ANGLO AMERICAN PLATINUM CORPORATION LIMITED 2003 RESULTS PRESENTATION

Transcription

1 ANGLO AMERICAN PLATINUM CORPORATION LIMITED 2003 RESULTS PRESENTATION 16 February 2004

2 2003 results presentation CEO overview 2003 performance Exciting market Progress on delivery Addressing cost base

3 CEO overview 2003 performance Produced 2,3 million ounces Earnings of R2,1 bn - impacted by strong rand Dividend cover maintained Capital expenditure of R7,4 bn Net debt of R6,9 bn

4 CEO overview Exciting market Platinum supply vs. demand Exciting market driven business Movement in Stocks Total Supply Total Demand Environmental driver '000 oz '000 oz Created demand

5 CEO overview Progress on delivery 2,3 million ounces Pipeline stock cleared Strategic review completed Funding finalised

6 CEO overview Addressing cost base Priority focus for 2004 Efficiency improvement and cost reduction Sustainable cost containment

7 2003 results presentation Financial overview % Profit on metal sales Rbn 3,91 9,42 (58,5) Net profit Rbn 2,09 5,74 (63,6) Net debt * Rbn 6,92 (1,44) (580,5) Headline earnings cps (63,0) Dividends cps (64,4) Refined Pt production 000 oz ,5 * Borrowings less cash and cash equivalents

8 2003 results presentation Financial overview Results features Debt level Financing

9 Financial overview Results features Strong rand Increase in volumes Cost increases Margin reduced but still robust

10 Financial overview Results features Headline earnings (Rm) (3 307) 2003 vs 2002 (461) (525) (312) Ex change Inf lat ion Met al prices Volume Costs Other 2003

11 Financial overview Results features 60,0 Gross profit margin 50,0 40,0 % 30,0 20,0 10,0 0,

12 Financial overview Results features Profitability and volume per mine 55,0% 50,0% AS 50,4% 45,0% 40,0% Operating Margin % 35,0% 30,0% 25,0% 20,0% Group average 28,0% US 20,4% LPM 20,5% PPL 28,6% RS 29,4% 15,0% 10,0% 5,0% 0,0% RS UG2 Project 4,0% Modikwa 0,5% BRPM 10,1% Equivalent Pt oz (000's) All operations positive in a difficult year

13 Financial overview Debt level ,3 ( 2 731,6) 2003 net debt ,6 (95,8) (1 474,9) (7 423,6) - R m Net Cash Cash from operations (6 923,0) Dividends Other Tax Capex 2003 Net Debt

14 Financial overview Debt level Sensitivity of cash from operations to a 10% change in revenue results + 10% Actual R m R / Pt oz - 10%

15 Financial overview Financing Funding considerations Expansion review Maintain balance sheet robustness Flexibility Optimise cost of debt & capital structure

16 Financial overview Financing Dividend reinvestment Choice of cash or ordinary shares Over 74% of cash retained

17 Financial overview Financing instrument R4 billion rights issue Major shareholder support Preference share instrument Market related coupon Embedded equity option Equity nature Convertible into ordinary shares Becomes perpetual if not converted Circulars Creation circular : February 2004 Rights offer : April / May 2004

18 2003 results presentation Operations overview

19 2003 results presentation Operations overview Safety Production is increasing Process operations well placed for future growth Cost base being addressed

20 Operations overview Safety Lost time injury frequency rate* decreased from 1,2 in 2002 to 0,7 in 2003 Behavioural - based safety process delivering significant improvement in safety Committed to eliminating fatalities * Per hours worked

21 Operations overview Production is increasing Equivalent refined Pt oz * R Steady State Ramp-up * Note: mines production converted to refined production at standard recoveries

22 Operations overview Production is increasing Tons milled volume and Pt content 100, ,0 Tons Milled ('000s) ,0 Pt oz / '000 tons milled , Note: 2004 excludes Western Limb Tailings Retreatment 0,0

