31st Jul 2006 08:00
Anglo Platinum Limited31 July 2006 Anglo PlatinumA member of the Anglo American plc group MAIN FEATURES • Refined Pt production increased by 6%• Attributable headline earnings per ordinary share up 117%• Dividend per ordinary share up 192% ABRIDGED INTERIM FINANCIAL RESULTSFOR THE SIX MONTHS ENDED 30 JUNE 2006 Consolidated Income Statement Reviewed Reviewed Audited ---------------- ------------ ----------- -------- ------------ Six months Six months Year ---------------- ------------ ----------- -------- ------------ ended ended ended ---------------- ------------ ----------- -------- ------------ 30 June 30 June % 31 December ---------------- ------------ ----------- -------- ------------R millions 2006 2005 Change 2005---------------- ------------ ----------- -------- ------------Gross sales revenue 16 656 10 795 23 108--------------- ------------ ----------- --------- ------------Mined 14 882 9 998 21 197--------------- ------------ ----------- --------- ------------Purchased metals in 1 774 797 1 911concentrate ------------ ----------- --------- ---------------------------Commissions paid (143) (88) (170)--------------- ------------ ----------- --------- ------------NET SALES REVENUE 16 513 10 707 54 22 938--------------- ------------ ----------- --------- ------------COST OF SALES (10 429) (8 127) (28) (17 100)--------------- ------------ ----------- --------- ------------GROSS PROFIT ON METAL SALES 6 084 2 580 136 5 838--------------- ------------ ----------- --------- ------------Mined 5 921 2 558 5 751--------------- ------------ ----------- --------- ------------Purchased metals in 163 22 87concentrate ------------ ----------- --------- ---------------------------Other net income 160 262 322--------------- ------------ ----------- --------- ------------Market development andpromotional (129) (102) (214)expenditure ------------ ----------- --------- ---------------------------Operating profit 6 115 2 740 123 5 946--------------- ------------ ----------- --------- ------------Interest expensed (103) (141) (273)--------------- ------------ ----------- --------- ------------Interest received 74 58 135--------------- ------------ ----------- --------- ------------Net income from associates 131 49 134--------------- ------------ ----------- --------- ------------Profit before taxation 6 217 2 706 130 5 942--------------- ------------ ----------- --------- ------------Taxation (1 713) (571) (200) (1 452)--------------- ------------ ----------- --------- ------------Net profit 4 504 2 135 111 4 490--------------- ------------ ----------- --------- ------------ Reconciliation between net profitand headline earnings ------------ ----------- -------- ----------------------------Net profit 4 504 2 135 4 490---------------- ------------ ----------- -------- ------------Less: Declared and undeclaredcumulative (127) (127) (255)preference share dividends and ------------ ----------- -------- ------------related STC----------------Basic earnings attributable toordinary 4 377 2 008 4 235shareholders ------------ ----------- -------- ----------------------------Adjustments (after tax whereapplicable): ------------ ----------- -------- ----------------------------Profit on disposal of conversion - - (117)rights ------------ ----------- -------- ----------------------------Impact of assets exchanged - - (140)---------------- ------------ ----------- -------- ------------Property, plant and equipment - - (67)---------------- ------------ ----------- -------- ------------Mineral rights - - (73)---------------- ------------ ----------- -------- ------------Profit on disposal and scrappingof property, - - (2)plant and equipment ------------ ----------- -------- ----------------------------Headline earnings attributable toordinary 4 377 2 008 118 3 976shareholders ------------ ----------- -------- ----------------------------Add: Declared and undeclaredcumulative 127 127 255preference share dividends and ------------ ----------- -------- ------------related STC---------------- Headline earnings 4 504 2 135 4 231---------------- ------------ ----------- -------- ------------Number of ordinary shares in 219,0 217,6 218,3issue (millions) ------------ ----------- -------- ----------------------------Weighted average number ofordinary shares in issue 218,6 217,4 217,5(millions) ------------ ----------- -------- ----------------------------Attributable earnings perordinary share (cents) ------------ ----------- -------- ----------------------------- Basic 2 002 924 117 1 947---------------- ------------ ----------- -------- ------------- Diluted 1 989 920 1 935---------------- ------------ ----------- -------- ------------Attributable headline earningsper ordinary share (cents) ------------ ----------- -------- ----------------------------- Headline 2 002 924 117 1 828---------------- ------------ ----------- -------- ------------- Diluted 1 989 920 1 824---------------- ------------ ----------- -------- ------------Dividends per ordinary share 1 400 480 1 180(cents) ------------ ----------- -------- ----------------------------- Interim 1 400* 480 192 480---------------- ------------ ----------- -------- ------------- Final 700---------------- ------------ ----------- -------- ------------Dividends per preference share 318,0 318,0 638(cents) ------------ ----------- -------- ----------------------------Dividend cover per ordinary share(headline 1,4 1,9 1,5earnings) ------------ ----------- -------- ----------------------------* Proposed ordinary dividend Group statement of recognised income and expense Reviewed Reviewed Audited -------------------- ------------ ------------ ------------- Six months Six months Year -------------------- ------------ ------------ ------------- ended ended ended -------------------- ------------ ------------ ------------- 30 June 30 June 31 December -------------------- ------------ ------------ -------------R millions 2006 2005 2005-------------------- ------------ ------------ -------------Income and expense recognised directlyin the income statement ------------ ------------ ---------------------------------Net profit for the period/year 4 504 2 135 4 490-------------------- ------------ ------------ -------------Total recognised income and expense forthe period/year 4 504 2 135 4 490-------------------- ------------ ------------ -------------Effect of changes in accounting policies/restatement: ------------ ------------ ---------------------------------IFRS 3 - Negative goodwill on associatereversed - 173 173-------------------- ------------ ------------ ------------- Total recognised income and expense is attributable to the equity holders ofAnglo Platinum Limited since there are no minority interests. Consolidated Balance Sheet Reviewed Reviewed Audited ------------------------ ----------- ---------- ------------- as at as at as at ----------------------- ----------- ---------- ------------- 30 June 30 June 31 December ----------------------- ----------- ---------- -------------R millions 2006 2005 2005----------------------- ----------- ---------- -------------ASSETS----------------------- ----------- ---------- -------------Non-current assets 27 784 25 502 26 984----------------------- ----------- ---------- -------------Property, plant and equipment 21 282 20 731 19 744----------------------- ----------- ---------- -------------Capital work-in-progress 5 389 3 689 6 132----------------------- ----------- ---------- -------------Investment in associates 745 639 683----------------------- ----------- ---------- -------------Cash deposits held by Platinum Producers'Environmental Trust 216 154 205----------------------- ----------- ---------- -------------Non-current accounts receivable 152 289 220----------------------- ----------- ---------- -------------Current assets 10 130 7 398 8 805----------------------- ----------- ---------- -------------Inventories 4 882 3 503 4 412----------------------- ----------- ---------- -------------Accounts receivable 3 304 2 592 2 418----------------------- ----------- ---------- -------------Cash and cash equivalents 1 944 1 303 1 975----------------------- ----------- ---------- -------------Total assets 37 914 32 900 35 789----------------------- ----------- ---------- -------------EQUITY AND LIABILITIES----------------------- ----------- ---------- -------------Shareholders' equity 23 807 19 476 20 802----------------------- ----------- ---------- -------------Non-current liabilities 7 573 6 364 6 952----------------------- ----------- ---------- -------------Deferred taxation 6 405 5 431 5 948----------------------- ----------- ---------- -------------Environmental obligations 484 383 425----------------------- ----------- ---------- -------------Employees' service benefit obligations 61 50 30----------------------- ----------- ---------- -------------Share based payment provision 152 43 86----------------------- ----------- ---------- -------------Obligations due under finance leases 471 457 463----------------------- ----------- ---------- -------------Current liabilities 6 534 7 060 8 035----------------------- ----------- ---------- -------------Interest-bearing borrowings 779 3 848 3 805----------------------- ----------- ---------- -------------Accounts payable 4 031 2 712 3 595----------------------- ----------- ---------- -------------Share based payment provision 240 59 102----------------------- ----------- ---------- -------------Taxation 1 484 441 519----------------------- ----------- ---------- -------------Derivative financial liabilities - - 14----------------------- ----------- ---------- -------------Total equity and liabilities 37 914 32 900 35 789----------------------- ----------- ---------- ------------- Consolidated Cash Flow Statement Reviewed Reviewed Audited ------------------- ------------ ------------ ------------- Six months Six months Year ------------------- ------------ ------------ ------------- ended ended ended ------------------- ------------ ------------ ------------- 30 June 30 June 31 December ------------------- ------------ ------------ -------------R millions 2006 2005 2005------------------- ------------ ------------ -------------CASH FLOWS FROM OPERATING ACTIVITIES------------------- ------------ ------------ -------------Cash from operations 6 513 3 058 7 649------------------- ------------ ------------ -------------Interest paid (net of interest (72) (103) (263)capitalised) ------------ ------------ --------------------------------Taxation paid (241) (284) (555)------------------- ------------ ------------ -------------Net cash from operating activities 6 200 2 671 6 831------------------- ------------ ------------ -------------CASH FLOWS USED IN INVESTINGACTIVITIES ------------ ------------ --------------------------------Purchase of property, plant andequipment (1 835) (1 539) (4 097)(including interest capitalised) ------------ ------------ --------------------------------Proceeds from sale of plant, equipmentand 67 13 124mineral rights ------------ ------------ --------------------------------Interest received 74 59 136------------------- ------------ ------------ -------------Other 37 7 (35)------------------- ------------ ------------ -------------Net cash used in investing activities (1 657) (1 460) (3 872)------------------- ------------ ------------ -------------CASH FLOWS USED IN FINANCINGACTIVITIES ------------ ------------ --------------------------------Proceeds from the issue of ordinary andpreference share capital 125 20 163------------------- ------------ ------------ -------------Repayment of interest-bearing borrowings (3 042) (1 498) (1 543)------------------- ------------ ------------ -------------Ordinary and preference dividends paid (1 657) (855) (2 029)------------------- ------------ ------------ -------------Net cash used in financing activities (4 574) (2 333) (3 409)------------------- ------------ ------------ -------------Net decrease in cash and cash (31) (1 122) (450)equivalents ------------ ------------ -------------------------------- Cash and cash equivalents at beginningof 1 975 2 425 2 425period/year ------------ ------------ --------------------------------Cash and cash equivalents at end of 1 944 1 303 1 975period/year ------------ ------------ --------------------------------MOVEMENT IN NET CASH/(DEBT)**------------------- ------------ ------------ -------------Net debt at beginning of year (2 293) (3 429) (3 429)------------------- ------------ ------------ -------------Net cash from operating activities 6 200 2 671 6 831------------------- ------------ ------------ -------------Net cash used in investing activities (1 657) (1 460) (3 872)------------------- ------------ ------------ -------------Other (1 556) (784) (1 823)------------------- ------------ ------------ ------------- 694 (3 002) (2 293) ------------------- ------------ ------------ ------------- ** Net cash/(debt) comprises interest-bearing liabilities and obligations underfinance leases net of cash and cash equivalents. Notes to the interim results 1. This abridged report has been extracted from the interim report whichcomplies with International Accounting Standard 34 - Interim Financial Reportingand South African Statement of Generally Accepted Accounting Practice, AC127,with the same title as well as with Schedule 4 of the South African CompaniesAct and the disclosure requirements of the JSE Limited's listings requirements. 2. The interim report has been prepared using accounting policies that complywith International Financial Reporting Standards and South African Statements ofGenerally Accepted Accounting Practice. The accounting policies are consistentwith those applied in the financial statements for the year ended 31 December2005, except for the changes described in note 5. Reviewed Reviewed Audited --------------------- ------------ ----------- ------------- Six months Six Year --------------------- ------------ months ------------- ----------- ended ended ended --------------------- ------------ ----------- ------------- 30 June 30 June 31 December --------------------- ------------ ----------- -------------R millions 2006 2005 2005--------------------- ------------ ----------- -------------3. Commitments--------------------- ------------ ----------- -------------Mining and process property, plant andequipment ------------ ----------- ----------------------------------Contracted for 1 353 1 168 1 443--------------------- ------------ ----------- -------------Not yet contracted for 11 435 7 652 6 259--------------------- ------------ ----------- -------------Authorised by the directors 12 788 8 820 7 702--------------------- ------------ ----------- -------------Other--------------------- ------------ ----------- -------------Operating lease rentals - buildings 612 678 590--------------------- ------------ ----------- -------------- within remainder of year/one year 45 46 41--------------------- ------------ ----------- -------------- within two to five years 192 181 163--------------------- ------------ ----------- -------------- thereafter 375 451 386--------------------- ------------ ----------- -------------Information Technology Service Providers 130 66 144--------------------- ------------ ----------- -------------- within remainder of year/one year 55 16 62--------------------- ------------ ----------- -------------- thereafter 75 50 82--------------------- ------------ ----------- ------------- 4. Contingent liabilities The Group is the subject of various claims, which are individually immaterial.The expected outcomes of these claims are varied, but on a probabilityweighting, the amount is estimated at R92 million. There have been no othermaterial changes to the contingent liabilities as disclosed in the annual reportfor the year ended 31 December 2005. 5. New accounting policies adopted IFRS 6 - Exploration for and Evaluation of Mineral Resources.On 1 January 2006, the Group adopted the requirements of IFRS 6 Exploration forand Evaluation of Mineral Resources. The standard requires disclosure ofexploration and evaluation assets and sets out the requirements to test theseassets for impairment. This disclosure will be presented in the December 2006financial statements. The Standard has no impact on the measurement of assets inthe financial statements. IFRIC 7 - Applying the Restatement Approach under IAS 29 Financial Reporting inHyperinflationary Economies. On 1 January 2006, the Group adopted the requirements of IFRIC 7 Applying theRestatement Aproach under IAS 29 Financial Reporting in HyperinflationaryEconomies. This has no impact on the financial results. IFRIC 8 - Scope of IFRS 2 On 1 January 2006, the Group adopted the requirements of IFRIC 8 Scope of IFRS 2. The issue addressed in the interpretation is whether IFRS 2 applies totransactions