Press Release Archive - 2005

• Record results: headline earnings(1) up 59% at $2,689 million; headline earnings per share up 57% at $1.88
• Total profit for the year up 83% at $2,913 million
• Cash generation: EBITDA (2) up by $2.3 billion at $7.1 billion
• Record Base and Ferrous Metals performances
• $1.5 billion of projects successfully commissioned: $4.7 billion project pipeline on track
• Ongoing optimisation of asset base: $2.1 billion of disposals, including Hudson Bay and stakes in Gold Fields and Terra. Minera Sur Andes and Kumba acquisitions performing well
• Cost savings and efficiencies up 65% at $554 million
• Final dividend increased by 31% to 51 cents. Total dividend up 30% at 70 cents

(1) See note 7 for basis of calculation of headline earnings.
(2) EBITDA is operating profit before exceptional items plus depreciation and amortisation of subsidiaries and share of EBITDA of joint ventures and associates. EBITDA is reconciled to net cash inflow from operating activities above the cash flow statement.
(3) See note 2 for definition of net operating assets.

Tony Trahar, Chief Executive, said:
"The record results achieved by the Group in 2004 reflect the transformation of our asset base into a focused global resources group over the last five years. During that period, we have completed over $15 billion of acquisitions and $9 billion of disposals, creating a balanced portfolio of high quality natural resource assets and positioning the Group to benefit from growing demand for our products. Our strong cash generation has provided the flexibility to continue investing in our current businesses through our $4.7 billion project pipeline and $8 billion of potential projects, while seeking further growth opportunities through acquisition. We remain intensely focused on improving the operating efficiency of our assets and on leveraging procurement spend and innovation initiatives across our business units. Our ongoing programme has already realised $1.2 billion in efficiency and cost improvement initiatives across the Group since 2002, $554 million of which were achieved in 2004.

The Group achieved record headline earnings of $2.7 billion for 2004, an increase of 59% over 2003. Global growth during 2004 was the highest for several decades, due both to the sustained recovery in the US and continued robust economic growth in Asia, in particular the ongoing industrialisation of China, which fed through into strong demand for many of our commodities. Copper, nickel, zinc, coal and iron ore markets all benefited materially as a result and a number of these commodities reached their highest price levels for many years.

Of particular note was the strong performance by Base Metals, which recorded headline earnings of over $1 billion on the back of record production of copper, nickel, zinc and mineral sands products and significantly higher base metal prices. The Minera Sur Andes (formerly Disputada) acquisition performed particularly well, earning an EBITDA return of 48% on this recent investment. With global steel production surpassing 1 billion tonnes for the first time, headline earnings from Ferrous Metals and Industries also reached record levels, increasing more than fourfold. Coal and Platinum achieved increased profit contributions compared to the prior year, benefiting from stronger prices for their products. However, the continued strength of the South African rand, which rose 15% against the US dollar, remained a challenge for our South African operations, impacting our gold and platinum businesses in particular. Cash generation increased, with EBITDA rising by 49% to $7.1 billion, on the back of the Group's strong operating performance.

Reflecting the significant increase in earnings, the final dividend has been increased by 31% to 51 cents per share, giving a total dividend of 70 cents per share, up 30%.

We continue to make good progress on our project pipeline, one of the largest in the resources sector. During 2004, the Group successfully commissioned several major new projects, including the Collahuasi Rosario project in Chile, the Skorpion zinc mine in Namibia and the Buxton cement plant in the UK. The platinum expansion programme continues with production scheduled to increase from the current 2.45 million ounces per annum to 2.6 million ounces per annum in 2005. Mondi has brought on stream an additional 105,000 tonnes capacity of pulp and 110,000 tonnes of paper at its Ruzomberok mill, completing its $233 million paper and pulp expansion in Slovakia.

The outlook for the year ahead is very dependent on growth prospects for both OECD countries and China. While the leading indicators for the OECD currently point to some slowing of industrial output, China continues to grow strongly and will remain a vital market for many of our commodities. On the supply side, global output is generally set to increase and much will depend on the industry maintaining capital discipline in the face of higher commodity prices. A key challenge for the Group will be to continue improving operating efficiencies and cost control against a background of volatile currencies and in particular a weak US dollar. In the meantime, Anglo American's geographic and commodity diversity, its significant project pipeline, its disciplined acquisition process and strong cash generation will continue to underpin performance.”

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