AngloGold Limited
Report to shareholders
for the quarter and six months ended 30 June 2003
Group results for the quarter *
* Operating profit1 down 4% to $140m and total cash costs up 6% to $223/oz,
due to stronger currencies against the US dollar in operating regions
* Operations steady, with higher volume mined offsetting lower grades -
Production increased 2% to 1.43Moz
* Received gold price2 up 3% to $354/oz
* Further 7% reduction in hedge book to 8.73Moz
* and for the six months
* Headline earnings3 down 20% to $140m or 63 US cents per share
* Lower grades and stronger currencies reduced operating profit to $286m and
increased total cash costs to $217/oz
* Gold production slightly higher at 2.84Moz
* Interim dividend declared at R3.75 or 51 US cents per share
Quarter Quarter Six Six Quarter Quarter Six Six
months months months months
ended ended ended ended
ended ended ended ended
June March June March
June June June June
2003 2003 2003 2003
2003 2002 2003 2002
Rand / Metric Dollar / Imperial
Gold
Produced - kg / oz (000) 44,613 43,605 88,218 87,185 1,434 1,402 2,836 2,803
Price received2 - R/kg / $ 87,983 91,962 89,948 104,305 354 344 349 296
/oz
Total cash costs - R/kg / 55,502 56,100 55,797 55,085 223 210 217 156
$/oz
Total production costs - R 65,654 66,520 66,082 68,629 264 248 256 195
/kg / $/oz
Operating profit - R / $ 1,094 1,208 2,302 3,460 142 145 287 316
million
Operating profit excluding 1,082 1,216 2,298 3,383 140 146 286 309
unrealised non-hedge
derivatives - R / $
million
Net profit - R / $ million 444 547 991 1,638 57 66 123 150
Headline earnings - R / $ 513 605 1,118 1,973 66 73 139 180
million
Headline earnings before 516 614 1,130 1,932 66 74 140 176
unrealised non-hedge
derivatives - R / $
million
Capital expenditure - R / 538 488 1,026 1,297 69 59 128 118
$ million
Earnings per ordinary
share
Basic - cents per share 199 246 445 740 26 30 55 68
Headline - cents per share 230 272 502 891 30 33 62 81
Headline before unrealised 232 276 507 872 30 33 63 79
non-hedge derivatives -
cents per share
Dividends - cents per 375 675 51 64
share
Note: 1 Operating profit excluding unrealised non-hedge derivatives
2 Price received including realised non-hedge derivatives
3 Headline earnings before unrealised non-hedge derivatives
$ represents US dollar, unless otherwise stated
Letter from Chairman and CEO
Dear Shareholder
AngloGold has, for a second successive quarter, produced results which are
operationally sound, with gold production 2% higher, despite the expected lower
grades at many of the operations. Again this quarter, as we anticipated in our
report for the first three months of 2003, the company's results were adversely
affected by local currency strength in seven of the eight countries in which we
do business - total cash costs rose 6% to $223/oz and operating profit was 4%
lower at $140m. Headline earnings were 11% down, to $66m for the quarter.
The effects of the lower grade and stronger currencies were moderated by a
higher received price for gold, which was 3% higher, at $354/oz, despite the
marginal decline in the average spot gold price for the quarter. Going forward,
we expect the company's prudent management of its hedge book, which declined by
a further 610,000oz this quarter, to ensure that the price we receive for gold
will continue to be close to the dollar spot price. The Board decided to change
the targeted level of hedging commitments from 50% to 30% of five years'
production. It was also confirmed that management would continue to have the
latitude to put new contracts in place where circumstances make this prudent.
We were disappointed with the company's safety performance during the quarter,
as reflected in both our fatal accident and lost time injury frequencies.
Workplace safety remains a priority and operating management has measures in
place to improve our performance in this critical area.
Looking ahead to the operations for the rest of the year, we expect performance
to improve as the grade at Geita strengthens and production levels at CC&V
increase during the third and fourth quarters.
This year's biennial wage negotiations for our South African operations have
now been completed. The agreement will have the effect of increasing employment
costs at these operations by approximately 10% per annum, including the
provisions for increased leave and employer contributions to retirement
funding. It remains management's commitment, as in previous years to ensure
that this increase does not lead to a material increase in unit labour costs on
AngloGold's South African operations, through continuing productivity
improvement programmes, which have seen individual employee productivity
improve by 18% over the last five years.
We understand that Ashanti Goldfields has been advised by the Government of
Ghana that it has appointed a consortium led by Soci�t� G�n�ral� to act as
advisors to the Government as a shareholder, holder of the golden share in
Ashanti and as a regulator of the mining industry in Ghana, and to assist the
Government in arriving at a decision on the proposed merger of Ashanti and
AngloGold.
As we note elsewhere in this report, AngloGold and our partners in the Jerritt
Canyon joint venture, Meridian Gold, have concluded the sale of Jerritt Canyon
to Queenstake Resources. With the consequent rationalising of AngloGold's
regional activities, our offices in Denver are being right sized. Jim Komadina,
who had the position of President, AngloGold North America, has left the
company. We take this opportunity to thank Jim for his contribution to
AngloGold and wish him well in the future.
AngloGold has declared an interim dividend of 375 South African cents per
share, or 51 US cents per share1 (the interim dividend paid in 2002 was 675
South African cents per share, or 63.8 US cents per share). This level of
dividend is consistent with AngloGold's established practice of paying out a
significant proportion of its earnings to shareholders, after providing for its
organic growth objectives.
