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AGL
ANAAL
Anglo American Plc - Interim Results for the six months ended
30 June 2006
ANGLO AMERICAN PLC
(the "Company")
JSE Code: AGL
ISIN Code: GB0004901517
Anglo American announces record underlying earnings of $2.5 billion, up
47%, additional $5 billion capital return and update on Strategic Review
*Operating profit (1) increased to $4.6 billion, up 52%
*Record underlying earnings (2) of $2.5 billion, up 47%, impacted by higher
tax charges
*Cash generation (EBITDA (3)) of $5.9 billion, up 37%
*Strong performances from mining businesses
*Further $4 billion buyback announced
*$1 billion special dividend (67 cents per share)
*Interim dividend increased from 28 to 33 cents per share, up 18%.
Significant progress made in meeting our strategic targets:
*AngloGold Ashanti disposal underway, initial $1 billion realised
*Plans to demerge Mondi being developed
*In depth review of Tarmac completed; restructuring on track
*Disposal of holding in Highveld Steel announced
*Tongaat-Hulett: Hulett Aluminium unbundling is progressing
Leading to:
*Simplified Group structure
*Focused core mining portfolio
*World class portfolio of assets
*Strong growth prospects underpinned by project pipeline
HIGHLIGHTS FOR THE SIX MONTHS ENDED30 6 6 %
JUNE 2006 months months change
ended ended
30 June 30 June
2006 2005
Group revenue including associates(4) 18,825 17,145 9.8%
Operating profit including associates 4,563 2,993 52.5%
before special items and
remeasurements(1)
Profit for the period attributable to 2,943 1,838 60.1%
equity shareholders
Underlying earnings for the period(2) 2,502 1,699 47.3%
EBITDA(3) 5,856 4,267 37.2%
Net cash inflows from operating 3,289 2,931 12.2%
activities
Earnings per share (US$):
Basic earnings per share 2.00 1.27 57.5%
Underlying earnings per share 1.70 1.18 44.1%
Interim dividend (US cents per share)
Recommended interim dividend 33 28 18%
Recommended special dividend 67 - -
Total dividends 100 28 257%
(1) Operating profit includes share of associates" operating profit
(before share of associates" tax and finance charges) and is before special
items and remeasurements, unless otherwise stated. See note 3 to the
financial information. For definition of special items and remeasurements
see note 6 to the financial information.
(2) See note 9 to the financial information for basis of calculation of
underlying earnings.
(3) EBITDA is operating profit before special items and remeasurements,
depreciation and amortisation of subsidiaries and joint ventures and share
of EBITDA of associates. EBITDA is reconciled to cash inflows from
operations and to total profit from operations and associates in note 13 to
the financial information.
(4) Includes the Group"s share of associates" turnover of $2,650 million
(2005: $2,635 million). See note 3 to the financial information.
Tony Trahar, Chief Executive, said:
"This has been a very successful six months, both in terms of the
performance of Anglo American and the implementation of our strategy.
Anglo American has again produced record results - with underlying earnings
up 47% to $2.5 billion. While these were achieved against a backdrop of a
favourable trading environment they are also testament to the strong
underlying performance of our divisions, especially the mining businesses.
There have been operating challenges, such as the industry-wide cost
pressures in some operations, and we have continued with focused cost
containment and efficiency programmes to mitigate these pressures.
At the same time, we have taken significant strides in delivering our
strategy, simplifying the Group structure and focusing on our core mining
portfolio. We have reduced our stake in AngloGold Ashanti, Tarmac"s
restructuring is on track, the disposal process for Highveld Steel has been
announced and plans are being developed to demerge Mondi. Further, we are
announcing today the return of $5 billion to shareholders.
Looking ahead, we are confident that Anglo American will deliver
significant shareholder value as a focused mining Group. Anglo American"s
strong growth prospects are underpinned by one of the industry"s strongest
organic project pipelines and by our unique portfolio of world class
assets."
Financial results
Anglo American"s first half underlying earnings were a record $2.5 billion
as continued strong metal prices and improved volumes reflected the
favourable trading environment for the Group"s key commodities. Operating
profit of $4.6 billion was 52% higher over the corresponding period last
year, with EBITDA up 37% at a record $5.9 billion. Strong contributions
came from Base Metals and Platinum as well as a significant increase in
contribution from AngloGold Ashanti. Kumba"s results also showed a
significant increase. Coal recorded underlying earnings in line with the
prior year, while Paper and Packaging and Industrial Minerals recorded
lower contributions owing to continuing difficult market conditions.
Underlying earnings at De Beers were below the prior year, mainly
reflecting lower preference share income due to the June 2005 redemptions,
and higher minorities as a result of the Ponahalo transaction which
completed in April 2006.
Production volumes were up for platinum, zinc and nickel, coal operations
in Colombia and South Africa and industrial minerals. However, the Group
encountered challenging operating conditions at some of its copper and coal
mines.
The mining industry globally is facing ongoing cost pressure throughout the
supply chain and, against this background, the Group achieved cost savings
of $261 million in synergies, efficiencies and procurement.
Interim dividend
The interim dividend has been increased 18% to $33 cents per share, in line
with our progressive dividend policy. Reflecting the continued strong
operating cash flows, as well as the cash generation from non-core
disposals, it has been decided to pay a special dividend of $67 cents per
share, which will be paid with the interim dividend.
Capital structure and increased return to shareholders
Our net debt position has reduced by $2.3 billion since year end and at 30
June amounted to $2.7 billion. This represents a significant decline in our
gearing and underlines the strong operating cash flows as well as proceeds
from disposals, deconsolidation of AngloGold Ashanti debt and conversion of
$0.8 billion of our convertible debt. The $2 billion share buyback - which
commenced in March this year - has almost been completed, with around $1.83
billion of shares having been repurchased as at 4 August 2006. Given the
continued strong underlying conditions in our business it has been decided
to increase the buyback by a further $4 billion for this year.
Strategy update
Considerable progress has been made in delivering on our strategy of
focusing on our core mining portfolio and simplifying the Group structure.
In line with our stated intention of reducing and ultimately exiting our
50.9% holding in AngloGold Ashanti, we announced in April a $1 billion
placement of shares, reducing our holding to 41.8%. We will continue to
examine options to effect an orderly exit of our stake in the company.
Plans are being developed for the separation of our paper and packaging
business, Mondi, through a demerger and discussions with regulatory
authorities are underway. Mondi will be led by its current management team
under chief executive David Hathorn.
In July, we announced the sale of Anglo American"s 79% stake in Highveld
Steel to Evraz, an international steel producer, and Credit Suisse, for a
total consideration of $678 million. Following the disposal of the initial
49.8%, for which Anglo American received $412 million, Evraz has an option
to acquire Anglo American"s remaining 29.2% stake in Highveld Steel for
$266 million once regulatory approvals are received. This amount will be
reduced by any dividends paid by Highveld Steel prior to Anglo American
selling its remaining shares. The deal represents a substantial foreign
direct investment in South Africa.
Regarding the partial unbundling of Kumba"s iron ore assets, two separate
listed entities, Kumba Iron Ore and Exxaro, are scheduled to be established
in the fourth quarter of 2006. Anglo American will own 65% of Kumba Iron
Ore and 19% of Exxaro.
The Tongaat-Hulett board, in consultation with Anglo American, has decided
to pursue the separate listing of Hulett Aluminium and to introduce black
economic empowerment into both businesses. This should result in further
value unlock for Tongaat-Hulett shareholders.
Regarding our industrial minerals business, Tarmac, we have completed an
extensive review and have concluded that this core extractive business
should be retained as a well established, cash generative, less cyclical
component of the Group. The management team has been strengthened over the
past two years and the business has been restructured on focused product
lines. The review has also resulted in the decision to dispose of a number
of non-core businesses (in Hong Kong, India, Germany and the UK). Together
with the operational, commercial and organisational restructuring carried
out over the past two years, Tarmac is well placed to drive further value
improvement and to grow its business. It has entered two new countries,
Romania and Turkey, this year, enhancing its exposure to the growth markets
in Eastern Europe and the Black Sea Basin.
Strong project pipeline driving growth
Anglo American"s $6 billion project portfolio is developing well and
further good progress has been made during the past six months. In addition
to its existing suite of approved projects, a number of attractive new
developments were approved during the first half of 2006. The largest of
these, approved in February, was the $692 million expansion at PPRust to
bring on an additional 230,000 ounces of platinum a year. A number of other
major platinum developments are also currently under way against a
background of robust long-term demand for platinum group metals. The $316
million Paardekraal platinum project is in the final stages of approval.
In Australia, development is continuing at Anglo Coal"s $835 million Dawson
project, which is planned to reach full production in 2007, with around
12.7 million tonnes per annum (Mtpa) destined for the international coal
market. Work also started early this year on the $516 million Lake Lindsay
greenfield project at German Creek, with additional annual production of
3.7 Mt of metallurgical coal and 0.3 Mt of thermal coal, most of it for
Pacific Rim markets. In Colombia, the first phase of the expansion to 28
Mtpa at Cerrejon Coal is expected to have reached completion by year end; a
second phase, to raise coal output still further to 32 Mtpa, is under way.
In South Africa, the Mafube mine development is progressing following the
granting of the prospecting right. Overall, Anglo Coal plans to lift its
metallurgical coal production by some 50% to around 16 Mtpa by the end of
2008.
Anglo Base Metals is undertaking feasibility and de-bottlenecking studies
to increase production at its two major Chilean copper operations, while a
decision on whether to proceed with the $1 billion, 40,000 tpa nickel
project at Barro Alto in Brazil is expected in the final quarter of this
year.
The main capital expenditure focus for Anglo Ferrous Metals remains Kumba"s
$559 million development at Sishen in South Africa to add another 10 Mtpa
of iron ore. A further $195 million was approved recently to extend this
expansion to Sishen by an additional 3 Mtpa of iron ore, to bring the total
expansion to 13 Mtpa. A final decision on the Sishen South project, with a
full production capacity of around 9 Mtpa, will be aligned with the
synchronised expansion of the rail and port facilities.
De Beers" Canadian Snap Lake and Victor projects, with a combined capital
expenditure value of $1.8 billion, remain on track to open in the final
quarters of 2007 and 2008 respectively. Project costs have increased,
principally owing to higher energy and material costs, technological
challenges and the impact of the early closure of the winter road to the
sites. In Angola, prospecting activities are fully under way through a
joint venture with the State-owned diamond company, Endiama. Subject to the
necessary government regulatory approvals, two projects in South Africa
have been given the green light: the re-opening of the long-dormant
Voorspoed mine and the South African Sea Areas marine mining project for a
total investment of $284 million.
Finally, Anglo American has a number of advanced-technology joint ventures
with international partners, including the recent signing of a Clean Coal
Energy Alliance with Shell to develop coal-to-gas-to-liquids projects,
potentially starting with co-operation at Monash Energy in Australia; and
the US-based FutureGen Industrial Alliance, a public-private partnership
that is developing the world"s most advanced power production project using
clean-coal-technology. In China, the Group is investigating a large coal-to-
chemicals project at Xiwan.
Safety and sustainable development
Although the Group"s Lost Time Injury Frequency Rate increased slightly in
the first half, there was a significant reduction in fatalities. We
continue to examine all available means to completely eliminate any loss of
life across our global operations. During 2006, Anglo American continued to
receive recognition from external bodies for the reporting of our non-
financial performance and for elements of our work with communities. The
period also saw important progress with the NEPAD Investment Climate
Facility and the Extractive Industries Transparency Initiative.
Outlook
The outlook for most of our metals and minerals remains positive as growth
in the OECD and China continues to underpin demand. While rising interest
rates may moderate global growth somewhat from current robust levels, the
improving economic outlook for Japan and Euroland and the continued
strength in Asian economies, notably India and China, remains supportive.
The supply side fundamentals for many metals have been impacted by
unforeseen disruptions and slow project development with metal inventories
in general remaining low or falling. Our project pipeline will continue to
underpin the Group"s growth prospects and ensure material increases in
production across our businesses.
If metal prices remain at, or close to, current levels the Group will enjoy
a strong second half.
For further information:
Investor Relations Media Relations
Charles Gordon Pamela Bell
Tel: +44 207 968 8933 Tel: +44 207 968 8568
Anne Dunn Daniel Ngwepe
Tel: +27 11 638 4730 Tel: +27 11 638 2267
Fiona Wrench
Tel: +27 11 638 2273
Webcast of presentation:
A live webcast of the annual results presentation starting at 10.00am UK
time on 4 August can be accessed through the Anglo American website at
www.angloamerican.co.uk.
Pictures:
High resolution images can be downloaded by the media at www.vismedia.co.uk
Notes to Editors:
Anglo American plc is one of the world"s largest mining and natural
resource groups. With its subsidiaries, joint ventures and associates, it
is a global leader in platinum, gold and diamonds, with significant
interests in coal, base and ferrous metals, industrial minerals and paper
and packaging. The Group is geographically diverse, with operations in
Africa, Europe, South and North America, Australia and Asia.
Note: Throughout this press release `$" denotes United States dollars and
`cents" refers to United States cents; operating profit includes
associates" operating profit and is before special items and remeasurements
unless otherwise stated; special items and remeasurements are defined in
note 6 and underlying earnings are calculated as set out in note 9 to the
financial information. EBITDA is operating profit before special items and
remeasurements, depreciation and amortisation of subsidiaries and joint
ventures and share of EBITDA of associates. EBITDA is reconciled to cash
inflows from operations and to total profit from operations and associates
in note 13 to the financial information.
Financial review of Group results
Underlying earnings per share for the half year increased to $1.70 per
share, up 44% over the first six months of 2005. Underlying earnings
totalled $2,502 million, with strong contributions from Base Metals and
Platinum as well as a significant increase in contribution from AngloGold
Ashanti. Coal recorded underlying earnings in line with the corresponding
period last year. Paper and Packaging and Industrial Minerals recorded
lower contributions owing to continuing difficult market conditions.
Underlying earnings at De Beers were below prior year levels mainly
reflecting lower preference share income due to the June 2005 redemptions
and higher minorities as a result of the Ponahalo transaction which
completed in April 2006. Kumba"s results showed a significant increase over
the same period in the prior year, however Ferrous Metals and Industries as
a whole recorded a lower contribution mainly owing to lower manganese and
vanadium prices as well as the impact of the disposal in mid-2005 of Boart
Longyear and Samancor Chrome.
6 months 6 months
ended ended
Underlying earnings 30 June 30 June
$ million 2006 2005
Profit for the financial period 2,943 1,838
attributable to equity shareholders
Operating special items including 482 55
associates
Operating remeasurements including 462 18
associates
Net profit on disposals including (1,035) (67)
associates
Financing remeasurements:
Fair value loss/(gain) on convertible 31 (32)
option
Exchange gain on De Beers preference (44) (91)
shares
Unrealised (gains)/losses on non-hedge (20) 10
derivatives including associates
Tax on special items and remeasurements (134) (22)
including associates
Related minority interests on special (183) (10)
items and remeasurements
Underlying earnings 2,502 1,699
Underlying earnings per share ($) 1.70 1.18
Profit for the period after special items and remeasurements increased by
60% to $2,943 million compared with $1,838 million in the first half of
2005. This increase relates mainly to strong operational results as
discussed above. There was a significant increase in net profits on
disposal, $968 million higher than the same period in the prior year,
mainly as a result of the Group"s disposal of 19.7 million ordinary shares
in AngloGold Ashanti and the Group"s non-participation in the issue of
ordinary shares by AngloGold Ashanti ($896 million net profit on disposal).
This was largely offset by operating special item losses of $482 million,
including the impairment and restructuring of certain Tarmac assets ($278
million), impairment and closure costs relating to the Dartbrook coal mine
in Australia ($122 million), impairment mainly of certain downstream
converting Packaging assets at Paper and Packaging ($72 million) and
unrealised losses on non-hedge derivatives ($462 million), recorded
principally at AngloGold Ashanti.
Summary income statement 6 months 6 months
30 June 30 June
$ million 2006 2005
Operating profit before special items 4,006 2,426
and remeasurements
Special items (462) (55)
Operating remeasurements (392) (18)
Group operating profit before 3,152 2,353
associates
Net profit/(loss) on disposals 927 (1)
Net income from associates (1) 369 407
Profit before finance costs 4,448 2,759
Net finance costs before (88) (224)
remeasurements
Financing remeasurements 13 122
Profit before tax 4,373 2,657
Tax (1,202) (526)
Profit after tax 3,171 2,131
Minority interests (228) (293)
Profit for the financial period 2,943 1,838
attributable to equity holders
Earnings per share ($) 2.00 1.27
Group operating profit including 4,563 2,993
associates before special items (1)
(1) Operating profit from associates 557 567
before special items and
remeasurements
Operating special items and (90) -
remeasurements (2)
Net profit on disposals (2) 108 68
Financing remeasurements (2) 20 (9)
Net finance costs (before (50) (31)
remeasurements)
Income tax expense (after special (166) (185)
items and remeasurements)
Underlying minority interest (after (10) (3)
special items and remeasurements)
Net income from associates 369 407
.
(2) See note 6 to the financial information.
The Group"s results are influenced by a variety of currencies owing to the
geographic diversity of the Group. The South African rand on average
weakened slightly against the US dollar compared with the prior period,
with an average exchange rate of R6.31 compared with R6.21 in the first
half of 2005. Currency movements negatively impacted underlying earnings by
$30 million. Operating results were positively impacted by weaker average
rates for the rand and Australian dollar although these were offset by the
stronger Chilean peso and Brazilian real and a weaker euro. There was a
significant positive impact of increased prices amounting to $1,788 million
Special items and remeasurement charges
30 June 2006 30 June 2005
Excluding Excludin
$ million associate Associates Total g Associate Tot
s associat s al
es
Operating (462) (20) (482) (55) - (55
special )
items
Operating (392) (70) (462) (18) - (18
remeasure )
ments
Operating
special (854) (90) (944) (73) - (73
items and )
remeasure
ments
Operating special items and remeasurements, including associates, amounted
to $944 million, with $462 million operating special charges in respect of
impairments, restructurings and mine and operation closures including a
$278 million combined impairment and restructuring charge relating to
certain non-core assets to be sold and other assets to be restructured at
Industrial Minerals following the conclusion of the strategic review, an
impairment and related closure costs of $122 million resulting from the
phased reduction of operations at AngloCoal Australia"s Dartbrook mine, and
a $72 million impairment mainly of certain downstream converting Packaging
assets as a result of continuing poor market conditions.
Operating remeasurements, including associates, of $462 million includes
$443 million of unrealised losses on non-hedge commodity derivatives at
AngloGold Ashanti (2005: $18 million). The loss in the current year relates
to the revaluation of non-hedge derivatives resulting from changes in the
prevailing spot gold price, exchange rates and interest rates compared with
the equivalent period in 2005.
Net profit on sale of operations, including associates, amounted to $1,035
million. This included the profit on sale of 19.7 million ordinary shares
in AngloGold Ashanti which resulted in $737 million profit on disposal as
well as $159 million profit on the deemed disposal of AngloGold Ashanti
arising from the non-participation in the issue of ordinary shares by
AngloGold Ashanti. The Group also realised a $105 million profit on the
sale of an indirect 26% equity interest in De Beers Consolidated Mines
Limited to Ponahalo Holdings (Proprietary) Limited.
