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Western Areas Limited - Unaudited Quarterly Results Ended 30 September 2003
WESTERN AREAS LIMITED
Registration number 1959/003209/06
Incorporated in the Republic of South Africa
ISIN: ZAE000016549 SHARE CODE: WAR
UNAUDITED QUARTERLY RESULTS ENDED 30 SEPTEMBER 2003
PRODUCTION AND UNIT RESULTS
IMPERIAL
Quarter Quarter Quarter Year
ended ended ended ended
30.09.03 30.06.03 31.03.03 31.12.02
Ore milled (000) tons 307 252 231 995
Yield oz/ton 0.204 0.225 0.214 0.198
Gold produced oz 62,709 56,735 49,322 197,419
Gold sold oz 60,787 62,115 43,942 195,297
Cash costs US$/oz 303 274 263 196
Total production costs US$/oz 369 347 289 226
Gold price achieved US$/oz 345 327 299 291
Capital expenditure US$m 17 14 12 42
Capital commitment
at end of period US$m 13 24 25 25
METRIC
Quarter Quarter Quarter Year
ended ended ended ended
30.09.03 30.06.03 31.03.03 31.12.02
Ore milled (000) tonnes 279 228 210 903
Yield g/tonne 6.99 7.73 7.30 6.79
Gold produced kg 1,949 1,766 1,534 6,141
Gold sold kg 1,890 1,951 1,367 6,075
Cash costs R/kg 68,311 65,980 70,464 66,070
Total production costs R/kg 83,106 83,549 77,381 76,262
Gold price achieved R/kg 77,653 78,159 79,992 98,189
Capital expenditure Rm 121 105 98 437
Capital commitment
at end of period Rm 91 176 208 214
ABRIDGED INCOME STATEMENT
Quarters ended Year to date Year ended
30.09.03 30.06.03 30.09.03 31.12.02
Unaudited Unaudited Unaudited Audited
Notes Rm Rm Rm Rm
Gold revenue 146.8 152.4 408.5 596.5
Total production
costs (162.0) (147.5) (428.2) (468.4)
Production costs
- cash (133.2) (116.5) (357.8) (405.8)
Production costs
- non-cash 6 (28.8) (31.0) (70.4) (62.6)
Operating (loss)/profit
from gold (15.2) 4.9 (19.7) 128.1
Other income 1 77.7 71.3 217.5 111.6
Administration
and other costs (8.5) (7.1) (20.7) (48.8)
Derivative transaction
income/(costs) 68.2 13.4 141.4 (51.2)
Hedge position closure costs - - - (592.5)
Non-recurring costs 7 (40.1) - (40.1) (9.0)
Profit/(Loss) before taxation 82.1 82.5 278.4 (461.8)
Taxation 29.2 (38.8) (47.7) 185.2
Minority interest in profit (1.0) (0.9) (4.1) (3.9)
Attributable profit/(loss)
after taxation 110.3 42.8 226.6 (280.5)
Headline earnings/(loss)
per share 62 (12) 77 (289)
Earnings/(Loss) per share 105 41 215 (266)
Number of issued
shares (million) 105.4 105.4 105.4 105.4
Determination of headline
earnings:
Net profit/(loss) for period 110.3 42.8 226.6 (280.5)
Net loss on disposal
of subsidiary 2.6 (4.1) (14.1) (40.7)
Non-recurring costs - - - 16.7
Net profit on disposal
of investment (48.0) (50.9) (131.8) -
Headline earnings/(loss) 64.9 (12.2) 80.7 (304.5)
ABRIDGED BALANCE SHEET
Quarters ended Year ended
30.09.03 30.06.03 31.12.02
Unaudited Unaudited Audited
Notes Rm Rm Rm
ASSETS
Mining assets 4 3,154.7 3,142.2 2,976.1
Deferred premium costs 942.4 1,009.0 1,148.8
Listed investments 2 165.3 92.4 61.5
Cash and cash equivalents 25.0 39.6 76.4
Other assets 94.3 237.2 228.5
Total assets 4,381.7 4,520.4 4,491.3
EQUITY AND LIABILITIES
Shareholders" equity 3 1,383.6 1,514.5 1,751.7
Outside shareholders" equity - 25.7 22.5
Deferred taxation (286.6) (104.2) 176.7
Option premium payable 1,147.2 1,245.3 1,382.2
Deferred premium income 859.5 907.9 1,009.7
Hedge liability 1,101.3 777.7 -
Other liabilities 176.7 153.5 148.5
Total equity and liabilities 4,381.7 4,520.4 4,491.3
ABRIDGED CASH FLOW STATEMENT
Quarters ended Year to date Year ended
30.09.03 30.06.03 30.09.03 31.12.02
Unaudited Unaudited Unaudited Audited
Rm Rm Rm Rm
Cash flow from/(utilised in)
operating activities 38.5 14.2 51.6 (422.8)
Cash flow utilised in
investing activities (41.3) (3.6) (72.0) (441.8)
Cash flow utilised in
financing activities (9.1) (10.7) (30.2) -
Net decrease in cash
and cash equivalents (11.9) (0.1) (50.6) (864.6)
Cash and cash equivalents:
- at beginning of period 39.6 41.6 76.4 1,104.1
- effect of exchange rate
fluctuations on cash held (2.7) (1.9) (0.8) (163.1)
- at end of period 25.0 39.6 25.0 76.4
STATEMENT OF CHANGES IN SHAREHOLDERS" EQUITY
Ret-
Number Avail- ained
of Cash able earnings/
shares flow for- (Accum-
issued Share Share hedge sale ulated
and cap- pre- Res- Res- def-
paid ital mium erve erve icit) Total
Millions Rm Rm Rm Rm Rm Rm
Balance at
31 Dec 2002 105.4 105.4 1,863.5 - - (217.2) 1,751.7
Change in
accounting
policy - AC 133 - - - (576.7) - 91.4 (485.3)
Restated
Opening
balance 105.4 105.4 1,863.5 (576.7) - (125.8) 1,266.4
Fair value
adjustment - - - (18.0) 40.3 - 22.3
Recycling of
fair value
on disposal
of investment - - - - (40.3) (91.4) (131.7)
Attributable
profit for
period - - - - - 226.6 226.6
Balance at
30 Sept 2003 105.4 105.4 1,863.5 (594.7) - 9.4 1,383.6
OPEN HEDGE POSITIONS
Years to December 2003 2004 2005 2006 2007 2008
Put options bought
Amount hedged (oz 000s) 51 210 215 205 206 214
Strike price ($/oz) 278.2 268.2 278.2 288.2 288.2 288.2
Call options sold
Amount hedged (oz 000s) 34 162 166 157 158 165
Strike price ($/oz) 278.7 268.7 278.7 288.7 288.7 288.7
Call options bought
Amount hedged (oz 000s) 18 87 89 85 85 89
Strike price ($/oz) 278.7 288.7 298.7 308.7 323.7 333.7
Call options sold
