176.7
Option premium payable 1,267.0 1,382.2
Deferred premium income 958.0 1,009.7
Hedge liability 3 785.8 -
Other liabilities 156.8 148.5
ABRIDGED CASH FLOW STATEMENT
Quarters ended Year ended
31.03.03 31.12.02 31.12.02
Unaudited Unaudited Audited
Rm Rm Rm
Cash flow (utilised in)/from operating activities (1.1) 73.5 (422.7)
Cash flow (utilised in)/from investing activities (27.1) (103.1) (441.9)
Cash flow (utilised in)/from financing activities (10.4) - -
Net (decrease)/increase in cash
and cash equivalents (38.6) (29.6) (864.6)
Cash and cash equivalents:
- at beginning of period 76.4 114.3 1,104.1
- effect of exchange rate fluctuations
on cash held 3.8 (8.3) (163.1)
- at end of period 41.6 76.4 76.4
OPEN HEDGE POSITIONS
Years to December 2003 2004 2005 2006 2007 2008
Put options bought
Amount hedged (oz 000s) 153 210 215 205 206 214
Strike price ($/oz) 278.2 268.2 278.2 288.2 288.2 288.2
Call options sold
Amount hedged (oz 000s) 102 162 166 157 158 165
Strike price ($/oz) 278.7 268.7 278.7 288.7 288.7 288.7
Call options bought
Amount hedged (oz 000s) 55 87 89 85 85 89
Strike price ($/oz) 278.7 288.7 298.7 308.7 323.7 333.7
Call options sold
Amount hedged (oz 000s) 41 65 66 63 63 66
Strike price ($/oz) 288.7 303.7 318.7 333.7 348.7 363.7
Call options sold
Amount hedged (oz 000s) 29 42 21
Strike ($/oz) 310.0 310.0 310.0
OPEN HEDGE POSITIONS (continue)
Years to December 2009 2010 2011 2012 2013 2014 Total
Put options bought
Amount hedged (oz 000s) 209 214 200 206 205 98 2,335
Strike price ($/oz) 293.2 303.2 313.2 313.2 323.2 333.2 296.0
Call options sold
Amount hedged (oz 000s) 161 165 154 158 158 76 1,782
Strike price ($/oz) 293.7 303.7 313.7 313.7 323.7 333.7 296.6
Call options bought
Amount hedged (oz 000s) 87 89 83 86 85 41 961
Strike price ($/oz) 348.7 358.7 373.7 398.7 413.7 428.7 344.4
Call options sold
Amount hedged (oz 000s) 64 66 62 63 63 30 712
Strike price ($/oz) 378.7 393.7 408.7 423.7 438.7 453.7 396.6
Call options sold
Amount hedged (oz 000s) 92
Strike ($/oz) 310,0
NOTES TO THE ABRIDGED FINANCIAL STATEMENTS
1. Sundry revenue includes a profit on the sale of warrants in Barnato
Exploration Limited of R10.6 million, profit on sale of Rangold and Exploration
Company Limited ("Rangold") shares of R40,5 million and interest received of
R5,5 million.
2. 1 429 150 Randgold shares have been sold during the quarter under review.
3. Adjustments have been made to the financial instruments to reflect the fair
value of these instruments at the end of the period in terms of AC133.
4. No adjustment has been made to reflect mining assets at their fair value.
These assets will be revalued in future.
5. Gold produced represents the kilograms or ounces of gold which have entered
the metallurgical process while gold sold represents dispatches from the mine to
a refinery.
6. The earnings have been adjusted by the profit on the sale of the warrants of
R7.6 million and the realised profit on disposal of R5.0 million after taxation
and minority interest, in Barnato Exploration Limited
("Barnex")
STATEMENT OF CHANGE IN SHAREHOLDERS" EQUITY
Retained
Number of ordinary earnings/
shares issued Share Share (Accumulated
and paid capital premium Reserve deficit) Total
Group Millions Rm Rm Rm Rm Rm
Balance as at
31 December 2002 105.4 105.4 1,863.5 - (217.0) 1,751.9
Attributable profit - - - - 95.6 95.6
Adjustment to
fair value - - - (305.9) - (305.9)
Balance as at
31 March 2003 105.4 105.4 1,863.5 (305.9) (121.4) 1,541.6
BASIS OF ACCOUNTING
The quarterly results are prepared in accordance with South African
Statements of Generally Accepted Accounting Practice.
The Group Financial Statements incorporate the assets, liabilities and results
of the operations of Western Areas Limited ("Western Areas") and its
subsidiaries on a consolidated basis.
The 2002 figures presented in this report have been audited by KPMG. The report
of the auditor is available for inspection at Western Areas" registered office.
LETTER TO SHAREHOLDERS
The attributable profit after taxation for the March quarter amounted to
R95.6 million. This profit was achieved despite a 40% decrease in gold revenue
from R179,3 million to R109,3 million.
Gold production declined by 9% from 1,682kg to 1,534kg during the March quarter,
mainly as a result of the backfill plant fire on 83 Level, the December holiday
break and equipment availability.
The yield put in a strong performance, increasing by 3.1% from 7,08g/t to
7,30g/t, partially negating the effect of a 12% decline in tonnes milled.
Compared with the same quarter in 2002, gold produced increased by 7%. This is
in line with the continuous improvement of the project as it ramps up to full
production.
Total production costs decreased from R143,2 million to R118,7 million,
resulting in total production costs per kilogram decreasing by 9% in Rand terms
from R85,125 per kg to R77,380 per kg. The cash costs increased by 21% in US$
terms from US$218 per ounce to US$263 per ounce. This increase is mainly due to
the strengthening of the Rand, which impacted negatively on the entire local
gold mining industry.
The proposed sale of Barnex is still ongoing. Shareholders will be informed of
developments in this regard, in due course. The proceeds from the proposed
Barnex transaction will be utilised by Western Areas to meet the future funding
requirements of the South Deep joint venture.
We unfortunately report one fatality at South Deep for the quarter and wish to
extend our sincerest sympathy to the family of Mr Jan Muller.
The final commissioning of the South Deep Shaft (Twin Shaft Complex) will be
completed during the last quarter of 2003, on time and under budget. Development
of the Twin Shaft Complex and supporting infrastructure continues to be one of
our main areas of focus in this long life, world class asset.
RB Kebble
Chief Executive Officer
Johannesburg
7 May 2003
CONTACT DETAILS
WESTERN AREAS LIMITED
28 Harrison Street
Johannesburg, 2001
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, 2000
OFFICE OF UK TRANSFER SECRETARIES
Capita Registrars
The Registry
34 Beckenham Road
Beckenham
Kent, BR3 4TV
INVESTOR RELATIONS
George Poole
Telephone: +27 (11) 688-5000
Fax: +27 (11) 836-3757
email: gpoole@jci.co.za
For more information visit our website at www.westernareas.co.za