in which the entity cannot identify specifically some or all of thegoods of services received. This new policy has no impact on the financialresults. IFRIC 9 - Reassessment of Embedded Derivatives On 1 January 2006, the Group adopted the requirements of IFRIC 9 Reassessment ofEmbedded Derivatives. An entity shall assess whether an embedded derivative isrequired to be separated from the host contract and accounted for as aderivative when the entity first becomes a party to the contract. Subsequentreassessment is prohibited unless there is a change in the terms of the contractthat significantly modifies the cash flows that otherwise would be requiredunder the contract, in which case reassessment is required. This new policy hasno impact on the financial results. AC 503 - Accounting for Black Economic Empowerment (BEE) TransactionsThe cost of entering into a BEE transaction that contains a share-based paymenttransaction, which is not a business combination, is expensed unless the costcan be directly attributed to the acquisition or protection of mining or similartangible assets. This new policy has had no impact on the financial results. 6. Derivatives - no fair value The Group holds a call option over a 22,5% stake in Northam Platinum Limited,which option is conditional upon the current owner achieving certain ownershipthresholds by historically disadvantaged persons on or before 30 July 2007,which has been extended on two occasions. The call option is exerciseable atR8,60 per share. No fair value is attributed to this option as it is contingentupon the event explained above. 7. Reclassification - transactions giving rise to adjustments to revenue/purchases During the period, the Group complied with the requirements of Circular 9/2006Transactions giving rise to Adjustments to Revenue/Purchases, issued by theSouth African Institute of Chartered Accountants. Previously the Group includedcertain trade discounts in commissions paid. This change resulted in revenue andcommissions paid for the period ended 30 June 2005 decreasing by R84 million (31December 2005: R200 million). Reclassification - apportionment of share based payment provision betweencurrent and non-current During the period, the Group classified the current portion of R240 million (30June 2005: R59 million, 31 December 2005: R102 million) of the share basedprovision to "Current liabilities." This had no impact on the financial results.Reclassification - cash held by insurance captivesCash held in insurance captives was previously disclosed separately on the faceof the balance sheet. This line item is now aggregated with cash and cashequivalents and prior periods were reclassified accordingly. The amount of cashheld by insurance captives is R220 million (30 June 2005: R61 million, 31December 2005: R167 million). 8. Change in accounting estimate During the period, the Group changed its estimate of the quantities of inventorybased on the outcome of a physical count of in process metals. The Group runs atheoretical metal inventory system based on inputs, the results of previousphysical counts and outputs. Due to the nature of in process inventories beingcontained in weirs, pipes and other vessels, physical counts take place onlyonce per annum. This change in estimate has had the effect of increasing the value of inventorydisclosed in the financial statements by R102 million (31 December 2005; R336million) (no physical count of in process inventory was undertaken for thecomparative period). This results in the recognition of an after tax gain of R72million. The amount of the effect in future periods cannot be disclosed becauseestimation is impracticable. 9. Corporate governance The Board is of the view that the Company and its subsidiaries are compliantwith the recommendations as set out in the Code of Corporate Practices andConduct contained in King 2. 10. Auditors' review The interim results have been reviewed by the Company's auditors, Deloitte &Touche. Their unqualified review report is available for inspection at theCompany's registered office. COMMENTARY 1. FINANCIAL RESULTS The Group achieved a significant improvement in headline earnings when comparedto those for the first six months of 2005. Factors contributing to the increasewere mainly higher US dollar prices realised on metals sold and increased salesvolumes. Headline earnings and headline earnings attributable to ordinary shareholdersmore than doubled to R4,50 billion and R4,38 billion respectively. Headlineearnings per ordinary share rose 117% to 2 002 cents. An interim dividend of 1400 cents per ordinary share has been declared. Net sales revenue rose by R5,81 billion to R16,5 billion. The increase wasprimarily the result of higher US dollar metal prices achieved on all metalssold, contributing R5,03 billion of the increase and higher volumes of metalssold, mainly platinum and rhodium, which contributed a further R462 million. Theaverage rand/US dollar exchange rate was slightly weaker at R6,34, when comparedto the rate of R6,26 achieved in the first half of 2005, contributing anincrease in revenue of R313 million. As a result of existing long term confidential contractual arrangements withsome customers entered into to support and develop the rhodium market, theaverage price achieved on sales of rhodium metal for the period was US$3 419 perounce. Cost of sales rose by R2,30 billion to R10,4 billion, principally as a result ofthe following: • Purchases of metal in concentrate more than doubled from R815 million to R1,68billion due to higher US dollar prices paid for metals in concentrate and anincrease in