| Fri 8 Aug 2003, 9:16 | | QUARTERLY RESULTS ENDED 30 JUNE 2003 |
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WESTERN AREAS LIMITED -
WESTERN AREAS LIMITED
Registration number 1959/003209/06
Incorporated in the Republic of South Africa
Share code: WAR ISIN: ZAE000016549
INVESTING IN PROSPERITY
QUARTERLY RESULTS ENDED 30 JUNE 2003
PRODUCTION AND UNIT RESULTS
Year Quarter Quarter
ended ended ended
31.12.02 31.03.03 30.06.03
IMPERIAL
Ore milled (000) tons 995 231 252
Yield oz/ton 0.198 0.214 0.225
Gold produced oz 197,419 49,322 56,735
Gold sold oz 195,297 43,942 62,115
Cash costs US$/oz 196 263 274
Total production costs US$/oz 226 289 347
Gold price achieved US$/oz 291 299 327
Capital expenditure US$m 42 12 14
Capital commitment at end of period US$m 25 25 24
METRIC
Ore milled (000) tonnes 903 210 228
Yield g/tonne 6.79 7.30 7.73
Gold produced kg 6,141 1,534 1,766
Gold sold kg 6,075 1,367 1,951
Cash costs R/kg 66,070 70,464 65,980
Total production costs R/kg 76,262 77,381 83,549
Gold price achieved R/kg 98,189 79,992 78,159
Capital expenditure Rm 437 98 105
Capital commitment at end of period Rm 214 208 176
ABRIDGED INCOME STATEMENT
Quarters ended Year ended
30.06.03 31.03.03 31.12.02
Unaudited Unaudited Audited
Notes Rm Rm Rm
Gold revenue 152.4 109.3 596.5
Total production costs (147.5) (118.7) (468.4)
Production costs - cash (116.5) (108.1) (405.8)
Production costs - non cash (31.0) (10.6) (62.6)
Operating profit/(loss) from gold 4.9 (9.4) 128.1
Other income 1/2 71.3 68.6 111.6
Administration and other costs (7.1) (5.0) (48.8)
Derivative transaction income/(costs) 6 13.4 59.7 (51.2)
Hedge position closure costs - - (592.5)
Non-recurring costs - - (9.0)
Profit/(loss) before taxation 82.5 113.9 (461.8)
Taxation (38.8) (38.2) 185.2
Minority interest in profit (0.9) (2.2) (3.9)
Attributable profit/(loss) after taxation 42.8 73.5 (280.5)
Headline earnings/(loss) per share 36 58 (289)
Earnings/(loss) per share 41 70 (266)
Number of issued shares (million) 105.4 105.4 105.4
ABRIDGED CASH FLOW STATEMENT
Quarters ended Year ended
30.06.03 31.03.03 31.12.02
Unaudited Unaudited Audited
Rm Rm Rm
Cash flow from/(utilised in)
operating activities 14.2 (1.1) (422.8)
Cash flow utilised in investing activities (7.4) (27.1) (441.8)
Cash flow utilised in financing activities (10.7) (10.4) -
Net decrease in cash and cash equivalents (3.9) (38.6) (864.6)
Cash and cash equivalents:
- at beginning of period 41.6 76.4 1,104.1
- effect of exchange rate fluctuations
on cash held 1.9 3.8 (163.1)
- at end of period 39.6 41.6 76.4
ABRIDGED BALANCE SHEET
Quarters ended Year ended
30.06.03 31.03.03 31.12.02
Unaudited Unaudited Audited
Notes Rm Rm Rm
ASSETS
Mining assets 4 3,142.2 3,055.1 2,976.1
Deferred premium costs 1,009.0 1,077.7 1,148.8
Listed investments 2 92.4 167.5 61.5
Cash and cash equivalents 39.6 41.6 76.4
Other assets 237.2 243.6 228.5
EQUITY AND LIABILITIES
Shareholders" equity 3 1,514.5 1,519.4 1,751.7
Outside shareholders" equity 25.7 24.7 22.5
Deferred taxation (104.2) (148.4) 176.7
Option premium payable 6 1,245.3 1,289.2 1,382.2
Deferred premium income 907.9 958.0 1,009.7
Hedge liability 777.7 785.8 -
Other liabilities 153.5 156.8 148.5
STATEMENT OF CHANGES IN SHAREHOLDERS" EQUITY
Retained
Number of earnings/
shares issued Share Share (Accumulated
and paid capital premium Reserve deficit) Total
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 - - - - 116.3 116.3
Adjustment to fair value - - - (353.7) - (353.7)
Balance as at
30 June 2003 105.4 105.4 1,863.5 (353.7) (100.7) 1,514.5
NOTES TO THE ABRIDGED FINANCIAL STATEMENTS
1. Other income includes the profit on the sale of Randgold & Exploration
Company Limited ("Randgold") shares of R62.8 million.
2. 3 101 660 Randgold shares were 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 are in the process of been revalued jointly with Placer Dome South
Africa (Pty) Limited.
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 the refinery.
6. The March Quarterly results have been restated on account of an error in the
computation of the option premium payable. The impact on profit after tax is R22
million and is mirrored by a corresponding adjustment on the balance sheet.