Russell Edey Bobby Godsell
Chairman Chief Executive
Officer
30 July 2003
1 See note 5 on page 9
Operations at a glance
for the quarter ended 30 June 2003
Price received Production Total cash EBITDA Operating
costs profit
$/oz % oz % $/oz % $m % $m %
Variance (000) Variance Variance Variance Variance
** ** ** ** **
Great Noligwa 364 6 196 8 214 4 29 7 27 8
TauTona 357 4 161 6 186 2 27 17 25 14
Morila* 337 (1) 95 - 94 12 23 (4) 17 (6)
Mponeng 358 5 128 5 233 7 16 14 12 20
Cripple Creek & 344 6 78 24 188 - 14 56 3 200
Victor*
Cerro Vanguardia 343 3 49 (18) 152 27 12 (20) 6 (33)
*
Morro Velho 357 (6) 55 4 143 13 12 (14) 9 (18)
Sunrise Dam 366 (2) 84 (12) 244 23 12 (8) 6 (25)
Kopanang 364 6 115 (8) 268 12 11 (15) 9 (25)
Tau Lekoa 363 5 82 1 271 10 7 - 6 -
Serra Grande* 357 (5) 24 - 104 12 7 17 5 -
Sadiola* 347 (3) 39 (3) 213 3 6 - 3 (25)
Geita* 307 - 62 (3) 230 6 5 - 3 (20)
Yatela* 346 (3) 30 43 198 (3) 4 33 2 68
Jerritt Canyon* 346 7 56 10 270 - 3 50 (2) 33
Union Reefs 362 (3) 28 47 233 (40) 3 400 3 400
Navachab 346 - 21 17 220 (8) 3 (25) 2 (50)
Ergo 351 5 49 (14) 351 22 (1) (200) (1) (200)
Savuka 358 4 53 10 384 (4) (1) 67 (2) (100)
Other 29 (9) (24) (100) 7 (42)
AngloGold Group 354 3 1,434 2 223 6 168 (1) 140 (4)
* Attributable
** Variance June 2003 quarter on March 2003 quarter - Increase (decrease)
Review of the gold market
The closing spot price of gold of $345/oz for this quarter was US$8 higher than
the opening price; the average price for the quarter of $347/oz was slightly
lower than the average for the previous quarter. These price markers conceal an
active quarter, however, and the gold price within the quarter was again
volatile, reaching a high of $374/oz, and covering a range of $56/oz. Currency
markets showed similar volatility, with the US dollar reaching an all-time low
against the Euro of $1.19, or almost 10% weaker than its opening rate of $1.09
to the Euro. The Australian dollar was similarly active, gaining 10% against
the US dollar, whilst the rand exchange rate against the US dollar ranged by
almost 20% between its strongest point of R7.02 and the weakest rate of R8.33
to the US currency.
The Rand gold price covered a range of almost 30% between the high for the
quarter of R97,240/kg and the low of R75,375/kg. The local price closed the
quarter close to the lows at R82,770/kg.
Activity in the market reflected ongoing interest in gold in a period of
widespread financial, economic and political uncertainty. With the exception of
the spur to the spot price at the time of the announcement of Newmont Mining's
offer of settlement to the Yandal creditors, the gold price was driven mostly
by movement of the US dollar against the Euro. The weakening dollar has been
good for a range of commodities, including base metals and oil, but investor
and speculator interest has been particularly focussed on gold as the most
consistent beneficiary of the weaker dollar.
Expectations of the gold price for the next 12 to 24 months are tied closely to
the fate of the US dollar and, more broadly, of the US economy. As the dollar
weakens, so the gold price is expected to rise.
The overwhelming consensus of commentators on currency markets is for a
continued weakening of the US currency, specifically against the Euro, with
some major players looking for exchange rates as low as $1.40 against the Euro
by the end of 2004. These forecasts seem to ignore some of the fundamental
weaknesses in the European economies today (particularly as a stronger Euro
will continue to squeeze growth in Europe), which would argue against further
strengthening of the common European currency. However, the reality is that
many of the Asian economies - Japan and China especially - are resisting the
re-valuation of their currencies against the dollar by actively buying US
bonds, and as a result the Euro might well have to bear a disproportionate
burden of the market's concerns over the US dollar. For that reason, the Euro
could move to an overvalued exchange rate against the dollar.
Whilst the weakening of the US dollar has been the indicator for gold price
movements, the vehicle for effecting those price movements has been the New
York Comex. Speculators and investors who trade gold on the Comex have so far
shown a consistent pattern in gold buying, with a core net long holding since
2001 of some 4-5Moz, and opportunistic trading up to aggregate net long
positions of 10-14Moz. It will be important for gold that Comex continue to
support the price by sustained buying as the economic indicators continue to
favour gold.
The physical market continues to react negatively to higher prices. Ongoing
spot price volatility has also not helped the physical markets to adjust their
buying thresholds to new price ranges. During May, Indian imports all but
ceased, and offtake is unlikely to resume until post-monsoon seasonal buying in
August. Italian offtake for the first quarter of 2003 declined by 27%
year-on-year, and there are indications that consumer offtake of gold jewellery
in the USA has been weak.
This fall in offtake has been offset by sustained de-hedging from producers.
After a reduction of some 430t in net gold producer hedge positions during
2002, the first quarter of 2003 saw hedges fall by a further 143t. This has
provided an important offset to weaker physical demand, as well as assisting to
balance sharply higher flows of scrap gold onto the physical markets throughout
2002. This was particularly so in the first quarter of 2003, when scrap flows
reached a rate equivalent to almost 1,000tpa. The current levels of scrap sales
or recycling of gold exceed by a significant margin the previous record levels
of selling seen during the Asian currency crises of late 1997 - 1998. With
producer sales reduced by de-hedging, these scrap sales have been absorbed by
the market, but some long-term equilibrium will be required in the physical
market in order for this level of selling not to weigh on the price of the
metal.
