Corus Group plc Interim Report for the Half Year to 29 June 2002.Business Editors LONDON--(BUSINESS WIRE)--Sept. 12, 2002 This Interim Report sets out the results for the six months to 29 June June: see month. 2002 and, unless otherwise stated, comparisons are to the six months to 30 June 2001. Figures for the twelve months ended 29 December December: see month. 2001 have been extracted from the audited accounts which have been delivered to the Registrar of Companies The introduction to this article provides insufficient context for those unfamiliar with the subject matter. Please help [ improve the introduction] to meet Wikipedia's layout standards. You can discuss the issue on the talk page. and on which the auditors AUDITORS, practice. Persons lawfully appointed to examine and digest accounts referred to them, take down the evidence in writing, which may be lawfully offered in relation to such accounts, and prepare materials on which a decree or judgment may be made; and to report the whole, together have issued an unqualified report. CHAIRMAN'S STATEMENT "The half year under review saw a turning point in the decline of carbon steel selling prices which began in 2001. This decline was due to weak economic conditions across our major markets in Europe Europe (y  r`əp), 6th largest continent, c.4,000,000 sq mi (10,360,000 sq km) including adjacent islands (1992 est. pop. 512,000,000). and North
America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. exacerbated by over-production. However, production cutbacks in
Europe gathered pace during early-2002 as producers addressed the
problem of over-supply, a situation which had been encouraged by the
threat of tariffs This is a list of tariffs and trade legislation:
Against this background the second quarter saw some modest recovery in European European emanating from or pertaining to Europe. European bat lyssavirus see lyssavirus. European beech tree fagussylvaticus. European blastomycosis see cryptococcosis. selling prices, although for flat products these increases only partially mitigated mit·i·gate v. mit·i·gat·ed, mit·i·gat·ing, mit·i·gates v.tr. To moderate (a quality or condition) in force or intensity; alleviate. See Synonyms at relieve. v.intr. To become milder. the impact of the continuing price falls seen during the first quarter. Despite these challenging market conditions and blast furnace blast furnace, structure used chiefly in smelting. The principle involved in this means of extracting metals is that of the reduction of the ores by the action of carbon monoxide, i.e., the removal of oxygen from the metal oxide in order to obtain the metal. disruptions which occurred during the first half, progress continued to be made in improving the operational performance and efficiency of the Group's carbon steel business. In aluminium, demand for rolled and extruded products improved in most world markets during the first half of the year after a sharp fall in the final quarter of 2001. In terms of primary aluminium, increasing over-supply was reflected in higher LME See London Metal Exchange. LME See London Metal Exchange (LME). stocks and led to lower average metal prices during the first half of 2002. In these difficult market conditions, the Group incurred an operating loss operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. of (pound)207m for the half year to 29 June and the loss after tax and minority interests amounted to (pound)237m. Net debt amounted to (pound)1,680m at 29 June giving a gearing ratio Gearing Ratio A general term describing a financial ratio that compares some form of owner's equity (or capital) to borrowed funds. Gearing is a measure of financial leverage, demonstrating the degree to which a firm's activities are funded by owner's funds versus creditor's funds. to net tangible assets Net Tangible Assets Calculated as the total assets of a company, minus any intangible assets such as goodwill, patents and trademarks, less all liabilities and the par value of preferred stock. Also known as "net asset value" or "book value". of some 59%. In the light of the results, and as already stated, the Board has decided that no interim dividend will be paid. A decision on the recommendation for a final dividend will be taken in March next year. Since the end of the half year, steel selling prices in Europe have continued to improve despite the general uncertainty as to the strength of the expected global economic recovery, reflecting a combination of cutbacks in production, some rebuilding of steel stocks by customers and a modest improvement in consumption levels. Additional price increases are expected in Europe during the rest of 2002. As to the future, the pace and timing of economic recovery across major markets remains uncertain, not least the strength of the manufacturing sector in Europe and particularly in the UK. Further price developments will be dependent on these factors. Two significant disposals have been announced by Corus Corus may refer to:
With the successful start-up of a of a major expansion in 2005, the Alouette Aluminum Smelter, at 550,000 metric tonnes capacity per year, became the largest primary aluminum smelter in smelter in Canada Canada (kăn`ədə), independent nation (2001 pop. 30,007,094), 3,851,787 sq mi (9,976,128 sq km), N North America. Canada occupies all of North America N of the United States (and E of Alaska) except for Greenland and the French islands of . The sale is expected to be completed later this month for a cash consideration of some (pound)108m. It is anticipated that agreement will be reached on the divestment divestment to strip one's investment from an entity. of our remaining aluminium assets by the end of this year. CHAIRMAN'S STATEMENT, continued The sale to Outokumpu