23 Operations overview Production is increasing 2003 features Steady state production maintained Amandelbult - small decrease geology related Union benefits of capital expenditure PPRust increase from Zwartfontein South Ramp up Steady rate of increase Improved technical focus Process 2003 commissioning & pipeline as planned

24 Operations overview Process operations well placed Smelting capacity concentrate tons smelted '000 tons Capacity 2003 Smelted 2004 Capacity 2004 Forecast Waterval Smelter Mortimer Smelter Polokwane Smelter Actual volume

25 Operations overview Process operations well placed Process capacity Concentrator construction to match mining build up Smelting capacity in place ACP project on schedule PMR capacity upgrade

26 Operations overview 2003 unit costs Increase in cash operating cost per refined ounce Steady state mines 20,0% 15,0% (% increase) 10,0% 5,0% 0,0% 6,8% 1,8% 8,6% 3,4% 12,0% 2,5% 5,1% 19,6% CPIX Labour, steel & safety Cost per ton milled Grade / recovery Cost per Pt equivalent ounce Smelting costs Pipeline increase Cost per Pt refined ounce

27 Operations overview Cost base being addressed Analysis of cash operating costs (excluding costs associated with purchased ounces) Smelt ing 8% Ref ining 7% Sundry 12% Utilities 8% Cont ract ing 10% Labour 41% On-mine 85% St ores 29%

28 Operations overview Cost base being addressed Costs Focus on cost reduction Centralised structures, operational & corporate Mining processes and costs Benefit of increased ramp-up volumes Lower unit cost increases in 2004 Lower CPI Grade / recovery flat Smelting unit cost reduction

29 Operations overview Cost base being addressed Cash on-mine cost per equivalent Pt oz refined (R/Pt oz) * * 2004 target CPI (assumed 5.5%)

30 2003 results presentation Project overview

31 Project overview Projects Project review completed Project status Slowdown benefits Outlook

32 Project overview Announced project Major project summary Announced steady state Pt oz's (000's) Announced Capex (2003 money) Rm BRPM Modikwa RPM UG2 Phase RPM UG2 Phase 2 (replacement) Twickenham Western limb tailings Unki (Rand R7/$) Pandora Kroondal JV and other Expansion capital : R8,3 bn Ongoing capital : Average , R3,7 bn pa Remaining Capex (2004 money) Rm

33 Project overview Key issues Excess processing capacity Mining output must increase New & existing projects Capitalise on slowdown period Strengthen management Simplify mine design Rigorous costing reviews Improve existing project performance

34 Project overview Results Improved capital efficiency RPM UG2 Phase 2 Western Limb Tailings project Optimised build-up profiles Simplified mine designs

35 Project overview Future Delivery from replacement projects Positioned for project acceleration if economic climate improves

36 2003 results presentation Market overview

37 Market overview Current issues Platinum / palladium roles in autocatalyst Jewellery development in current price environment

38 Market overview Platinum / palladium in autocatalyst Palladium will play an increased role again This is not a serious threat to the platinum market

39 Market overview PGM consumption by the autocatalyst sector million ounces Rh Pd Pt

40 Market overview

41 Market overview Platinum jewellery The platinum jewellery market is healthy Dampening of sales is expected due to price volatility Structural changes minimise the effect of high prices

42 Market overview Platinum jewellery Brand awareness is high The white wave persists Restricted margins are being addressed Unsaturated markets

43 Market overview Brand awareness is high

44 Market overview Restricted margins being addressed Shanghai Retail Pt Price and JM Base Price (Monthly Average) RMB per gram Jan-97 Jul-97 Jan-98 Jul-98 Jan-99 Jul-99 Jan-00 Jul-00 Jan-01 Jul-01 Jan-02 Jul-02 Jan-03 Jul-03 Jan-04 Average Shanghai Price RMB/gram Average JM Base Price RMB/gram