The currency markets continue to be dominated by movements in the value of the
US dollar. During May, the US currency reached an all time low of $1.19 to the
Euro. Although it closed the quarter at $1.15 to the Euro, at its weakest it
had lost over 40% in value against the European currency over the past 24
months. As observed above, expectations are that this devaluation will
continue. The weakness of the US dollar translated to a strengthening of both
the Australian dollar, which touched A$0.67 to the US currency late in the
quarter, and to the rand, which might otherwise have been expected to weaken on
the back of favourable corrections to South African consumer inflation rate
measurement, and a rate cut of 150 basis points during the quarter. As it was,
the South African currency ended the quarter at R7.55 to the dollar, compared
with an intra-quarter low of R8.33. As a result, South African producers remain
under pressure as the strong local currency continues to impact negatively on
the competitiveness of local production costs.
Hedging
As at 30 June 2003, the net delta hedge position of AngloGold was 8.73Moz,
0.61Moz or 18.9t lower than the hedge position at 31 March 2003. The
marked-to-market valuation of this position as at 30 June 2003 was negative
$179m. These figures reflect the ongoing reduction in forward price commitments
of the company.
At a meeting of the AngloGold board on 30 July 2003, a decision was taken to
review the current hedging upper limit of 50% of five years gold production. In
the light of the enduring strength of the dollar spot gold price and the
stability of AngloGold's operations, it has been decided to change the targeted
level of forward-price commitments to 30% of five years production. In
addition, it was confirmed that management would continue to have the latitude
to put new forward-pricing contracts in place where the gold price and
operating circumstances make this necessary or prudent.
Hedge position
As at 30 June 2003, the group had outstanding, the following forward-pricing
commitments against future production. The total net delta tonnage of the hedge
on this date was 8.73Moz or 271.6t (at 31 March 2003: 9.34Moz or 290.5t).
The marked-to-market value of all hedge transactions making up the hedge
positions was a negative $179.3m (negative R1.35bn) as at 30 June 2003 (as at
31 March 2003: negative $251.5m - negative R1.97bn). These values were based on
a gold price of $346/oz, exchange rates of R/$7.55 and A$/$0.6761 and the
prevailing market interest rates and volatilities at the time.
As at 30 July 2003, the marked-to-market value of the hedge book was a negative
$354.6m (negative R2.61bn), based on a gold price of $358/oz and exchange rates
of R/$7.37 and A$/$0.6569 and the prevailing market interest rates and
volatilities at the time.
These marked-to-market valuations are in no way predictive of the future value
of the hedge position nor of future impact on the revenue of the company. The
valuation represents the cost of buying all hedge contracts at the time of
valuation, at market prices and rates available at the time.
Year 2003 2004 2005 2006 2007 2008-2012 Total
DOLLAR GOLD
Forward Amount 16,811 26,576 19,862 18,974 25,878 108,101
contracts (kg)
$ per oz $311 $324 $333 $337 $355 $333
Put options Amount 1,266 3,906 757 563 728 7,220
purchased (kg)
$ per oz $383 $376 $291 $291 $292 $354
*Delta 890 2,302 110 90 119 3,511
(kg)
Put options Amount 12,006 10,886 22,892
sold (kg)
$ per oz $328 $340 $334
*Delta 3,307 4,065 7,372
(kg)
Call options Amount 1,267 572 1,839
purchased (kg)
$ per oz $339 $360 $345
*Delta 795 256 1,051
(kg)
Call options Amount 16,289 9,250 16,360 14,681 14,308 54,245 125,133
sold (kg)
$ per oz $349 $337 $322 $329 $336 $363 $347
*Delta 8,005 5,716 11,614 10,030 9,568 35,115 80,048
(kg)
RAND GOLD
Forward Amount 4,593 11,076 9,078 4,500 4,541 3,732 37,520
contracts (kg)
Rand per R60,137 R94,277 R116,891 R96,436 R114,915 R119,580 R100,843
kg
Put options Amount 1,875 1,875 1,875 1,875 7,500
purchased (kg)
Rand per R93,602 R93,602 R93,602 R93,602 R93,602
kg
*Delta 1,125 749 575 439 2,888
(kg)
Put options Amount
sold (kg)
Rand per
kg
*Delta
(kg)
Call options Amount 1,244 1,244
purchased (kg)
Rand per R77,162 R77,162
kg
*Delta 1,244 1,244
(kg)
Call options Amount 5,909 4,688 4,687 4,688 2,986 11,944 34,902
sold (kg)
Rand per R100,045 R115,284 R131,944 R132,647 R173,119 R209,288 R154,391
kg
*Delta 1,176 1,273 1,448 1,744 379 2,615 8,635
(kg)
Year 2003 2004 2005 2006 2007 2008-2012 Total
A DOLLAR GOLD
Forward Amount 6,853 5,443 6,221 9,331 8,398 13,343 49,589
contracts (kg)
A$ per A$501 A$549 A$683 A$664 A$635 A$654 A$624
oz
Put options Amount
purchased (kg)
A$ per
oz
*Delta
(kg)
Put options Amount 933 933
sold (kg)
A$ per A$530 A$530
oz
*Delta 705 705
(kg)
Call options Amount 3,888 3,110 6,221 3,732 11,197 28,148
purchased (kg)
A$ per A$701 A$724 A$673 A$668 A$702 A$693
oz
*Delta 13 382 1,994 1,408 5,186 8,983
(kg)
Call options Amount 6,532 6,532
sold (kg)
A$ per A$634 A$634
oz
*Delta 624 624
(kg)
Total net Delta 17,202 39,050 55,239 44,002 40,571 75,498 271,562
gold: (kg)
Delta 553,058 1,255,473 1,775,977 1,414,706 1,304,399 2,427,312 8,730,925
(oz)
The following table indicates the group's currency hedge position at 30 June
2003
Year 2003 2004 2005 2006 2007 2008-2012 Total
RAND DOLLAR
(000)
Forward Amount
contracts ($)
Rand per
$
Put options Amount
purchased ($)
Rand per
$
*Delta
($)
Put options Amount
sold ($)
Rand per
$
*Delta
($)
Call options Amount
purchased ($)
Rand per
$
*Delta
($)
Call options Amount 20,000 20,000
sold (kg)
Rand per R7.97 R7.97
$
*Delta 5,802 5,802
($)
A DOLLAR
(000)
Forward Amount 29,428 29,275 10,847 69,550
contracts ($)
$ per A$ A$0.59 A$0.59 A$0.51 A$0.58
* The Delta position indicated above reflects the nominal amount of the option
multiplied by the mathematical probability of the option being exercised. This
is calculated using the Black-Scholes option formula with the ruling market
prices, interest rates and volatilities as at 30 June 2003.
