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ARI
ARIM
African Rainbow Minerals Limited - Reviewed Interim Results For The Six Months
Ended 31 December 2005
African Rainbow Minerals Limited
(Formerly Anglovaal Mining Limited ("Avmin"))
(Incorporated in the Republic of South Africa)
(Registration number 1933/004580/06)
JSE Share code: ARI LSE Share code: AGM
ISIN: ZAE000054045
("ARM" or the "Company")
REVIEWED INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2005
HIGHLIGHTS
* Headline earnings increased from R19 million to R131 million
* Excellent progress on Two Rivers Platinum Project
* Assmang shareholders" agreement and delisting approved
* Release of the 8.4 million ton per annum export BKM iron ore mine
* Exploration assets outside South Africa listed through TEAL on the Toronto
Stock Exchange
* Nkomati approved expansion from a 30 000 tpm to 100 000 tpm mine with a new
concentrator
COMMENTARY
The board of ARM is pleased to announce its interim results for the six months
ended 31 December 2005 which have been prepared in accordance with International
Financial Reporting Standards.
Headline earnings increased from R19 million for the six months to 31 December
2004 to R131 million for the current reporting period. Earnings were positively
affected by improved results from Modikwa and not including our share of Harmony
Gold Mining Company Limited"s ("Harmony") results (now accounted for as an
investment), but negatively affected both by the participation in only 50%
of Nkomati"s earnings following the disposal of 50% to LionOre and lower
earnings from Assmang.
ARM Platinum benefited from strong PGM prices with Modikwa Platinum Mine
reporting a significant increase in cash operating profits to R70 million (at
50% ownership)(2004: R8 million). Nkomati Nickel Mine has continued with its
consistent strong performance.
Assmang Limited ("Assmang") reported a 22% decrease in headline earnings to
R275 million, mainly driven by lower sales volumes and prices achieved at the
manganese and chrome operations as explained below in more detail.
Harmony improved its gold production by 6% to 20 316kg and reported an
increase in operating profit to R389.4 million from R118.8 million for the
quarter ended 31 December 2005. A significant increase in the Harmony share
price resulted in a stronger ARM balance sheet with investments having
increased by R1.7 billion since June 2005.
Total consolidated short and long term borrowings increased from R1.6 billion
on 30 June 2005 to R2.0 billion on 31 December 2005, mainly as a result of
borrowings to fund the Two Rivers Platinum Project. ARM"s net debt to equity
ratio remains, however, at a comfortable 16%.
We continued with our organic growth programme through the release, in
conjunction with our partners, of two significant projects. The Two Rivers
Platinum Project in the Mpumalanga Province was released in June 2005 and the
8.4 million ton per annum export iron ore mine on our Bruce, King and Mokaning
properties ("the BKM Mine"), situated in the Northern Cape Province, was
released during January 2006.
Furthermore, we have successfully completed the Dwarsrivier underground chrome
mine situated in Mpumalanga, ahead of schedule and below budget. In addition,
the Nchwaning 3 manganese mine was completed and became fully
operational during the period under review.
The restructuring of the Assmang shareholders" agreement has been completed and
the delisting of the company has received all the necessary approvals.
We have also today announced that Nkomati Nickel will increase monthly
production from 30 000 tons per month to 100 000 tons per month, maintaining
current nickel production levels.
OPERATIONAL REVIEW
ARM Ferrous
The ARM Ferrous operations which are held through its investment in Assmang
consists of three divisions namely, iron ore, manganese and chrome.
Assmang reported turnover for the six months to 31 December 2005 of R1,87
billion (2004: R1,89 billion). Earnings decreased by 24% to R275 million
(2004: R362 million) and headline earnings decreased by 22% to R275 million
(2004: R354 million).
The decrease in earnings and headline earnings can be primarily attributed to
decreases in sales volumes of manganese ore and charge chrome and a substantial
price decrease for manganese alloys as a result of negative market conditions
over the reporting period.
Six months ended
2005 2004
100% basis `000 "000 Percentage
Assmang product volumes sales metric tons metric tons change
Manganese ore* 573 766 (25)
Iron ore 2 600 2 541 2
Manganese alloys 130 105 24
Charge chrome 89 104 (14)
Chrome ore* 56 23 144
*Excluding intra-group sales
Major capital projects
The ARM Ferrous division through Assmang continued its capital expenditure
programme, spending R313 million (2004: R286 million) during the period under
review. Of this, R43 million was spent on the completion of the Dwarsrivier
underground chrome mine, which commenced production well ahead of schedule and
under budget, at a total capital cost of R187 million. The Nchwaning 3
manganese mine has been completed and is fully operational.
