Wrap Text
10 DECEMBER 1999
PRELIMINARY RESULTS FOR THE YEAR ENDED 30 SEPTEMBER 1999
HIGHLIGHTS
YEAR TO YEAR TO
30 SEPTEMBER 30 SEPTEMBER
1999 1998
RESTATED
PROFITS
OPERATING PROFIT - CONTINUING OPERATIONS UP 12% $218M $195M
PROFIT BEFORE TAX PRE-EXCEPTIONALS - CONTINUING
OPERATIONS UP 23% $190M $154M
EARNINGS PER SHARE PRE-EXCEPTIONALS -
CONTINUING OPERATIONS UP 50% 81.7C 54.6C
DIVIDENDS PER SHARE 17.9P/29.1C 17.2P/29.1C
CASHFLOW
TRADING CASH FLOW PER SHARE - CONTINUING
OPERATIONS UP 56% 118.0C 75.8C
BALANCE SHEET
EQUITY INTERESTS $733M $641M
NET BORROWINGS $197M $226M
GEARING 20% 26%
COMMENTING ON THE RESULTS, LONMIN'S CHIEF EXECUTIVE, NICHOLAS MORRELL SAID:
"THIS YEAR HAS DEMONSTRATED THE REWARDS OF FOCUSING LONMIN AS A MINING GROUP
WHICH HAS LED TO A SIGNIFICANT IMPROVEMENT IN EARNINGS IN A PERIOD WHICH SAW
LOW COAL, GOLD AND PLATINUM PRICES AND DIFFICULT TRADING CONDITIONS. GIVEN THE
STRENGTH OF THE PLATINUM PRICE SINCE THE YEAR END, THE OUTLOOK FOR THE CURRENT
YEAR IS ENCOURAGING".
NOTES ON HIGHLIGHTS
THE 1999 FIGURES REFLECT THE ADOPTION OF THE US DOLLAR AS THE FUNCTIONAL
CURRENCY OF THE GROUP WITH EFFECT FROM 1 OCTOBER 1998 AND THE UTILISATION OF
THE AVERAGE EXCHANGE RATE METHOD FOR THE COMPUTATION OF THE PROFITS. THIS MORE
ACCURATELY REFLECTS THE UNDERLYING EARNINGS STREAM OF THE GROUP AND IS IN LINE
WITH THE MAJORITY OF INTERNATIONAL MINING COMPANIES. THE 1998 FIGURES HAVE
BEEN RESTATED TO REFLECT THE CHANGE IN METHODOLOGY OF COMPUTATION OF THE
PROFITS AT THE AVERAGE RATHER THAN CLOSING EXCHANGE RATE METHOD.
GEARING IS CALCULATED ON THE EQUITY AND MINORITY INTERESTS OF THE GROUP. THE
1998 NET BORROWINGS AND GEARING FIGURES ASSUME THE SETTLEMENT OF SHORT TERM
PAYABLES AND RECEIVABLES IN RESPECT OF BUSINESSES SOLD DURING 1998.
PRESS ENQUIRIES: ANTHONY CARDEW, CARDEW & CO - 0171 930 0777
THIS PRESS RELEASE IS AVAILABLE ON HTTP://WWW.LONMIN.COM
CHIEF EXECUTIVE'S STATEMENT
AFTER THE HIGH LEVEL OF CORPORATE ACTIVITY AND RESTRUCTURING OF THE LAST FEW
YEARS, THIS WAS A YEAR OF CONSOLIDATION WHICH SAW A MARKED AND FURTHER
IMPROVEMENT IN YOUR COMPANY'S EARNINGS AND RETURN TO SHAREHOLDERS. DESPITE A
SIGNIFICANT INCREASE IN THE DEPRECIATION CHARGE TO REFLECT THE MORE PRUDENT
ASSET LIVES NOW ADOPTED FOR OUR MINING ASSETS, LONMIN'S PROFIT BEFORE TAX AND
EXCEPTIONAL ITEMS FROM CONTINUING OPERATIONS INCREASED BY 23 PER CENT TO $190
MILLION. EXCLUDING EXCEPTIONAL ITEMS, EARNINGS PER SHARE INCREASED FROM
CONTINUING OPERATIONS BY 50 PER CENT TO 81.7 CENTS, CONSOLIDATING THE STRONG
GROWTH SHOWN AT THE HALF YEAR. MINING IS A CAPITAL INTENSIVE BUSINESS SO IT IS
EXTREMELY SATISFACTORY TO BE ABLE TO REPORT A FURTHER AND SUBSTANTIAL
IMPROVEMENT IN OUR CASH FLOW FIGURES. MEASURED IN TRADING CASH FLOW PER SHARE,
THE INCREASE WAS OVER 56 PER CENT. OUR BALANCE SHEET IS STRONG AND PROVIDES
ADEQUATE FLEXIBILITY TO FINANCE THE DEVELOPMENT OF OUR OPERATIONS, AS WELL AS
THE DIVIDEND WHICH HAS BEEN MAINTAINED AT 21.9 CENTS FOR THE YEAR WHICH IN
STERLING TERMS REPRESENTS 17.9 PENCE - A 4 PER CENT INCREASE ON LAST YEAR.