Amount hedged (oz 000s) 14 65 66 63 63 66
Strike price ($/oz) 288.7 303.7 318.7 333.7 348.7 363.7
Call options sold
Amount hedged (oz 000s) 10 42 21
Strike price ($/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 2,233
Strike price ($/oz) 293.2 303.2 313.2 313.2 323.2 333.2
Call options sold
Amount hedged (oz 000s) 161 165 154 158 158 76 1,714
Strike price ($/oz) 293.7 303.7 313.7 313.7 323.7 333.7
Call options bought
Amount hedged (oz 000s) 87 89 83 86 85 41 924
Strike price ($/oz) 348.7 358.7 373.7 398.7 413.7 428.7
Call options sold
Amount hedged (oz 000s) 64 66 62 63 63 30 685
Strike price ($/oz) 378.7 393.7 408.7 423.7 438.7 453.7
Call options sold
Amount hedged (oz 000s) 73
Strike price ($/oz) 310.0
BASIS OF ACCOUNTING
The quarterly results are prepared in accordance with South African
Statements of Generally Accepted Accounting Practice and the accounting policies
applied are consistent with that of the previous corresponding period except for
the adoption of AC 133 Financial Instruments: Recognition and Measurements.
The Group Financial Statement incorporate the assets, liabilities and results of
the operations of Western Areas Limited ("Western Areas") and its subsidiaries
on a consolidated basis.
NOTES TO THE ABRIDGED FINANCIAL STATEMENTS
1. Other income includes the profit on sale of the Randgold & Exploration
Company Limited ("Randgold") shares of R59.2 million. 2,656,890 Randgold shares
were sold during the quarter under review and concludes our investment in
Randgold.
2. Listed investments of R165.3 million represents 92,866,440 JCI Shares and
Debentures received at market price in terms of the Barnato Exploration Limited
("Barnex"), Scheme of Arrangement concluded at 30 September 2003.
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 AC 133.
4. No adjustment has been made to reflect mining assets at their fair value.
These assets are in the process of being 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. Non-cash operating costs generally includes the amortisation of Western
Areas" share of South Deep and the change in inventory for the period.
7. Non-recurring loss relates to the reversal of historical consolidation
retained earnings on disposal of a subsidiary company, Barnex.
LETTER TO SHAREHOLDERS
Attributable profit after taxation for the September quarter amounted to
R110.3 million compared to R42.8 million for the previous quarter. The increase
in attributable profit after taxation, despite a decrease in operating profit
from gold of R20.1 million quarter on quarter, was as a consequence of the
income from the sale of the remaining Randgold shares and the provision of R68.2
million in terms of the exchange revaluation and present value adjustment for
the derivative transaction.
Gold production increased by 10% in the September quarter, underpinned by the
availability of backfill and a constructive and rapid settlement in terms of the
wage negotiations. The benefit of the higher production was not reflected in
revenue as a consequence of bullion delivered but not refined and sold due to
the Rand Refinery year-end stocktake and the lower Rand gold price. The yield
for the quarter was down, mainly due to the treatment of 76,000 tonnes of low
grade surface material to help fill the plant and provide backfill material,
failing which the yield would have been in line with previous quarters. Total
production costs increased to R162.0 million from R147.5 million, primarily as a
consequence of the annual wage increases and adjustments for consignment
inventory expensed of R20 million, of which R11 million relates to 2002 which
was accounted for in the non-cash costs for the current year. Total production
costs per kilogram decreased marginally to R83,106 per kilogram from R83,549 per
kilogram. The cash costs increased by 4% to R68,311 per kilogram from R65,980
per kilogram.
The disposal of Barnex was completed on 30 September 2003. The tradeable
instruments received in terms of the Barnex disposal (see note 2), of which the
Debentures were sold subsequently, for a consideration of R97.2 million, will be
utilised, in conjunction with other alternatives, to fund the Company"s portion
of the South Deep joint venture expenditure.
The final equipping of the South Deep Twin Shaft Complex ("Shaft") is now
scheduled to be completed in the second half of 2004. Final commissioning of the
Shaft has been delayed to ensure the integrity of the suspended shaft steelwork
and design specifications thereof. Efforts are being made to accelerate the
equipping without compromising the quality and safety standards of the Shaft.
Development of the Shaft 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
27 November 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) 370-5271/2
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
Registration number 1959/003209/06
Incorporated in the Republic of South Africa
ISIN: ZAE000016549 SHARE CODE: WAR
Date: 27/11/2003 04:21:08 PM Supplied by www.sharenet.co.za
Produced by the JSE SENS Department
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