During the period under review the Board of Assmang approved the first phase
construction of a new export iron ore mine on its Bruce, King and Mokaning
properties, ("the BKM Mine"), adjacent to Kumba"s Sishen mine, near Kathu in
the Northern Cape Province. Construction of the BKM Mine will commence during
the early part of calendar year 2006 with the first phase resulting in a new
8.4 million ton per annum export iron ore mine at an estimated total capital
cost of R3.2 billion, excluding capitalised interest. First production is
expected during the first half of calendar year 2008. A second phase expansion
of the BKM Mine to increase production volumes from the initial 8.4 million
tons per annum to 16.0 million tons per annum export capacity forms part of the
current design and incorporates some of the capital required for the first
phase. The second phase expansion, which would need further Board approval,
will require a further estimated R1.8 billion to increase the capacity to 16.0
million tons per annum export capacity. This second phase expansion is,
however, dependant on further increases in the capacity of Transnet"s
Sishen/Saldanha export channel. The capital expenditure for the BKM Mine
referred to above will be funded by Assmang from internally generated cash and
funding facilities available to Assmang.
Delisting of Assmang
On 30 January 2006 minority shareholders of Assmang approved a scheme of
arrangement, in terms of Section 311 of the Companies Act No. 61 of 1973, as
amended, in terms of which Assore Limited ("Assore") will acquire all the
shares in the issued ordinary share capital of Assmang, other than those
already held by ARM and Assore. The High Court of South Africa ( Witwatersrand
Local Division) sanctioned the abovementioned scheme on 7 February 2006.
The effect of this transaction will be that ARM and Assore will each hold a 50%
interest in Assmang and will control the company jointly. Assmang"s listing on
the JSE Limited is expected to be terminated on or about 28 February 2006.
ARM Platinum
The ARM Platinum division consists of an effective interest of 41.5% in Modikwa
Platinum Mine, 50% in the Nkomati Nickel Mine, 55% in the Two Rivers Platinum
Project, 50% in the Nkomati Nickel Expansion Project and 90% in Kalplats
Exploration.
Modikwa Platinum Mine
Modikwa, which remains in a build-up phase, has made significant progress in
changing the mining method from down dip mining with reef drives to breast
(strike) mining with footwall drives . Production capacity has been
increased through the improved development rate and the mine is expected
to reach design capacity during the next reporting period.
The improved metals basket price has resulted in a cash operating profit of
R70 Million (at 50% ownership) (2004: R8 million) for the six months under
review.
Six months ended
Modikwa - 100%
basis 31 December 31 December Percentage
2005 2004 change
Tons milled million tons 1.29 1.14 13
Head grade (4E) g/t 4.15 4.35 (5)
Platinum in
concentrate ounces 65 445 60 000 9
Cash cost R/ton 373 373 -
Cash cost R/Pt oz 7 349 7 067 (4)
Capex R million 60 54 11
Nkomati Nickel Mine
The Nkomati Nickel Mine again reported consistent, high earnings. Nkomati
continues to mine from various ore bodies and during the past period 23% of the
run of mine tons comprised of MMZ, the ore body targeted for the Expansion
Project. Following the sale of 50% of Nkomati Nickel Mine ("Nkomati") to
LionOre, effective 31 May 2005, results for this reporting period will reflect
50% of the profits from this operation whereas in the comparative six month
period the Nkomati profits were accounted for on a 100% basis.
The mine has again had an excellent performance over the last six months, with
contribution to earnings of R52 million at 50% ownership (R103 million at 100%
ownership).
Six months ended
Nkomati - 100% basis 31 December 31 December
2005 2004
Cash operating profit R million 195 178
Tons milled (`000) 182 184
Nickel head grade (% nickel) 1.97 1.94
On-mine cash cost per tons
treated (R/ton) 508 426
Cash cost (net of by-products) US$/lb. 0.87 1.32
Market sales
Nickel tons 2 534 2 585
Copper tons 1 485 1 693
Cobalt tons 42 49
PGMs ounces 16 431 21 502
Nkomati Nickel Expansion Project
The current MSB orebody will be depleted during 2008. The Joint Venture
partners have approved the construction of a new 100 000 tons per month
(increasing from the current 30 000 tons per month) concentrator plant and
relevant infrastructure to mine the MMZ ore body and maintain the current metal
production of 5 000 tons nickel per annum in concentrate. Mining will take
place from the current underground infrastructure as well as from two open pits
over a 10-year period. The estimated capital cost is R384 million and
construction will span 18 months to full production. The above forms part of
the expansion project currently under review.
