Annual Report 2003 - Antofagasta plc

Financial ReviewIncome from Other Fixed Asset Investments 2003 2002US$m US$mDividend income 0.1 3.2Profit on disposal of fixed asset investments 1.1 –The Group did not receive a dividend from Quiñenco S.A. in 2003, and income from other fixed assetinvestments amounted to US$0.1 million. During 2002, dividend income was US$3.2 million, which relatedalmost entirely to Quiñenco.Following the demerger of Quiñenco in October 2003, the Group disposed of nearly all its other investments,including substantially all of its shares held in Banco de Chile S.A. This resulted in a profit of US$1.1 million.There were no comparable disposals in 2002.Net Interest Payable 2003 2002US$m US$mInterest receivable 4.6 6.4Interest payable (32.7) (46.7)Foreign exchange (2.1) (0.1)Release of discount relating to provisions (1.1) 0.1(31.3) (40.3)The decrease in interest receivable reflected lower market interest rates in 2003 compared with 2002.Group cash and deposit balances during 2003 were not materially different from 2002, although balancesdecreased at the end of the year due to the acquisition in December 2003 of the water concession for cash.Cash balances were US$195.7 million at the end of 2003 compared with US$252.4 million at the end of 2002.Deposits are typically held on short-term maturities of less than three months. 89% of the year-end cashand deposit balances were denominated in US dollars with the remainder mainly held in Chilean pesos.ANTOFAGASTA PLC Annual Report and Financial Statements 2003The decrease in interest payable resulted mainly from lower interest rates and regular principal repaymentsby Los Pelambres and El Tesoro. Interest costs at Los Pelambres were US$22.7 million compared withUS$31.7 million the previous year. Interest costs at El Tesoro for 2003 were US$9.7 million compared withUS$14.6 million in 2002.In 2003, the ratio of operating profit to net interest was 12.4 times (2002 – 5.3 times) and the ratio ofEBITDA to net interest and principal repayments (excluding amounts repaid on refinancing and voluntaryprepayments) was 3.0 times (2002 – 2.4 times).20