Financing remeasurements, including associates, are made up of a $31
million fair value loss on the AngloGold Ashanti convertible bond option,
unrealised gains of $20 million on non-hedge derivatives and a $44 million
foreign exchange gain on De Beers dollar preference shares held by a rand
denominated entity.
In line with IFRIC guidance, the option component of the AngloGold Ashanti
convertible bond is fair valued at each reporting period and held as a
liability. Changes in fair value of the liability are taken to the income
statement.
The US dollar preference shares held by De Beers (a rand functional
currency entity) are classified as `financial asset investments" and are
retranslated at each period end. The resulting rand:US dollar foreign
exchange gains and losses are reported through the income statement as a
remeasurement charge.
Net finance costs
Net finance costs, excluding financing remeasurement gains of $13 million
(2005: gain of $122 million), decreased from $224 million in the
corresponding period in 2005 to $88 million. The decrease reflects lower
interest costs due to the reduction in net debt.
Taxation
30 June 2006
$ million Before Associates" Including
special items tax and associates
and remeasure minority
ments interests
Profit before 4,231 194 4,425
tax
Tax (1,318) (184) (1,502)
Profit for 2,913 10 2,923
financial period
Effective tax 33.9%
rate
30 June 2005
Before special items Associates" tax Including
and remeasurements and minority associates
interests
2,550 188 2,738
(548) (185) (733)
2,002 3 2,005
26.8%
IAS 1 requires income from associates to be presented net of tax on the
face of the income statement. Associates" tax is therefore not included
within the Group"s total tax charge on the face of the income statement.
Associates" tax and minority interests before special items and
remeasurements included within `Net income from associates" for the period
ended 30 June 2006 is $194 million (2005: $188 million).
The effective rate of taxation including share of associates" tax and
minority interests before special items and remeasurements was 33.9%. This
was an increase from the effective rate on the same basis of 26.8% in the
six months ended 30 June 2005. The June 2005 tax rate benefited from the
one-off impact of a reduction in the statutory tax rates in South Africa
and Ghana. Without this benefit the effective tax rate would have been
31.7%. The June 2006 tax rate reflects the relative impact of the statutory
tax rates, on a fully distributed basis where appropriate, of the countries
in which the Group"s operations are based. In future periods it is expected
that the effective tax rate, including associates" tax, will remain above
the UK statutory tax rate of 30%.
Balance sheet
Total shareholders" equity was $23,523 million compared with $23,621
million as at 31 December 2005.
Net debt, excluding hedges but including balances that have been
reclassified as held for sale ($286 million) was $2,666 million, a decrease
of $2,327 million from 31 December 2005. The reduction was principally due
to reduction of debt using cash flows from operations and disposals,
deconsolidation of AngloGold Ashanti debt and conversion of $0.8 billion of
our convertible debt, although this was partially offset by $1.6 billion of
share buyback as at 30 June 2006.
Net debt at 30 June 2006 comprised $5,357 million of debt, offset by $2,691
million of cash, cash equivalents and current financial asset investments.
Net debt to total capital(1) as at 30 June 2006 was 11.0%, compared with
17.0% at 31 December 2005.
Cash flow
Net cash inflows from operating activities was $3,289 million compared with
$2,931 million in the first half of 2005. EBITDA was $5,856 million, a
substantial increase of 37% from $4,267 million in the first half of 2005.
Depreciation and amortisation, including associates, decreased by $36
million to $1,163 million.
Acquisition expenditure accounted for an outflow of $230 million compared
with $300 million in the first half of 2005. This included $77 million in
respect of the Group"s investment in AltaSteel (Ferrous Metals and
Industries) and $85 million in respect of the Group"s investment in Akrosil
and Stambolijski (Paper and Packaging).
Proceeds from disposals totalled $952 million, with net proceeds on the
sale of 19.7 million ordinary shares of AngloGold Ashanti of $839 million.
Repayment of loans and capital from associates amounted to $394 million.
Purchases of tangible fixed assets amounted to $1,466 million, an increase
of $33 million. Increased capital expenditure by Platinum, Coal, Ferrous
Metals and Industries and Base Metals was partially offset by a reduction
in capital expenditure at Paper and Packaging and Industrial Minerals, as
well as the impact of including AngloGold Ashanti"s capital expenditure up
to 20 April 2006, after which it is accounted for as an associate.
Dividends
An interim dividend of 33 US cents per share, plus a special dividend of 67
cents per share, to be paid together on 21 September 2006, have been
declared.
(1) Net debt to total capital is calculated as net debt divided by total
capital less investments in associates. Total capital is net assets
excluding net debt.
Operations Review
In the operations review on the following pages, operating profit includes
associates" operating profit and is before special items and remeasurements
unless otherwise stated. Capital expenditure relates to cash expenditure on
fixed assets.
BASE METALS
$ million 6 months 6 months
30 June 30 June
2006 2005
Operating profit 1,854 721
Copper 1,536 570
Nickel, niobium, mineral sands 141 141
Zinc 208 29
Other (31) (19)
EBITDA 2,022 875
Net operating assets 4,853 4,676
Capital expenditure 104 100
Share of Group operating profit (%) 41% 24%
Share of Group net operating assets (%) 18% 13%
Anglo Base achieved record operating profits on the back of increased
prices and record production of nickel and zinc, despite slightly lower
copper production.
Base metal markets tightened further and metal inventories have fallen
following improving demand and mine supply having been constrained by
unforeseen disruptions, particularly in the case of copper. The
acceleration of fund flows into commodity markets together with these
strong market fundamentals resulted in a surge in commodity prices from
January to May.
All operations suffered increasing pressure on costs, particularly in the
non-controllable category, from a combination of input costs, which are
themselves commodity price linked, and the tightness in the entire mining
industry supply chain. Producers of base metal concentrates also saw a
material increase in realised treatment charges owing to smelter deductions
and price participation. All operations, with the exception of Lisheen and
those in southern Africa, suffered from local currency strength.
Copper
Los Bronces produced 103,715 tonnes during the first half (2005: 112,810
tonnes). Throughput was impacted by unforeseen ore hardness and water
ingress into the open pit that led to an amendment in mine sequencing,
thereby generating lower grade ore to the mill. Collahuasi produced a lower
than expected attributable 90,900 tonnes (2005: 92,994 tonnes) owing to
excessive rains in the first quarter and further downtime in the crushing
and conveying circuits. By the end of June a recovery and stabilisation
programme had been largely completed. Production at Mantoverde was slightly
down on 2005 at 29,184 tonnes, while at Mantos Blancos it rose 4% to 42,527
tonnes with higher dump leach production offsetting slightly lower
production elsewhere. At El Soldado, output declined by 14% to 31,868
tonnes as a result of the temporary mining of lower grade sulphide ore.
Chagres successfully ramped up to full design capacity following the
completion of the expansion project.
The $80 million El Soldado life extension project remains on time and on
budget. The Los Bronces expansion feasibility study, which is examining a
doubling of sulphide ore treatment rate, is under way, as are
debottlenecking studies to maximise the potential sulphide treatment rate
at Collahuasi.
Nickel, niobium and mineral sands
Codemin lifted output of nickel in ferro-nickel by 14% to 4,871 tonnes as
the operation benefited from higher grade ore from the Barro Alto mine.
Production at Loma de Niquel increased by 6% to 8,830 tonnes of nickel in
ferro-nickel, with slightly lower grades being offset by higher mineral
throughput rates. Following the commissioning of the scalping project at
Catalao, niobium production has increased by 16% to 2,245 tonnes. At
Namakwa, zircon production was marginally higher at 64,336 tonnes, while
output of slag and pig iron declined marginally to 81,242 tonnes and 52,665
tonnes respectively.
The Barro Alto feasibility study (40,000 tonnes per annum nickel in ferro-
nickel) is nearing completion and a decision as to whether to proceed will
be taken before year end.
Zinc
The Skorpion mine, now operating at full capacity, boosted zinc output by
33% to 74,986 tonnes of zinc in the wake of improvements in tonnes mined,
ore milled, and grades and refinery efficiencies. Lisheen accounted for a
slightly lower 79,645 tonnes of zinc, owing primarily to lower ore grades,
while lead output improved to 12,010 tonnes. The underground paste fill
system is now performing reliably and the development drive to access the
additional satellite body Bog Zone reserves has progressed well and the
first ore has been produced from this area. The ramp-up of tonnage from the
Black Mountain Deeps operation has been slower than anticipated, adversely
impacting tonnages, as well as metallurgical recoveries owing to the mix of
ore and grades fed to the plant. Zinc production was 15,148 tonnes (2005:
16,184 tonnes).
Anglo PLATINUM
$ million 6 months 6 months
30 June 30 June
2006 2005
Operating profit 934 410
EBITDA 1,171 610
Net operating assets 6,515 6,571
Capital expenditure 276 243
Share of Group operating profit (%) 20% 14%
Share of Group net operating assets (%) 24% 19%
Platinum"s operating profit for the first six months of 2006 rose by 128%
to a record $934 million in comparison with the same period in 2005.
Factors contributing to the increase were mainly higher US dollar prices
realised on metals sold and increased sales volumes.
Refined platinum production for the first half of 2006 rose by 6% to
1,344,900 ounces. The increase was primarily due to higher mining
production and the release of metal from smelter pipeline stocks.
Equivalent refined production from the mines rose by 5% to 1,257,400
ounces. The improvement was mainly attributable to improved production
volumes at the Kroondal, Amandelbult, Rustenburg and Bafokeng-Rasimone
(BRPM) operations. This was partly offset, however, by lower output from
Union Section and the Western Limb Tailings retreatment plant.
The cash operating cost per equivalent refined platinum ounce in rand terms
increased by 11%. One-off additional ground support work during 2006 at
Union, equipping and development programmes to create a sustainable base
for future production at Amandelbult and Rustenburg, wage settlements in
excess of inflation and the effect of lower grades as a consequence of a
higher percentage of UG2 ore mined were the principal reasons for the above-
inflation unit cost increase. Cost savings of some $16 million, arising
from specific procurement projects and other cost savings initiatives, were
realised during the first six months.
The Paardekraal 2 shaft project is in the final stages of the approval
process and an announcement is expected shortly. The shaft will access
deeper Merensky reserves at a rate of 100,000 tonnes per month, at a
capital cost of $316 million.
Projects that continue to increase production include Modikwa, BRPM,
Kroondal and for the first time in 2006, the Marikana venture. The
Amandelbult 1 shaft optimisation project was completed on time during the
period and the Amandelbult 75,000 tpm UG2 plant is fully utilised and
performing well. The deepening of the BRPM and sinking of the Lebowa
Merensky declines are well advanced and the PPRust North project has
commenced. The Mototolo Joint Venture is on track, with commissioning of
the concentrator planned for the fourth quarter of 2006.
Demand for platinum is strong and supportive of firm platinum prices.
Recent experience suggests that resilience of jewellery consumption
particularly in the Chinese market continues even at prices over $1,100 per
ounce, adding confidence to our long term view. The growth in demand for
platinum for diesel autocatalyst systems in Europe is strong. Tightening
diesel emission legislation and its early adoption as well as the growing
popularity of diesel engine powered vehicles support this. Industrial
demand remains firm, particularly in the glass and petroleum sectors.
Although platinum prices have retreated from record highs of $1,336 per
ounce as investment positions were liquidated, this physical demand has
stemmed the decline and prices are supported above $1,100 per ounce.
Anglo Platinum remains confident of the robustness of demand for platinum
and is continuing with its expansion programme. The rate of expansion is
reviewed on an ongoing basis and currently supports the company"s stated
average compound growth target of 5% per annum. For 2006 as a whole,
refined platinum production is expected to be between 2.7 and 2.8 million
ounces, with sales volumes expected to match production in the second half
of the year. The outlook for long term metal prices remains positive and
consequently studies evaluating the ramping up of various projects are
currently being conducted. The most significant variables affecting
operating profit in the second six months of 2006 will be the rand: dollar
exchange rate and metal prices.
FERROUS METALS AND INDUSTRIES
$ million 6 months 6 months
30 June 30 June
2006 2005
Operating profit 644 791
Kumba 378 246
Highveld Steel 95 261
Scaw Metals 74 58
Samancor Group 26 121
Tongaat-Hulett 78 56
Boart Longyear - 55
Other (7) (6)
EBITDA 783 961
Net operating assets 2,488 4,140
Capital expenditure 222 133
Share of Group operating profit (%) 14% 26%
Share of Group net operating assets 9% 12%
(%)
Ferrous Metals and Industries" operating profit declined to $644 million
(2005: $791 million), mainly as a result of lower vanadium and manganese
prices, partially offset by higher iron ore prices. In the first half of
2006, there was also no contribution from Boart Longyear and Samancor
Chrome, both disposed of in mid-2005, which together had contributed $71
million in the first six months of 2005.
Operating performance
Kumba achieved an operating profit of $378 million. Following the 71.5%
annual iron ore price increase achieved in April 2005, a further annual
increase of 19% was achieved with effect from April 2006. During the
reporting period, iron ore export volumes were higher, stemming from
improvements in export-channel capacity together with good rail and port
operational performance. The $559 million 10 Mtpa Sishen Expansion Project
is under construction, with production scheduled to commence in 2007 and
full ramp up to 10 Mtpa by the beginning of 2009 in line with the Sishen-
Saldanha export-channel expansions. The additional $195 million 3 Mtpa
extension to the Sishen Expansion Project is expected to reach full
production in the last quarter of 2009.
Highveld reported a lower operating profit of $95 million, largely as a
result of significantly lower vanadium prices. The ferro-vanadium price for
the six months averaged $39/kgV compared with $71/kgV in the comparative
period. In July, the sale was announced of Anglo American"s 79% stake in
Highveld Steel.
Scaw Metals" operating profit reached a record $74 million. The acquisition
of AltaSteel in Canada in February 2006 contributed $8 million. There was
generally strong demand for cast and rolled products in the South African
market, while the international grinding media business experienced
improved sales volumes.
The attributable share of Samancor"s operating profit amounted to $26
million. This decline was mainly due to lower manganese prices and the
disposal of Samancor"s chrome business.
Tongaat-Hulett"s operating profit was higher, at $78 million. The sugar
business benefited from higher sugar prices and a reduced cost structure
and Hulett Aluminium achieved higher sales volumes. It has been decided to
unbundle and list Tongaat-Hulett"s aluminium business, Hulett Aluminium,
and also to introduce black economic empowerment into both Tongaat-Hulett
and Hulett Aluminium.
The outlook for the second half of the year remains broadly positive. Firm
iron ore prices should offset weaker manganese ore and vanadium market
conditions. The timing of the Kumba BEE transaction will impact second half
earnings.
COAL
$ million 6 6
months months
30 30 June
June 2005
2006
Operating profit 356 374
South Africa 144 205
Australia 102 48
South America 110 121
EBITDA 464 476
Net operating assets 2,199 2,124
Capital expenditure 290 126
Share of Group operating profit (%) 8% 12%
Share of Group net operating assets (%) 8% 6%
Operating profit decreased by 5% to $356 million mainly as a result of
lower export sales from South Africa and Australia.
Markets have remained relatively firm for the first six months of the year,
but prices have shown a degree of volatility. The API4 benchmark price for
2006 deliveries of thermal coal from South Africa"s Richards Bay Coal
Terminal has fluctuated around the $50 per tonne level, ranging between $42
and $56 per tonne. Pressure to meet supply commitments in countries such as
Australia, South Africa and Colombia have been alleviated to some extent by
growth in supplies from Russia and Indonesia.
Benchmark hard coking coal prices for the 2006/2007 Japanese fiscal year
(reported at $114 per tonne), though lower than the 2005 highs of around
$125 per tonne, remain very firm. However, continued price pressure on semi-
soft coking coal resulted in a more significant fall-off in this market
from 2005 peak levels of some $100 per tonne. Deals for the current
calendar year have been reported in the $60 per tonne range.
Operating profit from South African sourced coal decreased by 30% to $144
million, despite the rand:dollar exchange rate having weakened slightly
compared with the first six months of 2005. Export sales prices were 7%
lower as prices came off the previous year"s highs. Heavy rainfall during
the first quarter affected production and led to a 4% reduction in export
sales to 8.3 million tonnes.
Operating profit for the Australian operations improved by 113% to $102
million, primarily as a result of significantly higher metallurgical coal
prices realised during the period. Saleable production, however, was 10%
lower at 11.4 million tonnes, because of lower saleable output,
particularly at Dartbrook and Moranbah North. In March, a decision was
taken to place Dartbrook under `care and maintenance" as a result of the
ongoing operating challenges, and the mine is expected to cease production
in the fourth quarter of this year. During the last two months production
volumes across all operations have improved and these levels are expected
to be maintained for the rest of the year. Export sales from Australia were
impacted by rail and port constraints that continue to affect shipments
through Dalrymple Bay Coal Terminal and Gladstone Port.
Attributable operating profit from the South American operations declined
by 9% to $110 million. Improved sales volumes were offset by slightly
weaker average coal prices and increases in operating costs. Anglo Coal"s
attributable coal production from Cerrejon rose by 16% to 4.7 million
tonnes as the operation continued to ramp up to 28 Mtpa. Production in
Venezuela was hit by heavy rains in March and May and a ten day coal
transportation stoppage in May.
In South Africa, the Mafube mine development is progressing following the
granting of a prospecting right over the Nooitgedacht and Wildfontein
reserves. In Australia, the Grasstree development remains on schedule and
is planned to start production during the second half of 2006. The Dawson
and Lake Lindsay projects are on track, with increased tonnages expected in
2007 and 2008. Work continues on the feasibility study for Monash, a fuel
from brown coal project. At Cerrejon, in Colombia, the expansion to 32
Mtpa, which was announced in 2005, is expected to be achieved by 2008.
The performance for the second half of the year is expected to be better
than the first six months, as steps to bring production back on stream
continue to deliver results. Thermal and hard coking coal markets are
expected to remain firm.
GOLD
$ million 6 months 6 months
30 June 30 June
2006(1) 2005
Operating profit 303 172
EBITDA 540 433
Group"s share of net assets / net 1,519 6,793
operating assets
Capital expenditure 196 311
Share of Group operating profit (%) 7% 6%
Share of Group net operating assets (%) - 19%
(1) The results for 2006 are reported as a subsidiary up to 20
April and thereafter as an associate at 42% attributable (see
note 3 to the financial statements).
Attributable operating profit from AngloGold Ashanti of $303 million
represented a 76% increase against $172 million for the corresponding
period last year, mainly due to the impact of a stronger gold price,
partially offset by the Group accounting for AngloGold Ashanti as an
associate from 20 April 2006. Production declined from 3,138,000 ounces to
2,755,000 ounces on a 100% basis. At Geita in Tanzania lower production was
due to rain problems that slowed down the mining in the Nyankanga pit,
which has delayed the mining of higher grade ore into next year and at
Cripple Creek & Victor in the US, lower production was due to grade related
issues and reduced rainfall in the Colorado area. For the six months, the
average price received climbed from $423/oz to $573/oz, a 35% increase,
though 4% below the average spot price of $591/oz.
