Anglo benefits from higher iron ore, platinum prices


Anglo benefits from higher iron ore, platinum prices

Published Date: 2020-02-21 | Source: Stephen Gunnion | Author: Stephen Gunnion

Anglo benefits from higher iron ore, platinum prices

The diversified mining group has increased its payout by 9% following a strong performance from its PGM and iron ore operations.

Last year was a great year for Anglo American's iron ore and platinum group metals (PGMs) operations thanks to rising prices, but less so for diamonds and coal. Copper was also affected by production losses at its Los Bronces mine in Chile due to the continued drought in that country.

However, the group's strategy of getting rid of marginal operations and focusing on quality operations and improving efficiencies resulted in an 8% rise in underlying profit - and a 9% increase in its annual dividend.

Group production rose 1% on a copper equivalent basis for the year to end-December, supported by increases in metallurgical coal and its Minas-Rio iron ore mine in Brazil, which restarted operations in December 2018 after a nine-month stoppage due to a pipe leak. Copper production fell 5% as higher grades at its Los Bronces mine and a small rise in production at Collahuasi helped offset production losses due to the drought in Chile. Diamond subsidiary De Beers cut production in SA in response to weak demand and as its Venetia mine moved from open pit to underground operations. While production of metallurgical coal was up, thermal coal declined, as did manganese ore production.

Revenue for the year increased by 8% to $29.9 billion and underlying earnings before interest, tax, depreciation and amortisation (EBITDA) rose 9% to $10 billion. Attributable profit was steady at $3.55 million, as were earnings per share (EPS) at $2.81. Underlying EPS increased by 8% to $2.75. With the proposed final dividend payment of 47c per share, the group said its total dividend for the year would amount to $1.09 per share, up 9% from 2018. By the end of the period it had bought back shares worth $800 million as part of its $1 billion buyback programme.

Its shares rose 2.5% to R414.79 yesterday.

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