Diversified mining giant Anglo American delivered lower earnings the six months to June as lower commodity prices and higher costs took a toll.
In its interim financial results for the six months ended June 30, 2023, the group yesterday reported a 41% decrease in underlying earnings before interest, taxes, depreciation, and amortisation, which amounted to $5.1 billion (R91bn), largely due to weaker product prices.
The group flagged that attributable profit dropped by 66% to $1.26bn, while total group production increased by 10%, but average prices for its basket of products decreased by 19%.
Anglo said this led to a 13% decline in revenue. As a result the group slashed its dividend by 55.6% to $0.55 from $1.24 the previous year, a $700 million payout.
Group production was helped by a ramp-up of its new Quellaveco copper mine in Peru, as it had a 42% jump in copper output.
The Brazil coal and South African iron ore business also boosted the miner but saw production declines for both platinum group metals and diamonds.
Anglo American CEO Duncan Wanblad said: “We have been a bit surprised by how slow the reopening of China has been and the lack of stimulus that everybody expected. The good news is the politburo in the last couple of days has indicated quite strongly that it will take some action.
“What we are certain about is that there will be a recovery, what we are not certain about is the length of time that it is going to take to get from here to that recovery,” Wanblad said.
He said Macro headwinds, principally, weaker prices for the group's products and input cost inflation, certainly weighed on its first half financial performance.
“We are on track to deliver on our full-year production guidance, which includes a significant anticipated step-up in volumes in the second half. Our focus on operational stability and cost control are our key margin levers and we also expect to deliver annual efficiencies of $0.5 billion from across our full range of business support activities,” he said.
Looking ahead, Wanbald said: “There is no doubt that while the nearer term macro picture presents challenges, the longer term demand outlook for future-enabling metals and minerals is ever more compelling.
“As most major economies accelerate their decarbonisation programmes and as the global population grows by up to 2 billion people over the next 25 years, with an associated need for higher living standards, our objective is to grow the value of our business into that demand.”
Meanwhile, Anglo American said the board of Anglo American Platinum had announced the appointment of Craig Miller as CEO, with effect from October 1, 2023, following Natascha Viljoen’s decision in February to take up the chief operation officer role at Newmont Corporation.
“Miller is currently the finance director of Anglo American Platinum, a role he has held since 2019. With over 23 years of mining industry experience, he is a seasoned senior executive who has worked in South Africa, Brazil, and the UK, with expertise spanning Anglo American’s PGMs, base metals, and bulk commodities businesses,” the group said.
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