ALTHOUGH IT WAS NOT POSSIBLE TO RECOVER ALL THE EFFECTS ON OUR PLATINUM MINES
OF A SIGNIFICANT FALL OF GROUND AND SOME ISOLATED INDUSTRIAL ACTION AT THE
BEGINNING OF THE YEAR, THE OPERATIONS GENERATED A RECORD PROFIT BEFORE TAX OF
$125 MILLION. UNDER THESE CIRCUMSTANCES, AND CONSIDERING THE AVERAGE PRICE OF
PLATINUM, WHICH REPRESENTS 50 PER CENT OF THE DIVISION'S TOTAL OUTPUT, WAS $30
PER OUNCE BELOW LAST YEAR, THIS WAS A VERY SATISFACTORY PERFORMANCE WHICH
AUGURS WELL FOR THE FUTURE. HOWEVER DURING THIS PERIOD, SIGNIFICANT DIVIDEND
REMITTANCES WERE PAID WHICH, COMBINED WITH THE VIRTUAL ELIMINATION OF DEBT,
UNDERLINES THE STRONG ABILITY FOR THIS BUSINESS TO GENERATE PROFITS AND CASH.
WE MANAGE 100 PER CENT OF LONMIN PLATINUM AND IT REMAINS OUR OBJECTIVE TO
ACQUIRE 100 PER CENT OF THE EQUITY. ALTHOUGH HIGH METAL PRICES AND THE SCARCITY
OF NEW PGM DEPOSITS, REDUCE THE INCENTIVE FOR OUR MINORITY SHAREHOLDERS AND
PARTNERS IN THIS BUSINESS TO SELL, WE SHALL CONTINUE TO EXAMINE WITH IMPALA
POSSIBLE ALTERNATIVES IN AN EFFORT TO IDENTIFY A SOLUTION ACCEPTABLE TO BOTH
PARTIES.
IN COAL, THE INTEGRATION OF THE TAVISTOCK ASSETS WITH DUIKER HAS PROCEEDED
WELL. THE ADDITIONAL EXPORT ENTITLEMENT THROUGH RICHARDS BAY WAS ALWAYS
IDENTIFIED AS A PRINCIPAL BENEFIT OF THIS MERGER. HOWEVER, AND WHILE MARKET
CONDITIONS WERE DIFFICULT GENERALLY, THIS ADDITIONAL EXPORT FACILITY HAS BEEN
CRUCIAL IN MITIGATING THE EFFECT OF THE UNPRECEDENTED WEAKNESS IN THE DOMESTIC
COAL MARKET. ALTHOUGH NOT STRICTLY COMPARABLE, DUE TO THE TIMING OF THE
ACQUISITION OF TAVISTOCK, PROFITS WERE NEVERTHELESS AHEAD OF THE PREVIOUS YEAR.
THE WORLD STEAM COAL PRICE IS NOW THE KEY FACTOR IN DETERMINING DUIKER'S
SHORT-TERM RESULTS. WHILE RECENT PRICES ARE MORE ENCOURAGING INDICATING THAT
THE BOTTOM OF THE MARKET HAS BEEN REACHED, IT SHOULD BE NOTED THAT COAL PRICES
ARE GENERALLY BELOW THE AVERAGE ACHIEVED IN 1998.
INDEPENDENCE, YOUR COMPANY'S WHOLLY OWNED GOLD OPERATIONS IN ZIMBABWE, RECORDED
A SUBSTANTIAL INCREASE IN PROFITABILITY, BENEFITING FROM A COMBINATION OF A
DEVALUING LOCAL CURRENCY, AS WELL AS IMPROVEMENTS IN OPERATIONAL EFFICIENCIES
AND RECORD LEVELS OF PRODUCTION.
FOLLOWING THE UNPRECEDENTED SHORT-TERM RISE IN THE GOLD PRICE DURING SEPTEMBER
1999, IT EMERGED THAT ASHANTI FACED SIGNIFICANT LIQUIDITY ISSUES. THESE ISSUES
ASIDE, ASHANTI HAD A SATISFACTORY YEAR. PRODUCTION INCREASED BY 12 PER CENT TO
OVER 1.5 MILLION OUNCES. ALTHOUGH EARNINGS WERE BELOW THE PREVIOUS YEAR, THIS
WAS LARGELY DUE TO A PROVISION TO COVER THE COST OF THE STRIKE AT OBUASI AND
THE SUBSEQUENT REDUNDANCY COSTS. THE BIBIANI AND SIGUIRI MINES PERFORMED WELL,
WHILE THE PROSPECTS OF GEITA, THE NEW PROPERTY IN TANZANIA HAVE IMPROVED
SUBSTANTIALLY. THE LATEST ESTIMATES INDICATE ANNUAL PRODUCTION IN THE REGION OF
500,000 OUNCES, AND A CASH OPERATING COST BELOW $180 PER OUNCE.