Outokumpu is a group of companies headquartered in Espoo, Finland, aimed at stainless steel and technology. of our stainless steel stainless steel: see steel. stainless steel Any of a family of alloy steels usually containing 10–30% chromium. The presence of chromium, together with low carbon content, gives remarkable resistance to corrosion and heat. interests, a 23.2% stake in AvestaPolarit, was announced on 1 July July: see month. 2002 and cash proceeds of around (pound)356m were received in mid-August Noun 1. mid-August - the middle part of August period, period of time, time period - an amount of time; "a time period of 30 years"; "hastened the period of time of his recovery"; "Picasso's blue period" . The disposal of our stainless steel interests and the continuing process to sell our aluminium assets reaffirms the Corus strategy of focusing the Group around a strong carbon steel core operation. It was in this context that the Boards of Corus and CSN CSN Crosby, Stills, and Nash (band) CSN Centrala studiestödsnämnden (Swedish: state education grant and loan program) CSN Confédération des Syndicats Nationaux (French) announced on 17 July that they had reached agreement in principle to merge See mail merge and concatenate. the two companies, providing the opportunity to capitalise Verb 1. capitalise - supply with capital, as of a business by using a combination of capital used by investors and debt capital provided by lenders capitalize on the complementary strengths of both Groups." Sir Brian Moffat 12 September 2002 REVIEW OF THE PERIOD Summary The Group operating loss for the half year, including exceptional items, amounted to (pound)207m (2001: (pound)200m) and was dominated dom·i·nate v. dom·i·nat·ed, dom·i·nat·ing, dom·i·nates v.tr. 1. To control, govern, or rule by superior authority or power: by losses in carbon steel of (pound)228m (2001: (pound)239m). Group turnover was (pound)3,576m (2001: (pound)4,040m) and operating costs operating costs npl → gastos mpl operacionales totalled (pound)3,783m (2001: (pound)4,240m). Exceptional items for the first half amounted to a net credit of (pound)45m (2001: a net charge of (pound)47m), which mainly related to the release of surplus provisions following renegotiation and reappraisal of obligations for environmental and contractual liabilities for site closures, and for manpower productivity and restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). programmes previously announced. Comparisons are also affected by the impact of discontinued operations Discontinued operations Divisions of a business that have been sold or written off and that no longer are maintained by the business. (stainless steel) and these and other factors are discussed below (`Carbon steel', `Aluminium' and `Discontinued dis·con·tin·ue v. dis·con·tin·ued, dis·con·tin·u·ing, dis·con·tin·ues v.tr. 1. To stop doing or providing (something); end or abandon: operations'). Carbon steel Following the sharp slowdown For articles with similar titles, see Slow Down (disambiguation). A slowdown is an industrial action in which employees perform their duties but seek to reduce productivity or efficiency in their performance of these duties. in global economic growth during 2001, there was some recovery in major markets during the first half year. In our major European market, growth was mainly driven by higher exports with domestic demand generally weak. Turnover for the first half totalled (pound)3,076m (2001: (pound)3,408m) and included reduced levels of turnover through distribution and further processing of (pound)602m (2001: (pound)772m), and of other turnover of (pound)113m (2001: (pound)121m). Carbon steel product turnover amounted to (pound)2,361m and was 6% below the level of 2001 ((pound)2,515m). This reflected the combined effects of a 3% fall in sales volume and lower average revenue, which also fell by 3%. Carbon steel operating costs for the first half totalled (pound)3,304m (2001: (pound)3,647m). Excluding the impact of exceptional items, underlying costs at (pound)3,349m were 7% below the level of 2001 ((pound)3,600m), with the key factors influencing comparisons being lower sales, the impact of blast furnace outages and continuing cost and efficiency benefits. REVIEW OF THE PERIOD, continued Steelmaking Steelmaking is the second step in producing steel from iron ore. In this stage, impurities such as sulfur, phosphorus, and excess carbon are removed from the raw iron, and alloying elements such as manganese, nickel, chromium and vanadium are added to produce the exact steel operations during the first half of the year were affected by blast furnace outages at Port Talbot Port Talbot (tôl`bət), town (1981 pop. 40,078), Neath Port Talbot, S Wales, at the mouth of the Avon (Afan) River on Swansea Bay. Port Talbot is a popular seaside resort. Nearby are the steelworks at Margam and the oil refinery at Baglan. and IJmuiden IJmuiden (īmoi`dən), city (1991 est. pop. 58,000), North Holland prov., W Netherlands, on the North Sea. It is part of the municipality of Velsen. The city is a seaport, fishing, and industrial center at the end of the North Sea Canal. . The rebuild of the No. 5 furnace furnace, enclosed space for the burning of fuel. There are many kinds of furnaces, the type depending upon the fuel and the use to which the heat produced within it is put. Most familiar are the furnaces used in the heating of buildings. at Port Talbot is progressing on schedule and is expected to be completed in early-2003. Stock levels were higher at Port Talbot at the end of the half year due to third party slab purchases while the furnace is being rebuilt. At IJmuiden the planned reline reline /re·line/ (re-lin´) to resurface the tissue side of a denture with new base material in order to achieve a more accurate fit. of the No. 6 furnace was successfully completed at the end of June and site capacity is expected to build up to an annual rate of 6.5 million tonnes by the end of 2002. Although these outages inevitably disrupted dis·rupt tr.v. dis·rupt·ed, dis·rupt·ing, dis·rupts 1. To throw into confusion or disorder: Protesters disrupted the candidate's speech. 2. operations, good progress was nevertheless made in securing further operating and efficiency improvements. In the U.K. the major restructuring programme, announced in February February: see month. 2001, was completed in line with plan, with the closure of the Ebbw Vale Ebbw Vale (ĕb`  ), Welsh Glyn Ebwy, town (1981 pop. 24,422), Blaenau Gwent, SE Wales. site in July. Together with other measures implemented across
