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Kumba Resources Limited - Unaudited Consolidated Net Operating Profit And
Release Date: 30/10/2003 07:01:03 Code(s): KMB
KUMBA RESOURCES LIMITED - UNAUDITED CONSOLIDATED NET OPERATING PROFIT AND
PHYSICAL RESULTS FOR THE QUARTER ENDED 30 SEPTEMBER
2003
Kumba Resources Limited
REGISTRATION NUMBER 2000/011076/06
Incorporated in the Republic of South
Africa
JSE SHARE CODE KMB
ISIN CODE ZAE000034310
ADR CODE KBREY
UNAUDITED CONSOLIDATED NET OPERATING PROFIT AND PHYSICAL RESULTS
FOR THE QUARTER ENDED 30 SEPTEMBER 2003
FOCUS ON STAKEHOLDER PROSPERITY
CREATING BALANCE IN OUR ENVIRONMENT
DETERMINED TO UPLIFT OUR PEOPLE
Harnessing the power of the earth
COMMENTS
GROUP RESULTS
The group improved on the production levels of the corresponding quarter last
year.
Revenue increased marginally as a result of the consolidation of Ticor Limited,
higher coal and heavy minerals sales volumes and an average increase of 9% in
iron ore export prices, offset by a substantially stronger rand and lower iron
ore export sales.
Net operating profit declined by 28% to R295 million compared with the
corresponding quarter the previous year. An average exchange rate of R7,32 to
the US dollar was realised on export proceeds compared with R10,42 for the
comparative period, while US dollar denominated debtors and derivative
instruments were valued at a spot exchange rate of R7,13 on 30 September 2003.
This resulted in an unrealised currency translation loss of R20 million,
compared with a loss of R3 million at a spot exchange rate of R10,55 which
prevailed on 30 September 2002.
Net operating profit under "other" includes a pre-tax profit of R73 million on
the disposal of Kumba"s interest in Mincor Resources in July 2003.
OPERATIONS
Iron Ore
The lower export volumes combined with a stronger currency were the main
contributors to the decline of 22% and 48% in revenue and net operating profit
respectively.
Production increased by 4% compared with the corresponding quarter in the
previous financial year. Exports were however 14% lower due to a planned
replenishment of stock at Saldanha port and a rescheduling of some shipments
into the next quarter.
Coal
Revenue increased by 9% mainly due to higher Eskom and export sales volumes,
whilst net operating profit reduced by 17% due to the impact of the stronger
currency.
Record coal production and sales tonnages were achieved for the quarter as a
result of increased demand.
Base Metals
Despite the solid operational performance at both the Rosh Pinah mine and the
Zincor refinery, an operating loss was incurred for the quarter. This was due to
a decrease of 25% in the rand price of zinc metal, a softer local market and
materially lower internationally benchmarked treatment charges.
Heavy Minerals
Ticor SA project
Higher sales volumes of ilmenite, rutile and zircon yielded a 39% increase in
revenue. Net operating profit however decreased by R7 million to an operating
loss of R5 million as a result of a stronger currency and depreciation charges.
The second furnace of the Empangeni smelter was successfully commissioned in
September. The first shipment of saleable titanium slag was made in October.
Ticor Limited
The segment results reflect the impact of the consolidation of Ticor Limited on
the group"s operating results. Net operating profit was negatively affected by
the strong Australian dollar despite the sound operating performance.
Record synthetic rutile production was achieved at Tiwest, the joint venture in
which Ticor Limited has a 50% interest.
Industrial Minerals
The business unit reported results on a par with those of the comparative period
despite a slowdown in growth in the steel and construction sectors.
OUTLOOK
The group expects to maintain and in certain instances improve on the sound
operational performance reported in the previous financial year.
The continued strong rand and depressed commodity markets for heavy minerals and
zinc are expected to have a negative impact on the group"s results.
In order to mitigate the effect of these negative factors, the group has
embarked on a number of initiatives:
* a business improvement programme at Base Metals;
* short-term cost reduction actions;
* a longer-term programme to protect operating margins; and
* a critical review of capital expenditure programmes and new project
developments.
30 October 2003
Registered office Transfer secretaries
Kumba Resources Limited Computershare Limited
Roger Dyason Road 70 Marshall Street,
Pretoria West Johannesburg, 2001
0002 PO Box 61051, Marshalltown, 2107
If you have any queries regarding your Kumba Resources" shares, please call +27
11 370 5000.
SEGMENT RESULTS
First quarter ended 30 September
2003/04 2002/03
REVENUE (Rm)
Iron ore 907 1 163
Coal 430 396
Base metals 236 259
Heavy minerals 339 38
- Ticor SA project 53 38
- Ticor Limited* 286
Industrial minerals 21 18
Other 2 44
Total 1 935 1 918
NET OPERATING PROFIT (Rm)
Iron ore 154 299
Coal 65 78
Base metals (20) 26
Heavy minerals 17 2
- Ticor SA project (5) 2
- Ticor Limited* 22
Industrial minerals 4 4
Other 75 1
Total 295 410
*Consolidated from 1 April 2003
PHYSICAL RESULTS ("000 tons)
First quarter ended 30 September
2003/04 2002/03
Iron Ore
Production 7 284 6 982
Sales
* Export 4 571 5 288
* Domestic 2 355 2 104
Total 6 926 7 392
Coal
Production
* Power station 3 717 3 518
* Coking 511 565
* Other 738 635
Total 4 966 4 718
Sales
* Eskom 3 944 3 537
* Other domestic 954 929
* Exports 304 221
Total 5 202 4 687
Base Metals
Production
* Zinc concentrate 26 20
* Zinc metal 27 29
* Lead concentrate 8 4
Zinc metal sales
* Export 7 3
* Domestic 21 26
Lead concentrate sales
* Export 9 6
Heavy Minerals - Ticor SA
Project
Production
* Ilmenite 40 7
* Zircon 13 13
* Rutile 4 6
* Pig Iron 6
* Scrap Pig Iron 3
* Chloride Slag 11
* Sulphate Slag 8
Sales
* Ilmenite 10
* Zircon 12 9
* Rutile 2 1
* Scrap Pig Iron 1
Heavy Minerals - Ticor
Limited(1)
Production
* Ilmenite 112 110
* Zircon 21 21
* Rutile 9 9
* Synthetic Rutile 55 49
* Leucoxene 10 5
* Pigment 25 24
Sales
* Ilmenite 26 25
* Zircon 14 23
* Rutile 2 6
* Synthetic Rutile 26 11
* Leucoxene 9
Ticor Limited was consolidated from 1 April 2003 and the full production tonnes
of the Tiwest joint venture in which Ticor Limited has a 50% interest, are
included for the quarter ended 30 September 2003. Physical information for the
comparative period is provided for comparative purposes only.
Kumba Resources Limited
DIRECTORS MLD Marole (Chairman), Dr CJ Fauconnier*(Chief Executive),
BE Davison, 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
GS Gouws resigned from the board effective 14 October 2003
COMPANY SECRETARY MS Viljoen
INVESTOR RELATIONS Trevor Arran +27 12 307 3292
CORPORATE AFFAIRS Pat Mdoda +27 12 307 4553
SPONSOR JP Morgan +27 11 507 0300
REGISTRATION NUMBER 2000/011076/06
JSE SHARE CODE KMB
ISIN CODE ZAE000034310
ADR CODE KBREY
This report is available at Kumba Resources World Wide Web site at:
www.kumbaresources.com
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