7. Headline earnings excludes the royalty received by Barnoto Exploration
Limited from Golden Star Resources, which formed part of the disposal
consideration for Prestea.
OPEN HEDGE POSITIONS
Years to December 2003 2004 2005 2006 2007 2008 2009
Put options bought
Amount hedged (oz 000s) 102 210 215 205 206 214 209
Strike price ($/oz) 278.2 268.2 278.2 288.2 288.2 288.2 293.2
Call options sold
Amount hedged (oz 000s) 68 162 166 157 158 165 161
Strike price ($/oz) 278.7 268.7 278.7 288.7 288.7 288.7 293.7
Call options bought
Amount hedged (oz 000s) 37 87 89 85 85 89 87
Strike price ($/oz) 278.7 288.7 298.7 308.7 323.7 333.7 348.7
Call options sold
Amount hedged (oz 000s) 27 65 66 63 63 66 64
Strike price ($/oz) 288.7 303.7 318.7 333.7 348.7 363.7 378.7
Call options sold
Amount hedged (oz 000s) 19 42 21
Strike price ($/oz) 310.0 310.0 310.0
Call options bought
Amount hedged ($m"s) 10
Strike price ($/R) 8.0000
Call options sold
Amount hedged ($m"s) 10
Strike price ($/R) 8.6200
Years to December (continue) 2010 2011 2012 2013 2014 Total
Put options bought
Amount hedged (oz 000s) 214 200 206 205 98 2,285
Strike price ($/oz) 303.2 313.2 313.2 323.2 333.2
Call options sold
Amount hedged (oz 000s) 165 154 158 158 76 1,748
Strike price ($/oz) 303.7 313.7 313.7 323.7 333.7
Call options bought
Amount hedged (oz 000s) 89 83 86 85 41 943
Strike price ($/oz) 358.7 373.7 398.7 413.7 428.7
Call options sold
Amount hedged (oz 000s) 66 62 63 63 30 699
Strike price ($/oz) 393.7 408.7 423.7 438.7 453.7
Call options sold
Amount hedged (oz 000s) 82
Strike price ($/oz) 310.0
Call options bought
Amount hedged ($m"s) 10
Strike price ($/R) 8.0000
Call options sold
Amount hedged ($m"s) 10
Strike price ($/R) 8.6200
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.
LETTER TO SHAREHOLDERS
Attributable profit after taxation for the June quarter amounted to R42.8
million compared to R73.5 million for the previous quarter. The decline in
attributable profit after taxation, despite an increase in gold revenue of 39%
quarter on quarter, was offset by a lessor provision of R13.4 million in terms
of the present value adjustment for the derivative transaction relative to the
March quarter of R59.7 million. This swing in derivative transaction non-cash
provisions relates primarily to a revaluation of the deferred premium payable on
the back of a slow down in the appreciation of the Rand and a drop in the United
States interest rate yield curve quarter on quarter. Gold production increased
by 15% in the June quarter, as the effects of the backfill plant fire on 83
Level dissipated, and productivity levels improved relative to the first
quarter"s lackluster results, although the Easter break during the current
quarter caused a slight impact on production. The strong growth in gold revenue
for the quarter was achieved on the back of improved gold production and a
reduction in gold inventories, although the latter is also reflected in the
increase in operating costs for the quarter.
The yield continued to improve quarter on quarter, at 7.73g/t compared to
7.30g/t in the March quarter, reflecting the higher grades being achieved as
improved grade and dilution control initiatives implemented at South Deep pay-
off, in addition to higher in-situ grades currently being encountered, which is
anticipated to continue for the remainder of this year. The trend of improvement
in performance of South Deep is anticipated to continue as the project phase
ends, and the utilization of the new infrastructure commences. Total production
costs increased to R147.5 million from R118.7 million, primarily as a
consequence of the inventory reduction as reflected in the increased revenue,
and a write-off of the backfill plant following the fire, resulting in total
production costs per kilogram increasing by 8% to R83,549 per kilogram from
R77,381 per kilogram. The cash costs decreased by 6% to R65,980 per kilogram
from R70,464 per kilogram.
The proposed disposal of Barnato Exploration Limited ("Barnex") is in
process, and is anticipated to be completed by 30 September 2003. The tradeable
instruments received in terms of the proposed Barnex disposal will be utilised,
in conjunction with existing investments, to fund the Company"s portion of the
South Deep joint venture expenditure.
The final commissioning of the South Deep Shaft (Twin Shaft Complex) is
scheduled to be completed in December 2003. 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.
Brett Kebble Chris Lamprecht
Chief Executive Officer Financial Director
Johannesburg
7 August 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 Limited
70 Marshall Street,
Johannesburg, 2001
PO Box 1053, Johannesburg, 2000
Telephone: +27 (11) 370-5000
Fax: +27 (11) 372-5271/2
Office of UK Transfer Secretaries
Capita Registrars
The Registry
34 Beckenham Road
Beckenham
Kent, BR3 4TU
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
Date: 08/08/2003 07:13:16 AM Supplied by www.sharenet.co.za
Produced by the JSE SENS Department
