Anglo American is pushing ahead with the streamlining and restructuring processes to refocus the company on copper, iron ore and crop nutrients although it is suffering impairment hits along the way, with revenues, dividends and earnings for the June 2024 interim period taking big knocks.
Duncan Wanbald, the CEO for Anglo American, said yesterday that the company, which is demerging Anglo American Platinum and De Beers as well as divesting out of nickel and steelmaking coal, was “moving at pace to create a much more agile and structurally profitable” mining company.
Its “steelmaking coal divestment process (is) under way, with strong interest reiterated post Grosvenor (explosion) incident” . The the nickel divestment process was also in progress.
During a media briefing yesterday, Wanbald said operations would probably resume at Grosvernor under a new owner as the company was looking to wrap up a deal for the mine by as early as the beginning of next year.
Preparations for the demerger of its platinum group metal (PGM) unit, which has indicated an inclination for a dual-listing in London, were under way while it was also “preparing” for the demerger or divestment of De Beers, its diamond producing company, in the second half of 2025.
“We are transforming Anglo American by focusing on our world-class asset base in copper, premium iron ore and crop nutrients, thereby accelerating the recognition of value inherent in our business,” said Wanbald.
As the company restructures its operations, Anglo American’s financial performance for the half year period to the end of June saw its revenues dip by 8% to $15.2 billion (R280bn).
Earnings per share in the company for the period were also lower by 23% at $1.06, with the 42 cents interim dividend declared for the period falling by as much as 24% compared to the same period last year.
Underlying earnings before interest, tax, depreciation and amortisation (Ebitda) of $5bn were a result of “improved cost performance”, which largely offset a 10% lower product basket price for the half year.
Unit costs for the company improved by 4%, “reflecting weaker currencies, operational improvements” and effective cost control.
Anglo American’s copper and iron ore operations top performed on the back of stronger operating margins. The two streams contributed about $3.5bn to the company’s Ebitda earnings.
There was a $0.7bn loss attributable to equity shareholders mainly as a result of a $1.6bn impairment in the Woodsmith potash project due to the company’s decision to slow down development of the mine.
Anglo American’s production volumes decreased by 1% on a copper equivalent basis for the period while its manganese output was impacted by suspension of the Australian operations due to the impact of tropical cyclone Megan during the period.
Cash flows from operations during the interim period increased to $5.2bn from $3.9bn a year ago, reflecting the impact of a reduction in working capital amounting to $0.6bn.
“We are on track to reduce our annual run rate costs by $1.7bn and reduce capital spend by $1.6bn over the 2024-2026 period,” added Wanbald.
He emphasised that the company’s renewed focus on copper was “tracking well” after the Minas-Rio mine achieved its strongest first half production for several years.
Watch the presentation of Anglo American results below:
We have announced our half year results for 2024, highlighting a strong operational performance delivering $5.0 billion of underlying EBITDA.
— Anglo American (@AngloAmerican) July 25, 2024
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