Two Rivers Platinum Project
The 220 000 oz PGMs per annum Two Rivers Platinum Project was officially
released for construction on 1 June 2005. Of the R1,3 billion estimated capital
expenditure, project finance of R700 million has been secured with the balance
of the funding being contributed by the two partners (ARM 55% and Implats 45%).
The overall project progress to completion remains on plan at 60% complete and
capital expenditure is forecasted to be within budget. The mining stockpile now
exceeds 600 000 tons as mining ramp up progresses. The concentrator plant will
be commissioned during the second half of this calendar year.
Kalplats PGM Exploration Project
ARM and joint venture partner, Platinum Australia Limited, are progressing
with exploration and feasibility work to determine the viability of
Kalplats, the results of which are expected during the next six months.
TEAL Exploration & Mining Incorporated ("TEAL")
TEAL is a mineral development and exploration company that is currently focused
on development projects with properties located in Zambia, Namibia and the
Democratic Republic of Congo. TEAL completed its listing on the Toronto Stock
Exchange on 15 November 2005, raising US$33,3 million in order to further
progress its projects and properties. At listing, ARM diluted its holding to
65% resulting in an exceptional profit of R133 million.
The progress being made at the Mwambashi Copper Project remains encouraging.
It is expected that by the end of the 2006 calendar year, TEAL will have
completed the necessary permitting requirements , finalised marketing
and off-take arrangements; mine site establishment will be concluded and
open-pit mining will have commenced. This is expected to enable the build-up to
full production during the first-half of the 2007 calendar year.
As disclosed at the time of the Initial Public Offering a secondary listing of
TEAL"s Common Shares on the JSE Limited is expected to be completed within the
next two months.
SAFETY AND HEALTH
Safety
Our continued focus on safety at all levels within the company is yielding
positive results. Our quarter-on-quarter safety performance also showed
significant improvement, with the LDIFR dropping from 7.5 in the first quarter
to 6.1 in the second quarter. During December 2005, our Beeshoek and
Dwarsrivier mines completed 3 000 and 1 308 fatality free production shifts,
respectively.
Environment
We are pleased to announce that, during January 2006, the Cato Ridge Works
operation received ISO 14001 certification. Presently, most operations are
accredited for either ISO 14001, 9001 and/or 18001.
Outlook
The results as reported further demonstrate the continued benefit to ARM
through its diversified commodity portfolio. Most commodity prices are expected
to remain at similar, or slightly lower, levels in US$ terms for the remainder
of the year. We do not expect the United States Dollar : South African Rand
exchange rate to be materially different from current levels. As a result our
operations continue to strive for increased efficiencies and lower costs in
order to retain competitiveness.
Having made good progress in the release and development of our projects, ARM
is well- positioned to meet its growth strategy of doubling production in key
commodities by year 2010.
Dividends
The company is currently involved in a high expansion phase with a significant
and exciting project pipeline as well as a number of other growth
opportunities. As a result the Board of Directors has decided to conserve
resources and not to declare a dividend for the six months ended 31 December
2005.
Review by independent auditors
The financial information has been reviewed by Ernst & Young whose unqualified
review opinion is available for inspection at the company"s registered office.
Signed on behalf of the board:
P T Motsepe A J Wilkens
Executive Chairman Chief Executive Officer
Johannesburg
17 February 2006
GROUP BALANCE SHEETS
at 31 December 2005
Reviewed Unaudited Audited
at 31 December at 30 June
2005 2004 2005
Restated Restated
Notes Rm Rm Rm
ASSETS
Non-current assets
Property, plant and
equipment 5 529 4 903 5 025
Intangible assets 4 6 5
Deferred tax assets 69 7 68
Environmental
rehabilitation trust
funds 29 29 29
Loans and long-term
receivables 8 - -
Investments 4 5 404 3 261 3 708
11 043 8 206 8 835
Current assets
Inventories 1 317 1 210 1 144
Trade and other
receivables 1 166 1 073 1 528
Cash and cash equivalents 494 225 259
2 977 2 508 2 931
Total assets 14 020 10 714 11 766