Notes
The results included herein for the quarter and six months ended 30 June 2003,
which are unaudited, are prepared using the accounting policies which are in
accordance with International Financial Reporting Standards (IFRS) and South
African Generally Accepted Accounting Practices (SA GAAP).
1. During the quarter, 21,400 ordinary shares were allotted in terms of the
AngloGold Share Incentive Scheme.
2. Orders placed and outstanding on capital contracts as at 30 June 2003
totalled R1,123m (31 March 2003: R927m), equivalent to $150m (31 March 2003:
$117m) at the rate of exchange ruling on that date.
3. Although AngloGold holds a 66.7% interest in Cripple Creek & Victor Gold
Mining Company Limited, it is currently entitled to receive 100% of the
cash flow from the operation until the loan, extended to the joint venture
by AngloGold North America Inc., is repaid.
* During the quarter, AngloGold made the following announcements:
4.1 On 16 May 2003, AngloGold issued a cautionary announcement to shareholders
in which it confirmed that the boards of Ashanti Goldfields Company Limited and
AngloGold were in discussion regarding the proposed merger of the two companies
at a ratio of 26 AngloGold shares for every 100 Ashanti ordinary shares and
global depositary securities. These proposals may or may not lead to a proposal
being made for the entire issued share capital of Ashanti. This announcement
was followed by a further cautionary announcement on 13 June 2003 in which
AngloGold advised that the Government of Ghana, a substantial shareholder and
regulator of Ashanti, was taking appropriate professional advice in considering
the proposed merger.
4.2 On 23 May 2003, AngloGold announced that it had signed an agreement to sell
its wholly-owned Amapari Project to Minera��o Pedra Branca do Amapari, for the
total consideration of $18.2m. The Amapari project is located in the State of
Amap�, North Brazil. Since acquiring the property from Minorco, the Company has
sought to prove up additional reserve ounces in order to get it to a size and
life that would justify the management resources needed to run it effectively.
This was not achieved and AngloGold, on receiving a fair offer from a purchaser
who could constructively turn this orebody to account, agreed to sell.
4.3 On 6 June 2003, AngloGold announced that it had finalised the sale of its
49% stake in the Gawler Craton Joint Venture, including the Tunkillia project
located in South Australia to Helix Resources Limited. Consideration for the
sale comprised cash of $500,000 (A$750,000), 1.25m fully-paid Helix shares
issued at A$0.20 per share and 1.25m Helix options exercisable at A$0.25 per
option before 30 November 2003 with an additional payment of $335,000
(A$500,000) deferred to the delineation of a mineable resource of 350,000
ounces. Helix's proposed acquisition of AngloGold's rights to the Tarcoola
Project, 60km to the south, was excluded from the final agreement. This
resulted in a restructure of the original agreement terms, as announced on
8 April 2003.
4.4 On 2 July 2003, AngloGold announced that it had concluded the sale of its
interest in the Jerritt Canyon Joint Venture to Queenstake Resources USA Inc.
effective 30 June 2003. This followed negotiations originally announced on
27 February 2003. Queenstake paid the Jerritt Canyon Joint Venture partners,
AngloGold and Meridian Gold, $1.5m in cash and 32m shares issued by a
subsidiary, Queenstake Resources Limited, with $6m in deferred payments and $4m
in future royalty payments. Queenstake accepted full closure and reclamation
liabilities. AngloGold's shareholding represents approximately 9.2% of
Queenstake Resources Limited's issued share capital and, although it does not
currently have any intention to acquire additional shares in Queenstake,
depending on the market price of Queenstake shares, general economic and
industry conditions and other factors, and subject to applicable securities
laws, AngloGold may either sell its shares in Queenstake or acquire additional
shares.
5. Dividend:
The directors have today declared Interim Dividend No. 94 of 375 (Interim
Dividend No. 92: 675) South African cents per ordinary share for the six months
ended 30 June 2003. In compliance with the requirements of STRATE, the salient
dates for payment of the dividend are as follows:
To holders of ordinary shares and to holders of CHESS Depositary Interests
(CDIs)
Each CDI represents one-fifth of an ordinary share.