45 Market overview Unsaturated markets 2003 advertising coverage Jilin Shenyang Heilongjiang Gansu Chengdu Nanjing Shanghai Wuhan Wenzhou Jiangxi Guangzhou Shenzhen 10 PGI cities

46 Market overview Unsaturated markets 2003 advertising and point of sale material (POSM) coverage Heilongjiang Xinjiang Qinghai Inner Mongolia Beijing Jilin Shenyang Shaanxi Nanjing Gansu Shanghai Wuhan Chengdu Wenzhou Jiangxi Guangxi Yunnan Guangzhou Shenzhen 10 PGI cities Non-PGI cities

47 2003 results presentation Market overview

48 2003 results presentation QUESTIONS 16 February 2004

49 ANGLO AMERICAN PLATINUM CORPORATION LIMITED 2003 RESULTS PRESENTATION 16 February 2004

50 2003 results presentation Project information slides 16 February 2004

51 2003 results presentation Project update Capex (Rm): Modikwa JV Announced (2003 money) Spent to end 2003 (actual) Remaining (2004 money) 0 Forecast production profile: Steady state in 2005 Tons milled per month Pt oz per annum Pd oz per annum Comments: Project construction complete Project ramp up continues Milling capacity up to tons per month being investigated flexibility if grade is lower

52 2003 results presentation Project update Project Rustenburg update UG2 Phase 1 Capex (Rm): Forecast production profile: Steady state in 2007 Comments: Dilution of head grade due to safety standards Ore sorting plant being commissioned Announced (2003 money) Spent to end 2003 (actual) Remaining (2004 money) 25 Tons milled per month Pt oz per annum Pd oz per annum

53 2003 results presentation Project update Capex (Rm): Rustenburg UG2 Phase 2 Forecast production profile: Steady state in 2009 Announced (2003 money) Spent to end 2003 (actual) 775 Remaining (2004 money) Tons milled per month Pt oz per annum Pd oz per annum Comments: Need for second concentrator being investigated Included in overall review of Rustenburg production Boschfontein East development slowed down

54 2003 results presentation Project update Project updatetwickenham Capex (Rm): Forecast production profile: Steady state in 2009 Announced (2003 money) Spent to end 2003 (actual) Remaining (2004 money) Tons milled per month Pt oz per annum Pd oz per annum Comments: Implementation over a longer period Concentrator and decline contracts suspended Trial mining being investigated

55 2003 results presentation Project update Project update Western Limb Tailings Capex (Rm): Forecast production profile: Steady state in 2008 Announced (2003 money) Spent to end 2003 (actual) 625 Remaining (2004 money) 965 Tons milled per month Pt oz per annum Pd oz per annum Comments: Phase 1 commissioned ahead of schedule Pt oz per annum Pd oz per annum Implementation of phase 2 slowed down

56 2003 results presentation Project update Project update Capex (US$m): Forecast production profile: Steady state in 2008 Unki Comments: Surface civil construction underway Project on schedule Challenging environment Project development costs under review Announced (2003 money) 90 Spent to end 2003 (actual) 2 Remaining (2004 money) 90 Tons milled per month Pt oz per annum Pd oz per annum

57 2003 results presentation Project update Capex (Rm): (100% of project) Pandora JV Announced (2003 money) Spent to end 2003 (actual) 90 Remaining (2004 money) Forecast production profile: (100% of project) Tons milled per month Pt oz per annum Pd oz per annum Steady state in 2012 Comments: Staged implementation schedule possible

58 2003 results presentation Project update Capex Project (Rm): update Forecast production profile: Steady state in 2006 Kroondal Announced (2003 money) 750 Spent to end 2003 (actual) 0 Remaining (2004 money) 810 Tons milled per month Pt oz per annum Pd oz per annum Comments: PSA effective 1 st November 2003 Surface civil construction underway Project on schedule All production processed by Anglo Platinum from 2009