EQUITY AND LIABILITIES
Capital and reserves
Ordinary share capital 10 10 10
Share premium 3 511 3 496 3 497
Other reserves 686 (1 168) (772)
Retained earnings 4 020 3 552 3 776
Shareholders" interest in
capital and reserves 8 227 5 890 6 511
Minority interest 1 604 1 494 1 461
Total shareholders"
interest 9 831 7 384 7 972
Non-current liabilities
Long-term borrowings 5 1 342 787 962
Deferred tax liabilities 1 106 758 814
Long-term provisions 208 159 190
2 656 1 704 1 966
Current liabilities
Trade and other payables 637 583 861
Provisions 35 36 51
Taxation 170 174 304
Overdrafts and short-term
borrowings 5 691 833 612
1 533 1 626 1 828
Total equity and
liabilities 14 020 10 714 11 766
GROUP INCOME STATEMENTS
for the six months ended 31 December 2005
Reviewed Unaudited Audited
Six months ended Year ended
31 December 30 June
2005 2004 2005
Restated Restated
Note Rm Rm Rm
Revenue 2 348 2 391 5 485
Cost of sales (1 702) (1 618) (3 743)
Gross profit 646 773 1 742
Other operating income 115 27 273
Other operating expenses (263) (168) (419)
Retrenchment cost - (7) (8)
Profit from operations
before exceptional items 498 625 1 588
Income from investments 10 12 22
Finance costs (81) (98) (172)
Loss from associate - (138) (150)
Profit before taxation and
exceptional items 427 401 1 288
Exceptional items 6 116 284 155
Profit before taxation 543 685 1 443
Taxation (166) (285) (530)
Profit for period 377 400 913
Attributable to:
Minority interest 130 161 451
Equity holders of the parent 247 239 462
377 400 913
Additional information
Headline earnings (R million) 131 19 339
Headline earnings per share
(cents) 64 9 166
Basic attributable earnings
per share (cents) 121 117 226
Fully diluted attributable
earnings
per share (cents) 120 117 226
Fully diluted headline earnings
per share (cents) 64 9 166
Number of shares in issue
at end of period (thousands) 204 864 204 391 204 437
Weighted average number of
shares
in issue (thousands) 204 724 204 313 204 370
Weighted average number of
shares
used in calculating fully
diluted
earnings per share (thousands) 205 810 204 619 204 794
Net asset value per share
(cents) 4 016 2 882 3 185
STATEMENTS OF CHANGES IN EQUITY
for the six months ended 31 December 2005
Share Revaluation
capital and Minority of listed
premium interest investments
Rm Rm Rm
Six months ended
31 December 2005 (Reviewed)
Balance at 30 June 2005
as previously reported 3 507 1 461 (821)
Basic earnings - - -
Share options exercised 14 - -
Revaluation of listed investments - - 1 696
Deferred tax on revaluation of
listed investments - - (247)
Translation reserve on
translation of subsidiary - - -
Share-based payments
(IFRS 2 adjustment) - - -
Teal Limited minorities - 73 -
Minority interest in earnings - 130 -
Dividend paid to minorities - (60) -
Other - - -
Balance at 31 December 2005 3 521 1 604 628
Six months ended
31 December 2004 (Unaudited)
Restated
Balance at 30 June 2004
as previously reported 3 505 1 326 -
Basic earnings - - -
Revaluation of listed investments - - (1 423)
Deferred tax of revaluation of
listed investments - - 216
Share of associate other reserves - - -
Share-based payments
(IFRS 2 adjustment) - - -
Share options exercised 1 - -
Minority interest in earnings - 161 -
Dividend paid to minorities - (13) -
Re-allocation risk funding: Two
Rivers - 20 -
Other - - -
Balance at 31 December 2004 3 506 1 494 (1 207)
Year ended 30 June 2005 (Audited)
Restated
Balance at 30 June 2004
as previously reported 3 505 1 326 -
Basic earnings as previously stated - - -
Revaluation of listed investments - - (962)
Deferred tax on revaluation of
listed investments - - 141
Reversal of associate"s other
reserves - - -
Share options exercised 2 - -
Share-based payments
(IFRS 2 adjustment) - - -
Realisation of land and buildings - - -
Minority interest in earnings - 451 -
Dividend paid to minorities - (45) -
Re-allocation risk funding: Two
Rivers - (271) -
Other - - -
Balance at 30 June 2005 3 507 1 461 (821)
Retained
Other earnings Total
Rm Rm Rm
Six months ended
31 December 2005 (Reviewed)
Balance at 30 June 2005
as previously reported 49 3 776 7 972
Basic earnings - 247 247
Share options exercised - - 14
Revaluation of listed investments - - 1 696
Deferred tax on revaluation of
listed investments - - (247)
Translation reserve on
translation of subsidiary (6) - (6)
Share-based payments
(IFRS 2 adjustment) 14 - 14
Teal Limited minorities - - 73
Minority interest in earnings - - 130
Dividend paid to minorities - - (60)
Other 1 (3) (2)
