On 10 February 2003 Anglo Platinum advised shareholders that if US Dollar metal prices and the Rand / US Dollar exchange rate remained at levels prevailing at that time, earnings and dividends for 2003 would be lower than those for 2002. Since that announcement the Rand has strengthened further against the US Dollar and despite a small improvement in the average US Dollar price of the basket of metals sold by Anglo Platinum from the levels achieved in 2002, the average Rand price of that basket in 2003 has declined by 17% when compared to the average achieved in 2002.
During the first half of 2003 the increase in contained metal output from mining operations was, 9% higher than the first half of 2002. This was 3% below the announced expansion programme primarily because of a slower than planned ramp up at the new Waterval and Modikwa mines. The simultaneous commissioning of the ACP converter, the slag cleaning furnace and the Polokwane smelter caused a higher than planned temporary increase in pipeline stock levels resulting in reduced production of refined metal at the half year.
As a consequence of the above Anglo Platinum forecasts headline earnings for the half year ending 30 June 2003 of approximately R1,05 billion.
Included in the earnings is an amount of approximately R 290 million which resulted from the increase in pipeline stocks. The inventories accounting policy was changed to recognize concentrate purchased from JV partners and movements in concentrate stock. The effect of the change in policy is to more closely match cost of sales with revenue.
Production at ramp up operations continues to improve but it is not expected that the shortfall on plan for the half year will be made up by the year-end. Although not completely eliminated, the temporary lock up of metal in the newly commissioned metallurgical facilities will be reduced by year-end resulting in substantially higher refined production for the second half. It is anticipated that the factors mentioned above will result in refined platinum production for the full year being in the region of 2,3 million ounces.
Notwithstanding the increase in volumes forecast for the second half of the year, should US Dollar metal prices and the Rand / US Dollar exchange rate remain at current levels then earnings for the second half of 2003 will be significantly higher than those for the first half. Earnings for the full year ending December 2003 will nevertheless be significantly lower than for the year ended December 2002.
The Company will release its results for the half year ending 30 June 2003 on Wednesday 30 July 2003.
For further information, please contact
Mike Mtakati
(011) 373-6865
083 455 7887