IN PROPOSING THE CREATION OF A PRECIOUS METALS GROUP, WHICH WE BELIEVE WAS
BROADLY SUPPORTED BY THE STOCK MARKET'S REACTION TO OUR PROPOSAL TO MERGE WITH
ASHANTI, WE HAVE CONTINUED TO CONSIDER THE FUTURE OF OUR GREATLY STRENGTHENED
COAL OPERATIONS. OUR CONCLUSION MAY BE THAT, IN THE LONGER TERM, COAL DOES NOT
FIT INTO A PRECIOUS METALS GROUP. HOWEVER, THE TIMING OF ANY DEMERGER OR OTHER
REALISATION OF VALUE FROM OUR INVESTMENT IN COAL WILL BE CHOSEN TO MAXIMISE THE
BENEFIT TO SHAREHOLDERS.
DURING THE YEAR, THE GROUP ADOPTED THE US DOLLAR AS THE FUNCTIONAL CURRENCY,
REFLECTING THE UNDERLYING EARNINGS STREAM OF THE MAJORITY OF THE OPERATIONAL
ASSETS. EQUIVALENT FIGURES ARE PROVIDED IN STERLING FOR INFORMATION PURPOSES
ONLY.
THE OUTLOOK FOR THE GROUP IS ENCOURAGING WITH SIGNIFICANTLY BETTER COMMODITY
PRICES IN PLATINUM, PALLADIUM AND GOLD, OFFSETTING THE RELATIVELY WEAK COAL
PRICES. IN ZIMBABWE, THE INITIAL RESULTS OF THE EXPLORATION PROGRAMME ARE
ENCOURAGING AND THE LONG-TERM FUTURE OF THESE ASSETS LOOKS PROMISING. DESPITE
THE RECENT TURMOIL, ASHANTI CONTINUES ITS DEVELOPMENT PROGRAMME WITH THE
RESOURCE BASE AT ITS NEW PROPERTY, GEITA IN TANZANIA, NOW BEING ESTIMATED AT 12
MILLION OUNCES.
DEMAND REMAINS EXTREMELY STRONG FOR PLATINUM GROUP METALS. MORE STRINGENT
EMISSION CONTROLS AND THE ONGOING DEVELOPMENTS IN FUEL CELL TECHNOLOGY SHOULD
LEAD TO A CONTINUANCE IN THE GROWTH POTENTIAL IN THESE MARKETS FOR THE
FORESEEABLE FUTURE. THE COMPLETION OF THE NEW SMELTER DEVELOPMENT AT THE
PLATINUM OPERATIONS WILL FINALISE THE SURFACE INFRASTRUCTURE NECESSARY FOR
FUTURE PRODUCTION LEVELS OF UP TO 800,000 OUNCES OF PLATINUM.
IN CONCLUSION AND AS A RESULT, YOUR COMPANY IS NOW WELL POSITIONED FOR ITS
CONTINUED DEVELOPMENT WITH THE AIM OF ENHANCING THE TOTAL RETURN TO
SHAREHOLDERS OVER THE MEDIUM TERM.
NICHOLAS MORRELL
CHIEF EXECUTIVE
9 DECEMBER 1999
LONMIN PLC
CONSOLIDATED PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 30 SEPTEMBER 1999
1999
1999 RESTATED
NOTE $M $
TURNOVER (INCLUDING SHARE OF ASSOCIATES) 3 1,148 2,028
- CONTINUING OPERATIONS 1,148 1,071
- DISCONTINUED OPERATIONS - 957
LESS SHARE OF ASSOCIATES' TURNOVER (252) (255)
GROUP TURNOVER 896 1,773
OPERATING PROFIT 4
GROUP - CONTINUING OPERATIONS 183 161
- DISCONTINUED OPERATIONS - 61
- EXCEPTIONAL COSTS - DISCONTINUED OPERATIONS - (3)
183 219
SHARE OF ASSOCIATES' OPERATING PROFIT 35 36
TOTAL OPERATING PROFIT 218 255
EXCLUDING EXCEPTIONAL ITEMS 218 258
EXCEPTIONAL ITEMS - (3)
PROFIT/(LOSS) ON SALE OR TERMINATION OF OPERATIONS
GROUP - CONTINUING OPERATIONS (4) (2)
- DISCONTINUED OPERATIONS - (33)
SHARE OF ASSOCIATE - CONTINUING OPERATIONS 2 (10)
PROFIT BEFORE NET INTEREST PAYABLE AND SIMILAR ITEMS 216 210
NET INTEREST PAYABLE AND SIMILAR ITEMS 6 (28) (70)
PROFIT/(LOSS) BEFORE TAXATION 5 188 140
EXCLUDING EXCEPTIONAL ITEMS 190 188
EXCEPTIONAL ITEMS (2) (48)
TAXATION 7 (16) (39)
PROFIT/(LOSS) AFTER TAXATION 172 101
EXCLUDING EXCEPTIONAL ITEMS 173 164
EXCEPTIONAL ITEMS (1) (63)
MINORITY INTERESTS (42) (38)
PROFIT/(LOSS) FOR THE YEAR 130 63
EXCLUDING EXCEPTIONAL ITEMS 130 125
EXCEPTIONAL ITEMS - (62)
DIVIDENDS 8 (46) (46)
RETAINED PROFIT FOR THE YEAR 84 17
EARNINGS PER SHARE 9 81.5 35.6
EARNINGS PER SHARE EXCLUDING EXCEPTIONAL
ITEMS 9 81.7C 70.8C
DILUTED EARNINGS PER SHARE 77.0C 35.6C
DIVIDENDS PER SHARE 8 29.1C 29.1C
THE 1998 FIGURES HAVE BEEN RESTATED TO REFLECT THE CHANGE IN ACCOUNTING POLICY
TO TRANSLATING RESULTS AT WEIGHTED AVERAGE EXCHANGE RATES INSTEAD OF THE
PREVIOUS POLICY OF TRANSLATING RESULTS AT CLOSING EXCHANGE RATES. THE 1998
FIGURES HAVE NOT BEEN RESTATED TO REFLECT THE CHANGE IN ACCOUNTING FOR
REHABILITATION COSTS AS THE PROFIT EFFECT IS NOT MATERIAL. 1998 DISCONTINUED
OPERATIONS INCLUDE THE RESULTS OF DUTTON FORSHAW, PRINCESS HOTELS, SUNLEY
TURRIFF AND WILLOUGHBYS WHICH WERE SOLD AND LONRHO AFRICA WHICH WAS DEMERGED.