2003
Currency conversion date for UK pounds and Thursday 7 August
Australian dollars
Last date to trade ordinary shares cum dividend Friday 15 August
Last date to register transfers of certificated Friday 15 August
securities cum dividend
Ordinary shares trade ex dividend Monday 18 August
Record date Friday 22 August
Payment date Friday 29 August
On the payment date, dividends due to holders of certificated securities
on the South African share register will either be electronically
transferred to shareholders' bank accounts or, in the absence of suitable
mandates, dividend cheques will be posted to such shareholders.
Dividends in respect of dematerialised shareholdings will be credited to
shareholders' accounts with the relevant CSDP or broker.
To comply with the further requirements of STRATE, between Monday,
18 August 2003 and Friday, 22 August 2003, both days inclusive, no
transfers between the South African, United Kingdom and Australian share
registers will be permitted and no ordinary shares pertaining to the South
African share register may be dematerialised or rematerialised.
To holders of American Depositary Shares
Each American Depositary Share (ADS) represents one ordinary share.
2003
Ex dividend on New York Stock Exchange Wednesday 20 August
Record date Friday 22 August
Approximate date for currency conversion Friday 29 August
Approximate payment date of dividend Friday 12 September
Assuming an exchange rate of R7.305/$1, the dividend payable on an ADS is
equivalent to 51 US cents. This compares with the interim dividend of
63.81 US cents per ADS paid on 10 September 2002. However, the actual rate
of payment will depend on the exchange rate on the date for currency
conversion.
6. This report contains a summary of the results of AngloGold's operations. A
detailed report appears on the Internet and is obtainable in printed format
from the investor relations contacts, whose details, along with the website
address, appear at the end of this report.
By order of the board
R P EDEY R M GODSELL
Chairman Chief Executive Officer
30 July 2003
GROUP INCOME
STATEMENT
Quarter Quarter Six months Six months
ended ended ended ended
June March June June
SA Rand 2003 2003 2003 2002
million
Gold income 3,907 3,938 7,845 8,543
Cost of sales (2,932) (2,885) (5,817) (5,880)
Cash operating 2,429 2,378 4,807 4,736
costs
Other cash 63 70 133 117
costs
Total cash 2,492 2,448 4,940 4,853
costs
Retrenchment 2 3 5 25
costs
Rehabilitation 25 24 49 26
and other
non-cash costs
Production 2,519 2,475 4,994 4,904
costs
Amortisation 444 449 893 1,175
of mining
assets
Total 2,963 2,924 5,887 6,079
production
costs
Inventory (31) (39) (70) (199)
change
975 1,053 2,028 2,663
Non-hedge 119 155 274 797
derivatives
Operating 1,094 1,208 2,302 3,460
profit *
Corporate (82) (85) (167) (113)
administration
and other
expenses
Market (25) (40) (65) (88)
development
costs
Exploration (72) (75) (147) (143)
costs
Interest 63 71 134 204
receivable
Other net (66) (31) (97) (12)
expense
Finance costs (71) (69) (140) (260)
Abnormal item - - - (102)
- settlement
of claim
Profit before 841 979 1,820 2,946
exceptional
items
Amortisation (56) (58) (114) (153)
of goodwill
Impairment of (95) - (95) -
mining assets
Profit (loss) 56 - 56 (137)
on disposal of
assets
Termination of - - - 2
retirement
benefit plans
Profit on 746 921 1,667 2,658
ordinary
activities
before
taxation
Taxation (266) (338) (604) (955)
Normal (151) (245) (396) (740)
taxation
Deferred (126) (92) (218) (179)
taxation
Deferred tax (15) (1) (16) (36)
on unrealised
non-hedge
derivatives
Taxation on - - - 47
abnormal item
Taxation on 26 - 26 (47)
exceptional
items
Profit on 480 583 1,063 1,703
ordinary
activities
after taxation
Minority (36) (36) (72) (65)
interest
Net profit 444 547 991 1,638
* Operating 1,082 1,216 2,298 3,383
profit
excluding
unrealised
non-hedge
derivatives
Headline
earnings
The net profit
has been
adjusted by
the following
to arrive at
headline
earnings:
Net profit 444 547 991 1,638
Amortisation 56 58 114 153
of goodwill
Impairment of 95 - 95 -
mining assets
(Profit) loss (56) - (56) 137
on disposal of
assets
Termination of - - - (2)
retirement
benefit plans
Taxation on (26) - (26) 47
exceptional
items
Headline 513 605 1,118 1,973
earnings
Unrealised (12) 8 (4) (77)
non-hedge
derivatives
Deferred tax 15 1 16 36
on unrealised
non-hedge
derivatives
Headline 516 614 1,130 1,932
earnings
before
unrealised
non-hedge
derivatives
Earnings per
ordinary share
- cents
- Basic 199 246 445 740
- Headline 230 272 502 891
- Headline 232 276 507 872
before
unrealised
non-hedge
derivatives
Dividends
- Rm 835 1,506
- cents per 375 675
share
The results
have been
prepared in
accordance
with
International
Financial
Reporting
Standards
(IFRS)
GROUP INCOME
STATEMENT
Quarter Quarter Six months Six months
ended ended ended ended
June March June June
US Dollar 2003 2003 2003 2002
million
Gold income 505 472 977 779