The economic and political contexts in which gold currently trades remain
substantially unchanged. Gold exchange traded funds grew by 149 tonnes
during the six month period, with only modest reductions occurring during a
sharp fall-off in the gold price which occurred in May.
Central bank selling appears to have been very low since January, with
reported sales to date of between 315 tonnes and 320 tonnes. This means
that signatories to the Washington Agreement (an agreement reached between
the central banks with the largest gold holdings to, inter alia, regulate
official sales of gold) may sell up to a further 180 tonnes before 26
September this year if they are to utilise, in full, the 2006 quota.
Consumption from the gold jewellery sector was adversely affected in the
last months of 2005 and in 2006 by high and volatile prices for the metal.
Demand was soft, particularly in comparison with the prior period in 2005,
which witnessed exceptionally strong levels of demand. The Turkish and
Indian markets, being two of the more price-sensitive, were particularly
affected.
Higher metal prices have been accompanied by an influx of gold scrap into
refineries, with the new secondary refineries in Dubai being the major
beneficiaries.
Strong investor interest in gold continues to sustain the price of gold.
Although subject to pronounced swings, the average price of the metal is
now trading at its highest level for around 25 years and gold"s strong
rally from the lows of four years ago appears to be underpinned by sound
fundamentals.
DIAMONDS
$ million 6 months
30 June
2006 6 months
30 June
2005
Share of associates" operating profit 293 297
EBITDA 341 337
Group"s share of De Beers" net assets (1) 2,029 2,114
Share of Group operating profit (%) 6% 10%
(1) De Beers is an independently managed associate of the Group. The
Group"s share of De Beers" net assets is disclosed.
Attributable operating profit from De Beers of $293 million was at a
similar level to operating profit for the corresponding period in 2005 of
$297 milion, reflecting only marginal growth in sales volumes by The
Diamond Trading Company (DTC) and challenging conditions in the rough
diamond market.
Overall production from De Beers and its partners in Botswana, South
Africa, Namibia and Tanzania was 4% higher at a record 24.7 million carats.
The value of the diamond stockpile was some $188 million lower compared
with the level at the end of the first half of last year.
Demand for diamond jewellery in the consumer markets remains robust, with
growth of 3%-4% over the previous record first six months of 2005. However,
difficult trading conditions exist in the rough diamond market as a result
of rising interest rates, higher prices for the precious metals used in
diamond jewellery pieces, reduced margins and the need to manage inventory
levels across the distribution pipeline. During the reporting period, the
DTC, De Beers" marketing arm, improved sales by 1% to $3.25 billion, the
second highest figure ever.
In Canada, the Snap Lake and Victor projects, with a combined capital
expenditure value of $1.8 billion, remain on track to open, as planned, in
the final quarters of 2007 and 2008 respectively. Project costs have
increased, principally owing to higher energy and material costs,
technological challenges and the impact of the early closure of the winter
road to the sites. In Angola, prospecting activities are fully under way
through a joint venture with the State owned diamond company, Endiama.
Subject to the necessary government regulatory approvals, two projects in
South Africa have been given the green light: the re-opening of the long
dormant Voorspoed mine and the South African Sea Areas marine mining
project, for a total investment of $284 million.
In May, De Beers and the government of Botswana signed agreements to renew
Jwaneng mine"s mining licence for a further 25 years, the sale of
Debswana"s production to the DTC for another five years and the
establishment of the DTC Botswana to carry out local sales and marketing.
Following agreement reached with the European Commission, however, the
DTC"s trading relationship with Russian diamond producer Alrosa will come
to an end at the end of 2008.
A groundbreaking empowerment transaction was concluded in April, resulting
in the sale of 26% of De Beers Consolidated Mines, the South African mining
arm of De Beers, to a black economic empowerment consortium.
Conditions in the rough diamond market remain challenging, which is likely
to constrain the opportunity for the DTC to grow sales in the second six
months, particularly given its strong performance in the latter half of
2005. However, expectations remain positive for consumer diamond jewellery
sales in the second half, with growth forecast in the region of 5%-6% for
the full year - which would be the tenth consecutive half-year of demand
growth. De Beers group production is forecast to be around 1% higher over
the full year (despite the closure of a number of South African
operations), while the southern African operations will benefit from the
weakening of local currencies against the dollar.
PAPER AND PACKAGING
$ million 6 months 6 months
30 June 30 June
2006 2005
Operating profit 212 233
Packaging 128 132
Business Paper 56 89
Other 28 12
EBITDA 435 449
Net operating assets 6,671 6,359
Capital expenditure (including bio 287 418
assets)
Share of Group operating profit 5% 8%
(%)
Share of Group net operating 25% 18%
assets (%)
Operating profit declined 9% from $233 million to $212 million, a
creditable performance in difficult market conditions, particularly given
the adverse impact of exchange translation and the slow start up of PM31in
South Africa following a major rebuild. Margin pressure continued
throughout the period as increased input costs, particularly wood and
energy, were not fully recovered in selling price increases. These input-
cost pressures were partly offset by some packaging paper price
improvements and a further $101 million in cost savings for the first six
months.
Mondi Packaging"s operating profit at $128 million was 3% below the 2005
first half figure of $132 million, primarily due to closure and
restructuring costs of $12 million ($8 million in the prior corresponding
period). Positive packaging paper price developments were largely offset by
higher input costs. Converted product prices did not increase to the full
extent of the paper prices. The acquisition of the mainly US-based release
liner manufacturer Akrosil was completed in January and the acquisition of
the Bulgarian sack kraft Paper Factory Stambolijski was finalised during
June. In a move to further strengthen Mondi"s position in the European
release liner sector, Mondi has agreed the acquisition of the Italian and
German based Schleipen & Erkens business. This acquisition is still subject
to competition clearance.
Mondi Business Paper"s operating profit at $56 million was 37% below the
$89 million posted for the comparable period, primarily because of expenses
related to project development and a slow start up of Merebank"s PM31
following a major rebuild. Although the Merebank PM31 rebuild was completed
on time and within budget, the build up of production has been slow and
there have been volume and product quality issues which have significantly
impacted production and margins. Product quality and volumes are now
improving, though they have not yet reached the targeted level. Selling
prices for business papers increased slightly during the period from the
very low levels in the second half of 2005, however they have not reached
the price levels of the first half of 2005.
The rest of the group has performed better than in the comparable period,
with strong performances from Mondi Packaging South Africa and the
newsprint businesses.
Results for the half year continue to show that Mondi is operating in a
challenging industry environment. Selling prices within the Business Paper
sector and margins within the converted packaging sector were well below
historic mid-cycle levels. The company is constantly seeking new ways of
responding to that environment and continues with its drive to obtaining
operational excellence across all of its operations, with particular focus
on integrating and optimising the major investments made recently in South
Africa at Richards Bay and Merebank. This together, with the ongoing cost-
reduction programme should position the business well to benefit from any
upturn in the markets.
INDUSTRIAL MINERALS
$ million 6 months 6 months
30 June 30 June
2006 2005
Operating profit 151 193
Tarmac 152 183
Copebras (1) 10
EBITDA 275 317
Net operating assets 4,388 4,255
Capital expenditure 115 120
Share of Group operating profit (%) 3% 6%
Share of Group net operating assets (%) 16% 12%
Anglo Industrial Minerals" operating profit of $151 million was $42 million
lower than in the first half of 2005. Operating profit at Tarmac declined
by 17% to $152 million, reflecting weak markets in UK aggregate products,
particularly asphalt and housing products, which were exacerbated by high
energy costs. Operations in Germany and Poland, adversely impacted by the
severe winter in the early part of the year, have now largely recovered.
Profits in Copebras were $11 million down on 2005 owing to the combined
effects of the appreciation of the Brazilian real relative to the US dollar
and flat demand in the Brazilian fertiliser markets. Operational
efficiencies and procurement savings of some $27 million were insufficient
to mitigate these effects.
Tarmac has completed its strategic review. The scope of its activities is
clearly defined as aggregates, together with the three routes to market of
asphalt, concrete and concrete products, and integration with cement where
appropriate. Together with completion of the operational, commercial and
organisational restructuring, initiated two years ago, this strengthens
Tarmac"s ability to improve its results and grow. A special charge for
impairment and restructuring costs of $278 million has been taken, relating
to the announced sales ($46 million), businesses which are being retained
and restructured ($218 million) and closure costs and other items ($14
million).
In addition to bolt on acquisitions in the UK, France, Poland and the Czech
Republic, Tarmac entered Turkey and Romania with acquisitions in quarries
and ready mix concrete. These enhance Tarmac"s capacity to grow its
business in Central and Eastern Europe and the Black Sea Basin, a region
with promising growth prospects. TopPave and the Minerals and Materials
business have been sold and the previously announced disposals of non-core
businesses in Germany and Hong Kong are expected to be completed in the
second half of the year.
Tarmac"s operating profit in the UK declined by 18% largely owing to
general market weakness and high energy costs. Price increases have been
successfully maintained, though the benefits in Aggregate Products were
eroded by weak demand and a highly competitive market place that resulted
in lower volumes. Despite a substantial decline in demand from the housing
sector, particularly for blocks and mortar, profits in building products
were in line with the first half of 2005. This reflects the initial
benefits from the restructuring of the Concrete Products business and
improvements in the lime and cement businesses.
First half operating profits in Tarmac International remain in line with
last year with the exception of the Middle East, which benefited from the
high levels of construction in the UAE and France where profits were
boosted by acquisitions and stronger markets, particularly for aggregates.
Profits in Spain were 18% lower, largely reflecting the impact of higher
cement costs despite strong demand.
Following the announcement of Robbie Robertson"s intended retirement at the
end of 2006, David Weston, president of Shell Canada Products Ltd, will
become CEO of Tarmac with effect from 1 October 2006, to effect a smooth
handover.
Performance in the second half of the year is traditionally stronger than
in the first half. That said, markets in the UK are expected to remain
challenging and caution is required in view of the likely difficulties of
passing on significant additional bitumen and other energy cost increases
in the face of weak demand.
Consolidated income statement
for the six months ended 30 June 2006
Before Special Before
special items and special
items remeasu- items and
and rements remeasu-
US$ million Note remeasu- (note 6) rements
rements 6 months 6 months 6 months
6 months ended ended ended
ended 30.06.06 30.06.06 30.06.05(1)
30.06.06
Group revenue 3 16,175 - 16,175 14,510
Total (12,169) (854) (13,023) (12,084)
operating
costs
Operating 3 4,006 (854) 3,152 2,426
profit from
subsidiaries
and joint
ventures
Net 6 - 927 927 -
profit/(loss)
on disposals
Share of net 3 313 56 369 348
income of
associates
Total profit 3 4,319 129 4,448 2,774
from
operations
and
associates
Investment 307 64 371 224
income
Interest (395) (51) (446) (448)
expense
Net finance 7 (88) 13 (75) (224)
costs
Profit before 4,231 142 4,373 2,550
tax
Income tax 8 (1,318) 116 (1,202) (548)
(expense)/inc
ome
Profit for 2,913 258 3,171 2,002
the financial
period
Attributable
to:
Minority 411 (183) 228 303
interests
Equity 4 2,502 441 2,943 1,699
shareholders
of the
Company
Earnings per
share (US$)
Basic 9 2.00
Diluted 9 1.94
Dividends
Proposed ordinary 33.0
dividend per share
(US cents)
Proposed ordinary 484
dividend (US$
million)
Proposed special 67.0
dividend per share
(US cents)
Proposed special 983
dividend (US$
million)
Dividends paid 95.0
during the period
per share (US
cents)
Dividends paid 1,406
during the period
(US$ million)
Consolidated income statement
for the six months ended 30 June 2006
Special Before Special
items special items
and items and and
remeasu- remeasu- remeasu-
US$ million Note rements 6 months rements rements Year
(note 6) ended Year ended (note 6) ended
6 months 30.06.05 31.12.05 Year 31.12.05
ended ended
30.06.05 31.12.05
(1)
Group 3 - 14,510 29,434 - 29,434
revenue
Total (73) (12,157) (24,090) (487) (24,577)
operating
costs
Operating 3 (73) 2,353 5,344 (487) 4,857
profit from
subsidiaries
and joint
ventures
Net profit/ 6 (1) (1) - 87 87
(loss) on
disposals
Share of net 3 59 407 696 (39) 657
income of
associates
Total profit 3 (15) 2,759 6,040 (439) 5,601
from
operations
and
associates
Investment 128 352 498 72 570
income
Interest (6) (454) (926) (37) (963)
expense
Net finance 7 122 (102) (428) 35 (393)
costs
Profit 107 2,657 5,612 (404) 5,208
before tax
Income tax 8 22 (526) (1,283) 8 (1,275)
(expense)/in
come
Profit for 129 2,131 4,329 (396) 3,933
the
financial
period
Attributable
to:
Minority (10) 293 593 (181) 412
interests
Equity 4 139 1,838 3,736 (215) 3,521
shareholders
of the
Company
Earnings per
share (US$)
Basic 9 1.27 2.43
Diluted 9 1.23 2.36
Dividends
Proposed ordinary 28.0 62.0
dividend per share
(US cents)
Proposed ordinary 404 903
dividend (US$
million)
Proposed special - 33.0
dividend per share
(US cents)
Proposed special - 480
dividend (US$
million)
Dividends paid 51.0 79.0
during the period
per share (US
cents)
Dividends paid 734 1,137
during the period
(US$ million)
Consolidated balance sheet
as at 30 June 2006
Note
As at As at As at
US$ million 30.06.06 30.06.05 31.12.05
Intangible assets 2,056 2,588 2,572
Tangible assets 21,848 29,604 30,796
Biological assets 314 331 350
Environmental rehabilitation 166 217 288
trusts
Investments in associates 4,620 3,269 3,165
Financial asset investments 710 851 899
Deferred tax assets 280 226 337
Other financial assets 98 266 183
(derivatives)
Other non-current assets 115 62 153
Total non-current assets 30,207 37,414 38,743
Inventories 2,836 3,180 3,569
Trade and other receivables 5,347 5,289 5,174
Current tax assets 170 96 211
Current financial asset 2 5 16
investments
Other current financial assets 253 527 747
(derivatives)
Cash and cash equivalents 12 2,638 2,788 3,430
Total current assets 11,246 11,885 13,147
Assets classified as held for 16 2,498 757 -
sale
Total assets 43,951 50,056 51,890
Short term borrowings (1,710) (2,623) (2,076)
Trade and other payables (4,550) (4,497) (5,024)
Short term provisions (50) (3) (19)
Current tax liabilities (1,187) (790) (1,145)
Other current financial (336) (547) (1,286)
liabilities (derivatives)
Total current liabilities (7,833) (8,460) (9,550)
Medium and long term borrowings (3,310) (7,250) (6,363)
Retirement benefit obligations (755) (1,016) (1,258)
Other financial liabilities (358) (406) (508)
(derivatives)
Deferred tax liabilities (3,472) (5,022) (5,201)
Provisions (934) (1,370) (1,432)
Total non-current liabilities (8,829) (15,064) (14,762)
Liabilities directly associated 16 (1,184) (283) -
with assets classified as held
for sale
Total liabilities (17,846) (23,807) (24,312)
Net assets 26,105 26,249 27,578
Equity
Called-up share capital 10 765 747 747
Share premium account 2,474 1,634 1,637
Other reserves 82 1,100 1,330
Retained earnings 11 20,202 18,586 19,907
Equity attributable to equity 23,523 22,067 23,621
shareholders of the Company
Minority interests 11 2,582 4,182 3,957
Total equity 26,105 26,249 27,578
The interim financial information was approved by the Board of
directors on 3 August 2006.
Consolidated cash flow statement
for the six months ended 30 June 2006
US$ million Note
6 months 6 months Year
ended ended ended
30.06.06 30.06.05 31.12.05
Cash inflows from 12 4,060 3,074 7,265
operations
Dividends from 100 300 461
associates
Dividends from financial 3 4 9
asset investments
Income tax paid (874) (447) (954)
Net cash inflows from 3,289 2,931 6,781
operating activities
Cash flows from
investing activities
Acquisition of (215) (111) (298)
subsidiaries, net of
cash and cash
equivalents
Investment in associates (4) (26) (29)
Purchases of tangible (1,466) (1,433) (3,306)
assets
Investment in biological (33) (26) (55)
assets
Purchases of financial (11) (163) (203)
asset investments
Disposal of 882 67 419
subsidiaries, net of
cash and cash
equivalents
Sale of interests in - - 2
joint ventures
Sale of interests in - - 11
associates
Repayment of loans and 394 208 370
capital from associates
Proceeds from disposal 58 37 327
of tangible assets
Proceeds from sale of 70 226 245
financial asset
investments
Loan repayments from - - 1
related parties
Utilised in hedge - (69) (69)
restructure
Other investing 13 10 (18)
activities
Net cash used in (312) (1,280) (2,603)
investing activities
Cash flows from
financing activities
Movement in current - (5) 13
financial asset
investments
Issue of shares by 48 21 73
subsidiaries to minority
interests
Sale of treasury shares 191 82 240
to employees
Purchase of treasury (1,560) - -
shares
Interest received and 122 102 210
other investment income
Interest paid (256) (319) (547)
Dividends paid to (193) (165) (421)
minority interests
Dividends paid to (1,453) (727) (1,137)
Company shareholders
Repayment of short term (251) (510) (1,356)
borrowings
Repayment of medium and (70) (33) (632)
long term borrowings
Capital element of (14) - -
finance leases
Other financing activity 42 (45) (19)
Net cash used in (3,394) (1,599) (3,576)
financing activities
Net (decrease)/ increase (417) 52 602
in cash and cash
equivalents
Cash and cash 3,319 2,781 2,781
equivalents at start of
period(1)
Cash movements in the (417) 52 602
period
Effects of changes in (213) (157) (64)
foreign exchange rates
Cash and cash 12 2,689 2,676 3,319
equivalents at end of
period(1)
(1) Cash and cash equivalents per the cash flow statement
includes overdrafts and cash and cash equivalents within
disposal groups and is reconciled to the balance sheet in note
12.
