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By Zandi Shabalala
LONDON, Feb 25 (Reuters) - Anglo American reported a
slight fall in 2020 profits, beating expectations and boosting
dividends after strong commodity prices helped the diversified
miner recover from coronavirus disruptions suffered in its first
half.
The London-listed miner was the worst hit among its peers by
coronavirus lockdowns in many of its regions, including South
Africa and Botswana while it also fought operational issues in
its platinum unit.
But a rebound in commodity prices and a change in
operational fortunes saw the miner achieve its best second half
since 2011.
"It was certainly a year of two halves," Chief Executive
Mark Cutifani told reporters.
Anglo produces platinum, palladium, copper, diamonds, iron
ore, and thermal and metallurgical coal.
Price for many of the metals have jumped due to tight supply
and higher demand. Copper and iron ore are trading at
10-year highs while platinum hit its highest in six
years.
"Let me reassure you, whilst the fundamentals for the
industry are strong, we aren't being seduced by good prices,"
Cutifani said, adding that the miner would continue to remain
disciplined on costs.
Underlying earnings before interest, tax, depreciation and
amortisation (EBITDA), a measure closely watched by analysts,
fell 2% to $9.8 billion in the year to December, beating a
consensus of $9.4 billion from nine analysts compiled by
consensus platform Vuma.
In the second half, underlying EBITDA was $6.5 billion, the
best performance since 2011.
Anglo declared a final dividend of 72 cents per share, in
line with its 40% payout policy and up 53% from a year earlier,
beating consensus.
Net debt at the end of December stood at $5.6 billion
compared to $4.6 billion a year earlier, but was down from $7.6
billion at half year.
An inventory build caused operational issues at its platinum
unit in South Africa and low diamond demand should unwind during
the year, Anglo said, further easing pressure on debt.
Cutifani said the miner would complete the demerger of its
South African thermal coal assets this year if a spin-off, which
was the preferred exit route, was the final decision.
Bidders had approached Anglo to buy the assets as a sale is
still on the cards, he said.
Anglo and its peers are under pressure to reduce their
carbon footprints and cut exposure to polluting commodities such
as coal.
"We expect Anglo to benefit from further upside to prices of
copper, nickel and diamonds, continued strong prices in platinum
group metals, and better prices in iron ore than the market
currently expects," said Jefferies analyst Chris LaFemina.
(Reporting by Zandi Shabalala; Editing by Jan Harvey and Emelia
Sithole-Matarise)
Anglo American (AAL)