Cost of sales (380) (346) (726) (537)
Cash operating 314 286 600 432
costs
Other cash 9 8 17 11
costs
Total cash 323 294 617 443
costs
Retrenchment 1 - 1 2
costs
Rehabilitation 3 3 6 3
and other
non-cash costs
Production 327 297 624 448
costs
Amortisation 57 54 111 107
of mining
assets
Total 384 351 735 555
production
costs
Inventory (4) (5) (9) (18)
change
125 126 251 242
Non-hedge 17 19 36 74
derivatives
Operating 142 145 287 316
profit *
Corporate (11) (10) (21) (11)
administration
and other
expenses
Market (3) (5) (8) (8)
development
costs
Exploration (9) (9) (18) (13)
costs
Interest 9 8 17 19
receivable
Other net (11) (3) (14) -
expense
Finance costs (9) (8) (17) (24)
Abnormal item - - - (10)
- settlement
of claim
Profit before 108 118 226 269
exceptional
items
Amortisation (7) (7) (14) (14)
of goodwill
Impairment of (12) - (12) -
mining assets
Profit (loss) 7 - 7 (12)
on disposal of
assets
Termination of - - - -
retirement
benefit plans
Profit on 96 111 207 243
ordinary
activities
before
taxation
Taxation (34) (41) (75) (87)
Normal (20) (29) (49) (72)
taxation
Deferred (15) (12) (27) (13)
taxation
Deferred tax (2) - (2) (3)
on unrealised
non-hedge
derivatives
Taxation on - - - 5
abnormal item
Taxation on 3 - 3 (4)
exceptional
items
Profit on 62 70 132 156
ordinary
activities
after taxation
Minority (5) (4) (9) (6)
interest
Net profit 57 66 123 150
* Operating 140 146 286 309
profit
excluding
unrealised
non-hedge
derivatives
Headline
earnings
The net profit
has been
adjusted by
the following
to arrive at
headline
earnings:
Net profit 57 66 123 150
Amortisation 7 7 14 14
of goodwill
Impairment of 12 - 12 -
mining assets
(Profit) loss (7) - (7) 12
on disposal of
assets
Termination of - - - -
retirement
benefit plans
Taxation on (3) - (3) 4
exceptional
items
Headline 66 73 139 180
earnings
Unrealised (2) 1 (1) (7)
non-hedge
derivatives
Deferred tax 2 - 2 3
on unrealised
non-hedge
derivatives
Headline 66 74 140 176
earnings
before
unrealised
non-hedge
derivatives
Earnings per
ordinary share
- cents
- Basic 26 30 55 68
- Headline 30 33 62 81
- Headline 30 33 63 79
before
unrealised
non-hedge
derivatives
Dividends
- $m 114 142
- cents per 51 64
share
The results
have been
prepared in
accordance
with
International
Financial
Reporting
Standards
(IFRS)
GROUP BALANCE
SHEET
June March June June March June
2003 2003 2002 2003 2003 2002
SA Rand US
million Dollar
million
Non-current assets
18,283 18,902 20,382 Mining assets 2,443 2,394 1,965
2,980 3,023 4,093 Goodwill 398 383 395
155 156 171 Investments in associates 21 20 17
219 182 178 Other investments 29 23 17
292 286 227 AngloGold Environmental 39 36 22
Rehabilitation Trust
592 596 1,550 Derivatives 79 75 149
565 469 492 Other non-current assets 75 59 47
23,086 23,614 27,093 3,084 2,990 2,612
Current assets
1,954 2,162 1,251 Derivatives 261 274 121
1,523 2,107 2,575 Trade and other receivables 203 267 248
1,778 1,818 1,975 Inventories 238 230 190
67 3 4 Current portion of other 9 - -
non-current assets
2,330 2,686 3,508 Cash and cash equivalents 311 340 338
7,652 8,776 9,313 1,022 1,111 897
30,738 32,390 36,406 Total assets 4,106 4,101 3,509
EQUITY AND LIABILITIES
12,146 11,717 13,498 Shareholders' equity 1,622 1,484 1,300
304 325 317 Minority interests 41 41 31
12,450 12,042 13,815 1,663 1,525 1,331
Non-current liabilities
4,122 6,643 7,595 Borrowings 551 841 732
1,798 1,977 2,053 Provisions 240 250 198
3,953 3,767 2,919 Deferred taxation 528 477 282
1,200 1,398 3,464 Derivatives 160 177 334
11,073 13,785 16,031 1,479 1,745 1,546
Current liabilities
2,294 2,472 2,025 Derivatives 307 313 195
2,181 2,205 2,339 Trade and other payables 291 279 225
2,547 616 1,174 Current portion of 340 78 113
borrowings
193 1,270 1,022 Taxation 26 161 99
7,215 6,563 6,560 964 831 632
30,738 32,390 36,406 Total equity and 4,106 4,101 3,509
liabilities
The results
have been
prepared in
accordance
with
International
Financial
Reporting
Standards
(IFRS)
GROUP CASH
FLOW
STATEMENT
Quarter Quarter Six Quarter Quarter Six
months months
ended ended ended ended ended ended
June March June June March June
2003 2003 2003 2003 2003 2003
SA Rand US
million Dollar
million
Cash flows from
operating
activities
1,106 1,477 2,583 Cash generated from 130 181 311
operations
53 62 115 Interest received 7 7 14
(33) (50) (83) Environmental (4) (6) (10)
contributions and
expenditure
- 9 9 Dividends received - 1 1
from associates
(58) (86) (144) Finance costs (8) (10) (18)
681 - 681 Recoupment tax 91 - 91
received: Free
State assets
(681) - (681) Recoupment tax (91) - (91)
paid: Free State
assets
(547) (81) (628) Taxation paid (62) (10) (72)
521 1,331 1,852 Net cash inflow 63 163 226
from operating
activities
Cash flows from
investing
activities
(538) (488) (1,026) Capital expenditure (69) (59) (128)
14 - 14 Proceeds from 2 - 2
disposal of mining
assets
(3) - (3) Investments - - -
acquired
8 - 8 Disposal of 1 - 1
subsidiary
(6) (2) (8) Loans advanced (1) - (1)