the volume of metals in concentrate arising from the Kroondal andMarikana Pooling and Sharing agreements and the Bafokeng-Rasimone and Modikwajoint ventures. • Cash mining, smelting and refining costs rose 14% to R7,10 billion with cashoperating unit costs rising by 11%. The increase was primarily due to inflation,additional costs associated with increased mines' production which for the firsttime includes the costs associated with the Marikana mine, 2006 once-offextensive ground support work at the Union UG2 declines and costs associatedwith the well advanced turnaround programmes to establish a sustainable base forfuture production at Rustenburg and Amandelbult. Above inflation cost increasesin diesel and steel also contributed to the increase. Cost savings of some R101million, arising from specific procurement projects and other cost savingsinitiatives, were realised during the first half of 2006. • Other costs increased by R448 million or 101%, including an increase of R235million in the cost associated with share based payments mainly as a result of ahigher share price on 30 June 2006 when compared to 30 June 2005, higherroyalties and increased research and exploration costs. • Amortisation rose by 22% or R219 million as a result of the re-estimation ofthe expected useful lives of components of property, plant and equipmentconducted during the second half of 2005, the capital expenditure programme andincreased utilisation of new operating assets. • The value of metals in inventory increased by R424 million during the firsthalf of 2006. Notwithstanding a net decrease in pipeline stock following theprocessing of concentrate built up at the Polokwane smelter at the end of 2005,offset by an increase in metal identified during the annual stock take, thevalue of metal in stock increased as a result of refined metal stocks returningto normal levels and the increase in the unit cost at which metal inventoriesare valued. Other net income for the period amounted to R160 million and comprised mainly offoreign exchange gains of R306 million offset by restructuring and projectmaintenance costs of R164 million. 2. SAFETY Improving the safety performance of our employees and contractors remains AngloPlatinum's highest priority and a drop in the fatal incident rate was recordedfor the first half of 2006 when compared to the same period last year. The Groupcontinues to invest significant resources in a comprehensive suite of safetyinitiatives to ensure a sustainable step change in safety performance. It ishowever with deep regret that management reports the loss of the lives of 7employees at managed operations and 1 employee at the Modikwa Joint Venture as aresult of mine related accidents in the first half of 2006. Management and theBoard extend their condolences to the families, friends and colleagues of thedeceased. 3. OPERATIONS Refined platinum production for the first half of 2006 rose by 6% to 1 344 900ounces, primarily due to increased mining production and the release of metalfrom pipeline stocks. The cash operating cost per equivalent refined platinumounce (equivalent ounces are mined ounces converted to expected refined ounces)increased by 11%. Once-off additional ground support work during 2006 at Union,equipping and development programmes to establish a sustainable base for futureproduction at Amandelbult and Rustenburg, wage settlements in excess ofinflation and the effect of lower grades as a consequence of a higher percentageof UG2 ore mined, are the principal reasons for the above inflation unit costincrease. Mining and retreatment operations Equivalent refined production from the mines managed by Anglo Platinum and itsjoint venture partners for the first half of 2006 increased by 61 200 ounces orby 5% when compared to the same period in 2005.Increased production volumes were recorded primarily at: • Kroondal: Equivalent refined platinum production increased by 33 800 ounces to64 800 ounces. The increase is mainly due to increased mining productionprocessed through the Kroondal K-2 plant which was commissioned during thesecond quarter of 2005. Despite the increase, production was hampered by anumber of geological features, more complex than anticipated, that wereencountered at No. 3 Shaft. • Amandelbult: Equivalent refined platinum production increased by 23 600 ouncesor by 9% as a result of the measures taken to address the significantly morecomplex underground conditions first encountered in the second half of 2004. Themine continues to increase the rate of development and equipping to establishthe level of immediately available ore reserves and its key sub-component ofimmediately stopeable reserves necessary to match the working conditions.Fluctuating reef widths in the transition zone continued to negatively affectgrade at the No. 1 shaft. • Bafokeng-Rasimone: Equivalent refined platinum production increased by 12 400ounces or 13% mainly due to the processing of a surface stockpile built-up in2005. • Rustenburg: Rustenburg continues to increase production volumes andefficiencies as part of its turnaround programme. Equivalent refined platinumproduction increased by 11 600 ounces or 3%. Increasing the level of immediatelyavailable and immediately stopeable ore reserves remains a high priority and theintensive equipping programme underway should achieve the required reserveposition by the end of 2006. The UG2 ore proportion of tons milled increasedagain from 55% to 62%. Lower production was recorded at: • Union: Equivalent refined platinum production decreased by 11 800 ounces or 8%as a result of the ongoing installation