Consolidated statement of recognised income and expense
for the six months ended 30 June 2006
6 months 6 months Year
US$ million ended ended ended
30.06.06 30.06.05 31.12.05
Gain/(loss) on revaluation of 116 (20) 31
available for sale
investments
Loss on cash flow hedges (344) (87) (316)
Loss on cash flow hedges - (174) - -
associates
Exchange losses on (1,113) (2,557) (2,182)
translation of foreign
operations
Actuarial gain/(loss) on post- 54 (48) (171)
retirement benefit schemes
Actuarial loss on post- - - (24)
retirement benefit schemes -
associates
Deferred tax 121 53 140
Other movements - - 5
Net expense recognised (1,340) (2,659) (2,517)
directly in equity
Transfers
Transferred to profit or (31) (32) (32)
loss: sale of available for
sale investments
Transferred to profit or 2 (6) (8)
loss: cash flow hedges
Transferred to the initial - (4) -
carrying amount of hedged
items on cash flow hedges
Transferred to profit or 11 - -
loss: exchange differences on
disposal of foreign
operations
Tax on items transferred from - 1 -
equity
Total transferred from equity (18) (41) (40)
Profit for the period 3,171 2,131 3,933
Total recognised income and 1,813 (569) 1,376
expense
Attributable to:
Minority interests (8) (123) (82)
Equity shareholders of the 1,821 (446) 1,294
Company
Notes to financial Information
1. General information
The financial information for the year ended 31 December 2005 does not
constitute statutory accounts as defined in section 240 of the Companies
Act 1985. This information was derived from the statutory accounts for the
year ended 31 December 2005, a copy of which has been delivered to the
Registrar of Companies. The auditor"s report on those accounts was
unqualified and did not contain a statement under Section 237 (2) or (3) of
the Companies Act 1985.
Investors should consider non-GAAP financial measures in addition to, and
not as a substitute for or as superior to, measures of financial
performance reported in accordance with International Financial Reporting
Standards (IFRS). The IFRS results reflect all items that affect reported
performance and therefore it is important to consider the IFRS measures
alongside the non-GAAP measures. Reconciliations of key non-GAAP data to
directly comparable GAAP financial measures are presented in notes 4, 9 and
13 to this report.
2. Basis of preparation
These June 2006 interim consolidated financial statements (`the interim
financial statements") are for the six months ended 30 June 2006 and have
been prepared in accordance with IFRS including International Accounting
Standard (IAS) 34, Interim Financial Reporting. The interim financial
statements have been prepared under the historical cost convention as
modified by the recording of pension liabilities and revaluation of
biological assets and certain financial instruments.
The accounting policies applied are consistent with those adopted and
disclosed in the Group"s annual financial statements for the year ended 31
December 2005, with the exception of adopting the Amendment to IAS 21 The
Effects of Changes in Foreign Exchange Rates (with effect from 1 January
2006). IAS 21 provides additional guidance that allows the net investment
in a foreign operation to include loans between sister companies in the
Group. This has not had a material impact on the Group.
3. Segmental information
Based on risks and returns the directors consider that the primary
reporting format is by business segment and the secondary reporting format
is by geographical segment.
The analysis of associates" revenue by business segment is provided here
for completeness and consistency.
On 20 April 2006 the Group completed the sale of 19.7 million ordinary
shares held in AngloGold Ashanti Limited for cash of $978 million. This,
together with the Group"s non-participation in the issue of additional
ordinary shares by AngloGold Ashanti, diluted the Group"s percentage
investment from 50.9% to 41.8%.
As a result of this, the Group is no longer considered to `control"
AngloGold Ashanti and therefore our investment is now reflected in the
Group accounts on an equity accounted basis. This change in accounting
treatment is effective from the date of sale and therefore the current
period includes AngloGold Ashanti"s 100% contribution to profit for the
period 1 January to 20 April 2006 and a 41.8% share of associate"s profit
for the period 20 April 2006 until the period end.
Segment Segment result before
Revenue(1)(2) special items and
remeasurements(4)
6 months 6 months Year 6 months 6 months Year
ended ended ended ended ended ended
US$ million 30.06.06 30.06.05 31.12.05 30.06.06 30.06.05 31.12.05
Subsidiaries
and joint
ventures
Platinum 2,623 1,738 3,646 914 405 835
Gold 857 1,325 2,629 228 171 332
Coal 1,293 1,191 2,766 227 243 752
Base Metals 2,967 1,629 3,647 1,854 721 1,678
Industrial 1,989 2,021 4,043 150 191 366
Minerals
Ferrous 2,931 3,175 6,030 612 667 1,308
Metals and
Industries
Paper and 3,515 3,431 6,673 205 226 484
Packaging
Exploration - - - (66) (67) (150)
Corporate - - - (118) (131) (261)
Activities
Total 16,175 14,510 29,434 4,006 2,426 5,344
subsidiaries
and joint
ventures
Revenue and
net income
from
associates
Platinum 41 29 68 12 3 12
Gold 245 8 15 38 1 -
Diamonds 1,635 1,628 3,316 143 163 386
Coal 297 288 583 91 92 192
Industrial 6 14 30 1 2 3
Minerals
Ferrous 273 519 743 23 83 96
Metals and
Industries
Paper and 153 149 283 5 4 7
Packaging
Total 2,650 2,635 5,038 313 348 696
associates
Total Group 4,319
operations 18,825 17,145 34,472 2,774 6,040
including net
income from
associates
Net profit/
(loss) on
disposals
Total profit
from
operations
and
associates
Segment result after
special items and
remeasurements(4)
6 months 6 months Year ended
ended ended 31.12.05
US$ million 30.06.06 30.06.05
Subsidiaries and joint
ventures
Platinum 914 405 835
Gold (142) 115 (50)
Coal 103 243 753
Base Metals 1,838 721 1,667
Industrial Minerals (128) 175 350
Ferrous Metals and 618 666 1,312
Industries
Paper and Packaging 133 226 401
Exploration (66) (67) (150)
Corporate Activities (118) (131) (261)
Total subsidiaries and 3,152 2,353 4,857
joint ventures
Revenue and net income
from associates
Platinum 12 3 12
Gold (2) 1 (2)
Diamonds 239 155 257
Coal 91 92 192
Industrial Minerals 1 2 3
Ferrous Metals and 23 150 189
Industries
Paper and Packaging 5 4 6
Total associates 369 407 657
Total Group operations 3,521
including net income from 2,760 5,514
associates
Net profit/(loss) on 927 (1) 87
disposals
Total profit from 4,448 2,759 5,601
operations and associates
As further additional information, a segmental analysis of associates"
operating profit is set out below to show operating profit for total Group
operations including associates.
Operating profit after
special items and
Operating profit before remeasurements(4)
special items and
remeasurements(4)
6 months 6 months Year 6 months 6 months Year
ended ended ended ended ended ended
US$ million 30.06.06 30.06.05 31.12.05 30.06.06 30.06.05 31.12.05
Total 4,006 2,426 5,344 3,152 2,353 4,857
subsidiarie
s and joint
ventures
Associates
Platinum 20 5 19 20 5 19
Gold 75 1 - 2 1 (2)
Diamonds 293 297 583 276 297 431
Coal 129 131 267 129 131 267
Industrial 1 2 4 1 2 4
Minerals
Ferrous 32 124 148 32 124 149
Metals and
Industries
Paper and 7 7 11 7 7 11
Packaging
Total 557 567 1,032 467 567 879
associates
Total Group 4,563 2,993 6,376 3,619 2,920 5,736
operations
including
operating
profit from
associates
(1) Revenue is measured at the fair value of consideration received or
receivable for all significant products. Where a by-product is not
regarded as significant, then revenue may be credited against cost of
sales. The amount credited to Group cost of sales for the 6 months
ended 30 June 2006 was $34 million (6 months ended 30 June 2005: $36
million; year ended 31 December 2005: $76 million) and related
principally to AngloGold Ashanti, who credit uranium, silver and acid
revenues to cost of sales in accordance with the Gold Industry Standard
on production cost.
(2) Base Metals" turnover is stated net of treatment and refining
charges on concentrate sales to external parties and refining charges on
copper anode sales from Chagres to refineries.
(3) Segment result is defined as being segment revenue less segment
expense; that is, operating profit. In addition net income from
associates is shown by segment. There are no material inter-segment
transfers or transactions that would affect the segment result.
(4) Special items and remeasurements are set out in note 6.
3. Segmental information (continued)
Primary reporting format - by business segment (continued)
Associates" operating profit is reconciled to `Net income from
associates" as follows:
6 months 6 months Year ended
ended ended 31.12.05
30.06.06 30.06.05
US$ million
Operating profit from associates 557 567 1,032
before special items and
remeasurements
Operating special items and (90) - (153)
remeasurements (see note 6)
Operating profit from associates 467 567 879
after special items and
remeasurements
Net profit on disposals (see note 108 68 98
6)
Financing remeasurements (see note 20 (9) 7
6)
Net finance costs (before (50) (31) (51)
remeasurements)
Income tax expense (after special (166) (185) (274)
items and remeasurements)
Underlying minority interest (10) (3) (2)
(after special items and
remeasurements)
Net income from associates 369 407 657
The segment result and associates" operating profit before special items
and remeasurements, as shown above, is reconciled to `Profit for the
financial period" as follows:
6 months 6 months Year
ended ended ended
30.06.06 30.06.05 31.12.05
US$ million
Operating profit, including 4,563
associates, before special items 2,993 6,376
and remeasurements
Operating special items and
remeasurements (see note 6):
Subsidiaries and joint ventures (854) (73) (487)
Gold (370) (56) (382)
Coal (124) - 1
Base Metals (16) - (11)
Industrial Minerals (278) (16) (16)
Ferrous Metals and Industries 6 (1) 4
Paper and Packaging (72) - (83)
Associates (90) - (153)
Gold (73) - (2)
Diamonds (17) - (152)
Ferrous Metals and Industries - - 1
Operating profit, including 3,619
associates, after special items and 2,920 5,736
remeasurements
Net profit on disposals
Subsidiaries and joint ventures 927 (1) 87
Associates 108 68 98
Associates" net finance costs (50) (31) (51)
Associates" financing 20 (9) 7
remeasurements
Associates" income tax expense (166) (185) (274)
Associates" underlying minority (10) (3) (2)
interests
Total profit from operations and 4,448 2,759 5,601
associates
Net finance costs before (88) (224) (428)
remeasurements
Financing remeasurements 13 122 35
Profit before tax 4,373 2,657 5,208
Income tax expense (1,202) (526) (1,275)
Profit for the financial period 3,171 2,131 3,933
3. Segmental information (continued)
Primary reporting format - by business segment (continued) Primary segment
disclosures for segment assets, liabilities and capital expenditure are as
follows:
Segment assets(1)
US$ million 6 months ended 6 months ended Year
30.06.06 30.06.05 ended
31.12.05
Platinum 7,009 6,907 7,550
Gold - 7,545 7,890
Coal 3,052 2,927 3,024
Base Metals 5,467 5,143 5,358
Industrial Minerals 5,201 5,243 5,041
Ferrous Metals and 3,163 4,798 5,341
Industries
Paper and Packaging 7,717 7,426 7,400
Exploration - - -
Corporate Activities 221 154 251
31,830 40,143 41,855
Unallocated:
Investment in 4,620 3,269 3,165
associates
Financial asset 712 856 915
investments
Deferred tax 280 226 337
assets/(liabilities)
Cash and cash 2,638 2,788 3,430
equivalents
Other financial 351
assets/(liabilities) - 793 930
(derivatives)
Other non-operating 3,520 1,258
assets/ (liabilities) 1,981
(4)
Provisions - - -
Borrowings - - -
Net assets 43,951 50,056 51,890
Segment liabilities(2)
US$ million 6 months 6 months Year 6 months
ended ended ended ended
30.06.06 30.06.05 31.12.05 30.06.06
Platinum (494) (336) (532) 6,515
Gold - (752) (908) -
Coal (853) (803) (780) 2,199
Base Metals (614) (467) (573) 4,853
Industrial Minerals (813) (988) (1,059) 4,388
Ferrous Metals and (675) (658) (902) 2,488
Industries
Paper and Packaging (1,046) (1,067) (1,035) 6,671
Exploration (2) (5) (3) (2)
Corporate Activities (294) (229) (310) (73)
(4,791) (5,305) (6,102) 27,039
Unallocated:
Investment in - - - 4,620
associates
Financial asset - - - 712
investments
Deferred tax (3,472) (5,022) (5,201) (3,192)
assets/(liabilities)
Cash and cash - - - 2,638
equivalents
Other financial (694) (343)
assets/(liabilities) (953) (1,794)
- (derivatives)
Other non-operating (3,557) (37)
assets/ (liabilities) (2,275) (2,420)
(4)
Provisions (312) (379) (356) (312)
Borrowings (5,020) (9,873) (8,439) (5,020)
Net assets (17,846) (23,807) (24,312) 26,105
Capital expenditure (3)
Net segment assets
US$ 6 months 6 months Year 6 months 6 Year
million ended ended ended ended months ended
30.06.06 30.06.05 31.12.05 30.06.06 ended 31.12.05
30.06.0
5
Platinum 6,515 6,571 7,018 286 247 685
Gold - 6,793 6,982 196 311 721
Coal 2,199 2,124 2,244 290 126 331
Base 4,853 4,676 4,785 109 109 273
Metals
Industrial 4,388 4,255 3,982 194 151 312
Minerals
Ferrous 2,488 4,140 4,439 298 139 376
Metals and
Industries
Paper and 6,671 6,359 6,365 333 388 703
Packaging
Exploratio (2) (5) (3) - - -
n
Corporate (73) (75) (59) 9 8 27
Activities
27,039 34,838 35,753 1,715 1,479 3,428
Unallocate
d:
Investment 4,620 3,269 3,165
in
associates
Financial 712 856 915
asset
investment
s
Deferred (3,192) (4,796) (4,864)
tax
assets/
(liabiliti
es)
Cash and 2,638 2,788 3,430
cash
equivalent
s
Other (343) (864)
financial (160)
assets/(li
abilities)
-
(derivativ
es)
Other non- (37)
operating (294) (1,162)
assets/
(liabiliti
es) (4)
Provisions (312) (379) (356)
Borrowings (5,020) (9,873) (8,439)
Net assets 26,105 26,249 27,578
Segment assets at 30 June 2006 are operating assets and consist primarily f
tangible assets ($21,848 million), intangible assets ($2,056 million),
biological assets ($314 million), environmental rehabilitation trusts ($166
million), inventories ($2,836 million), pension and post-retirement
healthcare assets ($57 million) and operating receivables ($4,552 million).
Segment assets at 30 June 2005 consist of tangible assets ($29,604
million), intangible assets ($2,588 million), biological assets ($331
million), environmental rehabilitation trusts ($217 million), inventories
($3,180 million), pension and post-retirement healthcare assets ($2
million) and operating receivables ($4,221 million). Segment assets at 31
December 2005 consist of tangible assets ($30,796 million), intangible
assets ($2,572 million), biological assets ($350 million), environmental
rehabilitation trusts ($288 million), inventories ($3,569 million), pension
and post-retirement health care assets ($77million) and operating
receivables ($4,203 million).
(2) Segment liabilities are operating liabilities and consist primarily of
non-interest bearing current liabilities, restoration and decommissioning
provisions and provisions for post-retirement benefits.
(3) Capital expenditure reflects cash payments, capitalised interest and
accruals in respect of additions to tangible assets of $1,473 million (30
June 2005: $1,441 million; 31 December 2005: $3,373 million) and intangible
assets of $14 million (30 June 2005: $2 million; 31 December 2005: $4
million) and includes additions resulting from acquisitions through
business combinations of $228 million (30 June 2005: $36 million; 31
December 2005: $51 million).
(4) Other non-operating assets/(liabilities) includes $2,498 million
assets (30 June 2005: $757 million; 31 December 2005: $nil), $1,184 million
liabilities (30 June 2005: $283 million; 31 December 2005: $nil), net
segment assets $1,314 million relating to assets classified as held for
sale (30 June 2005: $474 million; 31 December 2005: $nil). For segmental
split see note 16.
Other primary segment items included in the income statement are as
follows:
US$ million
Depreciation and amortisation
6 months 6 months Year
ended ended ended
30.06.06 30.06.05 31.12.05
Platinum 237 198 428
Gold 183 261 538
Coal 85 85 188
Base Metals 169 155 312
Industrial Minerals 124 124 248
Ferrous Metals and Industries 137 158 300
Paper and Packaging 218 211 411
Exploration - - -
Corporate Activities 10 7 16
1,163 1,199 2,441
US$ million (Impairments)/reversal (1) Other non-cash expense (2)
6 months 6 months Year 6 months 6 months Year
ended ended ended ended ended ended
30.06.06 30.06.05 31.12.05 30.06.06 30.06.05 31.12.05
Platinum - - - 40 53 55
Gold - (38) (96) 12 22 50
Coal (122) - - 13 10 14
Base Metals - - 1 44 32 68
Industrial (278) (16) (16) 14 25 36
Minerals
Ferrous Metals 9 (1) 8 7 50 56
and Industries
Paper and (71) - (83) 15 12 17
Packaging
Exploration - - - 1 1 1
Corporate - - - 20 19 41
Activities
(462) (55) (186) 166 224
338
(2)Other non-cash expenses include share-based payments and charges in
respect of environmental rehabilitation provisions and other provisions.
(1)Includes restructuring charges. See operating special items in note 6.
3. Segmental information (continued)
Secondary reporting format - by geographical segment
The Group"s geographical analysis of revenue, allocated based on the
country in which the customer is located, is as follows. The geographical
analysis of the Group"s attributable revenue from associates is provided
for completeness and consistency.
US$ million
Revenue
6 months 6 months Year
ended ended ended
30.06.06 30.06.05 31.12.05
Subsidiaries and
joint ventures
South Africa 2,930 2,474 5,280
Rest of Africa 363 247 505
Europe 6,943 7,112 13,629
North America 1,296 1,375 2,740
South America 1,190 810 1,723
Australia and Asia 3,453 2,492 5,557
Total subsidiaries and 16,175 14,510 29,434
joint ventures
Associates
South Africa 143 406 169
Rest of Africa 454 6 40
Europe 740 680 1,500
North America 498 811 1,768
South America 15 14 29
Australia and Asia 800 718 1,532
Total associates 2,650 2,635 5,038
Total Group operations 18,825 17,145 34,472
including associates
The Group"s geographical analysis of segment assets, liabilities and
capital expenditure, allocated based on where assets and liabilities are
located is:
.
US$ million
Revenue
6 months 6 months Year
ended ended ended
30.06.06 30.06.05 31.12.05
Subsidiaries and
joint ventures
South Africa 2,930 2,474 5,280
Rest of Africa 363 247 505
Europe 6,943 7,112 13,629
North America 1,296 1,375 2,740
South America 1,190 810 1,723
Australia and 3,453 2,492 5,557
Asia
Total subsidiaries and 16,175 14,510 29,434
joint ventures
Associates
South Africa 143 406 169
Rest of Africa 454 6 40
Europe 740 680 1,500
North America 498 811 1,768
South America 15 14 29
Australia and 800 718 1,532
Asia
Total associates 2,650 2,635 5,038
Total Group operations 18,825 17,145 34,472
including associates
Segment liabilities
Segment assets
US$ 6 months 6 months Year 6 months 6 months Year
million ended ended ended ended ended ended
30.06.06 30.06.05 31.12.05 30.06.06 30.06.05 31.12.
