Published On: Thu, Jul 28th, 2016

Anglo American reports earnings reduction

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Anglo American  CSIJOHANNESBURG, (CAJ News) – ANGLO-AMERICAN has reported a reduction in underlying earnings and earnings before interest and taxes (EBIT) for the six months ended June 30.

The company earned $0,7 billion and $1,4 billion respectively.

These reduced from $0.9 billion and 27 percent correspondingly.

Falling realised prices were seen across most products compared with the prior year ($1,2 billion impact on underlying EBIT), with the platinum US$ basket price down 24 percent, metallurgical coal down 23 percent, copper down 15 percent, diamonds down 14 percent and Kumba’s iron ore down 10 percent.

This was only partly offset by weaker producer country currencies ($0,9 billion impact), in particular a 29 percent weakening of the South African rand against the US dollar.

Expected lower Kumba Iron Ore volumes as a result of the pit reconfiguration at Sishen, and lower Copper volumes due to expected lower grades, negatively affected underlying EBIT, although this was partially offset by increased sales volumes at De Beers.

Mark Cutifani, Chief Executive of Anglo American, says the decisive actions they have taken to strengthen the balance sheet put us well on track to achieve our net debt target of less than $10 billion at the end of 2016 – both through stringent capital and cost discipline and improved operational performance – and assuming the completion of announced non-core asset divestments.

“We are transforming Anglo American to be a more resilient business, with a core portfolio of world class assets in products where we are developing a sustainable competitive advantage – in De Beers, PGMs and copper.”

AngloAmerican has agreed $1,5 billion of non-core disposals in H1 2016, including the Niobium and Phosphates businesses in Brazil.

“We will continue to divest non-core assets using strict value thresholds as we continue to reduce our debt levels and position the core business on a foundation to deliver sustainably positive cash flows,” Cutifani said.

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