of additional and permanent groundsupport at the UG2 decline operations which activity limited access to miningareas. Re-development of access ways and installation of extensive support indisturbed areas continued. The mine expects to return to full production duringthe fourth quarter of 2006. • Western Limb Tailings Retreatment: Equivalent refined platinum production was8 700 ounces lower than last year mainly as a result of lower grades processed. • Potgietersrust: Equivalent refined platinum production decreased by 4 700ounces or 5% mainly due to above normal rainfall in the first quarter whichtemporarily restricted access to the lower benches, and mechanical failures of acrusher and a mill. Process operations Smelting and refining operations recorded good performances in the first half of2006 with improved metal recoveries and the Waterval smelter complex sulphuremissions being below the permit and target levels. High levels of concentratestocks at the beginning of the year, arising from the Polokwane furnace shutdown in September 2005, were reduced to normal working levels by the end of theperiod. Higher volumes and continued focus on cost containment and savings, limited theincrease in smelting and refining cash cost per refined platinum ounce to 1%compared to the same period last year. 4. PROJECTS Anglo Platinum remains confident of the robustness of demand for platinum and iscontinuing with its expansion programme. The rate of expansion is reviewed on anongoing basis and currently supports the Company's stated average compoundgrowth target of 5% per annum. The long term outlook for metal prices remainspositive and consequently studies evaluating the ramping up of various projectsare currently being conducted. The Board approved projects totaling R5,7 billion, in 2006 money terms, duringthe first half of 2006. Included in these approvals is some R3,8 billion for thePPRust North expansion project which will mill an additional 600 000 tons of oreper month and produce an additional 230 000 platinum ounces per annum in 2009. The Paardekraal 2 shaft project is in the final stages of the approval processand an announcement is expected shortly. The vertical Paardekraal 2 shaft willaccess deeper Merensky reserves at a rate of 100 000 tons per month, replacing120 000 ounces of platinum per annum by 2015 at a capital cost of R 2 billion in2006 money terms. The implementation of Anglo Platinum's extensive suite of mining and processingprojects to maintain and expand production continues on schedule and withinbudget. Projects that continue to increase production include Modikwa, BRPM,Kroondal and for the first time in 2006, the Marikana venture. The Amandelbult 1shaft optimisation project was completed on time during the period and the75ktpm UG2 plant is fully utilised and performing well. The deepening of theBRPM and sinking of the Lebowa Merensky declines is well advanced and the PPRustNorth project has commenced. The Mototolo Joint Venture is on track withcommissioning of the concentrator planned for quarter 4 of 2006. 5. CAPITAL EXPENDITURE Total capital expenditure amounted to R1,84 billion (2005: R1,54 billion).Expansion expenditure amounted to R635 million (2005: R550 million) andexpenditure to maintain operations increased to R1,14 billion (2005: R926million). Interest of R64 million was capitalised (2005: R63 million).It is anticipated that capital expenditure for 2006 will be between R5,5 billionand R6,0 billion. 6. CASH FLOWS The Group's net cash position at 30 June 2006 amounted to R694 million, asignificant turnaround from the R2,29 billion net debt position at the end of2005. Cash generated by operations amounted to R6,51 billion. Cash outflowsconsisted mainly of capital expenditure of R1,84 billion (2005: R1,54 billion),taxation payments amounting to R241 million (2005: R284 million) and dividendpayments of R1,66 billion (2005: R855 million) of which R1,53 billion wereordinary dividends and R127 million preference dividends. 7. NEW MINERALS LEGISLATION AND EMPOWERMENT OF HISTORICALLY DISADVANTAGED SOUTHAFRICANS The Department of Minerals and Energy (DME) invited the Company to a 3 dayconversion application review early in July. The review enhanced theunderstanding by both parties of submissions already made in respect of therequirements of the Mineral and Petroleum Resources Development Act and theBroad-Based Socio-Economic Empowerment Charter for the SA Mining Industry forconversion of "old order rights" to "new order rights". The review confirmedboth the DME's and the Company's commitment to a successful conversion process.Discussions to finalise the applications already lodged will continue. We lookforward to a speedy and satisfactory outcome. 8. SOCIAL RESPONSIBILITY AND HIV/AIDS Anglo Platinum remains committed to contributing towards social projects in thecommunities in which its operations are located. The Group continues to makesignificant contributions towards education, health, social services, arts andculture, and small business development projects during the first half of 2006.Anglo Platinum has continued to fight against the HIV/AIDS epidemic andassociated infections, particularly sexually transmitted infections andtuberculosis. In the first six months of 2006, the Company spent R25 million oneducation, training, community based organisation support and a full wellnessprogramme which includes free anti-retroviral treatment, counselling andvoluntary testing. This social investment has achieved success as a result of the increasedpartnerships and support from government departments, civil society,international development agencies and unions. 