UK-based businesses, there was a reduction of some 900 jobs during the
half year. The `High Performance Strip UK' project is progressing
well and it is anticipated that benefits will accelerate during the next
two years, with aggregate benefits of some (pound)150mpa by end- end-pref. Variant of endo-. 2004. In the Netherlands, the Netherlands, The officially Kingdom of The Netherlands byname Holland Country, northwestern Europe. Area: 16,034 sq mi (41,528 sq km). Population (2005 est.): 16,300,000. Capital: Amsterdam. Seat of government: The Hague. Most of the people are Dutch. `World Class IJmuiden' project has made good progress with around 60% of targeted benefits expected to have been secured by the end of this year, rising to its overall target of EUR EUR In currencies, this is the abbreviation for the Euro. Notes: The currency market, also known as the Foreign Exchange market, is the largest financial market in the world, with a daily average volume of over US $1 trillion. 300m (approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. (pound)194m) by early-2004. The Direct Sheet Plant (`DSP') successfully met product quality targets during the first half. The level of output from the DSP (1) (Digital Signal Processor) A special-purpose CPU used for digital signal processing applications (see definition #2 below). It provides ultra-fast instruction sequences, such as shift and add, and multiply and add, which are commonly used in math-intensive , some 350,000 tonnes during the first half year, reflected the adverse impact of the furnace reline at IJmuiden, but an annual operating rate Operating rate The percentage of total production capacity of a company, industry, or country that is being used. operating rate The portion of capacity at which a business operates. of some 1 million tonnes is anticipated by the end of 2002. In the Netherlands Netherlands (nĕth`ərləndz), Du. Nederland or Koninkrijk der Nederlanden, officially Kingdom of the Netherlands, constitutional monarchy (2005 est. pop. 16,407,000), 15,963 sq mi (41,344 sq km), NW Europe. , there were some 300 job reductions effected during the first half. Aluminium Although European demand for rolled and extruded products improved during the first half of 2002 as compared to the low levels seen in the final quarter of 2001, there was a fall of some 3.5% from the level of the first half of 2001. The underlying LME aluminium price averaged US$1,366 in the half year, a fall of 12% on the corresponding period in 2001, as metal stocks increased against a background of a 4% expansion of global capacity but only a 1% rise in consumption. Corus' aluminium turnover of (pound)500m was 9% below the level of 2001 ((pound)552m) and mainly reflected a fall of 8% in average revenue. Operating costs totalled (pound)479m and were 7% below the level of 2001 ((pound)516m) and reflected lower LME-linked material prices and the fall in sales volume. Discontinued operations (stainless steel) On 22 January January: see month. 2001 Avesta Avesta, city, Sweden Avesta (ä`vəstä'), city (1990 est. pop. 16,860), Kopparberg co., S central Sweden, on the Dalälven River. Aluminum and high quality steel are manufactured there. Sheffield Sheffield, city, England Sheffield, city (1991 pop. 470,685), N England, at the confluence of the Don River and four tributaries. Sheffield was one of the leading industrial cities of England. It has been a center of cutlery manufacture since the 14th cent. , the Group's 51%-owned stainless steel business, ceased to be a subsidiary of Corus. From that date, AvestaPolarit became an associated undertaking with Corus holding a 23.2% stake. On 1 July 2002, Corus announced the sale of its stake in AvestaPolarit (see `Acquisitions and Investments' below) and consequently the stainless steel activities of Corus have been treated as discontinued operations in the accounts for the half year. REVIEW OF THE PERIOD, continued Profit and loss account The Group operating loss after exceptional items amounted to (pound)207m. This translated into a total operating loss of (pound)188m, after taking account of Corus' share of operating results of its joint ventures and associated undertakings amounting to (pound)19m, of which (pound)16m related to AvestaPolarit. There was a profit of (pound)18m reported on sale of fixed assets fixed assets npl → activo sg fijo fixed assets npl → immobilisations fpl fixed assets fix npl → , which included some (pound)12m in respect of the ongoing insurance settlement related to the rebuilding of the Port Talbot No. 5 blast furnace. The net loss of (pound)12m on disposals included a goodwill write-off Write-Off A reduction in the value of an asset or earnings by the amount of an expense or loss. Companies are able to write off certain expenses that are required to run the business, or have been incurred in the operation of the business and detract from retained revenues. of some (pound)15m related to AvestaPolarit. The loss before interest was (pound)182m (2001: (pound)178m) and net interest payable amounted to (pound)52m, unchanged from the level of the first half of 2001. After taking account of tax and minority interests, a net loss of (pound)237m (2001: (pound)195m) was incurred. Securitisation of trade debtors On 15 April 2002, Corus launched a revolving period securitisation programme under which it may offer to assign all of its rights, title and interest in a pool of invoiced trade debtors to a third party which is funded ultimately in the commercial paper markets. Cash advanced against this pool takes into account, inter alia [Latin, Among other things.] A phrase used in Pleading to designate that a particular statute set out therein is only a part of the statute that is relevant to the facts of the lawsuit and not the entire statute. , the risks that may be attached to the debtors and the expected collection period. Under FRS FRS abbr. Fellow of the Royal Society FRS, n “flexed rotated side-bent,” an osteopathic abbreviation used to describe vertebral position in cases of spinal dysfunction. 