05
South 13,106 16,459 18,965 (1,792) (2,043) (2,689
Africa )
Rest of 734 4,360 4,142 (82) (239) (298)
Africa
Europe 10,657 10,699 10,048 (1,655) (1,932) (1,926
)
North 307 488 500 (114) (46) (59)
America
South 4,871 4,927 5,124 (594) (514) (543)
America
Australia 2,155 3,210 3,076 (554) (531) (587)
and Asia
31,830 40,143 41,855 (4,791) (5,305) (6,102
)
Net segment assets
Capital expenditure
US$ 6 months 6 months Year ended 6 months 6 months Year
million ended ended 31.12.05 ended ended ended
30.06.06 30.06.05 30.06.06 30.06.05 31.12.05
South 11,314 14,416 16,276 740 821 1,890
Africa
Rest of 652 4,121 3,844 58 92 261
Africa
Europe 9,002 8,767 8,122 425 310 658
North 193 442 441 109 30 28
America
South 4,277 4,413 4,581 145 132 317
America
Australia 1,601 2,679 2,489 238 94 274
and Asia
27,039 34,838 35,753 1,715 1,479 3,428
3. Segmental information (continued)
Secondary reporting format - by geographical segment (continued)Additional
disclosure of secondary segmental information by origin is as follows:
US$ million Operating profit
Revenue before special items and
remeasurements(1)
6 months 6 months Year 6 months 6 months Year
ended ended ended ended ended ended
30.06.06 30.06.05 31.12.05 30.06.06 30.06.05 31.12.05
Subsidiaries
and joint
ventures
South 6,444 5,849 11,981 1,691 1,144 2,651
Africa
Rest of 465 553 1,193 94 34 63
Africa
Europe 5,337 5,085 9,748 404 370 694
North 201 342 531 24 21 27
America
South 2,796 1,742 3,873 1,683 757 1,732
America
Australia 932 939 2,108 110 100 177
and Asia
Total 16,175 14,510 29,434 4,006 2,426 5,344
subsidiaries
and joint
ventures
Associates
South 636 768 1,479 119 139 217
Africa
Rest of 1,158 1,065 2,138 220 192 468
Africa
Europe 380 359 753 71 60 47
North 6 - - 3 - -
America
South 290 263 525 95 107 189
America
Australia 180 180 143 49 69 111
and Asia
Total 2,650 2,635 5,038 557 567 1,032
associates
Total Group 18,825 17,145 34,472 4,563 2,993 6,376
operations
including
associates
US$ million Operating profit
after special items and
remeasurements(1)
Year 6 months 6 months Year ended
ended ended ended 31.12.05
31.12.05 30.06.06 30.06.05
Subsidiaries and
joint ventures
South 2,651 1,523 1,124 2,482
Africa
Rest of 63 (102) 15 (156)
Africa
Europe 694 77 354 600
North 27 (14) 14 (11)
America
South 1,732 1,650 755 1,704
America
Australia 177 18 91 238
and Asia
Total subsidiaries 5,344 3,152 2,353 4,857
and joint ventures
Associates
South 217 90 139 193
Africa
Rest of 468 190 192 356
Africa
Europe 47 71 60 30
North - (22) - -
America
South 189 92 107 189
America
Australia 111 46 69 111
and Asia
Total 1,032 467 567 879
associates
Total Group 6,376 3,619 2,920 5,736
operations including
associates
(1) special items and remeasurements are set out in note 6
4. Profit for the financial period
The table below analyses the contribution of each business segment to the
Group"s operating profit including operating profit from associates for the
financial period and its underlying earnings, which the directors consider
to be a useful additional measure of the Group"s performance. A
reconciliation from profit for the financial period to underlying earnings
is given in note 9. Group operating profit including operating profit from
associates is reconciled to `Underlying earnings" and `Profit for the
financial period attributable to equity shareholders of the Company" in the
table below:
6 months ended 30.06.06
Operating Operatin Net
US$ profit g profit Special Financin interest
million before after items and Net g , tax
special special remeasure profit Remeasur and Total
items and items ments: on ements minority
remeasure- and operating( disposa and interest
ments remeasur 2) ls(2) other(2) s
e-
ments
By
business
segment
Platinum 934 934 - - - (442) 492
Gold 303 (140) 443 - - (201) 102
Diamonds 293 276 17 - - (129) 164
Coal 356 232 124 - - (96) 260
Base 1,854 1,838 16 - - (577) 1,277
Metals
Industrial 151 (127) 278 - - (39) 112
Minerals
Ferrous 644 650 (6) - - (351) 293
Metals and
Industries
Paper and 212 140 72 - - (92) 120
Packaging
Exploratio (66) (66) - - - 13 (53)
n
Corporate (118) (118) - - - (147) (265)
Activities
Total/ 4,563 3,619 944 - - (2,061) 2,502
Underlying
earnings
Underlying (944) 1,035 33 317 441
earnings
adjustment
s(note 9)
Profit for the financial year 2,943
attributable to equity
shareholders of the Company
6 months ended 30.06.05
Operating Operating Net
US$ million profit profit Special Financing interes
before after items Net Remeasure t,tax
special special and profit ments and Total
items and items and remeasu on and minorit
remeasure remeasure rements disposal other(2) y
ments(1) ments : s interes
operati (2) t
ng(2)
By business
segment
Platinum 410 410 - - - (154) 256
Gold 172 116 56 - - (103) 69
Diamonds 297 297 - - - (109) 188
Coal 374 374 - - - (111) 263
Base Metals 721 721 - - - (196) 525
Industrial 193 177 16 - - (53) 140
Minerals
Ferrous 791 790 1 - - (378) 413
Metals and
Industries
Paper and 233 233 - - - (100) 133
Packaging
Exploration (67) (67) - - - 17 (50)
Corporate (131) (131) - - - (107) (238)
Activities
Total/Under 2,993 2,920 73 - - (1,294) 1,699
lying
earnings
Underlying
earnings (73) 67 113 32 139
adjustments
(note 9)
Profit for the financial period 1,838
attributable to equity shareholders
of the Company
4. Profit for the financial period (continued)
Operating Operating
US$ million profit profit Special Financing
before after items and Net remeasurements
special special remeasure profit on and other(2)
items and items and ments: disposals
remeasure remeasure operating (2)
ments(1) ments (2)
By business
segment
Platinum 854 854 - - -
Gold 332 (52) 384 - -
Diamonds 583 431 152 - -
Coal 1,019 1,020 (1) - -
Base Metals 1,678 1,667 11 - -
Industrial 370 354 16 - -
Minerals
Ferrous Metals 1,456 1,461 (5) - -
and Industries
Paper and 495 412 83 - -
Packaging
Exploration (150) (150) - - -
Corporate (261) (261) - - -
Activities
Total/ 6,376 5,736 640 - -
Underlying
earnings
Underlying
earnings (640) 185 42
adjustments(no
te 9)
Net interest,
US$ million tax and
minority
interests Total
By business segment
Platinum (371) 483
Gold (227) 105
Diamonds (153) 430
Coal (295) 724
Base Metals (438) 1,240
Industrial Minerals (103) 267
Ferrous Metals and Industries (699) 757
Paper and Packaging (199) 296
Exploration 35 (115)
Corporate Activities (190) (451)
Total/Underlying earnings (2,640) 3,736
Underlying earnings adjustments(note
9) 198 (215)
Profit for the financial year attributable to equity
Shareholders of the Company 3,521
5. Exploration expenditure
US$ million 6 months 6 months Year ended
ended ended 31.12.05
30.06.06 30.06.05
By business segment
Platinum 15 9 21
Gold 16 22 45
Coal 10 4 13
Base Metals 19 20 50
Ferrous Metals and 6 12 21
Industries
66 67 150
6. Special items and remeasurements
`Special items" are those items of financial performance that the Group
believes should be separately disclosed on the face of the income statement
to assist in the understanding of the underlying financial performance
achieved by the Group and its businesses. Such items are material by nature
or amount to the period"s results and require separate disclosure in
accordance with IAS 1.86. Special items that relate to the operating
performance of the business are classified as special operating items and
include impairment charges and reversals and other exceptional items
including significant legal provisions. Non-operating special items include
profits and losses on disposals of investments and businesses.
Remeasurements comprise other items which the Group believes should be
reported separately to aid an understanding of the underlying performance
of the Group. This category includes (i) unrealised gains and losses on
`non-hedge" derivative instruments open at period end and the reversal of
the historical marked-to-market value of instruments settled in the period,
such that the full realised gain or loss is recorded in underlying earnings
in the same period as the underlying transaction for which such instruments
provide an economic, but not formally designated, hedge and (ii) foreign
exchange gains and losses arising on the retranslation of dollar
denominated De Beers" preference shares held by a Rand functional currency
subsidiary of the Group. Remeasurements are defined as operating, non-
operating or financing according to the nature of the underlying expense.6.
Special items and remeasurements (continued)
US$ million 6 months 6 months Year
ended ended ended
30.06.06 30.06.05 31.12.05
Subsidiaries and joint ventures
Operating special items
Impairment of Tarmac assets and (278) (12) (12)
restructuring costs
Impairment and closure costs of Dartbrook (122) - -
Impairment of Packaging assets (72) - -
Impairment of Corrugated assets, goodwill - - (77)
and restructuring costs
Impairment of Bibiani - - (38)
Closure of Ergo - (31) (31)
Other 10 (12) (28)
Total operating special items (462) (55) (186)
Taxation 97 17 14
Minority interests 2 12 38
Total attributable to equity shareholders (363) (26) (134)
Operating remeasurements
Unrealised net losses on non-hedge (392) (18) (301)
derivatives
Taxation 46 (6) 22
Minority interests 160 12 130
Total attributable to equity shareholders (186) (12) (149)
Financing remeasurements
Fair value (loss)/gain on AngloGold (43) 32 (32)
Ashanti convertible bond
Foreign exchange gain on De Beers" 44 91 72
preference shares
Unrealised net gains and (losses) on non- 12 (1) (5)
hedge derivatives
Total financing remeasurements 13 122 35
Taxation (1) - (2)
Minority interests 21 (16) 16
Total attributable to equity shareholders 33 106 49
Profits and (losses) on disposals
Part disposal of AngloGold Ashanti 737 - -
Gain on deemed disposal of AngloGold 159 - -
Ashanti
Part disposal of Western Areas 31 7 14
Gain on sale of mineral rights - Anglo 14 - -
American Brazil
Formation of Marikana JV - - 27
Sale of Acerinox - 25 25
Disposal of Wendt - 21 21
Disposal of Boart Longyear - - 21
Disposal of Elandsfontein - - 18
Sale of Columbus - 14 14
Disposal of Hope Downs - (50) (57)
Part disposal of Mondi Packaging South - (18) (12)
Africa
Other items (14) - 16
Net profit on disposals 927 (1) 87
Taxation (26) 11 (26)
Minority interests - 2 (3)
Total attributable to equity shareholders 901 12 58
Total special items and remeasurements 86 48 (365)
before tax and minority interests
Taxation 116 22 8
Minority interests 183 10 181
Total special items and remeasurements 385 80 (176)
attributable to equity shareholders
6. Special items and remeasurements (continued)
US$ million 6 months 6 months Year
ended ended ended
30.06.06 30.06.05 31.12.05
Associates" special items and
remeasurements
Share of De Beers" class action (20) - (113)
payment
Unrealised net losses on non-hedge (70) - (16)
derivatives
Other impairments and restructuring - - (24)
costs
Operating special items and (90) - (153)
remeasurements
Associates" financing remeasurements
Fair value gain on AngloGold Ashanti 12 - -
convertible bond
Unrealised net gains and (losses) on 8 (9) 7
non-hedge derivatives
Total financing remeasurements 20 (9) 7
Associates" profits and (losses) on
disposals
Gain on partial sale of De Beers 105 - -
Consolidated Mines
Disposal of Samancor Chrome - 52 52
Disposal of Wonderkop joint venture - - 20
interest
Other items 3 16 26
Net profit on disposals 108 68 98
Total associates" special items and 38 59 (48)
remeasurements
Taxation 18 - 7
Minority interests - - 2
Net associates" special items and 56 59 (39)
remeasurements
Operating special items and remeasurements
US$ million 6 months 6 months Year
ended ended ended
30.06.06 30.06.05 31.12.05
Operating special items (462) (55) (186)
Operating remeasurements (392) (18) (301)
(854) (73) (487)
Associates" operating special items (20) - (137)
Associates" operating remeasurements (70) - (16)
(90) - (153)
Total operating special items and (944) (73) (640)
remeasurements (including associates)
Operating special items including (482) (55) (323)
associates
Operating remeasurements including (462) (18) (317)
associates
Total operating special items and (944) (73) (640)
remeasurements (including associates)
Operating special items excluding associates of $462 million (6 months
ended 30 June 2005: $55 million; year ended 31 December 2005: $186 million)
relate principally to impairment, restructuring and closure costs.
Following the conclusion of its strategic review, Industrial Minerals has
identified certain non-core assets which are to be sold and other assets
which are to be restructured and, as such, Tarmac has recorded a combined
impairment and restructuring charge of $278 million.
On 18 May 2006 the Group announced that due to ongoing geological
difficulties, Anglo Coal intends to implement a phased reduction of
operations at Dartbrook. As such an impairment charge and closure costs of
$122 million have been recognised.
Paper and Packaging have recorded an additional impairment of $72 million
mainly of downstream converting Packaging assets as a result of continuing
challenging market conditions.
Unrealised net losses excluding associates of $392 million on non-hedge
derivatives (6 months ended 30 June 2005: $18 million; year ended 31
December 2005: $301 million) have been included in operating
remeasurements. These unrealised losses were recorded principally at
AngloGold Ashanti, during the period it was held as a subsidiary prior to
20 April 2006.
6. Special items and remeasurements (continued)
Associates" operating special items and remeasurements include $20 million
for the Group"s share of De Beers" payment in respect of class action
suits. Agreement has been reached, and a preliminary order issued, to
settle the majority of civil class action suits filed against De Beers in
the United States. This settlement does not involve any admission of
liability on the part of De Beers and will, when concluded, bring to an end
a number of outstanding class actions. In 2005, De Beers paid $250 million
($113 million attributable share) into escrow and an additional $45 million
($20 million attributable share) has been paid by De Beers into escrow
pending conclusion of the settlement process.
The Group"s share of unrealised net losses on non-hedge derivatives of
AngloGold Ashanti incurred during the period of ownership as an associate
totalled $73 million, partially offset by gains at De Beers.
Financing remeasurements
AngloGold Ashanti records the option element of its convertible bond at
fair value with changes going through the income statement following the
adoption of IAS 32 and IAS 39. As a result, a charge of $43 million (6
months ended 30 June 2005: gain of $32 million; year ended 31 December
2005: charge of $32 million) has been included in financing remeasurements,
relating to the period it was held as a subsidiary.
The Group holds US dollar preference shares issued by De Beers which are
held by a Rand functional currency subsidiary of the Group. These shares
are classified as `non-current investments" and retranslated at each period
end. As a result, a gain of $44 million (6 months ended 30 June 2005: $91
million; year ended 31 December 2005: $72 million) has been included in
financing remeasurements.
Associates" financing remeasurements
The Group"s share of the associates" financing remeasurements includes a
share of the fair value movement of the option element of the convertible
bond of AngloGold Ashanti which generated a gain of $12 million during the
period that this investment was recorded as an associate, and a share of
the unrealised gains on non-hedge financing derivatives of $8 million in De
Beers.
Profits and losses on disposals
On 20 April 2006 the Group completed the sale of 19.7 million ordinary
shares held in AngloGold Ashanti for cash of $978 million. This, together
with the Group"s non-participation in the issue of additional ordinary
shares by AngloGold Ashanti, diluted the Group"s percentage investment from
50.9% to 41.8%.
As such the Group has recorded a profit on disposal of $737 million in
respect of shares sold and a profit on the deemed disposal of $159 million,
arising from the non-participation in the issue of ordinary shares by
AngloGold Ashanti. Further details are provided in note 15.
Associates" profit and losses on disposal
In April, De Beers announced that agreements had been signed in respect of
the implementation of the De Beers" BEE transaction resulting in the sale
of an indirect 26% equity interest in De Beers Consolidated Mines Limited
to Ponahalo Holdings (Proprietary) Limited. The total agreed proceeds for
the transaction were approximately $585 million. The Group"s share of the
profit realised on the transaction was $105 million.
7. Net finance costs
Finance costs and foreign exchange gains/(losses) are presented net of
effective cash flow hedges for respective interest bearing and foreign
currency borrowings. Fair value gains/(losses) on derivatives, presented
below, include the mark-to-market value changes of interest rate and
currency derivatives designated as fair value hedges, net of fair value
changes in the associated hedged risk; and fair value changes of non-hedge
derivatives of non-operating items, including the mark-to-market of the
conversion option within the AngloGold Ashanti convertible bond, relating
to the period it was held as a subsidiary.
US$ million Before After Before After Before After
remeasu remeas remeasur remeasu remeasu remeasu
re- ur- e-ments re- re- rements
ments ments 30.06.05 ments ments 31.12.0
30.06.0 30.06. 30.06.0 31.12.0 5
6 06 5 5
Investment
income
Interest 128 128 115 115 227 227
and other
financial
income
Expected 137 137 106 106 241 241
return on
defined
benefit
arrangement
s
Foreign 32 76 - 96 20 92
exchange
gains
Dividend 5 5 3 3 10 10
income from
financial
asset
investments
Fair value - 20 - - - -
gains on
derivatives
Other fair 5 5 - 32 - -
value gains
Total 307 371 224 352 498 570
investment
income
Interest
expense
Amortisatio (17) (17) (10) (10) (42) (42)
n discount
relating to
provisions
Bank loans (148) (148) (205) (205) (320) (320)
and
overdrafts
Other loans (80) (80) (116) (116) (167) (167)
Interest (4) (4) - - (71) (71)
paid on
convertible
bonds
Unwinding (13) (13) (23) (23) (53) (53)
of discount
on
convertible
bonds
Interest on (129) (129) (116) (116) (270) (270)
defined
benefit
arrangement
s
Foreign (9) (10) - - (33) (33)
exchange
losses
Dividend on (5) (5) - - - -
redeemable
preference
shares
Fair value (2) (9) (1) (7) (19) (24)
losses on
derivatives
Other fair (1) (44) - - - (32)
value
losses
(408) (459) (471) (477) (975) (1,012)
Less: 13 13 23 23 49 49
interest
capitalised
Total (395) (446) (448) (454) (926) (963)
interest
expense
Net finance (88) (75) (224) (102) (428) (393)
cost
The weighted average interest rate applicable to interest on general
borrowings capitalised was 8.1% (6 months ended 30 June 2005: 8.9%; year
ended 31 December 2005: 8.7%).
Financing remeasurements are set out in note 6.