LONMIN PLC
CONSOLIDATED BALANCE SHEET
AS AT 30 SEPTEMBER 1999
1999
1999 RESTATED
NOTE $M $
FIXED ASSETS
TANGIBLE ASSETS 1,049 991
INVESTMENTS:
ASSOCIATES 240 204
OTHER INVESTMENTS 11 20
251 224
1,300 1,215
CURRENT ASSETS
STOCKS 63 61
DEBTORS 111 147
INVESTMENTS 27 21
CASH AT BANK AND IN HAND 110 203
311 432
CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR (267) (325)
NET CURRENT ASSETS 44 107
TOTAL ASSETS LESS CURRENT LIABILITIES 1,344 1,322
CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR
CONVERTIBLE DEBT (175) (189)
OTHER (114) (159)
(289) (348)
PROVISIONS FOR LIABILITIES AND CHARGES (67) (99)
10 988 875
CAPITAL AND RESERVES
CALLED UP SHARE CAPITAL 262 268
SHARE PREMIUM ACCOUNT 310 322
REVALUATION RESERVE 19 22
OTHER RESERVES (70) (97)
PROFIT AND LOSS ACCOUNT 212 126
EQUITY INTERESTS 733 641
MINORITY EQUITY INTERESTS 255 234
988 875
LONMIN PLC
CONSOLIDATED CASH FLOW STATEMENT
FOR THE YEAR ENDED 30 SEPTEMBER 1999
1999
1999 RESTATED
NOTE $M $
NET CASH INFLOW FROM OPERATING ACTIVITIES 11
- CONTINUING OPERATIONS 240 209
- DISCONTINUED OPERATIONS - 45
240 254
DIVIDENDS RECEIVED FROM ASSOCIATE 4 7
INTEREST - RECEIVED 8 29
- PAID (40) (92)
DIVIDENDS PAID TO MINORITIES (23) (7)
RETURNS ON INVESTMENT AND SERVICING OF FINANCE (55) (70)
TAXATION (20) (49)
CAPITAL EXPENDITURE AND FINANCIAL INVESTMENT (120) (83)
ACQUISITIONS AND DISPOSALS (45) 224
EQUITY DIVIDENDS PAID (38) (61)
NET CASH (OUTFLOW)/INFLOW BEFORE FINANCING (34) 222
- CONTINUING ACTIVITIES (34) 143
- DISCONTINUED ACTIVITIES - 79
FINANCING
NEW LONG TERM LOANS 3 110
NEW SHORT TERM LOANS 10 10
REPAYMENT OF LONG TERM LOANS (49) (40)
REPAYMENT OF SHORT TERM LOANS (31) (57)
(67) 23
ISSUE OF ORDINARY SHARE CAPITAL 3 2
SHARE BUYBACK - (327)
NET CASH OUTFLOW FROM FINANCING (64) (302)
(DECRESSE)/INCREASE IN CASH (98) (80)
- CONTINUING ACTIVITIES (98) (130)
- DISCONTINUED ACTIVITIES - 50
LONMIN PLC
STATEMENT OF TOTAL CONSOLIDATED RECOGNISED GAINS AND LOSSES FOR THE YEAR ENDED
30 SEPTEMBER 1999
1999
1999 RESTATE
$M $
PROFIT FOR THE YEAR - GROUP 104 46
- ASSOCIATES 26 17
DILUTION OF GROUP'S INTEREST IN ASHANTI (6)
GROUP SHARE OF EQUITY ISSUED BY ASHANTI 15 2
EXCHANGE ADJUSTMENTS - GROUP - (119)
- ASSOCIATES - (14)
TOTAL RECOGNISED GAINS/(LOSSES) RELATING TO THE YEAR 139 (68)
THERE ARE NO EXCHANGE ADJUSTMENTS FOR 1999 AS THE FIGURES ARE PREPARED
UTILISING THE US DOLLAR AS THE FUNCTIONAL CURRENCY.