5 `Reporting the substance of transactions' the cash advanced has been offset against the assigned as·sign tr.v. as·signed, as·sign·ing, as·signs 1. To set apart for a particular purpose; designate: assigned a day for the inspection. 2. trade debtors in a linked presentation. Included within debtors due within one year are the following amounts:
(pound)m
Securitised gross trade debtors 315
Less non returnable proceeds (185)
------
Net securitised trade debtors 130
Other trade debtors 940
------
Total trade debtors 1,070
======
Cash flow and financing The net cash outflow from operating activities was (pound)6m, the key feature being a net reduction in working capital of (pound)101m, which included the benefit of (pound)185m from the securitisation of trade debtors. A net cash outflow from capital expenditure and financial investments of (pound)41m included gross capital expenditure of (pound)75m and there was a net cash outflow of (pound)43m related to returns on investments and servicing of finance. After taking account of these and other movements, net debt amounted to (pound)1,680m at 29 June 2002 and represented a gearing ratio of 59% to net tangible assets. On 11 January 2002, the Company issued EUR307m of 3% guaranteed unsubordinated bonds due 2007, convertible into shares of the Company. Most of the funds from the securitisation programme and almost all of the bond issue proceeds, in aggregate amounting to some EUR540m (approximately (pound)348m), were used to pay down and cancel (character) Cancel - (CAN, Control-X) ASCII character 24. part of the Company's EUR2,400m bank facility. REVIEW OF THE PERIOD, continued Employees Employees at 29 June 2002 totalled 51,600 (52,700 at 29 December 2001). The net reduction of 1,100 included 1,200 job losses related to previously announced efficiency measures. Acquisitions and investments In March 2002 Corus announced that, following a reappraisal of its position in the global aluminium industry, it was to offer its aluminium businesses for sale. On 16 August 2002 Corus announced that it had agreed to sell its 20% interest in the Aluminerie Alouette smelter to Alcan for US$165m (approximately (pound)108m) in cash, with a consideration for working capital on completion, which is expected to be later this month. It is anticipated that agreement will be reached on the sale of the Group's remaining aluminium assets by the end of this year. On 1 July 2002 Corus announced the disposal of its 23.2% stake in AvestaPolarit to Outokumpu for EUR6.55 per share in cash, plus EUR25m in cash as consideration for the termination The point where a line, channel or circuit ends. See SCSI termination and hybrid. of the shareholders' agreement shareholders' agreement n. an employment agreement among the shareholders of a small corporation permitting a shareholder to take a management position with the corporation without any claim of conflict of interest or self-dealing against the shareholder/manager. between Corus and Outokumpu entered into in connection with the formation of AvestaPolarit in January 2001. The total proceeds amounted to some EUR555m (approximately (pound)356m) and were applied to reduce Group debt when the transaction was completed in mid-August. On 17 July 2002 Corus announced that its Board and that of Companhia Siderurgica Nacional Nacional is the Spanish and Portuguese word for national. It can refer to: Sports
A non-binding document outlining the main issues relevant to a tentative partnership agreement. Notes: It is the draft used by lawyers when drawing up the contract. It serves as a guideline for both parties before any documents are legalized. have been entered into by Corus and CSN, and set out the key terms of the proposed merger and the process envisaged for preparing and executing definitive documentation and achieving completion, which is expected to occur during the first quarter of 2003. Based on a preliminary assessment, the proposed merger is expected to generate annual EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become savings of approximately US$250m by the end of the third full year of trading following completion. The one-off (1) One at a time. CD-ROM recorders (CD-R drives) are commonly called one-off machines because they write one CD-ROM at a time. (2) Only once. Software that is written to solve a specific problem only one time is sometimes called a one-off. cost of securing these benefits is estimated at approximately US$300m. Accounting Policies The accounts for the half year have been prepared in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with the accounting policies set out in the Report & Accounts for the period to 29 December 2001, except for the adoption of the new US accounting standards referred to in Note 10. Forward Looking Statements: Statements in this release include "forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. " that express expectations of future events or results. All statements based on future expectations rather than on historical facts are forward-looking statements that involve a number of risks and uncertainties, and Corus cannot give assurance that such statements will prove to be correct.