8. Tax on profit on ordinary activities
a) Analysis of charge for the period from continuing operations
US$ million 6 months 6 months Year
ended ended ended
30.06.06 30.06.05 31.12.05
United Kingdom corporation tax at 30% 28 55 15
South Africa tax 361 224 580
Other overseas tax 773 323 721
Current tax (excluding tax on special 1,162 602 1,316
items and remeasurements)
Deferred tax 156 (54) (33)
Total deferred tax (excluding tax on 156 (54) (33)
special items and remeasurements)
Total tax on special items and (116) (22) (8)
remeasurements
Total tax charge 1,202 526 1,275
b) Factors
c) affecting tax charge for the period
The effective tax rate for the period of 27.5% (6 months ended 30 June
2005: 19.8%; year ended 31 December 2005: 24.5%), after adjusting profits
for the net income from associates, is lower than the standard rate of
corporation tax in the United Kingdom (30%). The differences are explained
below:
US$ million 6 months 6 months Year
ended ended ended
30.06.06 30.06.05 31.12.05
Profit on ordinary activities before 4,373 2,657 5,208
tax
Tax on profit on ordinary activities 1,312
calculated at United Kingdom 797 1,562
corporation tax rate of 30%
Tax effect of net income from (111) (122) (197)
associates
Tax effects of:
Expenses not deductible for tax
purposes
Operating special items and 113 11 110
remeasurements
Exploration costs 10 15 21
Other non-deductible expenses 5 55 92
Non-taxable income
Profits and losses on disposals and (255) (47) (9)
remeasurements
Other non-taxable income (73) (67) (113)
Temporary difference adjustments
Changes in tax rates - (136) (187)
Movement in tax losses (49) (9) (30)
Other temporary differences 7 1 (23)
Other adjustments
South African secondary tax on 144 49 160
companies
Effect of differences between local 74 (15) (108)
and UK rates
Other adjustments 25 (6) (3)
Tax charge for the period 1,202 526 1,275
IAS 1 requires income from associates to be presented net of tax on the
face of the income statement. The associates" tax is no longer included
within the Group"s total tax charge. Associates" tax included within `Net
income from associates" for the 6 months ended 30 June 2006 is $166 million
(6 months ended 30 June 2005: $185 million; year ended 31 December 2005:
$274 million).
The effective rate of taxation including share of associates" tax before
special items and remeasurements for the 6 months ended 30 June 2006 was
33.9%. This was an increase from the effective rate of 26.8% in the 6
months ended 30 June 2005. The June 2005 tax rate benefited from the one-
off impact of a reduction in the statutory tax rates in South Africa and
Ghana. Without this benefit the effective tax rate would have been 31.7%.
The June 2006 tax rate reflects the relative impact of the statutory tax
rates, on a fully distributed basis where appropriate, of the countries in
which the Group operates. In future periods it is expected that the
effective tax rate, including associates" tax, will remain above the UK
statutory tax rate of 30%.
9. Earnings per share
US$ 6 months 6 months Year
ended ended ended
30.06.06 30.06.05 31.12.05
Profit for the financial period
attributable to equity
shareholders
Basic earnings per share 2.00 1.27 2.43
Diluted earnings per share 1.94 1.23 2.36
Headline earnings for the
financial period(1)
Basic earnings per share 1.56 1.24 2.43
Diluted earnings per share 1.51 1.19 2.36
Underlying earnings for the
financial period(1)
Basic earnings per share 1.70 1.18 2.58
Diluted earnings per share 1.65 1.13 2.50
(1)Basic and diluted earnings per share are shown based on headline and
underlying earnings, which the directors believe to be useful additional
measures of the Group"s performance.
The calculation of the basic and diluted earnings per share is based on the
following data:
US$ million (unless otherwise stated) 6 months 6 months Year
ended ended ended
30.06.06 30.06.05 31.12.05
Earnings
Basic earnings, being profit for the 2,943 1,838 3,521
financial period attributable to equity
shareholders
Effect of dilutive potential ordinary
shares
Interest on convertible bonds 2 15 29
(net of tax)
Unwinding of discount on - - 20
convertible bonds (net of tax)
Diluted Earnings 2,945 1,853 3,570
Number of shares (million)
Basic number of ordinary shares 1,475 1,442 1,447
outstanding (1)
Effect of dilutive potential ordinary
shares (2)
Share options 19 19 18
Convertible bonds 25 48 48
Diluted number of ordinary shares 1,519 1,509 1,513
outstanding (1)
(1)Basic and diluted number of ordinary shares outstanding represent the
weighted average for the period. The average number of ordinary shares in
issue excludes own shares held.
(2)Diluted earnings per share is calculated by adjusting the weighted
average number of ordinary shares in issue on the assumption of conversion
of all potentially dilutive ordinary shares.
`Underlying earnings" is an alternative earnings measure, which the
directors
believe provides a clearer picture of the underlying financial performance
of the Group"s operations. Underlying earnings is presented after minority
interests and excludes
special items and remeasurements (see note 6). Underlying earnings is
distinct
from `headline earnings", which is a Johannesburg Stock Exchange (`JSE
Ltd")
defined performance measure.
9. Earnings per share (continued)The calculation of basic and diluted
earnings per share, based on headline and underlying earnings, uses the
following earnings data:
Basic earnings per share
Earnings (US$ million) (US$)
6 months 6 months Year 6 months 6 months Year
ended ended ended ended ended ended
30.06.06 30.06.05 31.12.05 30.06.06 30.06.05 31.12.05
Profit for 2,943 1,838 3,521 2.00 1.27 2.43
the
financial
period
attributable
to equity
shareholders
Special 462 55 186 0.31 0.04 0.13
items:
operating
Net (927) 1 (87) (0.63) - (0.06)
(profit)/los
s on
disposals
Special (108) (68) (74) (0.07) (0.04) (0.05)
items:
associates
(1)
Related tax (71) (28) 6 (0.05) (0.02) -
Related (2) (14) (36) - (0.01) (0.02)
minority
interest
Headline 2,297 1,784 3,516 1.56 1.24 2.43
earnings for
the
financial
period
Unrealised 442 28 315 0.30 0.02 0.22
net losses
on non-hedge
derivatives
Fair value 31 (32) 32 0.02 (0.02) 0.02
loss/(gain)
on AngloGold
Ashanti
convertible
bond
Exchange (44) (91) (72) (0.03) (0.06) (0.05)
gain/loss on
DBI
preference
shares
Share of De 20 - 113 0.01 - 0.08
Beers" legal
settlement
Related tax (63) 6 (21) (0.04) - (0.02)
Related (181) 4 (147) (0.12) - (0.10)
minority
interest
Underlying 2,502 1,699 3,736 1.70 1.18 2.58
earnings for
the
financial
period
(1) Excluding legal settlements.
The following instruments are potentially dilutive but have not been
included in the calculation of diluted earnings per share because they
are anti-dilutive for the periods presented:
6 months Year ended
6 months ended 31.12.05
ended 30.06.05
30.06.06
Number of shares (million)
Share options - 8 -
Potentially dilutive shares - 8 -
10. Called-up share capital
As at 30.06.05 As at 31.12.05
As at 30.06.06
Number of US$ Number of US$ Number of US$
shares million shares million shares million
Authorised
5%
cumulative
preference
shares of 50,000 - 50,000 - 50,000 -
GBP1 each
Ordinary 2,000,000 1,000 2,000,000 1,000 2,000,000 1,000
shares of ,000 ,000 ,000
50 US cents
each
Called-up,
allotted
and fully
paid
5%
cumulative
preference
shares of 50,000 - 50,000 - 50,000 -
GBP1 each
Ordinary 1,530,894 765 1,493,849 747 1,493,855 747
shares of ,824 ,673 ,896
50 US cents
each
In the event of winding up, the holders of the cumulative preference shares
will be entitled to the repayment of a sum equal to the nominal capital
paid up, or credited as paid up, on the cumulative preference shares held
by them and any accrued dividend, whether such dividend has been earned or
declared or not, calculated up to the date of the winding up.
11. Reconciliation of changes in equity
Attributable to equity shareholders of the
Company
Cumulat
Total Share- ive Fair
US$ million sharecap Retained basedpaym transla value and
ital earnings entreserv tion otherrese
(1) (2) e adjustm rves
ent
reserve
Balance at 1 2,380 17,440 55 2,247 998
January 2005
Total recognised - 1,798 - (2,147) (97)
income and
expense
Dividends paid - (734) - - -
Shares issued 1 - - - -
Share-based - - 44 - -
payments
Disposal of - - - - -
businesses
Issue of shares - - - - -
to minority
interests
Dividends paid to - - - - -
minority
interests
Exercise of - 82 - - -
employee share
options
Purchase of - - - - -
minority
interests
Balance at 30 2,381 18,586 99 100 901
June 2005
Total recognised - 1,566 - 239 (65)
income and
expense
Dividends paid - (403) - - -
Shares issued 3 - - - -
Share-based - - 56 - -
payments
Issue of shares - - - - -
to minority
interests
Dividends paid to - - - - -
minority
interests
Exercise of - 158 - - -
employee share
options
Purchase of - - - - -
minority
interests
Balance at 31 2,384 19,907 155 339 836
December 2005
Total recognised - 2,980 9 (946) (222)
income and
expense
Dividends paid - (1,406) - - -
Shares issued(3) 828 - - - -
Reclassification 27 - - - (27)
on conversion of
bond(3)
Share-based - - 47 - -
payments
Disposal of - - - - -
businesses
Issue of shares - - - - -
to minority
interests
Treasury share - (1,585) - - -
buy back
Purchase of - (13) - - -
treasury shares
for share schemes
Convertible bond - 87 - - (87)
reserve transfer
to retained
earnings
Reclassification - 20 (20) - -
of vested awards
Current tax on - 20 - - -
share-based
payments
Dividends paid to - - - - -
minority
interests
Exercise of - 192 (2) - -
employee share
options
Balance at 30 3,239 20,202 189 (607) 500
June 2006
Fair
US$ million value and Minorityin Totalequity
otherrese terests
rves
Balance at 1 998 4,466 27,586
January 2005
Total recognised (97) (123) (569)
income and expense
Dividends paid - - (734)
Shares issued - - 1
Share-based - 3 47
payments
Disposal of - (3) (3)
businesses
Issue of shares to - 3 3
minority interests
Dividends paid to - (165) (165)
minority interests
Exercise of - - 82
employee share
options
Purchase of - 1 1
minority interests
Balance at 30 June 901 4,182 26,249
2005
Total recognised (65) 205 1,945
income and expense
Dividends paid - - (403)
Shares issued - - 3
Share-based - 3 59
payments
Issue of shares to - 13 13
minority interests
Dividends paid to - (256) (256)
minority interests
Exercise of - - 158
employee share
options
Purchase of - (190) (190)
minority interests
Balance at 31 836 3,957 27,578
December 2005
Total recognised (222) (8) 1,813
income and expense
Dividends paid - - (1,406)
Shares issued(3) - - 828
Reclassification (27) - -
on conversion of
bond(3)
Share-based - - 47
payments
Disposal of - (1,186) (1,186)
businesses
Issue of shares to - 12 12
minority interests
Treasury share buy - - (1,585)
back
Purchase of - - (13)
treasury shares
for share schemes
Convertible bond (87) - -
reserve transfer
to retained
earnings
Reclassification - - -
of vested awards
Current tax on - - 20
share-based
payments
Dividends paid to - (193) (193)
minority interests
Exercise of - - 190
employee share
options
Balance at 30 June 500 2,582 26,105
2006
(1) Total share capital comprises called-up share capital $765 million (30
June 2005: $747 million; 31 December 2005: $747 million) and the share
premium account $2,474 million (30 June 2005: $1,634 million; 31 December
2005: $1,637 million).
(2) Retained earnings is stated after deducting $1,894 million of
`own shares". Own shares comprise shares of Anglo American plc held in the
employee benefit trust, treasury shares and those held by Epoch Investment
Holdings Limited (Epoch). Epoch is a South African registered entity owned
by a charitable trust whose trustees are independent of the Group.
Although the Group has no voting rights in Epoch and cannot appoint or
remove trustees, it does meet the accounting definition of a subsidiary in
accordance with IAS 27 Consolidated and Separate Financial Statements and
as a result is consolidated. Own shares held by the employee benefit trust
were $586 million as at 30 June 2005 and $456 million as at 31 December
2005.
(3) During the 6 months ended 30 June 2006, 77.5% of the Anglo
American plc convertible bond was converted to equity by bondholders. This
has resulted in a reduction in the discounted balance sheet liability of
$828 million and a corresponding increase in issued share capital and share
premium. A further reserve transfer of $27 million has been made from the
convertible bond reserve to share premium to reflect the total fair value
of shares issued to bondholders. During the 6 months ended 30 June 2006,
the number of shares converted was 37,038,523, at a conversion price of
$23.12 to 3 May 2006, and $22.76 subsequently.
Fair value and other reserves comprise:
Convertib Available Cash Total
US$ million le debt for sale flow Other fair
reserve reserve hedge reserves value and
reserve (1) other
reserves
Balance at 1 128 48 50 772 998
January 2005
Total recognised - (41) (56) - (97)
income and
expense
Balance at 30 128 7 (6) 772 901
June 2005
Total recognised 3 47 (115) - (65)
income and
expense
Balance at 1 131 54 (121) 772 836
January 2006
Total recognised 9 89 (320) - (222)
income and
expense
Convertible bond (27) - - - (27)
reserve transfer
to share premium
Convertible bond (87) - - - (87)
reserve transfer
to retained
earnings
Balance at 30 26 143 (441) 772 500
June 2006
(1) Other reserves comprise $690 million (30 June 2005: $690 million; 31
December 2005: $690 million) legal reserve and $82 million (30 June 2005:
$82 million; 31 December 2005: $82 million) capital redemption reserve.
12. Consolidated cash flow analysis
a) Reconciliation of profit before tax to cash inflows from operations
US$ million 6 months Year
6 months ended ended
ended 30.06.05 31.12.05
30.06.06
Profit before tax 4,373 2,657 5,208
Depreciation and amortisation 1,163 1,199 2,441
Share option expense 47 40 92
Special items and remeasurements (86) (48) 365
of subsidiaries and joint ventures
Net finance costs before 88 224 428
remeasurements
Fair value gains before special (120) (61) (278)
items and remeasurements
Net income from associates (369) (407) (657)
Additional pension contribution (232) - -
Provisions 31 60 113
Increase in inventories (295) (113) (453)
Increase in operating receivables (698) (471) (600)
Increase in operating payables 197 13 539
Other adjustments (39) (19) 67
Cash inflows from operations 4,060 3,074 7,265
b)Reconciliation to the balance sheet
Cash and cash equivalents
US$ million As at As at As at
30.06.06 30.06.05 31.12.05
Balance sheet
Continuing operations 2,638 2,788 3,430
Disposal groups(2) 226 38 -
Bank overdrafts
Continuing operations (175) (143) (111)
Disposal groups(2) - (7) -
Net debt classification 2,689 2,676 3,319
Short term borrowings(1) Medium and long term
borrowings
US$ million As at As at As at As at As at As at
30.06.06 30.06.05 31.12.05 30.06.05 31.12.0
30.06.06 5
Balance
sheet
Continuing (1,710) (2,623) (2,076) (3,310) (7,250) (6,363)
operations
Disposal (272) - - (240) (5) -
groups(2)
Bank
overdrafts
Continuing 175 143 111 - - -
operations
Disposal - - - - - -
groups(2)
Net debt (1,807) (2,480) (1,965) (3,550) (7,255) (6,363)
classificati
on
(1) Short term borrowings on the balance sheet include overdrafts which
are included within cash and cash equivalents for net debt.
(2) Disposal group balances are shown as `assets classified as held for
sale" and `liabilities associated with assets classified as held for sale"
on the balance sheet.
12. Consolidated cash flow analysis (continued)
c)Movement in net debt
Debt due within Debt due
one year after(3)one year
US$ million Cash and Carrying Carrying
cash value Hedge value
equivalents (2) Hedge
(1) (2)
Balance at 1 2,781 (3,272) 55 (7,961) 302
January 2005
Cash flow 52 510 - 33 -
Acquisition/dispo - - - 1 -
sal of businesses
Unwinding of - - - (23) -
discount on
convertible bonds
Reclassifications - (59) - 59 -
Movement in fair - - (13) (25) (201)
value
Currency (157) 341 - 661 -
movements
Balance at 30 2,676 (2,480) 42 (7,255) 101
June 2005
Cash flow 550 846 25 599 -
Acquisition/dispo - 2 - 4 -
sal of businesses
Unwinding of - - - (30) -
discount on
convertible bonds
Reclassifications - (241) - 240 -
Movement in fair - - (54) 37 (101)
value
Other non-cash - - - - -
movements
Currency 93 (92) - 42 -
movements
Balance at 31 3,319 (1,965) 13 (6,363) -
December 2005
Cash flow (417) 251 - 84 -
Acquisition/dispo - 116 - 1,758 -
sal of businesses
Conversion to - - - 828 -
equity(3)
Unwinding of - - - (17) -
discount on
convertible bonds
Reclassifications (270) - 270 -
Movement in fair - - 129 33 (30)
value
Other non-cash - - - - -
movements
Currency (213) 61 - (143) -
movements
Closing balance 2,689 (1,807) 142 (3,550) (30)
at 30 June 2006
US$ million Current
financial Totalnet
asset debt
investments (4)
Balance at 1 January 2005 2 (8,093)
Cash flow 5 600
Acquisition/disposal of businesses - 1
Unwinding of discount on convertible - (23)
bonds
Reclassifications - -
Movement in fair value - (239)
Currency movements (2) 843
Balance at 30 June 2005 5 (6,911)
Cash flow (18) 2,002
Acquisition/disposal of businesses - 6
Unwinding of discount on convertible - (30)
bonds
Reclassifications 1 -
Movement in fair value - (118)
Other non-cash movements 29 29
Currency movements (1) 42
Balance at 31 December 2005 16 (4,980)
Cash flow - (82)
Acquisition/disposal of businesses (9) 1,865
Conversion to equity(3) - 828
Unwinding of discount on convertible - (17)
bonds
Reclassifications - -
Movement in fair value - 132
Other non-cash movements (6) (6)
Currency movements 1 (294)
Closing balance at 30 June 2006 2 (2,554)
(1) The Group operates in certain countries (principally South Africa and
Venezuela) where the existence of exchange controls may restrict the use of
certain cash balances. These restrictions are not expected to have any
material effect on the Group"s ability to meet its ongoing obligations.
(2) Derivative instruments that have been designated as hedges of assets
and liabilities included in net debt are included above to reflect the true
net debt position of the Group at the period end. These instruments are
classified within other financial assets and liabilities on the balance
sheet.
(3) Debt due after more than one year includes $nil of convertible bond
(30 June 2005: $1,954 million; 31 December 2005: $1,975 million). During
the 6 months ended 30 June 2006 77.5%, ($828 million), of the convertible
bond held by Anglo American plc was converted to equity. The remaining
$239 million is due to mature in April 2007 and has therefore been
reclassified to debt due within 1 year. $924 million of AngloGold Ashanti
convertible bond was disposed on the sale of Anglo American plc"s
controlling interest.
(4) Net debt excluding the impact of hedges is $2,666 million (30 June
2005: $7,054 million; 31 December 2005: $4,993 million) and consists of
cash and cash equivalents $2,689 million (30 June 2005: $2,676 million; 31
December 2005: $3,319 million), short term borrowings $1,807 million (30
June 2005: $2,480 million; 31 December 2005: $1,965 million), medium and
long term borrowings $3,550 million (30 June 2005: $7,255 million; 31
December 2005: $6,363 million) and current financial asset investments $2
million (30 June 2005: $5million; 31 December 2005: $16 million).