THE COMPARATIVE FIGURES FOR 1998 ARE NOT PREPARED ON A COMPARABLE BASIS AS THE
US DOLLAR WAS NOT USED AS THE FUNCTIONAL CURRENCY IN THIS PERIOD. THE EXCHANGE
ADJUSTMENTS FOR 1998 INCLUDE EXCHANGE ADJUSTMENTS ORIGINALLY REPORTED IN
STERLING, THE TRANSLATION ADJUSTMENT OF THE STERLING EQUITY FIGURES AT 1
OCTOBER 1997 INTO US DOLLARS, AND THE DIFFERENCES BETWEEN THE AVERAGE AND
CLOSING EXCHANGE RATES ON THE PROFITS FOR THE PERIOD.
RECONCILIATION OF MOVEMENT IN EQUITY INTERESTS
FOR THE YEAR ENDED 30 SEPTEMBER 1999
1999
1999 RESTATE
$M $
TOTAL RECOGNISED GAINS/(LOSSES) FOR THE YEAR 139 (68)
DIVIDENDS (46) (46)
RETAINED PROFIT/(LOSS) FOR THE YEAR 93 (114)
SHARES ISSUED IN LIEU OF CASH DIVIDENDS - 8
SHARE BUYBACK - (327)
DEMERGER OF LONRHO AFRICA - (368)
NET SURPLUS ON ACQUISITION OF SUBSIDIARIES AND
ASSOCIATES - (15)
NET GOODWILL ON ACQUISITION OF SUBSIDIARIES
BY ASHANTI - (32)
SHARE BUYBACK IN ASHANTI - (7)
NET SURPLUS REALISED ON SALE OF SUBSIDIARIES - (92)
MOVEMENT OF THE GROUP'S INTEREST IN DUIKER MINING - (3)
OTHER ITEMS (1) (5)
NET INCREASE/(REDUCTION) IN EQUITY INTERESTS
IN THE YEAR 92 (925)
EQUITY INTERESTS AT 1 OCTOBER 641 1,566
EQUITY INTERESTS AT 30 SEPTEMBER 733 641
CONSOLIDATED HISTORICAL COST PROFITS
FOR THE YEAR ENDED 30 SEPTEMBER 1999
1999
1999 RESTATE
$M $
REPORTED PROFIT BEFORE TAXATION 188 140
REALISATION OF PROPERTY REVALUATION GAINS
OF PREVIOUS YEARS - 232
DIFFERENCE BETWEEN A HISTORICAL COST DEPRECIATION
CHARGE AND THE ACTUAL DEPRECIATION CHARGE
CALCULATED ON THE REVALUED AMOUNT 2 2
HISTORICAL COST PROFIT BEFORE TAXATION 190 374
LONMIN PLC
1 PROFIT FOR THE YEAR
1999
1999 RESTATED
NOTE $M $
TURNOVER
GROUP 896 1,773
CONTINUING OPERATIONS 896 846
DISCONTINUED OPERATIONS - 927
OPERATING COSTS (713) (1,551)
CONTINUING OPERATIONS (713) (685)
DISCONTINUED OPERATIONS - (866)
OPERATING PROFIT 4
GROUP 183 222
SHARE OF ASSOCIATES 35 36
218 258
CONTINUING OPERATIONS 218 195
DISCONTINUED OPERATIONS - 63
NET INTEREST PAYABLE AND SIMILAR ITEMS 6
GROUP (22) (63)
SHARE OF ASSOCIATES (6) (7)
PROFIT BEFORE EXCEPTIONAL ITEMS 5 190 188
CONTINUING OPERATIONS 190 154
DISCONTINUED OPERATIONS - 34
EXCEPTIONAL ITEMS (2) (48)
PROFIT/(LOSS) BEFORE TAXATION 5 188 140
CONTINUING OPERATIONS 188 142
DISCONTINUED OPERATIONS - (2)
TAXATION 7 (16) (39)
PROFIT/(LOSS) AFTER TAXATION 172 101
CONTINUING OPERATIONS 172 124
DISCONTINUED OPERATIONS - (23)
MINORITY INTERESTS (42) (38)
PROFIT/(LOSS) FOR THE YEAR 130 63
CONTINUING OPERATIONS 130 88
DISCONTINUED OPERATIONS - (25)
EARNINGS PER SHARE EXCLUDING EXCEPTIONAL ITEMS 9 81.7 70.8C
CONTINUING OPERATIONS 81.7 54.6C
DISCONTINUED OPERATIONS - 16.2C
EARNINGS PER SHARE BASED ON PROFIT/(LOSS) FOR THE YEAR 81.5 35.6C
CONTINUING OPERATIONS 81.5 49.2C
DISCONTINUED OPERATIONS - (13.6)C
LONMIN PLC
2 CASH FLOWS FOR THE YEAR
1998
1999 RESTATED
$M $