CORUS GROUP plc
CONSOLIDATED PROFIT AND LOSS ACCOUNT
Unaudited Unaudited Audited
6 months 6 months 12 months
to 29 June to 30 June to 29 Dec
2002 2001 2001
(pound)m (pound)m (pound)m
---------- ---------- ---------
TURNOVER
Group and share of joint ventures 3,729 4,163 7,924
Less share of joint ventures' turnover (153) (123) (225)
GROUP TURNOVER
Continuing operations 3,576 3,960 7,619
Discontinued operations - 80 80
------ ------ ------
3,576 4,040 7,699
Operating costs
before exceptional items (3,828) (4,193) (8,076)
Restructuring and impairment
exceptional items credited/(charged)
against operating costs 45 (47) (8)
------ ------ ------
TOTAL OPERATING COSTS (3,783) (4,240) (8,084)
------ ------ ------
GROUP OPERATING LOSS
Continuing operations (207) (203) (388)
Discontinued operations - 3 3
------ ------ ------
(207) (200) (385)
SHARE OF OPERATING RESULTS OF JOINT
VENTURES AND ASSOCIATED UNDERTAKINGS
Continuing operations 3 7 10
Discontinued operations 16 13 2
------ ------ ------
19 20 12
TOTAL OPERATING LOSS (188) (180) (373)
Profit on sale of fixed assets 18 1 17
(Loss)/profit on disposal
of businesses, subsidiaries
and associated undertakings (12) 1 2
------ ------ ------
LOSS BEFORE INTEREST (182) (178) (354)
NET INTEREST AND INVESTMENT INCOME
Group (51) (50) (103)
Joint ventures and
associated undertakings (1) (2) (5)
------ ------ ------
LOSS BEFORE TAXATION (234) (230) (462)
Taxation (2) 37 43
LOSS AFTER TAXATION (236) (193) (419)
Minority Interests (1) (2) -
LOSS FOR FINANCIAL PERIOD (237) (195) (419)
Dividends - - -
LOSS RETAINED FOR THE PERIOD (237) (195) (419)
====== ====== ======
Basic loss per ordinary share (7.58)p (6.25)p (13.42)p
Diluted loss per ordinary share (7.58)p (6.25)p (13.42)p
CORUS GROUP plc
CONSOLIDATED BALANCE SHEET
Unaudited Unaudited Audited
at 29 June at 30 June at 29 Dec
2002 2001 2001
(pound)m (pound)m (pound)m
---------- ---------- ---------
FIXED ASSETS
Intangible assets 130 145 135
Tangible assets 3,046 3,183 3,064
Investments in joint ventures 126 134 128
Investments in associated undertakings 365 373 358
Other investments and loans 62 75 65
------ ------ ------
3,729 3,910 3,750
CURRENT ASSETS
Stocks 1,332 1,434 1,320
Debtors: amounts falling
due after more than one year 492 447 468
Debtors: amounts
falling due within one year 1,500 1,654 1,396
Less: securitisation of trade debtors (185) - -
Net debtors falling
due within one year 1,315 1,654 1,396
Short term investments 3 62 11
Cash at bank and in hand 201 150 173
------ ------ ------
3,343 3,747 3,368
CREDITORS: AMOUNTS FALLING
DUE WITHIN ONE YEAR (1,680) (1,876) (1,729)
------ ------ ------
NET CURRENT ASSETS 1,663 1,871 1,639
------ ------ ------
TOTAL ASSETS LESS CURRENT LIABILITIES 5,392 5,781 5,389
CREDITORS: AMOUNTS FALLING DUE
AFTER MORE THAN ONE YEAR
Convertible bonds (310) (110) (109)
Other borrowings (1,456) (1,519) (1,503)
Other creditors (28) (68) (34)
PROVISIONS FOR
LIABILITIES AND CHARGES (581) (684) (576)
ACCRUALS AND DEFERRED INCOME
Regional development and other grants (43) (51) (46)
------ ------ ------
2,974 3,349 3,121
====== ====== ======
CAPITAL AND RESERVES
Called up share capital 1,565 1,561 1,564
Share premium account 6 5 5
Statutory reserve 2,338 2,338 2,338
Other reserves 201 201 201
Profit and loss account (1,194) (816) (1,047)
------ ------ ------
SHAREHOLDERS' FUNDS
- EQUITY INTERESTS 2,916 3,289 3,061
MINORITY INTERESTS
Equity interests
in subsidiary undertakings 58 60 60
------ ------ ------
2,974 3,349 3,121
====== ====== ======
CORUS GROUP plc
STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES
Unaudited Unaudited Audited
6 months 6 months 12 months
to 29 June to 30 June to 29 Dec
2002 2001 2001
(pound)m (pound)m (pound)m
----------- ---------- ----------
Loss for financial period (237) (195) (419)
Exchange translation differences
on foreign currency net investments 90 (51) (58)
------ ------ ------
Total recognised
losses relating to the period (147) (246) (477)
====== ====== ======
RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS
Unaudited Unaudited Audited
at 29 June at 30 June at 29 Dec
2002 2001 2001
(pound)m (pound)m (pound)m
----------- ---------- ----------
Shareholders' funds
at beginning of period 3,061 3,495 3,495
Loss for the period (237) (195) (419)
Exchange translation differences
on foreign currency net investments 90 (51) (58)
Transfer of goodwill - 40 40
New shares issued 2 - 3
------ ------ ------
Shareholders' funds
at end of the period 2,916 3,289 3,061
====== ====== ======
CORUS GROUP plc
CONSOLIDATED CASH FLOW STATEMENT
Unaudited Unaudited Audited
6 months 6 months 12 months