13. EBITDA by business segment
EBITDA is operating profit before special items and remeasurements plus
depreciation and amortisation in subsidiaries and joint ventures and share
of EBITDA of associates:
US$ million 6 months Year ended
6 months ended 31.12.05
ended 30.06.05
30.06.06
Operating profit including 4,563 2,993 6,376
associates" operating profit
before special items and
remeasurements
Depreciation and amortisation
Subsidiaries and joint 1,163 1,199 2,441
ventures
Associates 130 75 142
5,856 4,267 8,959
US$ million 6 Year
6 months mont ended
ended hs 31.12
30.06.06 ende .05
d
30.0
6.05
By business segment
Platinum 1,171 610 1,282
Gold 540 433 871
Diamonds 341 337 655
Coal 464 476 1,243
Base Metals 2,022 875 1,990
Industrial Minerals 275 317 618
Ferrous Metals and 783 961 1,779
Industries
Paper and Packaging 435 449 916
Exploration (66) (67) (150)
Corporate Activities (109) (124 (245)
)
EBITDA 5,856 4,26 8,959
7
EBITDA is stated before special items and
remeasurements and is reconciled to `Total profit
from operations and associates" as follows:
US$ million 6 months Year
6 months ended ended
ended 30.06.05 31.12.05
30.06.06
Total profit from 4,448 2,759 5,601
operations and
associates
Special items and 924 82 633
remeasurements
(including associates)
Net profit on disposals (1,035) (67) (185)
(including associates)
Depreciation and 1,163 1,199 2,441
amortisation:
subsidiaries and joint
ventures
Share of associates" 356 294 469
interest, tax,
depreciation,
amortisation and
underlying minority
interest
EBITDA 5,856 4,267 8,959
EBITDA is reconciled to cash inflows from operations as follows:
US$ million 6 months Year
6 months ended ended
ended 30.06.05 31.12.05
30.06.06
EBITDA 5,856 4,267 8,959
Share of operating profit of (557) (567) (1,032)
associates, before special items and
remeasurements
Underlying depreciation and (130) (75) (142)
amortisation in associates
Share option expense 47 40 92
Fair value gains before (120) (61) (278)
remeasurements
Additional pension contributions (232) - -
Provisions 31 60 113
Increase in inventories (295) (113) (453)
Increase in operating receivables (698) (471) (600)
Increase in operating payables 197 13 539
Other adjustments (39) (19) 67
Cash inflows from operations 4,060 3,074 7,265
14. Acquisition of subsidiaries
The Group made one material acquisition in the 6 months ended 30 June 2006.
The Group acquired a 100% interest in AltaSteel for a total cash
consideration of $85 million (including transaction costs). Net assets
acquired in the transaction were $88 million. $3 million negative goodwill
arising on acquisition has been written back to the income statement as a
special operating item.
The fair values of the acquired assets and liabilities relating to
AltaSteel in the table below are provisional, and will be finalised in the
2006 annual report when the final values arising from the fair value
exercises are confirmed.
US$ million AltaStee Other Total
l
Net assets acquired
Tangible fixed assets 74 140 214
Investment in associate - (1) (1)
Deferred tax asset - 1 1
Other financial assets (derivatives) 35 - 35
Inventories 30 19 49
Trade and other receivables 27 37 64
Cash and cash equivalents 8 1 9
Short term borrowings - (31) (31)
Trade and other payables (21) (15) (36)
Provisions for liabilities and (43) (2) (45)
charges
Medium and long term borrowings (14) - (14)
Deferred tax liability (8) (17) (25)
Minority interest - (4) (4)
Net assets acquired 88 128 216
Goodwill arising on acquisition - 14 14
Negative goodwill arising on (3) - (3)
acquisition
Total cost of acquisition 85 142 227
Satisfied by
Net cash acquired 8 1 9
Deferred consideration - 3 3
Net cash paid 77 138 215
15. Partial and deemed disposals of AngloGold Ashanti shares
On 20 April 2006 the Group completed the sale of 19.7 million ordinary
shares held in AngloGold Ashanti Limited for cash of $978 million. This,
together with the Group"s non-participation in the issue of additional
ordinary shares by AngloGold Ashanti, diluted the Group"s percentage
investment from 50.9% to 41.8%. With effect from that date, the Group
ceased to account for AngloGold Ashanti as a subsidiary and began
accounting for it as an associate under the equity method.
The net asset position at the date of disposal, together with the
reclassification to an associate and resulting gain on disposal of shares
and related net cash inflow are shown below:
US$ million 30.06.06
Tangible assets 6,613
Other non-current assets 856
Current assets 2,162
Current liabilities (2,596)
Non-current liabilities (4,233)
Net assets 2,802
Minority interest (1,101)
Group"s share of AngloGold Ashanti 1,701
net assets immediately prior to
disposal
Less: Retained investment in an (1,451)
associated undertaking immediately
after disposal
Net assets disposed of 250
Cumulative translation differences (9)
recycled from reserves
Net gain on disposal 737
Net sale proceeds 978
Less: Net cash and cash (147)
equivalents disposed
Add: Costs accrued not yet paid 3
Add: Realised foreign exchange 5
gain
Net cash inflow from partial 839
disposal of AngloGold Ashanti
The non-participation in the issue of additional shares by AngloGold
Ashanti further diluted the percentage investment and thereby resulted in a
deemed disposal. The gain on deemed disposal is:
30.06.06
US$ million
Movement in share of net assets as a result of 174
share issue
Deemed disposal of goodwill and mining (17)
properties
Cumulative translation differences recycled 2
from reserves
Deemed gain on disposal 159
16. Disposals of subsidiaries
Other than the partial disposal of AngloGold Ashanti in note 15, no
significant disposals were made during the 6 months to 30 June 2006.
The following assets and liabilities relating to disposal groups have been
reclassified as held for sale at 30 June 2006. The Group expects to
complete the sale of these businesses within 12 months of the period end.
US$ million Highveld Other(1) Total
Kumba (1)
(non iron-
ore)
(1)
Intangible fixed assets 11 - - 11
Tangible fixed assets 1,222 232 36 1,490
Biological assets 4 - - 4
Environmental 23 - - 23
rehabilitation trusts
Investments in associates 20 - - 20
Financial asset 23 15 1 39
investments
Deferred tax assets 57 - - 57
Total non-current assets 1,360 247 37 1,644
Inventories 161 119 17 297
Trade and other 177 127 19 323
receivables
Other current financial 6 2 - 8
assets
Cash and cash equivalents 141 80 5 226
Total current assets 485 328 41 854
Total assets(2) 1,845 575 78 2,498
Short term borrowings (163) (109) - (272)
Trade and other payables (148) (171) (19) (338)
Other current financial (2) (5) - (7)
liabilities
Short term provisions (2) (3) - (5)
Total current liabilities (315) (288) (19) (622)
Medium and long term (233) (5) (2) (240)
borrowings
Provisions (87) (14) (3) (104)
Deferred tax liabilities (182) (23) - (205)
Retirement benefit - (13) - (13)
obligations
Total non-current (502) (55) (5) (562)
liabilities
Total liabilities(2) (817) (343) (24) (1,184)
Net assets 1,028 232 54 1,314
(1) Kumba (non iron-ore) and Highveld disposal groups are included in
the Ferrous Metals and Industries business segment. The `other" disposal
group is included in the Industrial Minerals business segment.
(2) The carrying amount of assets ($757 million) and associated
liabilities ($283 million), reclassified as held for sales at 30 June 2005
(31 December 2005: $nil) were held principally within the Ferrous Metals
and Industries business segment.
17. Capital expenditure on fixed assets and biological assets
US$ million 6 months 6 months Year ended
ended ended 31.12.05
30.06.06 30.06.05
Platinum 276 243 616
Gold 196 311 722
Coal 290 126 331
Base Metals 104 100 271
Industrial Minerals 115 120 274
Ferrous Metals and Industries 222 133 373
Paper and Packaging 254 392 691
Other 9 8 28
Purchase of tangible fixed 1,466 1,433 3,306
assets
Investment in biological 33 26 55
assets
1,499 1,459 3,361
Capital expenditure shown above comprises cash expenditure on fixed assets
and biological assets. Segmental capital expenditure shown in note 3 also
includes accruals and expenditure on acquisitions and intangible assets and
capitalised interest, but excludes expenditure on biological assets.
18. Contingent liabilities and contingent assets
There have been no significant changes in contingent liabilities from those
reported at 31 December 2005, other than reductions arising from the
classification of AngloGold Ashanti as an associate.
The Group is subject to various claims which arise in the ordinary course
of business. Having taken appropriate legal advice, the Group believe that
the likelihood of a material liability arising is remote.
At 30 June 2006, contingent liabilities comprise aggregate amounts of $86
million (30 June 2005: $272 million; 31 December 2005: $163 million) in
respect of loans and performance guarantees given to banks and other third
parties.
There were no significant contingent assets in the Group at 30 June 2006,
30 June 2005 or 31 December 2005.
19. Related party transactions
The Group has related party relationships with its subsidiaries, associates
and joint ventures.
At 30 June 2006, Anglo American holds $175 million (30 June 2005: $350
million; 31 December 2005: $350 million) of 10% non-cumulative redeemable
preference shares in DB Investments, the holding company of De Beers
Societe Anonyme.
On 20 April 2006 the Group completed the sale of 19.7 million ordinary
shares held in AngloGold Ashanti Limited. This, together with the Group"s
non-participation in the issue of additional ordinary shares by AngloGold
Ashanti, diluted the Group"s percentage investment from 50.9% to 41.8%.
Thus, effective from that date, the Group ceased to account for AngloGold
Ashanti as a subsidiary and began accounting for it as an associate under
the equity method.
The Company and its subsidiaries, in the ordinary course of business, enter
into various sales, purchase and service transactions with joint ventures
and associates and others in which the Group has a material interest. These
transactions are under terms that are no less favourable than those
arranged with third parties. These transactions are not considered to be
significant.
Dividends received from associates during the period totalled $100 million
(30 June 2005: $300 million; 31 December 2005: $461 million), as disclosed
in the consolidated cash flow statement.
The directors of the Company and their immediate relatives control 4% (30
June 2005: 4%; 31 December 2005: 3%) of the voting shares of the Company.
20. Events occurring after the period end
On 14 July 2006, the Group announced the sale of Anglo American"s 79% stake
in Highveld Steel and Vanadium Corporation Limited to Evraz Group SA and
Credit Suisse for a total consideration of $678 million. Following the
disposal of the initial 49.8%, for which Anglo American received $412
million, Evraz has an option to acquire Anglo American"s remaining 29.2%
stake in Highveld Steel and Vanadium Corporation Limited for $226 million.
This amount will be reduced by any dividends paid by Highveld Steel and
Vanadium Corporation Limited prior to Anglo American selling its remaining
shares. The deal represents a substantial foreign direct investment in
South Africa.
Since the period ended 30 June 2006, the remaining 22.5% of the Anglo
American plc convertible bond was converted to equity by bondholders. This
was completed on 25 July 2006. The number of shares converted subsequent
to the period end was 10,754,465 at a conversion price of $22.76.
INDEPENDENT REVIEW REPORT TO ANGLO AMERICAN PLC
Introduction
We have been instructed by the Company to review the financial information
for the six months ended 30 June 2006 which comprises the consolidated
income statement, the consolidated balance sheet, the consolidated cash
flow statement, the consolidated statement of recognised income and expense
and related notes 1 to 20. We have read the other information contained in
the interim report and considered whether it contains any apparent
misstatements or material inconsistencies with the financial information.
This report is made solely to the Company in accordance with Bulletin
1999/4 issued by the Auditing Practices Board. Our work has been
undertaken so that we might state to the Company those matters we are
required to state to them in an independent review report and for no other
purpose. To the fullest extent permitted by law, we do not accept or assume
responsibility to anyone other than the Company, for our review work, for
this report, or for the conclusions we have formed.
Directors" responsibilities
The interim report, including the financial information contained therein,
is the responsibility of, and has been approved by, the directors. The
directors are responsible for preparing the interim report in accordance
with the Listing Rules of the Financial Services Authority and the
requirements of IAS 34 Interim Financial Reporting, which require that the
accounting policies and presentation applied to the interim figures are
consistent with those applied in preparing the preceding annual accounts
except where any changes, and the reasons for them, are disclosed.
Review work performed
We conducted our review in accordance with the guidance contained in
Bulletin 1999/4 issued by the Auditing Practices Board for use in the
United Kingdom. A review consists principally of making enquiries of Group
management and applying analytical procedures to the financial information
and underlying financial data and, based thereon, assessing whether the
accounting policies and presentation have been consistently applied unless
otherwise disclosed. A review excludes audit procedures such as tests of
controls and verification of assets, liabilities and transactions. It is
substantially less in scope than an audit performed in accordance with
International Standards on Auditing (UK and Ireland) and therefore provides
a lower level of assurance than an audit. Accordingly, we do not express
an audit opinion on the financial information.
Review conclusion
On the basis of our review we are not aware of any material modifications
that should be made to the financial information as presented for the six
months ended 30 June 2006.
Deloitte & Touche LLP
Chartered Accountants
London
3 August 2006
Production statistics
The figures below include the entire output of consolidated entities and
the Group"s share of joint ventures, joint arrangements and associates
where applicable, except for Collahuasi in Base Metals which is quoted on a
100% basis.
6 months Year ended
6 months ended 31.12.05
ended 30.06.05
30.06.06
Anglo Platinum (troy
ounces)(1)(2)
Platinum 1,368,800 1,291,400 2,502,000
Palladium 743,400 731,700 1,376,700
Rhodium 150,000 175,700 333,500
2,262,200 2,198,800 4,212,200
Nickel (tonnes) 10,900 11,200 20,900
AngloGold Ashanti (gold in
troy ounces) (1)(3)
South Africa 965,000 1,330,000 2,676,000
Argentina 88,000 108,000 211,000
Australia 152,000 261,000 455,000
Brazil 116,000 167,000 346,000
Ghana 239,000 342,000 680,000
Guinea 88,000 123,000 246,000
Mali 209,000 261,000 528,000
Namibia 34,000 37,000 81,000
Tanzania 124,000 357,000 613,000
USA 100,000 152,000 330,000
2,115,000 3,138,000 6,166,000
Anglo Coal (tonnes)
South Africa
Eskom 16,141,000 16,585,200 34,327,900
Trade - Thermal 10,331,500 9,170,800 20,281,100
Trade - Metallurgical 723,200 852,800 2,268,800
27,195,700 26,608,800 56,877,800
Australia
Thermal 7,381,100 8,147,700 16,710,300
Metallurgical 4,027,800 4,591,000 9,390,300
11,408,900 12,738,700 26,100,600
South America
Thermal 5,501,000 4,835,300 10,066,000
Total 44,105,600 44,182,800 93,044,400
Anglo Coal (tonnes)
South Africa
Bank 196,400 1,415,600 3,202,200
Greenside 1,151,300 1,345,600 2,730,000
Goedehoop 3,869,800 3,029,100 6,298,600
Isibonelo 1,683,500 - 1,358,300
Kriel 5,805,300 5,918,800 12,030,900
Kleinkopje 1,792,500 2,090,800 4,483,500
Landau 2,000,200 1,760,000 3,682,900
New Denmark 2,591,200 2,007,500 4,139,400
New Vaal 7,451,600 8,066,200 17,100,000
Nooitgedacht 361,000 382,400 794,400
Mafube 292,900 592,800 1,057,600
27,195,700 26,608,800 56,877,800
(1)See the published results of Anglo Platinum Limited, Northam Platinum
Limited and AngloGold Ashanti Limited for further analysis of production
information.
(2)Includes Anglo Platinum"s 22.5% share of Northam Platinum Limited"s
production.
(3) Gold production for AngloGold Ashanti reflects 100% of that company"s
production to 20 April 2006 and 41.8% of production thereafter.
Production statistics (continued)
6 months 6 months Year ended
ended ended 31.12.05
30.06.06 30.06.05
Anglo Coal
(tonnes)
(continued)
Australia
Callide 4,592,800 4,851,500 9,500,000
Drayton 1,877,900 2,043,900 4,099,000
Dartbrook(1 62,100 501,000 1,495,500
)
German 1,668,300 1,433,600 3,560,000
Creek
Jellinbah 459,900 461,900 851,100
East
Moranbah 1,264,600 1,861,400 3,432,800
Dawson 1,483,300 1,585,400 3,162,200
Complex
11,408,90 12,738,700 26,100,600
0
South
America
Carbones 754,100 748,200 1,409,700
del Guasare
Carbones 4,746,900 4,087,100 8,656,300
del
Cerrej?n
5,501,000 4,835,300 10,066,000
Total 44,105,60 44,182,800 93,044,400
0
Anglo Base
Metals
Copper(2)
Collahuasi
100%
basis
(Anglo
American
44%)
Ore mined tonnes 20,758,00 18,406,000 40,705,000
0
Ore Oxide tonnes 2,884,000 3,172,000 6,461,000
processed
Sulphid tonnes 18,375,00 18,329,000 36,659,000
e 0
Ore grade Oxide % Cu 1.0 0.8 0.9
processed
Sulphid % Cu 1.1 1.1 1.0
e
Productio Copper dmt 610,000 594,000 1,234,000
n concent
rate
Copper tonnes 29,800 30,100 60,700
cathode
Copper tonnes 176,800 181,200 366,400
in
concent
rate
Total tonnes 206,600 211,300 427,100
copper
productio
n for
Collahuas
i
Minera
Sur Andes
Los
Bronces
mine
Ore mined tonnes 11,355,00 10,729,000 22,146,000
0
Marginal tonnes 14,258,00 13,355,000 27,936,000
ore mined 0
Las Ore tonnes 9,564,000 10,335,000 21,034,000
Tortolas process
concentra ed
tor
Ore % Cu 1.0 1.0 1.0
grade
process
Average % 88.2 89.4 88.3
recover
y
Productio Copper dmt 257,400 256,200 510,000
n concent
rate
Copper tonnes 20,700 19,800 38,800
cathode
Copper tonnes 83,000 93,000 188,500
in
concent
rate
Total tonnes 103,700 112,800 227,300
El
Soldado
mine
Ore mined Open tonnes 2,689,000 1,620,000 2,907,000
pit -
ore
mined
Open tonnes 63,000 209,000 384,000
pit -
margina
l ore
mined
Undergr tonnes 1,060,000 875,000 1,996,000
ound
(sulphi
de)
Total tonnes 3,812,000 2,704,000 5,287,000
Ore Oxide tonnes 309,000 329,000 665,000
processed
Sulphid tonnes 3,726,000 3,371,000 7,004,000
e
Ore grade Oxide % Cu 1.3 1.2 1.3
processed
Sulphid % Cu 1.0 1.2 1.1
e
Productio Copper dmt 98,600 117,000 210,500
n concent
rate
Copper tonnes 2,800 3,100 6,500
cathode
Copper tonnes 29,100 34,100 60,000
in
concent
rate
Total tonnes 31,900 37,200 66,500
(1) On care and maintenance.
