XSTRATA INTERIM RESULTS TO SIX MONTHS ENDED 30TH JUNE 2003
Zug, 17 September 2003
Xstrata plc, the international natural resources group, today announces interim results for the six months to 30 June 2003. On 7 April 2003, Xstrata announced its intention to acquire MIM Holdings for a total consideration of US$2.1 billion. The acquisition was successfully completed on 24 June 2003, at the end of the period under review, creating a diversified, competitive global mining Group with exciting prospects for future growth. The interim report focuses on Xstrata’s statutory (stand-alone) financial results for the interim period. The report also includes pro forma results showing MIM and Xstrata’s results combined, as if MIM had been owned from 1 January 2003, to provide a basis for ongoing analysis. MIM Holdings’ results will be consolidated from 1 July 2003.
Key Financial Results
| • | Turnover | US$1,157.1 million (H1 02: US$957.2 million**) |
| • | EBITDA* | US$188.2 million (H1 02: US$270.3 million**) |
| • | Attributable profit* | US$76.8 million (H1 02: US$112.9 million**) |
| • | Earnings per share* | US$0.31 (H1 02: US$0.45**) |
| • | Interim dividends per share | 6.7USc |
| * Excludes an exceptional loss of US$1.6 million on disposal of magnesium plant | ||
| ** H1 2002 results are pro forma to include coal acquisition from 01.01.02 | ||
Highlights
| • | Turnover up by US$200 million or 21%, boosted by higher sales volumes in Coal and Alloys, higher prices for ferrochrome and the acquisition of the Nordenham zinc smelter |
| • | Commodity prices in general were slightly lower in the period compared to the corresponding period last year; this trend is now reversing |
| • | Cost savings and efficiencies of US$36 million (3.3% of operating costs) were achieved in real terms across Xstrata’s businesses |
| • | Weak US dollar against local currencies had the largest impact on earnings, reducing EBIT by US$163 million compared to the corresponding period |
| • | Dividend of 6.7USc per share announced, consistent with implied 2002 dividend |
Acquisition of MIM
| • | Successful US$2.1 billion acquisition of MIM Holdings Limited completed during the period, with US$1.4 million raised through a Rights Issue |
| • | Excellent progress made in integrating and restructuring MIM; formal integration process to complete by end of September 2003 |
| • | US$38 million annual cash cost savings from the acquisition already identified ahead of targets; total annual synergy benefits now expected to reach US$55 million, an increase of 22% over previous estimate |
| • | US$600 million Guaranteed Convertible Bonds issued since period end, reducing overall financing costs and diversifying the Group’s funding base |
Chief Executive, Mick Davis commented:
" The first six months of 2003 presented extremely difficult operating conditions, caused by the weak US dollar and dull commodity prices. Nevertheless, it is precisely in a time of weak prices that the best deals can be achieved and a company must move forward. In the face of these pressures, the successful completion of the MIM acquisition, together with the ongoing realisation of meaningful efficiency gains across the Group, represent significant achievements. The Group is now well positioned to capture fully the benefits that will accrue from recovering world markets and commodity prices. Save for the ongoing strength of the South African Rand, in particular, as well as the Euro and Australian dollar, the outlook for the coming year is most encouraging."
ends
The Interim Report 2003 and other related materials are available from our financial reports section
Xstrata contacts
| Marc Gonsalves |  |
Justine Winn | ||
| Telephone | +44 20 7968 2812 | Telephone | +61 2 9253 6748 | |
| Mobile | +44 7775 662 348 | Mobile | +61 416 196 403 | |
| mgonsalves@Xstrata.com | jwinn@xstratacoal.com | |||
| Brigitte Mattenberger | Michael Oke & Claire Bithell | |||
| Telephone | +41 41 726 6071 | Prospero Financial | ||
| Mobile | +41 793 811 823 | Telephone | +44 20 7898 9394/9387 | |
| bmattenberger@Xstrata.com | Mobile | +44 7778 469630/07796 278 294 | ||