to 29 June to 30 June to 29 Dec
2002 2001 2001
(pound)m (pound)m (pound)m
----------- ---------- ----------
Net cash (outflow)/inflow
from operating activities (6) 36 172
Dividends from joint ventures
and associated undertakings 5 5 9
RETURNS ON INVESTMENTS AND
SERVICING OF FINANCE
Interest and other dividends received 7 13 16
Interest paid (49) (70) (124)
Interest element of
finance lease rental payments (1) (2) (2)
------- ------- -------
Net cash outflow from returns on
investments and servicing of finance (43) (59) (110)
------- ------- -------
TAXATION
UK corporation tax received/(paid) 5 (10) 5
Overseas tax (paid)/received (7) (9) 8
------- ------- -------
Tax (paid)/received (2) (19) 13
------- ------- -------
CAPITAL EXPENDITURE
AND FINANCIAL INVESTMENT
Purchase of tangible fixed assets (78) (100) (167)
Sale of tangible fixed assets 31 7 37
Purchase of other
fixed asset investments (7) (3) (3)
Purchase of intangible fixed assets (1) - -
Loans to joint ventures
and associated undertakings - (1) -
Repayment of loans by joint
ventures and associated undertakings 14 - 3
------- ------- -------
Net cash outflow from
capital expenditure
and financial investments (41) (97) (130)
------- ------- -------
ACQUISITIONS AND DISPOSALS
Purchase of subsidiary
undertakings and businesses (1) - -
Investments in joint
ventures and associated undertakings (2) (3) (12)
Sale and exchange of businesses
and subsidiary undertakings 2 56 52
Sale of joint ventures
and associated undertakings (1) 3 9
------- ------- -------
Net cash (outflow)/inflow
from acquisitions and disposals (2) 56 49
------- ------- -------
CORUS GROUP plc
CONSOLIDATED CASH FLOW STATEMENT, continued
Unaudited Unaudited Audited
6 months 6 months 12 months
to 29 June to 30 June to 29 Dec
2002 2001 2001
(pound)m (pound)m (pound)m
----------- ---------- ----------
Equity dividends
paid to shareholders - - -
Net cash (outflow)/inflow
before use of liquid
resources and financing (89) (78) 3
------- ------- -------
Management of liquid resources:
Net sale/(purchase)
of short term investments 8 (25) 27
FINANCING
Issue of ordinary shares 2 - -
Cash inflow from
issue of ordinary shares 2 - -
------- ------- -------
New loans 186 179 282
Repayment of borrowings (71) (274) (333)
Capital element of
finance lease rental payments (3) (5) (9)
------- ------- -------
Increase/(decrease) in debt 112 (100) (60)
------- ------- -------
Net cash inflow/(outflow)
from financing activities 114 (100) (60)
------- ------- -------
INCREASE/(DECREASE) IN CASH IN PERIOD 33 (203) (30)
======= ======= =======
CORUS GROUP plc
RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET DEBT
Unaudited Unaudited Audited
6 months 6 months 12 months
to 29 June to 30 June to 29 Dec
2002 2001 2001
(pound)m (pound)m (pound)m
---------- ---------- ----------
Increase/(decrease) in cash 33 (203) (30)
(Decrease)/increase
in liquid resources (8) 25 (27)
(Increase)/decrease in debt (112) 100 60
Change in net funds
resulting from cash flows in period (87) (78) 3
Debt and liquid resources exchanged - 103 103
Effect of foreign
exchange rate changes (33) 12 10
------- ------- -------
Movement during the period (120) 37 116
Net debt at beginning of the period (1,560) (1,676) (1,676)
------- -------- -------
Net debt at end of the period (1,680) (1,639) (1,560)
======= ======== =======
ANALYSIS OF NET BORROWINGS
Unaudited Unaudited Audited
at 29 June at 30 June at 29 Dec
2002 2001 2001
(pound)m (pound)m (pound)m
----------- ---------- ----------
Cash at bank and in hand 201 150 173
Bank overdrafts (20) (177) (27)
Short term investments 3 62 11
Other short term loans (94) (69) (101)
Long term borrowings (1,742) (1,572) (1,586)
Obligations under finance leases (28) (33) (30)
------- ------- -------
(1,680) (1,639) (1,560)
======= ======= =======
CORUS GROUP plc
SUPPLEMENTARY INFORMATION
1. Turnover & operating result
Unaudited Unaudited Audited
6 months 6 months 12 months
to 29 June to 30 June to 29 Dec
2002 2001 2001
(pound)m (pound)m (pound)m
----------- ---------- -----------
SEGMENTAL TURNOVER
Carbon steel products 2,361 2,515 4,792
Distribution & further processing 602 772 1,433
Other turnover 113 121 309
------- ------- -------
Carbon steel 3,076 3,408 6,534
Aluminium 500 552 1,085
Stainless steel
(discontinued operations) - 80 80
------- ------- -------
Group turnover 3,576 4,040 7,699
======= ======= =======
BY DESTINATION
UK 1,046 1,162 2,291
Europe (excluding UK) 1,817 2,107 3,899
North America 435 467 889
Other areas 278 304 620
------- ------- -------
3,576 4,040 7,699
======= ======= =======
PRODUCT TURNOVER
Carbon steel products:
UK 830 914 1,737