9. DIVIDENDS Ordinary dividends are declared after consideration of current and futurefunding requirements and are paid out of cash generated from operations.The Board has declared an interim ordinary dividend of 1 400 cents per share.This results in a dividend cover ratio of 1,4 on headline earnings andrepresents an increase of 192% on the 2005 interim dividend. A preference dividend of 318 cents per preference share was declared and paid inMay 2006. 10. PROSPECTS Refined platinum production for the year is expected to be between 2,7 and 2,8million ounces. Management continues to vigorously address unit costs. Theemphasis on increasing volumes and improving operating efficiencies remains thedriver of performance at operations. Demand for platinum is strong and supportive of firm platinum prices. Recentexperience suggests that the resilience of jewellery consumption, particularlyin the Chinese market, continues even at prices over US$1 100 per ounce addingconfidence to our long term view. The growth in demand for platinum for dieselautocatalyst systems, both oxidation and now heavily loaded particulate traps,in Europe is strong. Tightening diesel emission legislation and its earlyadoption as well as the growing popularity of diesel engine powered vehiclessupports this. Industrial demand remains firm, particularly in the glass andpetroleum sectors. Platinum prices have retreated from record highs of US$1 336as investment positions were liquidated. The strong physical demand describedabove has stemmed the decline and prices are supported above US$1 100. Thismarket position is expected to continue for some time. Industrial palladium demand continues to grow encouraged by the relatively lowprice. There continues to be interest in palladium jewellery manufacture inChina although at seemingly reduced volumes when compared to 2005. Palladiumprices, off their recent lows brought about by the general correction incommodity markets, remain susceptible to volatility due to investor and fundactivity. Refined platinum production for the second half of 2006 is expected to beslightly higher than that of the first half. While sales volumes are expected toincrease in the second half of 2006, the most significant variable affectingearnings will be metal prices in rand terms. If the rand basket price remains atcurrent levels, earnings for the second half of 2006 are likely to be higherthan those of the first half. B E Davison R Havenstein Johannesburg---------------- ----------------------- --------------(Chairman) (Chief Executive Officer) 28 July 2006---------------- ----------------------- -------------- Declaration of interim ordinary dividend (No. 107)Notice is hereby given that an interim dividend of 1 400 cents per ordinaryshare, in the currency of the Republic of South Africa, has been declared inrespect of the six months ended 30 June 2006. The dividend is payable toshareholders recorded in the books of the Company at the close of business onFriday, 25 August 2006. The salient dates for the interim ordinary dividend are as follows: Salient Dates for South Africa and United Kingdom 2006------------------------------------ -----------------Last day to trade (cum dividend) Friday, 18 ------------------------------------ August -----------------First day of trading (ex dividend) Monday, 21------------------------------------ August -----------------Currency conversion date (for sterling payments from London) Tuesday, 22------------------------------------ August -----------------Record date Friday, 25------------------------------------ August -----------------Payment date Monday, 28------------------------------------ August ----------------- Share certificates may not be dematerialised or re-materialised and no coversionof preference shares into ordinary shares will be permitted between Monday, 21August 2006 and Friday, 25 August 2006, both days inclusive, nor may transferstake place between the South African and United Kingdom share registers duringthis period. On Monday, 28 August 2006, the dividend will be electronically transferred tothe bank accounts of all certificated shareholders where this facility isavailable. Where electronic fund transfer is either not available or not electedby the shareholder, cheques dated 28 August 2006 will be posted on that date.Holders of dematerialised shares will have their accounts credited at their CSDPor broker on 28 August 2006. Shareholders registered on the United Kingdom register will be paid the dividendin pounds sterling at the rate of exchange determined on Tuesday, 22 August2006. A further announcement stating the rand/sterling conversion rate will bereleased through the relevant South African and United Kingdom news services onWednesday, 23 August 2006. The dividend is payable subject to payment conditions which may be inspected ator obtained from the Company's Johannesburg Office or from its LondonSecretaries. By order of the Board J D Meyer Johannesburg-------------------- ---------------------------------Group Company Secretary 28 July 2006-------------------- --------------------------------- Supplementary informationConsolidated Statistics (Unaudited) Six months Six months Year ---------------- ------------- ---------- --------- ------------ ended ended ended ---------------- ------------- ---------- --------- ------------ 30 June 30 June 31 December ---------------- ------------- ---------- --------- ------------Total operations 2006 2005 2005---------------- ------------- ---------- --------- ------------Marketing