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ANGLO AM PLC ADR Message Board

  • Vaalie60 Vaalie60 Feb 22, 2010 9:45 AM Flag

    Earnings / Dividend?

    Anglo American FY EPS down 53.5% to 2.02 US c
    I-Net Bridge
    Published: 2010/02/19 11:16:14 AM

    RESOURCES giant Anglo American (AGL) today reported a 53.5% drop in full year earnings per share to 2.02 US cents for 2009 from 4.34 US cents in 2008. This was as attributable profit fell to US$2.4 billion in the 12 months to end December 2009 from $5.2 billion in the 12 months to end December 2008.

    Revenue dropped 25.3% to $24.6 billion from $33 billion rand while operating profit of $5.0 billion was reported for 2009 from $10.1 billion in 2008. Anglo American 's underlying earnings were $2.6 billion from $5.2 billion the year before. Net debt stood at $11 billion at end December 2009. The group said the impact of the global economic downturn on realised platinum group metals (PGMs), iron ore, export coal, nickel and diamond prices was the key driver of the decline in earnings, coupled with falling demand, particularly in the metallurgical coal and thermal coal businesses.

    Against the backdrop of the challenging economic environment, notable performances included copper, with increased production driving operating profit growth; production and sales volume increases at Kumba Iron Ore (KIO) from the Sishen jig project; and nickel. Copper delivered an operating profit of $2 billion, 6% higher as a result of record production and lower costs as well as marginally higher realised copper prices. Nickel reported an operating profit of $2 million, $121 million lower despite a 32% increase in sales volumes, reflecting the impact of a 30% decrease in the average nickel price and Venezuelan inflation of 25%.

    Iron ore and manganese generated an operating profit of $1.5 billion, 42% lower. This was despite the strong performance by Kumba Iron Ore . Platinum generated an operating profit of $32 million, down 99% due to a 38% decrease in the dollar basket price of metals sold while diamonds recorded an attributable operating profit of $64 million, down 87%, with Diamond Trading Company (DTC) revenues down 45%. Metallurgical coal delivered an operating profit of $451 million, a 59% decrease lower price and demand from steelmakers, partially mitigated by cost reduction programmes. Thermal coal's operating profit of $721 million was 33% lower, principally as a result of lower prices and demand reduction.

    Other mining and industrial generated an operating profit of $506 million, 53% lower. Strong performances from the Zinc and Niobium businesses, driven by improved production, were offset by the impact of the economic slowdown on Tarmac and Scaw Metals. In October the group announced a major corporate reorganisation that has clearly delineated seven focused commodity businesses. Anglo American CEO Cynthia Carroll said the group expected full implementation of the new structures by the end of the first quarter of 2010, with associated annualised cost savings of approximately $120 million.

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    • With cost control continuing a major focus for the group, cash cost reductions across the group totalling $712 million, representing a 5% decrease, in 2009. "Two areas of synergy where we are continuing to deliver clear and substantial value are in our asset optimisation and global procurement programmes. We are now well advanced towards delivering our stated combined target of $2 billion of uplift in 2011, generating more than $1.6 billion in 2009, ahead of expectations," said Carroll.

      "Based on our excellent progress to date, we now expect to achieve our $2 billion asset optimisation and procurement targets from our core businesses alone on the same timeline," she said. Looking ahead, Carroll said the medium and long term outlook for the mining industry remained strong. Demand for commodities is expected to remain robust with the continuing shift in the pattern of economic growth towards fast-growing emerging economies.

      "In order to sustain its growth potential, we anticipate that China will continue to upgrade and develop its infrastructure, while the longer term potential of India and Brazil is expected to provide further support. These economies also have the greatest scope for strong consumer spending growth, the principal long term demand driver for platinum group metals and diamonds," Carroll said.

      • 1 Reply to Vaalie60
      • Anglo upbeat on resumption of dividend payouts
        Published: 2010/02/22 06:31:47 AM

        DIVERSIFIED miner Anglo American on Friday had high hopes that it would resume paying dividend s later this year after its freeze of 2008’s final dividend — the first freeze in 70 years — had angered shareholders.

        Anglo, which on Friday released its financial results for the year to December, kept the dividend on hold for a second successive year as its earnings more than halved, but both CEO Cynthia Carroll and chairman Sir John Parker said payments could resume later this year.

        Anglo’s rivals BHP Billiton , Rio Tinto and Vale continued payouts throughout last year . Xstrata said last week it would resume payment despite reporting a drop in full-year profits.

        Parker said resumption of the dividend at the earliest possible time remained “a key priority” for the board.

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