Europe (excluding UK) 1,134 1,222 2,258
North America 261 250 504
Other areas 136 129 293
------- ------- -------
2,361 2,515 4,792
======= ======= =======
Aluminium ( ):
UK 45 32 104
Europe (excluding UK) 335 390 737
North America 85 86 171
Other areas 35 44 73
------- ------- -------
500 552 1,085
======= ======= =======
( ): comprising:
Rolled products 331 367 683
Extrusions 101 112 213
Primary metal 68 73 189
------- ------- -------
500 552 1,085
======= ======= =======
CORUS GROUP plc
SUPPLEMENTARY INFORMATION
Unaudited Unaudited Audited
months 6 months 12 months
to 29 June to 30 June to 29 Dec
2002 2001 2001
(pound)m (pound)m (pound)m
----------- ----------- ----------
GROUP OPERATING RESULT
Carbon steel (228) (239) (446)
Aluminium 21 36 58
Stainless steel
(discontinued operations) - 3 3
------- ------- -------
(207) (200) (385)
======= ======= =======
2. Sales volume kt kt kt
Carbon steel products:
UK 2,989 3,199 6,146
Europe (excluding UK) 4,130 4,151 7,994
North America 811 750 1,573
Other areas 457 542 1,163
------- ------- -------
8,387 8,642 16,876
======= ======= =======
Aluminium( ):
UK 32 16 78
Europe (excluding UK) 195 221 429
North America 48 37 78
Other areas 16 23 36
------ ------- -------
291 297 621
====== ======= =======
( ): comprising:
Rolled products 168 171 320
Extrusions 46 49 91
Primary metal 77 77 210
------ ------- -------
291 297 621
====== ======= =======
3. Total operating costs (pound)m (pound)m (pound)m
Raw materials & consumables 1,634 1,802 3,539
Maintenance costs
(excluding own labour) 378 409 706
Other external charges 628 668 1,272
Employment costs 789 902 1,633
Depreciation & amortisation
(net of grants released) 161 194 376
Other operating costs 197 316 543
Changes in stock 1 (24) 61
Own work capitalised (5) (27) (46)
------ ------- -------
3,783 4,240 8,084
====== ======= =======
CORUS GROUP plc
SUPPLEMENTARY INFORMATION
Unaudited Unaudited Audited
6 months 6 months 12 months
to 29 June to 30 June to 29 Dec
2002 2001 2001
(pound)m (pound)m (pound)m
----------- ---------- ----------
4. Exceptional items
As included in total operating costs:
- Redundancy & related costs (3) 39 (9)
- Accelerated depreciation (11) 4 5
- Other asset write-downs (1) - (13)
- Other rationalisation costs (30) 4 25
------ ------ ------
(45) 47 8
====== ====== ======
5. Net interest & investment income
Interest receivable 7 12 15
Interest payable (57) (61) (116)
Finance leases (1) (1) (2)
Group (51) (50) (103)
Joint ventures
& associated undertakings (1) (2) (5)
------ ------ ------
(52) (52) (108)
====== ====== ======
6. Taxation
UK corporation tax 2 - 25
Double tax relief (2) - (25)
Prior year credit/(charge) 4 (3) (6)
Overseas taxes (9) 12 28
------ ------ ------
Current tax (5) 9 22
UK deferred tax - (51) (58)
Overseas deferred tax 2 - (12)
Group tax (3) (42) (48)
Joint ventures 1 3 3
Associated undertakings 4 2 2
------ ------ ------
2 (37) (43)
====== ====== ======
Deferred tax assets amounting to (pound)177m have been recognised.
The deferred tax assets in respect of tax losses are recoverable
against future forecast taxable profits within a time horizon that the
directors consider to be more likely than not to occur. Deferred tax
assets have not been recognised in respect of losses with a value of
(pound)933m, of which (pound)414m are UK losses.
CORUS GROUP plc
SUPPLEMENTARY INFORMATION
Unaudited Unaudited Audited
6 months 6 months 12 months
to 29 June to 30 June to 29 Dec
2002 2001 2001
---------- ---------- ----------
7. Reconciliation of operating
result to net cash flow
from operating activities (pound)m (pound)m (pound)m
Operating loss (207) (200) (385)
Depreciation & amortisation
(net of grants released) 161 194 376
Exceptional items (excluding
accelerated depreciation) (34) 43 3
Utilisation of provisions (27) (48) (137)
Decrease/(increase) in stocks 22 (73) 41
Decrease/(increase) in debtors 81 (87) 177
(Decrease)/increase in creditors (2) 203 91
Other movements (net) - 4 6
------ ------ ------
(6) 36 172
====== ====== ======
8. Employees numbers numbers numbers
Average weekly numbers employed:
UK 26,300 30,100 28,800
Netherlands 12,000 12,600 12,400
Other countries 13,800 14,900 14,400
------ ------ ------
52,100 57,600 55,600
====== ====== ======
Numbers employed at end of period:
UK 25,800 28,500 26,700
Netherlands 11,900 12,300 12,200
Other countries 13,900 14,100 13,800
------ ------ ------
51,600 54,900 52,700
====== ====== ======
9. Pensions - FRS 17
The following amounts are in respect of the British Steel (BS)
scheme and other Group pension schemes, and were measured in
accordance with the UK requirements of FRS 17.
