| Fri 4 Aug 2006, 15:32 | | Attributable operating profit from AngloGold Ashan |
|
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) (53