(2) Copper production figures exclude Palabora.
Production statistics (continued)
6 months 6 months Year
ended ended ended
30.06.06 30.06.05 31.12.05
Anglo Base Metals
(continued)
Chagres Smelter
Copper tonnes 92,300 82,900 144,800
concentrate
smelted
Production Copper tonnes 89,900 79,400 138,100
blister
/anodes
Acid tonnes 256,900 211,900 371,900
Total copper 135,600 150,000 293,800
production for tonnes
the Minera Sur
Andes group
Mantos Blancos
Mantos Blancos
mine
Ore processed Oxide tonnes 2,264,000 2,243,00 4,535,00
0 0
Sulphid tonnes 1,939,000 1,981,00 3,954,00
e 0 0
Margina tonnes 2,655,000 3,456,00 5,337,00
l ore 0 0
mined
Ore grade Oxide %Cu 0.8 0.6 0.8
processed (solubl
e)
Sulphid %Cu 1.1 1.0 1.1
e (insolu
ble)
Margina %Cu 0.3 0.4 0.4
l ore (solubl
e)
Production Copper dmt 56,600 49,100 105,300
concent
rate
Copper tonnes 23,100 22,300 48,600
cathode
Copper tonnes 19,400 18,400 39,100
in
concent
rate
Total tonnes 42,500 40,700 87,700
Mantoverde mine
Ore processed Oxide tonnes 4,655,000 4,533,00 9,439,00
0 0
Margina tonnes 2,400,000 2,100,00 3,625,00
l ore 0 0
Ore grade Oxide %Cu 0.7 0.7 0.7
processed (solubl
e)
Margina %Cu 0.4 0.3 0.3
l ore (solubl
e)
Production Copper tonnes 29,200 30,600 62,000
cathode
Black Mountain tonnes 1,800 1,300 3,200
Total attributable copper tonnes 300,000 315,600 634,600
production
Nickel, Niobium
and Mineral Sands
Nickel
Codemin
Ore mined tonnes 194,400 190,400 528,600
Ore processed tonnes 256,700 245,800 521,400
Ore grade % Ni 2.1 2.0 2.1
processed
Production tonnes 4,900 4,300 9,600
Loma de Niquel
Ore mined tonnes 695,000 697,300 1,317,00
0
Ore processed tonnes 620,400 584,000 1,169,00
0
Ore grade % Ni 1.6 1.6 1.6
processed
Production tonnes 8,800 8,300 16,900
Total attributable tonnes 13,700 12,600 26,500
nickel production
Niobium
Catalao
Ore mined tonnes 278,900 237,700 723,100
Ore processed tonnes 398,000 306,500 672,300
Ore grade Kg 10.8 11.3 11.0
processed Nb/tonn
e
Production tonnes 2,200 1,900 4,000
Mineral Sands
Namakwa Sands
Ore mined tonnes 8,700,000 9,000,00 18,100,0
0 00
Production Ilmeni tonnes 164,600 162,800 316,100
te
Rutile tonnes 14,000 14,700 29,100
Zircon tonnes 64,300 63,100 128,600
Smelter production Slag tonnes 81,200 83,600 164,400
tapped
Iron tonnes 52,700 53,200 105,400
tapped
Production statistics (continued)
6 months 6 months Year
ended ended ended
30.06.06 30.06.05 31.12.05
Anglo Base Metals
(continued)
Zinc and Lead
Black Mountain
Ore mined tonnes 759,000 714,000 1,413,000
Ore processed tonnes 715,000 648,000 1,350,000
Ore grade Zinc % Zn 3.2 3.5 3.3
processed
Lead % Pb 3.9 3.5 3.7
Copper % Cu 0.4 0.4 0.4
Production Zinc in tonnes 15,200 16,200 32,100
concentra
tes
Lead in tonnes 21,200 19,500 42,200
concentra
tes
Copper in tonnes 1,800 1,300 3,200
concentra
tes
Lisheen
Ore mined tonnes 749,000 726,000 1,527,000
Ore processed tonnes 716,000 709,000 1,461,000
Ore grade Zinc % Zn 12.3 12.5 12.0
processed
Lead % Pb 2.3 2.0 2.0
Production Zinc in tonnes 79,600 81,300 159,300
concentra
te
Lead in tonnes 12,000 10,300 20,800
concentra
te
Skorpion
Ore mined tonnes 679,100 578,300 1,199,000
Ore processed tonnes 668,000 574,000 1,280,000
Ore grade Zinc % Zn 12.3 12.2 12.4
processed
Production Zinc tonnes 75,000 56,300 132,800
Total tonnes 169,800 153,800 324,200
attributable zinc
production
Total tonnes 33,200 29,800 63,000
attributable lead
production
Anglo Industrial
Minerals
Aggregates tonnes 44,166,2 41,403,70 85,887,00
00 0 0
Lime products tonnes 746,900 751,800 1,428,100
Concrete m3 4,162,10 4,204,000 8,353,200
0
Sodium tonnes 36,900 60,700 106,000
tripolyphosphate
Phosphates tonnes 399,600 377,400 833,500
Production statistics
(continued)
6 Year
6 months months ende
ended ended d
30.06.06 30.06.0 31.1
5 2.05
Anglo Ferrous Metals and
Industries
Kumba Resources
Limited
Iron ore production
Lump tonnes 9,236,000 9,578,0 18,7
00 47,0
00
Fines tonnes 6,093,000 5,933,0 12,2
00 40,0
00
Total iron ore 15,329,00 15,511, 30,9
0 000 87,0
00
Coal
Power station coal tonnes 7,550,000 7,331,0 14,5
00 73,0
00
Coking coal tonnes 1,109,000 1,174,0 2,27
00 3,00
0
Steam coal tonnes 1,476,000 1,441,0 2,99
00 3,00
0
Total coal 10,135,00 9,946,0 19,8
0 00 39,0
00
Zinc metal tonnes 48,000 53,000 119,
000
Heavy minerals(1)
Ilmenite tonnes 160,000 153,000 356,
000
Scaw Metals
Rolled products tonnes 205,100 179,200 386,
500
Cast products tonnes 74,800 63,000 133,
900
Grinding media tonnes 228,800 223,500 461,
400
Highveld Steel
Rolled products tonnes 385,900 319,600 684,
000
Continuous cast blocks tonnes 428,300 421,300 874,
900
Vanadium slag tonnes 31,800 32,600 66,8
00
Samancor
Manganese ore mtu m 32 46 88
Manganese alloys tonnes 93,600 164,400 309,
000
Tongaat-Hulett
Sugar tonnes 371,600 388,800 861,
000
Aluminium tonnes 99,200 94,300 192,
000
Starch and glucose tonnes 272,800 283,400 595,
000
Hippo Valley
Sugar tonnes 57,800 74,900 194,
000
Anglo Paper and Packaging
Mondi Packaging
Packaging papers tonnes 1,409,946 1,336,2 2,70
98 5,69
1
Corrugated board and boxes m m2 1,071 1,048 2,08
1
Paper sacks m units 1,799 1,667 3,28
2
Coating and release liners m m2 1,186 866 1,68
1
Pulp - external tonnes 89,025 90,475 174,
683
Mondi Business Paper
Uncoated wood free paper tonnes 1,015,481 938,582 1,89
0,07
9
Newsprint tonnes 92,056 93,384 186,
924
Pulp - external tonnes 52,221 66,989 127,
745
Wood chips green 475,665 877,693 1,74
metric 7,29
tonnes 0
Mondi Packaging South
Africa
Packaging papers tonnes 149,078 154,323 316,
820
Corrugated board and boxes m m2 142 154 330
Newsprint Joint Ventures
and other
Newsprint (attributable tonnes 162,065 154,252 316,
share) 459
Aylesford tonnes 100,272 95,085 193,
528
Shanduka (attributable tonnes 61,793 59,167 122,
share) 932
(1) Further details of heavy minerals production are
available in Kumba"s published results.
Reconciliation of subsidiaries" and associates" reported earnings to the
underlying
earnings included in the consolidated financial statements
For the six months ended 30 June 2006
Note only key reported lines are reconciled
AngloGold Ashanti Limited US$
million
IFRS adjusted headline earnings 226
Exploration 15
Depreciation on assets fair valued on acquisition (16)
Deferred tax on depreciation on assets fair valued on 5
acquisition
Minorities" share of profit during subsidiary period (69)
up to 20 April 2006
Share of earnings not attributable to Anglo American (59)
plc"s 41.8% shareholding from 20 April 2006
Contribution to Anglo American plc underlying earnings 102
Anglo Platinum Limited US$
million
IFRS headline earnings (US$ equivalent of published) 715
Exploration 15
Exchange rate difference (19)
Other adjustments (6)
705
Minority interest (182)
Depreciation on assets fair valued on acquisition (net (31)
of tax)
Contribution to Anglo American plc underlying earnings 492
DB Investments (DBI) US$
million
DBI underlying earnings (100%) 308
Adjustments(1) 9
DBI Underlying earnings - Anglo American plc basis 317
(100%)
Anglo American plc"s 45% ordinary 143
share interest
Income from preference shares 21
Contribution to Anglo American plc 164
underlying earnings
(1) Adjustments include the reclassification of the actuarial
gains and losses booked to the income statement by Dbsa under the
corridor mechanism of IAS 19.
Kumba Resources Limited US$
million
IFRS headline earnings (US$ equivalent of published) 247
Exchange rate difference (14)
Depreciation on assets fair valued on acquisition (net (8)
of tax)
Exploration 6
Other adjustments (7)
224
Minority interest (77)
Contribution to Anglo American plc underlying earnings 147
Reconciliation of subsidiaries" and associates" reported earnings to the
underlying earnings included in the consolidated financial statements
(continued)
For the six months ended 30 June 2006
Note only key reported lines are reconciled
Highveld Steel and Vanadium Corporation Limited US$
million
IFRS headline earnings (US$ equivalent of published) 64
Other adjustments (3)
61
Minority interest (13)
Contribution to Anglo American plc underlying earnings 48
The Tongaat-Hulett Group Limited US$
million
IFRS headline earnings (US$ equivalent of published) 47
Other adjustments 8
55
Minority interest (27)
28
Add Anglo American plc"s share of Hulett Aluminium 3
Contribution to Anglo American plc underlying earnings 31
Exchange rates and commodity prices
US$ exchange rates 6 months Year
6 months ended ended
ended 30.06.05 31.12.05
30.06.06
Average spot prices for the period
South African rand 6.31 6.21 6.37
Sterling 0.56 0.53 0.55
Euro 0.81 0.78 0.80
Australian dollar 1.35 1.29 1.31
Chilean peso 527 580 559
Closing spot prices
South African rand 7.15 6.68 6.35
Sterling 0.54 0.56 0.58
Euro 0.78 0.83 0.85
Australian dollar 1.35 1.31 1.36
Chilean peso 539 579 512
Commodity prices 6 months 6 months Year
ended ended ended
30.06.06 30.6.05 31.12.05
Average market prices for the period
Gold - US$/oz 590 427 445
Platinum - US$/oz 1,111 867 897
Palladium - US$/oz 318 190 201
Rhodium - US$/oz 4,222 1,583 2,056
Copper - US cents/lb 275 151 167
Nickel - US cents/lb 787 720 668
Zinc - US cents/lb 125 59 63
Lead - US cents/lb 53 45 44
European eucalyptus pulp price (CIF) 617 575 582
- US$/tonne
Summary by business segment
EBITDA(2) Operating
Turnover(1) profit/
(loss)(3)
US$ million 6 months 6 months 6 6 6 6
ended ended month months months month
30.06.06 s ended ended s
30.06.05 ended 30.06. ended
30.06 30.06. 06
.06 05 30.06
.05
Platinum 2,664 1,767 1,171 610 934 410
Gold 1,102 1,333 540 433 303 172
Diamonds 1,635 1,628 341 337 293 297
Coal 1,590 1,479 464 476 356 374
South 673 681 173 231 144 205
Africa
Australia 656 536 159 109 102 48
South 261 262 132 136 110 121
America
Base Metals 2,967 1,629 2,022 875 1,854 721
Copper 2,238 1,118 1,637 673 1,536 570
Collahuasi 715 319 537 209 503 174
Minera Sur 1,115 559 832 355 783 306
Andes
Mantos 408 240 269 110 251 90
Blancos
Other - - (1) (1) (1) -
Nickel, 334 324 167 164 141 141
Niobium,
Mineral
Sands
Catalao 31 25 14 11 13 10
Codemin 81 65 42 36 38 33
Loma de 133 143 85 89 74 79
Niquel
Namakwa 89 91 26 28 16 19
Sands
Zinc 395 187 250 56 208 29
Black 64 33 13 6 7 6
Mountain
Lisheen 156 68 109 23 101 17
Skorpion 175 86 128 27 100 6
Other - - (32) (18) (31) (19)
Industrial 1,995 2,035 275 317 151 193
Minerals
Tarmac 1,899 1,921 265 299 152 183
Copebras 96 114 10 18 (1) 10
Ferrous 3,204 3,694 783 961 644 791
Metals and
Industries
Kumba 1,127 846 457 324 378 246
Highveld 522 668 112 282 95 261
Steel
Scaw Metals 597 488 87 68 74 58
Samancor 215 466 26 133 26 121
Group
Tongaat- 740 658 107 86 78 56
Hulett
Boart - 512 - 72 - 55
Longyear
Other 3 56 (6) (4) (7) (6)
Paper and 3,668 3,580 435 449 212 233
Packaging
Mondi 2,005 1,969 245 250 128 132
Packaging
Mondi 1,113 1,063 140 164 56 89
Business
Paper
Other 550 548 50 35 28 12
Exploration - - (66) (67) (66) (67)
Corporate - - (109) (124) (118) (131)
18,825 17,145 5,856 4,267 4,563 2,993
Underlying earnings/
(loss)
US$ million 6 months 6 months
ended ended
30.06.06 30.06.05
Platinum 492 256
Gold 102 69
Diamonds 164 188
Coal 260 263
South Africa 107 142
Australia 74 36
South America 79 85
Base Metals 1,277 525
Copper 993 413
Collahuasi 324 133
Minera Sur 501 216
Andes
Mantos 166 64
Blancos
Other 2 -
Nickel, 98 103
Niobium,
Mineral Sands
Catalao 1 6
Codemin 36 34
Loma de 50 47
Niquel
Namakwa Sands 11 16
Zinc 214 26
Black 10 4
Mountain
Lisheen 113 21
Skorpion 91 1
Other (28) (17)
Industrial 112 140
Minerals
Tarmac 113 136
Copebras (1) 4
Ferrous 293 413
Metals and
Industries
Kumba 147 105
Highveld 48 130
Steel
Scaw Metals 51 41
Samancor 21 33
Group
Tongaat- 31 85
Hulett
Boart - 21
Longyear
Other (5) (2)
Paper and 120 133
Packaging
Mondi 88 82
Packaging
Mondi 20 54
Business
Paper
Other 12 (3)
Exploration (53) (50)
Corporate (265) (238)
2,502 1,699
(1)Turnover includes the Group"s share of turnover of joint ventures and
associates. Base Metals" turnover is shown after deduction of treatment
charges and refining charges (TC/RCs).
(2)EBITDA is operating profit before special items, operating
remeasurements,
depreciation and amortisation in subsidiaries and share of EBITDA of joint
ventures and associates.
(3)Operating profit includes operating profit before special items and
remeasurements from subsidiaries and joint ventures and share of operating
profit (before interest, tax, minority interests, special items and
remeasurements) of associates.
ANGLO AMERICAN plc
(Incorporated in England and Wales - Registered number 3564138)
(the `Company")
Notice of Interim (including Special) Dividend
(Dividend No 15)
Notice is hereby given that an interim dividend (including a
special dividend) on the Company"s ordinary share capital in
respect of the year to 31 December 2006 will be paid as follows
Total amount (interim and special) - 100 cents per ordinary
United States currency share (notes 1 and 2)
Last day to effect removal of shares Friday 4 August 2006
between the UK and SA registers
Currency conversion US$:Rand rate Monday 7 August 2006
determined
Last day to trade on the JSE Limited Friday 18 August 2006
(`JSE") to qualify for dividend
Ex-dividend on the JSE from the Monday 21 August 2006
commencement of trading on
Ex-dividend on the London Stock Wednesday 23 August 2006
Exchange from the commencement of
trading on
Record date (applicable to both the Friday 25 August 2006
United Kingdom principal register and
South African branch register)
Currency conversion US$:GBP/Euro rates Tuesday 29 August 2006
determined
Removal of shares between the UK and Tuesday 29 August 2006
SA registers permissible from
Last day for receipt of Dividend Wednesday 30 August 2006
Reinvestment Plan (`DRIP") Mandate
Forms by
Central Securities Depository
Participants (`CSDPs") (notes 4 and 5)
Last day for receipt of DRIP Mandate Thursday 31 August 2006
Forms by the UK Registrars or the
South African Transfer Secretaries
(notes 4 and 5)
Dividend warrants posted Wednesday 20 September
2006
Payment date of dividend Thursday 21 September 2006
Notes:
This amount includes a special dividend of 67 US cents per
ordinary share.
2 Shareholders on the United Kingdom register of members with an
address in the United Kingdom will be paid in pounds sterling and
those with an address in a country in the European Union which
has adopted the euro, will be paid in euros. Such shareholders
may, however, elect to be paid their dividends in US dollars
provided the UK Registrars receive such election by Friday 25
August 2006. Shareholders with an address elsewhere will be paid
in US dollars except those registered on the South African branch
register who will be paid in South African rand. The currency
conversion rates and the amounts per share in South African rand
and in pounds sterling/euros will be announced on Monday 7 August
and Tuesday 29 August 2006 respectively.
3 Dematerialisation and rematerialisation of registered share
certificates in South Africa will not be effected by CSDPs during
the period from Monday 21 August 2006 to Friday 25 August 2006
(both days inclusive).
4 Those shareholders who already participate in the DRIP need not
complete a DRIP mandate form for each dividend as such forms
provide an on-going authority to participate in the DRIP until
cancelled in writing. Shareholders who wish to participate in the
DRIP should obtain a mandate form from the UK Registrars, the
South African Transfer Secretaries or, in the case of those who
hold their shares through the STRATE system, their CSDP.
5 In terms of the DRIP, and subject to the purchase of shares in
the open market, share certificates/Crest notifications are
expected to be mailed and CSDP investor accounts credited/updated
on Friday 6 October 2006.
6 Copies of the terms and conditions of the DRIP are available
from the UK Registrars or the South African Transfer Secretaries.
By order of the Board
N Jordan
Secretary
3 August 2006
Registered office UK Registrars South African
20 Carlton House Lloyds TSB Transfer Secretaries
Terrace Registrars Link Market Services
London The Causeway South Africa (Pty)
SW1Y 5AN Worthing Limited
England West Sussex 11 Diagonal Street
BN99 6DA Johannesburg 2001
England PO Box 4844,
Johannesburg 2000
South Africa
Sponsor: J.P.Morgan Equities Limited
Date: 04/08/2006 03:14:11 PM Produced by the JSE SENS Department
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