(Alliance News) - Anglo American PLC reported on Thursday it had cut its dividend as annual profit crashed, with the diversified mining group grappling with weaker commodity prices and rising costs.
The London-based diversified miner also said it had agreed to acquire the contiguous Serra da Serpentina's iron ore project from Brazliam miner Vale SA. It plans to integrate this project into its Minas-Rio mine in Brazi.
The transaction is expected to complete in the fourth quarter this year, subject to regulatory conditions.
Shares in Anglo American rallied 5.5% at 1,806.40 pence on Thursday in London, while its Johannesburg shares were 4.4% higher at ZAR431.14.
For 2023, Anglo American said pretax profit tumbled to USD3.59 billion from USD9.48 billion in 2022.
Annual revenue fell 13% to USD30.65 billion from USD35.12 billion.
Average market prices for its basket of products decreased by 13% compared to 2022, dragging down earnings before interest, taxes, depreciation and amortisation.
Underlying Ebitda slumped 31% to USD9.95 billion from USD14.49 billion, also reflecting a 4% unit cost increase.
Production volumes rose 2% on a copper equivalent basis, primarily driven by the ramp-up of Quellaveco copper mine in Peru, a strong operational performance at Minas-Rio iron ore operation, as well as higher production from steelmaking coal operations in Australia.
However, production was lower at De Beers and at platinum group metals due to lower production from the Kroondal joint operation and planned infrastructure closures at Amandelbult. Lower grades hit copper production at Los Bronces in Chile.
Anglo American slashed the final dividend to 41 US cents from 74 cents, with the total payout more than halving to 96 cents from USD1.98.
Earnings per share crashed to 23 cents from USD3.72, while headline EPS plummeted to USD2.06 from USD4.98.
"There is no doubt that while the immediate macro picture presents some challenges for our PGMs and diamonds businesses, the demand trends for metals and minerals have rarely looked better," Anglo American Chief Executive Officer Duncan Wanblad said.
"We are focused on reducing complexities and continue to manage our assets, capital and portfolio dynamically and for value. This includes syndicating large greenfield projects for value, as we did with Quellaveco, and as we plan to do for Woodsmith at the right time," Wanblad said.
For 2024, PGM production is guided to between 3.3 million ounces and 3.7 million ounces.
Copper production is seen between 730,000 tonnes and 790,000 tonnes.
Diamond production is seen slowing to between 29 million carats and 32 million carats. Nickel is expected at between 36,000 tonnes and 38,000 tonnes.
Steelmaking coal is likely to rise to between 15 million and 17 million tonnes.
But iron ore output changed slightly to between 58 million tonnes and 62 million tonnes, from 58 million tonnes and 68 forecast previously.
By Artwell Dlamini, Alliance News reporter
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