NET CASH INFLOW FROM OPERATING ACTIVITIES:
- GROUP OPERATING PROFIT FROM CONTINUING OPERATIONS 183 161
- DEPRECIATION CHARGE 56 32
- INCREASE IN WORKING CAPITAL 8 16
- OTHER ITEMS (7) -
- DISCONTINUED OPERATIONS - 45
240 254
NET INTEREST PAID (32) (63)
TAX PAID (20) (49)
TRADING CASH FLOW 188 142
- CONTINUING ACTIVITIES 188 135
- DISCONTINUED ACTIVITIES - 7
CAPITAL EXPENDITURE - GROUP (144) (87)
- DOUGLAS TAVISTOCK ASSOCIATE (14) (5)
FIXED ASSET SALES AND OTHER FINANCIAL INVESTMENT (5) 5
DISTRIBUTIONS FROM DOUGLAS TAVISTOCK ASSOCIATE 13 4
DIVIDENDS RECEIVED FROM ASHANTI 4 7
MINORITY DIVIDENDS PAID (23) (7)
FREE CASH FLOW 49 59
- CONTINUING ACTIVITIES 49 68
- DISCONTINUED ACTIVITIES - (9)
ACQUISITIONS AND DISPOSALS (45) 102
SHARES ISSUED 3 2
EQUITY DIVIDENDS PAID (38) (61)
(INCREASE)/DECREASE IN NET BORROWINGS (31) 102
RECONCILIATION OF NET BORROWINGS
OPENING NET BORROWINGS 177 416
EXCHANGE (11) (21)
INCREASE/(DECREASE) IN NET BORROWINGS 31 (102)
NET REDUCTION IN SUBSIDIARIES ACQUIRED /(SOLD) - (116)
CLOSING NET BORROWINGS 197 177
NOTE - OPENING NET BORROWINGS ARE THOSE ORIGINALLY REPORTED PER THE 30
SEPTEMBER 1998 BALANCE SHEET. CASH FLOWS DURING 1999 INCLUDED THE SETTLEMENT
SHORTLY AFTER THE YEAR END OF NET PAYABLES AND RECEIVABLES IN RESPECT OF
BUSINESSES SOLD IN 1998 INCLUDED IN THE ADJUSTED NET BORROWINGS FIGURE AT 30
SEPTEMBER 1998 OF $226M.
LONMIN PLC
3 TURNOVER
TURNOVER REPRESENTS SALES OF GOODS AND SERVICES OUTSIDE THE GROUP NET OF
DISCOUNTS AND ALLOWANCES AND VALUE ADDED TAXATION AND INCLUDES COMMISSIONS
EARNED.
TURNOVER BY ORIGIN, INCLUDING SHARE OF ASSOCIATES' TURNOVER, IS ANALYSED BY
ACTIVITY AND GEOGRAPHICAL AREA BELOW:
1998
1999 RESTATED
$M $M
PLATINUM 404 388
COAL 379 317
GOLD 246 246
OTHER 119 120
DISCONTINUED OPERATIONS - 957
1148 2028
SOUTH AFRICA 780 706
ZIMBABWE AND GHANA 246 246
THE AMERICAS 110 110
EUROPE 12 9
DISCONTINUED OPERATIONS - 957
1,148 2,028
SHARE OF ASSOCIATES' TURNOVER IS ANALYSED BY ACTIVITY AND GEOGRAPHICAL AREA
BELOW:
1999
1998 RESTATED
$M $M
COAL 58 34
GOLD 192 190
OTHER 2 1
DISCONTINUED OPERATIONS - 30
252 255
SOUTH AFRICA 58 34
ZIMBABWE AND GHANA 192 190
EUROPE 2 1
DISCONTINUED OPERATIONS - 30
252 255
LONMIN PLC
4 OPERATING PROFIT BY ACTIVITY AND GEOGRAPHICAL AREA
AN ANALYSIS OF OPERATING PROFIT, INCLUDING SHARES OF ASSOCIATERS' OPERATING
PROFIT IS ANALYSED BY ACTIVITY AND GEOGRAPHICAL AREA BELOW:
1998
1999 RESTATED
$M $
PLATINUM 129 123
COAL 57 47
GOLD 41 32
OTHER 2 4
CENTRAL COSTS (11) (11)
218 195
DISCONTINUED OPERATIONS - 63
TOTAL OPERATING PROFIT 218 258
SOUTH AFRICA 178 164
ZIMBABWE AND GHANA 41 32
THE AMERICAS 7 8
EUROPE 3 2
CENTRAL COSTS (11) (11)
218 195
DISCONTINUED OPERATIONS - 63
TOTAL OPERATING PROFIT 218 258
SHARE OF ASSOCIATES' OPERATING PROFIT IS ANALYSED BY ACTIVITY AND GEOGRAPHICAL
AREA BELOW:
1998
1999 RESTATED
$M $
COAL 8 5