BS Other
scheme schemes
At 29 June 2002 (pound)m (pound)m
Total market value of assets 7,857 3,191
Present value of scheme liabilities (6,600) (3,085)
------ ------
Surplus in the scheme 1,257 106
Non-recoverable surplus (222) -
------ ------
Recoverable surplus 1,035 106
Related deferred tax liability (311) (40)
------ ------
Net pension asset 724 66
====== ======
CORUS GROUP plc
SUPPLEMENTARY INFORMATION
10. US GAAP
Unaudited Unaudited Audited
6 months 6 months 12 months
to 29 June to 30 June to 29 Dec
2002 2001 2001
(pound)m (pound)m (pound)m
---------- ---------- ----------
Loss for the period (237) (195) (419)
Adjustments:
Amortisation of goodwill 6 (2) (5)
Impairment of US GAAP goodwill
on adoption of SFAS 142 (net
of release of negative goodwill) (22) - -
Depreciation of fixed assets - 2 5
Loss on sale of
associated undertaking/subsidiary 15 (203) (202)
Interest costs capitalised 4 8 8
Depreciation of capitalised interest (9) (9) (16)
Pension costs 60 42 100
Stock-based
employee compensation awards (8) (5) (9)
Accelerated depreciation (8) (15) (21)
Deferred taxation (18) (24) 18
Profit/(loss) on commodity derivatives 25 - (25)
Loss on foreign currency derivatives (3) - (4)
------- ------ ------
Loss for the period - US GAAP (195) (401) (570)
============ ====== ======
Basic loss per ADS - US GAAP (pound)(0.62)(pound)(1.28)(pound)(1.83)
============ ========== ============
Diluted loss per ADS - US GAAP (pound)(0.62)(pound)(1.28)(pound)(1.83)
============ ========== ============
Shareholders' equity 2,916 3,289 3,061
Adjustments:
Additional goodwill under US GAAP 3 104 99
UK GAAP goodwill on AvestaPolarit (75) (127) (93)
Fixed assets - (50) (77)
Purchase consideration (26) (28) (26)
Interest costs capitalised
(net of depreciation) 114 127 119
Pension costs 302 184 242
Accelerated depreciation 298 312 306
Deferred taxation (196) (212) (178)
Liabilities for derivatives (7) - (29)
------ ------ ------
Shareholders' equity - US GAAP 3,329 3,599 3,424
====== ====== ======
During the current period Corus has adopted SFAS 141 `Business
Combinations' and SFAS 142 `Goodwill and Other Intangible Fixed
Assets'. Under these standards goodwill is no longer amortised (which
totalled (pound)23m last year under US GAAP) but instead is assessed
for impairment each year. The standards also require that any negative
goodwill will be immediately credited to the result.
CORUS GROUP plc
Independent Review Report to Corus Group plc
Introduction
We have been instructed by the company to review the financial
information which comprises the profit and loss account, the balance
sheet, the cash flow statement, the statement of total recognised
gains and losses and the related notes. We have read the other
information contained in the interim report and considered whether it
contains any apparent misstatements or material inconsistencies with
the financial information.
Directors' responsibilities
The interim report, including the financial information contained
therein, is the responsibility of, and has been approved by the
directors. The directors are responsible for preparing the interim
report in accordance with the Listing Rules of the Financial Services
Authority which require that the accounting policies and presentation
applied to the interim figures should be consistent with those applied
in preparing the preceding annual accounts except where any changes,
and the reasons for them, are disclosed.
Review work performed
We conducted our review in accordance with guidance contained in
Bulletin 1999/4 issued by the Auditing Practices Board for use in the
United Kingdom. A review consists principally of making enquiries of
group management and applying analytical procedures to the financial
information and underlying financial data and, based thereon,
assessing whether the accounting policies and presentation have been
consistently applied unless otherwise disclosed. A review excludes
audit procedures such as tests of controls and verification of assets,
liabilities and transactions. It is substantially less in scope than
an audit performed in accordance with United Kingdom Auditing
Standards and therefore provides a lower level of assurance than an
audit. Accordingly we do not express an audit opinion on the financial
information.
Review conclusion
On the basis of our review we are not aware of any material
modifications that should be made to the financial information as
presented for the six months ended 29 June 2002.
PricewaterhouseCoopers
Chartered Accountants
London
12 September 2002
Notes:
(a) The maintenance and integrity of the Corus Group plc website
is the responsibility of the directors; the work carried out
by the auditors does not involve consideration of these
matters and, accordingly, the auditors accept no
responsibility for any changes that may have occurred to the
interim report since it was initially presented on the
website.
(b) Legislation in the United Kingdom governing the preparation
and dissemination of financial information may differ from
legislation in other jurisdictions.
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