7 - 7 Repayment of loans 1 - 1
advanced
(518) (490) (1,008) Net cash outflow (66) (59) (125)
from investing
activities
Cash flows from
financing
activities
3 17 20 Proceeds from issue - 2 2
of share capital
(1) (1) (2) Share issue - - -
expenses
75 73 148 Proceeds from 9 9 18
borrowings
(305) (108) (413) Repayment of (38) (13) (51)
borrowings
(38) (1,522) (1,560) Dividends paid (5) (185) (190)
(266) (1,541) (1,807) Net cash outflow (34) (187) (221)
from financing
activities
(263) (700) (963) Net decrease in (37) (83) (120)
cash and cash
equivalents
(93) (158) (251) Translation 8 10 18
2,686 3,544 3,544 Opening cash and 340 413 413
cash equivalents
2,330 2,686 2,330 Closing cash and 311 340 311
cash equivalents
The results
have been
prepared in
accordance
with
International
Financial
Reporting
Standards
(IFRS)
NOTES TO THE
CASH FLOW
STATEMENT
Quarter Quarter Six Quarter Quarter Six
months months
ended ended ended ended ended ended
June March June June March June
2003 2003 2003 2003 2003 2003
SA Rand US Dollar
million million
Cash
generated
from
operations
746 921 1,667 Profit on 96 111 207
ordinary
activities
before
taxation
Adjusted
for:
(15) (58) (73) Non-cash (2) (7) (9)
movements
444 449 893 Amortisation 57 54 111
of mining
assets
(63) (71) (134) Interest (9) (8) (17)
receivable
26 44 70 Other net 4 5 9
income
71 69 140 Finance 9 8 17
costs
(26) 11 (15) Movement on (3) 1 (2)
non-hedge
derivatives
56 58 114 Amortisation 7 7 14
of goodwill
95 - 95 Impairment 12 - 12
of mining
assets
(56) - (56) Profit on (7) - (7)
disposal of
assets
(172) 54 (118) Movement in (34) 10 (24)
working
capital
1,106 1,477 2,583 130 181 311
Movement in
working
capital:
(99) 84 (15) (Increase) (28) (11) (39)
decrease in
trade and
other
receivables
26 30 56 (Increase) (9) (15) (24)
decrease in
inventories
(99) (60) (159) Increase 3 36 39
(decrease)
in trade and
other
payables
(172) 54 (118) (34) 10 (24)
STATEMENT OF
CHANGES IN
SHAREHOLDERS'
EQUITY
Ordinary Non - Foreign Other Retained Total
share distributable currency comprehensive earnings
capital reserves translation income
and
premium
SA Rand
million
Balance at 31 9,607 138 360 (1,583) 3,853 12,375
December 2002
Movements on 666 666
other
comprehensive
income
Net profit 991 991
Dividends (1,500) (1,500)
paid
Ordinary 18 18
shares issued
Translation (540) 135 1 (404)
Balance at 30 9,625 138 (180) (782) 3,345 12,146
June 2003
US Dollar
million
Balance at 31 1,120 16 43 (185) 449 1,443
December 2002
Movements on 94 - 94
other
comprehensive
income
Net profit 123 123
Dividends (183) (183)
paid
Ordinary 2 2
shares issued
Translation 164 2 (67) (14) 58 143
Balance at 30 1,286 18 (24) (105) 447 1,622
June 2003
The results
have been
prepared in
accordance
with
International
Financial
Reporting
Standards
(IFRS)
AngloGold
Riches of Africa
Jewellery Design Competition
A leader in gold marketing internationally, AngloGold is involved in a range of
projects to increase consumer demand for gold jewellery through enhancing its
image and desirability. These have included the sponsorship of a number of gold
jewellery competitions, which the company has found to be an effective way of
encouraging designers to experiment with new styles and techniques in gold.
When AngloGold established the Riches of Africa gold jewellery design
competition in South Africa in 1998, there were further objectives in mind.
These were to use the competition to enhance local skills and to support the
local gold jewellery industry, and to use the event to showcase the design and
goldsmithing capabilities of South Africans.
With the recent unveiling of the fifth gold jewellery collection - Riches of
Africa 2003 - in Johannesburg, it seems appropriate to reflect on what has been
achieved since the competition was launched. Support for the event has grown,
with the number of entries growing from 204 in 1999 to 1,112 in 2003.
Unquestionably, if the collections of the first and fifth competitions are
compared the pieces of 2003 are more innovative, more visually arresting and
definitely bolder than those of 1999.
This does not detract from the achievements of the first winners. The progress
is testimony to the great value of competitions, challenging people to try ever
harder to improve standards and to innovate. It is also a consequence of
changes to the rules every year. These changes have been made in the interests
of fine-tuning competition conditions to give entrants every chance to produce
the best work possible. Important changes that have been made are the
introduction of a theme; the holding of workshops for all entrants; the opening
of the competition to non-jewellers, making the event accessible to people
involved in all design disciplines; and the scrapping of separate categories
for professionals and amateurs. The most significant development in 2003 has
been to allow participants to include both white and coloured gold in their
designs.