GOLD 27 29
35 34
DISCONTINUED OPERATIONS - 2
SHARE OF ASSOCIATES' OPERATING PROFIT 35 36
SOUTH AFRICA 8 5
ZIMBABWE AND GHANA 27 29
35 34
DISCONTINUED OPERATIONS - 2
SHARE OF ASSOCIATES' OPERATING PROFIT 35 36
LONMIN PLC
5 PROFIT BEFORE TAXATION BY ACTIVITY AND GEOGRAPHICAL AREA
AN ANALYSIS OF PROFIT BEFORE TAXATION IS ANALYSED BY ACTIVITY AND GEOGRAPHICAL
AREA BELOW:
1998
1999 RESTATED
$M $
PLATINUM 125 104
COAL 42 41
GOLD 33 20
OTHER 4 5
CENTRAL FINANCE AND COSTS (14) (16)
190 154
DISCONTINUED OPERATIONS - 34
190 188
EXCEPTIONAL ITEMS (2) (48)
PROFIT BEFORE TAXATION 188 140
SOUTH AFRICA 159 139
ZIMBABWE AND GHANA 33 20
THE AMERICAS 9 9
EUROPE 3 2
CENTRAL FINANCE AND COSTS (14) (16)
190 154
DISCONTINUED OPERATIONS - 34
190 188
EXCEPTIONAL ITEMS (2) (48)
PROFIT BEFORE TAXATION 188 140
LONMIN PLC
6 NET INTEREST PAYABLE AND SIMILAR ITEMS
1998
1998 RESTATED
$M $M
ON BANK LOANS AND OVERDRAFTS WHOLLY REPAYABLE
WITHIN FIVE YEARS 27 79
ON ALL OTHER LOANS 11 13
DISCOUNTING ON PROVISIONS 2 -
40 92
SHARE OF INTEREST OF ASSOCIATES 6 7
46 99
INTEREST RECEIVABLE (8) (29)
EXCHANGE DIFFERENCES ON NET DEBT (10) -
28 70
LONMIN PLC
7 TAX ON PROFIT ON ORDINARY ACTIVITIES
1998
1998 RESTATED
$M $M
UNITED KINGDOM:
CORPORATION TAX AT 30.5% (1998 - 31%) 8 -
ADVANCE CORPORATION TAX (7) -
RELIEF FOR OVERSEAS TAX (1) -
- -
OVERSEAS TAX FOR THE YEAR 21 22
PRIOR YEAR ADJUSTMENTS (5) -
SHARE OF ASSOCIATES' TAX 1 2
TAX ON PROFIT ON ORDINARY ACTIVITIES BEFORE
EXCEPTIONAL ITEMS 17 24
TAX ON EXCEPTIONAL ITEMS (1) 15
16 39
THE CHARGE FOR TAX HAS BEEN REDUCED BY $41M (1998 - $20M ) IN RESPECT OF
ACCELERATED TAX ALLOWANCES IN EXCESS OF DEPRECIATION AND OTHER TIMING
DIFFERENCES.
LONMIN PLC
8 DIVIDENDS
1999 1998
$ $
INTERIM 7.5P/12.1C (1998 - 7.2P/12.1C) 1 1
FINAL 10.4P/17.0C (1998 - 10.0P/17.0C) 2 2
4 4
A FINAL DIVIDEND OF 10.4P (17.0C) PER SHARE IS RECOMMENDED FOR PAYMENT ON 6
APRIL 2000 TO SHAREHOLDERS ON THE REGISTERS AT 10 MARCH 2000.
ADVANCE CORPORATION TAX (ACT) IS ABOLISHED FROM 6 APRIL 1999 AND THE SET-OFF OF
SURPLUS ACT IS RESTRICTED BY "SHADOW ACT" ON DIVIDENDS PAID ON OR AFTER 6 APRIL
1999. AT THE YEAR END THE GROUP HAD SURPLUS ACT OF $119M CARRIED FORWARD AND
AVAILABLE FOR SET-OFF AGAINST FUTURE UNITED KINGDOM CORPORATION TAX
LIABILITIES. THE NOTIONAL "SHADOW ACT" WHICH MUST BE SET-OFF PRIOR TO
UTILISATION OF SURPLUS ACT AMOUNTS TO $21M.
LONMIN PLC
9 EARNINGS PER SHARE
EARNINGS PER SHARE HAS BEEN CALCULATED ON THE PROFIT ATTRIBUTABLE TO
SHAREHOLDERS AMOUNTING TO $130M (1998 - $63M) USING A WEIGHTED AVERAGE OF
159,325,714 ORDINARY SHARES (1998 - 178,133,954 ORDINARY SHARES).
EARNINGS PER SHARE EXCLUDING EXCEPTIONAL ITEMS HAS BEEN CALCULATED ON THE
PRE-EXCEPTIONAL PROFIT ATTRIBUTABLE TO SHAREHOLDERS AMOUNTING TO $130M (1998 -
$125M) USING THE SAME WEIGHTED AVERAGE NUMBER OF ORDINARY SHARES AS ABOVE.
