Anglo American plc notification: De Beers Société Anonyme results 2007
08 February, 2008
De Beers Société Anonyme (“DBSA”) today reported underlying earnings for the year ended 31 December 2007 of US$483 million.
Anglo American plc (“AA plc”) arrives at its underlying earnings in respect of De Beers by accounting for the interests arising from the ordinary shares and the 10% preference shares it holds. AA plc will therefore report underlying earnings of US$239 million for the year ended 31 December 2007 from it's investment in De Beers, as reconciled in the table below:
| US$ million | Year ended 31.12.2007 |
|---|---|
| De Beers underlying earnings (100%) | 483 |
| Difference in IAS 19 accounting policy | 13 |
| De Beers underlying earnings – AA plc basis (100%) | 496 |
| AA plc's 45% ordinary share interest | 223 |
| Income from preference shares | 16 |
| AA plc underlying earnings | 239 |
In the year ended 31 December 2007, AA plc received a total of US$59 million in distributions from De Beers, consisting of a US$23 million final dividend on ordinary shares relating to FY 2006, a US$18m interim dividend on ordinary shares relating to FY 2007, US$9 million dividends representing the second payment on preference shares for 2006 and a further interim dividend of US$9 million on preference shares for 2007.
On 31 December 2007, DBSA redeemed 25% of the preference shares in issue, taking the total redemption to 81% of the original issue, and on that date AA plc received US$44 million, representing 6% of its original US$701 million preference share interest. AA plc now holds US$131 million of preference shares in DBSA.
Underlying Earnings
Underlying Earnings is net profit attributable to equity shareholders, adjusted for the effect of special items and remeasurements, and any related tax and minority interests. Special items are those items of financial performance which are material by nature or amount and should therefore be separately presented. These principally relate to impairment and significant closure costs, exceptional legal provisions and profit or loss on disposals. Remeasurements include (i) adjustments to ensure that the unrealised gains or losses on non-hedge derivative instruments are recorded in underlying earnings in the same period as the underlying transaction against which these instruments provide an economic, but not formally designated, hedge and (ii) foreign currency gains and losses arising on the retranslation of dollar denominated De Beers preference shares held by a rand functional currency subsidiary of the Group.
The above figures are unaudited.