Balance at 31 December 2005 58 4 020 9 831
Six months ended
31 December 2004 (Unaudited)
Restated
Balance at 30 June 2004
as previously reported (193) 3 316 7 954
Basic earnings - 239 239
Revaluation of listed investments - - (1 423)
Deferred tax of revaluation of
listed investments - - 216
Share of associate other reserves 235 - 235
Share-based payments
(IFRS 2 adjustment) 1 - 1
Share options exercised - - 1
Minority interest in earnings - - 161
Dividend paid to minorities - - (13)
Re-allocation risk funding: Two Rivers - - 20
Other (4) (3) (7)
Balance at 31 December 2004 39 3 552 7 384
Year ended 30 June 2005 (Audited)
Restated
Balance at 30 June 2004
as previously reported (193) 3 316 7 954
Basic earnings as previously stated - 462 462
Revaluation of listed investments - - (962)
Deferred tax on revaluation of
listed investments - - 141
Reversal of associate"s other reserves 235 - 235
Share options exercised - - 2
Share-based payments
(IFRS 2 adjustment) 11 - 11
Realisation of land and buildings (6) - (6)
Minority interest in earnings - - 451
Dividend paid to minorities - - (45)
Re-allocation risk funding: Two Rivers - - (271)
Other 2 (2) -
Balance at 30 June 2005 49 3 776 7 972
GROUP CASH FLOW STATEMENTS
for the six months ended 31 December 2005
Reviewed Unaudited Audited
Six months ended Year ended
31 December 30 June
2005 2004 2005
Rm Rm Rm
CASH FLOW FROM OPERATING ACTIVITIES
Cash receipts from customers 2 799 2 574 5 297
Cash paid to suppliers and employees (2 133) (1 966) (3 636)
Cash generated from operations 666 608 1 661
Interest received 10 12 22
Interest paid (81) (105) (183)
-
Dividends received 19 19
Dividends paid to minorities (60) (13) (45)
Taxation paid (256) (55) (168)
Net cash inflow from operating activities 279 466 1 306
CASH FLOW FROM INVESTING ACTIVITIES
Additions to fixed assets to maintain
operations (391) (349) (705)
Additions to fixed assets to expand
operations (303) (92) (297)
Proceeds on disposal of property plant
and equipment 2 50 39
-
Proceeds on disposal of investments - 9
Increase in loans and long-term receivable (8) - -
-
Net cash effect on disposal of 50% of
Nkomati mine - 136
-
Investments acquired - (8)
Net cash outflow from investing activities (700) (391) (826)
CASH FLOW FROM FINANCING ACTIVITIES
Proceeds on exercise of share options 14 1 2
Funding received from minority shareholders 47 21 -
Investment by minority shareholders 215 - -
Long-term borrowings raised 391 30 110
Long-term borrowings repaid (135) (94) (215)
Increase/(Decrease) in short-term borrowings 129 (136) (446)
Net cash inflow/(outflow) from financing
activities 661 (178) (549)
Net increase/(decrease) in cash and cash
equivalents 240 (103) (69)
Effects of exchange rate changes (5) - -
Cash and cash equivalents at beginning of
period 259 328 328
Cash and cash equivalents at end of period 494 225 259
Cash generated from operations per share
(cents) 325 298 813
NOTES TO THE FINANCIAL STATEMENTS
for the six months ended 31 December 2005
1. BASIS OF PREPARATION
The reviewed results for the half-year have been prepared in accordance with
International Financial Reporting Standards ("IFRS") on a historical cost
basis except for certain derivative financial instruments that have been
measured at fair value.
The financial information for the half-year ended 31 December 2005 has been
prepared adopting the same accounting policies used in the most recent
annual financial statements, except for the adoption of the new statement
IFRS 2 - share- based payments.
As a result the previously reported results for the half-year ended 31
December 2004 and the year ended 30 June 2005 have been restated as is more
fully explained below.
These consolidated financial statements are prepared in accordance with IAS
34 - interim financial reporting.
2. IMPLICATIONS OF ADOPTING IFRS 2 - SHARE-BASED PAYMENTS
The group grants share options to employees under employee share incentive
schemes. In accordance with the requirements of IFRS 2, the group now
recognises an expense in the income statement with a corresponding credit to
equity. The fair value at the date of granting the options is charged to
income on a straight-line basis over the relevant option vesting periods,
adjusted to reflect actual and expected levels of vesting.
This new statement has been applied retrospectively by the group and results
in a restatement of prior year financial information.
This statement becomes effective for the ARM group for the financial year
ending 30 June 2006.