LONMIN PLC
10 NET NON-INTEREST BEARING OPERATING ASSETS
AN ANALYSIS OF GROUP NET NON-INTEREST BEARING OPERATING ASSETS AND OF
ASSOCIATES' NET ASSETS BY ACTIVITY AND GEOGRAPHICAL AREA IS GIVEN BELOW:
1999 1998
GROUP ASSOCIATES TOTAL GROUP ASSOCIATES TOTAL
$M $M $M $M $M $M
PLATINUM 583 - 583 551 - 551
COAL 369 40 409 328 26 354
GOLD 21 200 221 21 178 199
OTHER 17 - 17 (1) - 1
CENTRAL FINANCE (3) - (3) 1 - 1
DISCONTINUED
OPERATIONS - - (25) - - (25)
987 240 1,227 875 204 1,075
NET INTEREST
BEARING
LIABILITIES - - (193) - - (164)
PROPOSED
DIVIDENDS - - (46) - - (40)
NET TOTAL ASSETS - - 988 - - 875
SOUTH AFRICA 958 40 998 886 26 912
ZIMBABWE AND
GHANA 21 200 221 21 178 199
THE AMERICAS 24 - 24 (7) - (7)
EUROPE (13 - (13) (1) - (1)
CENTRAL FINANCE (3) - (30 1 - (1)
DISCONTINUED
OPERATIONS - - - (25) - (25)
987 240 1,227 875 204 1,079
NET INTEREST
BEARING LIABILITIES - - (193) - - (164)
PROPOSED DIVIDENDS - - (46) - - (40)
NET TOTAL ASSETS - - 988 - - 875
1999 1998
$M $M
NET INTEREST BEARING LIABILITIES COMPRISE THE FOLLOWING:
NET BORROWINGS 197 177
LOANS RECEIVABLE (4) (13)
193 164
11 NET CASH FLOW FROM OPERATING ACTIVITIES
1998
1999 RESTATED
$M $M
GROUP OPERATING PROFIT FROM CONTINUING OPERATIONS 183 161
DEPRECIATION CHARGE 56 32
(INCREASE)/DECREASE IN STOCK (3) 4
DECREASE/(INCREASE) IN DEBTORS 1 (12)
INCREASE IN CREDITORS 10 24
OTHER ITEMS (7) -
NET CASH INFLOW FROM CONTINUING OPERATIONS 240 209
NET CASH INFLOW IN RESPECT OF DISCONTINUED OPERATIONS - 45
NET CASH INFLOW FROM OPERATING ACTIVITIES 240 254
LONMIN PLC
12 EXCHANGE RATES
THE PRINCIPAL US DOLLAR EXCHANGE RATES USED ARE AS FOLLOWS:
YEAR TO YEAR TO
30 SEPTEMBER 30 SEPTEMBER
1999 1998
AVERAGE EXCHANGE RATES
POUNDS STERLING 0.61 0.60
SOUTH AFRICA RAND 6.02 5.33
ZIMBABWE DOLLAR 37.92 18.86
CLOSING EXCHANGE RATES
POUNDS STERLING 0.61 0.59
SOUTH AFRICA RAND 6.04 5.83
ZIMBABWE DOLLAR 38.20 31.75
13 YEAR 2000
ALL BUSINESS CRITICAL SYSTEMS AND OPERATING EQUIPMENT OF THE GROUP HAVE EITHER
BEEN TESTED AND ARE BELIEVED TO BE COMPLIANT OR HAVE BEEN RECTIFIED AND ARE NOW
BELIEVED TO BE COMPLIANT. IT IS ALSO BELIEVED THAT OPERATIONS OPERATED BY
THIRD PARTIES HAVE APPLIED YEAR 2000 STRATEGIES IN ORDER TO ATTAIN COMPLIANCE.
CONTINGENCY PLANS HAVE BEEN DEVELOPED BY HEAD OFFICE AND GROUP COMPANIES AND
ARE CONTINUALLY BEING UPDATED.
BASED ON THE ABOVE, LONMIN PLC BELIEVES THAT IT AND GROUP COMPANIES HAVE TAKEN
RESPONSIBLE STEPS TO ENSURE YEAR 2000 COMPLIANCE, ALTHOUGH IT IS NOT POSSIBLE
TO PROVIDE ABSOLUTE GUARANTEES DUE TO THE NATURE OF THE YEAR 2000 ISSUE.
14 ANNUAL GENERAL MEETING
THE ANNUAL GENERAL MEETING WILL BE HELD ON FRIDAY 10 MARCH 2000.
15 STATUTORY DISCLOSURE
THE FINANCIAL INFORMATION SET OUT ABOVE IS TAKEN FROM BUT DOES NOT CONSTITUTE
THE COMPANY'S STATUTORY ACCOUNTS FOR THE YEARS ENDED 30 SEPTEMBER 1999 OR 1998,
EXCEPT FOR NOTE 2 WHICH REPRESENTS A NON-STATUTORY FORMAT CASH FLOW STATEMENT
WHICH HAS BEEN PRESENTED TO SHOW A RECONCILIATION OF CASH FLOWS DURING THE YEAR
TO THE NET BORROWINGS OF THE GROUP. STATUTORY ACCOUNTS FOR 1998 HAVE BEEN
DELIVERED, AND FOR 1999 WILL BE DELIVERED, TO THE REGISTRAR OF COMPANIES. THE
AUDITORS HAVE MADE UNQUALIFIED REPORTS ON THOSE ACCOUNTS AND SUCH REPORTS DID
NOT CONTAIN A STATEMENT UNDER SECTION 237(2) OR (3) OF THE COMPANIES ACT 1985.
COPIES OF THE 1999 LONMIN ACCOUNTS WILL BE POSTED TO SHAREHOLDERS AND WILL BE
AVAILABLE AT THE COMPANY'S REGISTERED OFFICE IN MID JANUARY 2000.
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