statistics---------------- ------------- ---------- --------- ------------Average market pricesachieved ------------- ---------- --------- ----------------------------Platinum (US$/oz) 1 104 867 894---------------- ------------- ---------- --------- ------------Palladium (US$/oz) 315 191 199---------------- ------------- ---------- --------- ------------Rhodium (US$/oz) 3 419 1 529 1 966---------------- ------------- ---------- --------- ------------Nickel (US$/lb) 7,66 7,15 6,77---------------- ------------- ---------- --------- ------------US$ Basket price (Netsales revenue (US$) 1 953 1 330 1 388per refined Pt ounce sold) ------------- ---------- --------- ----------------------------Platinum (R/oz) 7 018 5 412 5 704---------------- ------------- ---------- --------- ------------Palladium (R/oz) 2 001 1 196 1 274---------------- ------------- ---------- --------- ------------Rhodium (R/oz) 21 616 9 601 12 640---------------- ------------- ---------- --------- ------------Nickel (R/lb) 48,45 44,90 43,00---------------- ------------- ---------- --------- ------------R Basket price (Net salesrevenue per (R) 12 390 8 323 8 871refined Pt ounce sold) ------------- ---------- --------- ----------------------------Average exchange rateachieved on (R : US$) 6,3444 6,2576 6,3915sales ------------- ---------- --------- ----------------------------Exchange rate at end of (R : US$) 7,1452 6,6841 6,3450period/year ------------- ---------- --------- ----------------------------Financial statistics andratios ------------- ---------- --------- ----------------------------Gross profit margin (%) 36,8 24,1 25,5---------------- ------------- ---------- --------- ------------ Earnings before interest,taxation, (R millions) 7 462 3 785 8 354depreciation and amortisation ---------------- --------- -------- ----------(EBITDA)----------------Operating profit to averageoperating (%) 43,1 21,6 23,7assets ---------------- --------- -------- --------------------------Return on average shareholders' (%) 41,6 22,8 23,2equity ---------------- --------- -------- --------------------------Return on average capital (%) 54,8 26,4 27,3employed ---------------- --------- -------- --------------------------Interest cover - EBITDA 49,9 20,2 21,6---------------- ---------------- --------- -------- ----------Net asset value per ordinary (R) 108,7 89,5 95,3share ---------------- --------- -------- --------------------------Net debt to total capital (%) 0,0 13,3 9,9employed ---------------- --------- -------- --------------------------Interest-bearing debt toshareholders' (%) 5,2 22,1 20,5equity ---------------- --------- -------- --------------------------Cost of sales per total Pt oz (R) 7 832 6 271 6 587sold ---------------- --------- -------- --------------------------Cash operating cost perequivalent Ptoz (excluding ounces from (R) 6 041 5 426 5 523purchased ---------------- --------- -------- ----------concentrate and associated costs)----------------Cash operating cost per refined (R) 5 672 5 152 5 670Pt oz ---------------- --------- -------- -------------------------- Equivalent refinedplatinum production (thousands) (oz) 1 257,4 1 196,2 2 503,7------------ --------------- ---------- ----------- ------------Gain in smelting andrefining pipeline (thousands) (oz) 39,9 73,1 73,1------------ --------------- ---------- ----------- ------------Refined platinumproduction (thousands) (oz) (1 344,9) (1 268,5) (2 453,2)------------ --------------- ---------- ----------- ------------Mining (thousands) (oz) (1 199,6) (1 166,0) (2 236,1)------------ --------------- ---------- ----------- ------------Purchase of concentrate (thousands) (oz) (145,3) (102,5) (217,1)------------ --------------- ---------- ----------- ------------Platinum pipelinemovement (thousands) (oz) (47,6) 0,8 123,6------------ --------------- ---------- ----------- ------------ Anglo Platinum Limited and its Subsidiaries ("Anglo Platinum") (Incorporated inthe Republic of South Africa)(Registration number 1946/022452/06)JSE Codes: AMS; AMSP ISIN: ZAE000013181; ZAE000054474A member of the Anglo American plc group Registered Office55 Marshall Street, Johannesburg, 2001(P.O. Box 62179, Marshalltown, 2107)Facsimile +27 11 373-5111Telephone +27 11 373-6111 South African registrarsComputershare Investor Services 2004 (Pty) Limited(Registration No. 2000/006082/06)70 Marshall Street, Johannesburg, 2001(P.O. Box 61051, Marshalltown, 2107)Facsimile +27 11 836-0792/6145Telephone +27 11 370-5000 London SecretariesAnglo American Services (UK) Limited,20 Carlton House Terrace, London, SW1Y 5AN, EnglandFacsimile +44 207 968-8755Telephone +44 207 968-8888 United Kingdom RegistrarsCapita IRG plcThe Registry, 34 Beckenham RoadBeckenham, Kent, BR3 4TU, EnglandFacsimile +44 870 162-3100Telephone +44 208 639-2342Detailed results are available on the Internet at: http://www.angloplatinum.comE-mail enquiries should be directed to:[email protected] DIRECTORS AND COMPANY SECRETARY EXECUTIVE DIRECTORS: R Havenstein (Chief Executive Officer), J M Halhead(British), N B Mbazima (Zambian) R G Mills, A M Thebyane, R H H van Kerckhoven(Belgian), D G Wanblad, A I Wood (British).NON-EXECUTIVE DIRECTORS: B E Davison (Chairman), D D Barber, P M Baum, D AHathorn, Sir S E Jonah (Ghanaian), W A Nairn, A E Redman (British), A J Trahar. INDEPENDENT NON-EXECUTIVE DIRECTORS: T A Wixley (Deputy Chairman), C B Brayshaw,R M W Dunne (British), B A Khumalo, T H Nyasulu.ALTERNATE DIRECTORS: A H Calver (British), R Pilkington, C B Sheppard, J GWilliams (British).Company Secretary: J D Meyer. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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