The overall winner of this year's competition was Cape Town-based Johan Louw,
for a neck piece inspired by the wings of dragonflies. Noeline Kruger, also
from Cape Town, took second place and Alet-Marie van Zyl, from Johannesburg,
was placed third.
The Minister of Minerals and Energy, Phumzile Mlambo-Ngcuka, speaking at the
award ceremony, recognised the significant contribution made by AngloGold to
the development of South African jewellery design talent. She applauded
AngloGold's involvement with OroAfrica and that company's success in growing
its jewellery exports to the United States during the past two years.
The Riches of Africa collections are exhibited throughout South Africa and
abroad, either in fashion shows where they are teamed with designer garments or
in exhibitions.
AngloGold is proud of the role that Riches of Africa has played in bringing the
talents of South African jewellery designers and goldsmiths to the attention of
a wide audience.
Administrative information
AngloGold Limited
Registration No. 1944/017354/06
Incorporated in the Republic of South Africa
ISIN: ZAE000043485
Share codes:
JSE: ANG
LSE: 79 LK
NYSE: AU
ASX: AGG
Euronext Paris: VA FP
Euronext Brussels: ANG BB
JSE Sponsor: UBS
Contacts
South Africa
Steve Lenahan
Telephone: +27 11 637 6248
Fax: +27 11 637 6400
E-mail: slenahan@anglogold.com
Peta Baldwin
Telephone: +27 11 637 6647
Fax: +27 11 637 6399
E-mail: pbaldwin@anglogold.com
Europe / Asia
Tomasz Nadrowski
Telephone: +1 212 750 7999
Fax: +1 212 750 5626
E-mail: tnadrowski@anglogold.com
United States of America
Charles Carter
Telephone: (800) 417 9255 (toll free in USA and Canada) or +1 212 750 7999
Fax: +1 212 750 5626
E-mail: cecarter@anglogold.com
Australia
Andrea Maxey
Telephone: +61 8 9425 4604
Fax: +61 8 9425 4662
E-mail: amaxey@anglogold.com.au
General E-mail enquiries
investors@anglogold.com
AngloGold website
http://www.anglogold.com
Directors
Executive
R M Godsell (Chief Executive Officer)
J G Best
D L Hodgson
K H Williams
Non-Executive
R P Edey* (Chairman)
Dr T J Motlatsi (Deputy Chairman)
F B Arisman#
Mrs E le R Bradley
C B Brayshaw
A W Lea (Alternate: P G Whitcutt)
W A Nairn (Alternate: A H Calver*)
J Ogilvie Thompson (Alternate: D D Barber)
N F Oppenheimer
A J Trahar
* British # American
Offices
Registered and Corporate
Managing Secretary
Ms Y Z Simelane
Company Secretary
C R Bull
11 Diagonal Street
Johannesburg 2001
(PO Box 62117, Marshalltown 2107)
South Africa
Telephone: +27 11 637 6000
Fax: +27 11 637 6624
Australia
Level 13, St Martins Tower
44 St George's Terrace
Perth, WA 6000
(PO Box Z5046, Perth WA 6831)
Australia
Telephone: +61 8 9425 4604
Fax: +61 8 9425 4662
United Kingdom Secretaries
St James's Corporate Services Limited
6 St James's Place
London SW1A 1NP
England
Telephone: +44 20 7499 3916
Fax: +44 20 7491 1989
Share Registrars
South Africa
Computershare Limited
Ground Floor, 70 Marshall Street
Johannesburg 2001
(PO Box 61051, Marshalltown 2107)
South Africa
Telephone: +27 11 370 7700
Fax: +27 11 688 7722
United Kingdom
Computershare Investor Services PLC
P O Box 82
The Pavilions
Bridgwater Road
Bristol BS99 7NH
England
Telephone: +44 870 702 0001
Fax: +44 870 703 6119
Australia
Computershare Investor Services Pty Limited
Level 2, 45 St George's Terrace
Perth, WA 6000
(GPO Box D182 Perth, WA 6840)
Australia
Telephone: +61 8 9323 2000
Telephone: 1300 55 7010 (in Australia)
Fax: +61 8 9323 2033
ADR Depositary
The Bank of New York
101 Barclay Street
22nd Floor
New York, NY 10286
United States of America
Telephone: +1 888 269 2377
Fax: +1 212 571 3050/3052
Global BuyDIRECTSM
The Bank of New York maintains a direct share purchase and dividend
reinvestment plan for AngloGold. For additional information, please visit The
Bank of New York's website at
www.globalbuydirect.com or call Shareholder Relations Department at
1-888-BNY-ADRS or write to:
The Bank of New York
Church Street Station, PO Box 11258
New York, NY 10286-1258
United States of America
Fax: +1 302 738 7210
Certain statements contained in this document, including, without limitation,
those concerning the economic outlook for the gold mining industry,
expectations regarding gold prices and production, the completion and
commencement of commercial operations of certain of AngloGold's exploration and
production projects, and its liquidity and capital resources and expenditure,
contain certain forward-looking statements regarding AngloGold's operations,
economic performance and financial condition. Although AngloGold believes that
the expectations reflected in such forward-looking statements are reasonable,
no assurance can be given that such expectations will prove to have been
correct. Accordingly, results could differ materially from those set out in the
forward-looking statements as a result of, among other factors, changes in
economic and market conditions, success of business and operating intiatives,
changes in the regulatory environment and other government actions,
fluctuations in gold prices and exchange rates, and business and operational
risk management. For a discussion on such risk factors, refer to the annual
report on Form 20-F for the year ended 31 December 2002, which was
END