The prior and current reporting period adjustments are:
- Half-year ended 31 December 2005: R14 million - charge to income
statement.
- Financial year ended 30 June 2005: R11 million - charge to income
statement and restatement of comparatives.
- Half-year ended 31 December 2004: R1 million - charge to income statement
and restatement of comparatives.
NOTES TO THE FINANCIAL STATEMENTS
for the six months ended 31 December 2005
Reviewed Unaudited Audited
Six months ended Year ended
31 December 30 June
2005 2004 2005
Restated Restated
Rm Rm Rm
3. INVESTMENT IN ASSOCIATE
Opening balance - 4 338 4 338
Movement for period - (138) 329
Transfer to investments - (4 200) (4 667)
Closing balance - - -
The investment in Harmony has been accounted
for as an associate from the date of
acquisition to 30 November 2004 which was
the date when the ARM interest diluted
to 16.19% following the new share issue
by Harmony to certain Gold Fields
shareholders.
4. INVESTMENTS
Listed
Opening balance 3 708 3 3
Transfer from associates - 4 200 4 667
Unrealised fair value adjustment 1 696 (1 207) (962)
Realisation of unrealised profit on sale of
Avgold - 265 -
Total carrying amount of investments 5 404 3 261 3 708
5. BORROWINGS
Long-term borrowings are held as follows:
- African Rainbow Minerals Limited 225 212 130
- Assmang Limited 13 14 13
- ARM Platinum (Proprietary) Limited 459 561 465
- Two Rivers Platinum (Proprietary) Limited 645 - 354
1 342 787 962
Overdrafts and short-term borrowings are
held
as follows:
- African Rainbow Minerals Limited 309 109 249
- Assmang Limited 225 567 161
- ARM Platinum (Proprietary) Limited 148 157 202
- Two Rivers Platinum (Proprietary) Limited 9 - -
691 833 612
Total borrowings 2 033 1 620 1 574
Interest of R14 million was capitalised for the half-year ended 31 December
2005 (31 December 2004: R1 million, 30 June 2005: R7 million).
NOTES TO THE FINANCIAL STATEMENTS
for the six months ended 31 December 2005
Reviewed Unaudited Audited
Six months ended Year ended
31 December 30 June
2005 2004 2005
Restated Restated
Rm Rm Rm
6. EXCEPTIONAL ITEMS
-
Profit on disposal of Avgold (associate) 265 265
-
Profit on sale of property plant and
equipment 13 -
Impairment of property, plant and equipment (12) - (35)
Loss on disposal of 50 per cent of Nkomati
mine - - (82)
Profit on dilution in subsidiary 133 - -
Other (5) 6 7
Exceptional items per income statement 116 284 155
Taxation - (66) (41)
Minority interest - (4) 5
Profit on sale of property, plant and
-
equipment in associates 6 4
Net exceptional items 116 220 123
7. HEADLINE EARNINGS
Basic earnings per income statement 247 239 462
Loss on sale of Chambishi (subsidiary) - - (7)
Impairment of property, plant and equipment 12 - 35
-
( P rofit)/Loss on sale of pro p e rty
plant and equipment (13) 6
Profit on sale of property, plant and
equipment
-
in associate (6) (4)
Loss on disposal of 50 per cent of Nkomati
mine - - 82
-
Profit on disposal of Avgold (associate) (265) (265)
Profit on dilution in subsidiary (133) - -
-
Loss on dilution of associate - 2
Other 5 (6) (8)
131 (51) 303
Taxation - 66 41
Minority interest - 4 (5)
Headline earnings 131 19 339
8. COMMITMENTS AND CONTINGENT LIABILITIES
Commitments in respect of future capital
expenditure
which will be funded from cash generated and
available borrowing resources are
summarised below:
Approved by directors
- contracted for 689 160 251
- not contracted for 801 326 272
Total commitments 1 490 486 523
Contingent liabilities
Shareholders are advised that there have been no significant changes to the
contingent liabilities of the group as disclosed in the June 2005 annual
report.
NOTES TO THE FINANCIAL STATEMENTS
for the six months ended 31 December 2005
ARM
Platinum Division Ferrous
Gold Platinum Nickel metals
Rm Rm Rm Rm
9. SEGMENTAL INFORMATION
Primary segmental
information
Six months ended
31 December 2005 (Reviewed)
Revenue
External revenue - 309 169 1 870
Cost of sales - (292) (95) (1 315)
Other operating income
per income statement - - 21 16
Insurance premiums written
non-Group companies - - - -
Other operating income - - 21 16
Reinsurance premiums
non-Group companies - - - -
Other operating expenses - (1) (22) (126)
Segment result - 16 73 445
Income from investments - 1 1 1
Finance cost - (45) - (16)
Exceptional items - - - -
Taxation - 8 (22) (155)
Minority interest - 3 - (137)
Contribution to earnings - (17) 52 138
Contribution to headline
earnings - (17) 52 138
Other information
Segment assets 5 401 2 707 272 5 089
Taxation - - - -
Consolidated total assets - - - -
Segment liabilities - 1 390 17 738
Taxation - - - -
Consolidated total liabilities - - - -
Cash in /(out) flow from
operating activities - (10) 22 214
Cash in/(out) flow from
investing activities - (368) (12) (318)
Cash inflow from
financing activities - 213 - 65
Capital expenditure - 395 14 313
Amortisation and
depreciation - 50 22 148
Corpo-
Explo- rate and
ration other Total
Rm Rm Rm
9. SEGMENTAL INFORMATION
Primary segmental
information
Six months ended
31 December 2005 (Reviewed)
Revenue
External revenue - - 2 348
Cost of sales - - (1 702)
Other operating income
per income statement - 78 115
Insurance premiums written
non-Group companies - 59 59
Other operating income - 19 56
Reinsurance premiums
non-Group companies - (57) (57)
Other operating expenses (10) (47) (206)
Segment result (10) (26) 498
Income from investments 1 6 10
Finance cost - (20) (81)
Exceptional items - 116 116
Taxation - 3 (166)
Minority interest 4 - (130)
Contribution to earnings (5) 79 247
Contribution to headline
earnings (5) (37) 131
Other information
Segment assets 214 268 13 951
Taxation - - 69
Consolidated total assets - - 14 020
Segment liabilities 10 758 2 913
Taxation - - 1 276
Consolidated total liabilities - - 4 189
Cash in /(out) flow from
operating activities 2 51 279
Cash in/(out) flow from
investing activities (3) 1 (700)
Cash inflow from
financing activities 216 167 661
Capital expenditure - - 722
Amortisation and
depreciation - - 220
NOTES TO THE FINANCIAL STATEMENTS
for the six months ended 31 December 2005
ARM
Platinum Division Ferrous
Gold Platinum Nickel metals
Rm Rm Rm Rm
9. SEGMENTAL INFORMATION
(continued)
Six months ended
31 December 2004
(Unaudited)
Restated*
Revenue
External revenue - 195 309 1 887
Cost of sales - (246) (145) (1 227)
Other operating income - - 9 8
Other operating expenses - (2) (32) (100)
Segment result - (53) 141 568
Income from investments - 1 1 1
Finance cost - (52) - (33)
Loss from associate (138) - - -
Exceptional items - - - 8
Taxation - 25 (39) (182)
Minority interest - 18 - (179)
Contribution to earnings (138) (61) 103 183
Contribution to headline
earnings (144) (61) 103 179
Other information
Consolidated total assets 3 258 2 085 535 4 520
Consolidated total liabilities - 862 173 1 705
Cash in/(out) flow from
operating activities - (106) 140 485
Cash outflow from
investing activities - (107) (12) (267)
Cash in/(out) flow from
financing activities - (43) - (170)
Capital expenditure - 107 12 286
Amortisation and
depreciation - 31 13 121
Corpo-
Explo- rate and
ration other Total
Rm Rm Rm
9. SEGMENTAL INFORMATION
(continued)
Six months ended
31 December 2004
(Unaudited)
Restated*
Revenue
External revenue - - 2 391
Cost of sales - - (1 618)
Other operating income - 10 27
Other operating expenses - (41) (175)
Segment result - (31) 625
Income from investments - 9 12
Finance cost - (13) (98)
Loss from associate - - (138)
Exceptional items - 276 284
Taxation - (89) (285)
Minority interest - - (161)
Contribution to earnings - 152 239
Contribution to headline
earnings - (58) 19
Other information
Consolidated total assets - 316 10 714
Consolidated total liabilities - 590 3 330
Cash in/(out) flow from
operating activities - (53) 466
Cash outflow from
investing activities - (5) (391)
Cash in/(out) flow from
financing activities - 35 (178)
Capital expenditure - 36 441
Amortisation and
depreciation - 1 166
NOTES TO THE FINANCIAL STATEMENTS
for the six months ended 31 December 2005
ARM
Platinum Division Ferrous
Gold Platinum Nickel metals
Rm Rm Rm Rm
9. SEGMENTAL INFORMATION
(continued)
Year ended 30 June 2005
(Audited)
Restated*
Revenue
External revenue - 456 623 4 406
Cost of sales - (532) (295) (2 916)
Other operating income
per income statement - - 46 166
Insurance premiums written
non-Group companies - - - -
Other operating income - - 46 166
Reinsurance premiums
non-Group companies - - - -
Exploration - - - -
Other operating expenses - (7) (63) (193)
Segment result - (83) 311 1 463
Income from investments - 2 2 2
Finance cost - (104) - (41)
Loss from associate (150) - - -
Exceptional items (2) - - (10)
Taxation - 66 (94) (465)
Minority interest - 20 - (471)
Contribution to earnings (152) (99) 219 478
Contribution to headline
earnings (155) (99) 219 480
Other information
Segment assets 3 706 2 295 269 5 069
Taxation - - - -
Consolidated total assets 3 706 2 295 269 5 069
Segment liabilities - 1 138 17 790
Taxation - - - -
Consolidated total liabilities - - - -
Cash in/(out) flow from
operating activities - (179) 304 1 307
Cash in/(out) flow from
investing activities - (265) (20) (655)
Cash in/(out) flow from
financing activities - (30) - (577)
Capital expenditure - 280 20 699
Amortisation and
depreciation - 85 54 285
Corpo-
Explo- rate and
ration other Total
Rm Rm Rm
9. SEGMENTAL INFORMATION
(continued)
Year ended 30 June 2005
(Audited)
Restated*
Revenue
External revenue - - 5 485
Cost of sales - - (3 743)
Other operating income
per income statement - 61 273
Insurance premiums written
non-Group companies - 55 55
Other operating income - 6 218
Reinsurance premiums
non-Group companies - (59) (59)
Exploration - (25) (25)
Other operating expenses - (80) (343)
Segment result - (103) 1 588
Income from investments - 16 22
Finance cost - (27) (172)
Loss from associate - - (150)
Exceptional items - 167 155
Taxation - (37) (530)
Minority interest - - (451)
Contribution to earnings - 16 462
Contribution to headline
earnings - (106) 339
Other information
Segment assets - 359 11 698
Taxation - 68 68
Consolidated total assets - 427 11 766
Segment liabilities - 731 2 676
Taxation - - 1 118
Consolidated total liabilities - - 3 794
Cash in/(out) flow from
operating activities - (126) 1 306
Cash in/(out) flow from
investing activities - 114 (826)
Cash in/(out) flow from
financing activities - 58 (549)
Capital expenditure - 38 1 037
Amortisation and
depreciation - 2 426
CONTACT DETAILS AND ADMINISTRATION
Registered office
ARM House
29 Impala Road
Chislehurston
Sandton 2146
PO Box 786136
Sandton, 2146
Telephone: +27 11 779 1300
Telefax: +27 11 779 1312
E-mail: ir.admin@arm.co.za
Website: http://www.arm.co.za
Investor relations
Pieter Rorich
Executive: Corporate Development
Telephone: +27 11 779 1476
pieter.rorich@arm.co.za
Corne Bobbert
Corporate Development
Telephone: +27 11 779 1478
corne.bobbert@arm.co.za
Portia Sebulela
Investor Relations Officer
Telephone: +27 11 779 1300
portia.sebulela@arm.co.za
Company secretary
Annamarie van der Merwe
Telephone: +27 11 779 1480
annamarie.vdmerwe@arm.co.za
United Kingdom Secretaries
St James"s Corporate Services Limited
6 St James"s Place
London SW1A 1NP
Telephone: +44 20 7499 3916
Telefax: +44 20 7491 1989
Transfer secretaries
South Africa
Computershare Investor Services
Ground Floor, 70 Marshall Street
Johannesburg 2001
PO Box 61051
Marshalltown, 2107
Telephone: +27 11 370 5000
Telefax: +27 11 688 5222
United Kingdom
Capita Registrars
The Registry
34 Beckenham Road
Beckenham
Kent BR34TU
Telephone: +44 870 162 3100
Telefax: +44 20 8658 3430
Directors
P T Motsepe (Executive Chairman)
R P Menell (Deputy Chairman)
A J Wilkens (Chief Executive Officer)
F Abbott
Dr M M M Bakane-Tuoane**
J A Chissano (Mozambican)**
W M Gule
M W King**
A K Maditsi**
J R McAlpine**
Dr P S Sibisi**
Dr R V Simelane**
M V Sisulu**
J C Steenkamp
Z B Swanepoel*
(*Non-executive
**Independent non-executive)
Sponsor
Deutsche Securities (SA) (Proprietary) Limited
Date: 20/02/2006 08:00:26 AM Produced by the JSE SENS Department
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