JOHANNESBURG (miningweekly.com) – The underlying operating profit of the LSE- and JSE-listed Anglo American decreased 44% to $6.2-billion in the year to December 31, with financial results driven down by lower commodity prices in weak global economic conditions, the company said.
Anglo reported impairments totalling $4.6-billion after tax relating to the delayed and costlier Minas-Rio project in Brazil, and a number of platinum projects in South Africa.
“The illegal strike in South Africa hit our bottom line,” outgoing Anglo American CEO Cynthia Carroll told Mining Weekly Online in a conference call.
Some $3.9-billion of the decrease in underlying profit was due to weaker commodity prices.
The final dividend was, however, increased by 15% to 53 US cents a share, bringing rebased total dividends for 2012 to 85 US cents a share, a 15% increase.
"We want to rebase the dividend at a more competitive level," Anglo American CFO Rene Medori told analysts.
The diversified major’s earnings before interest, taxes, depreciation and amortisation were down 35% to $8.7-billion, with underlying earnings decreasing to $2.8-billion and underlying earnings per share to $2.26.
The company delivered record volumes of 24% more metallurgical, record production of 43.1-million tons of 4% more iron-ore and record volumes of export thermal coal, nickel and phosphates. Copper was also up 10%.
“We’re seeing considerable benefits of having invested through the cycle,” Carroll told Mining Weekly Online, adding that new mining operations and expansions had increased production and had contributed $1.2-billion of underlying operating profit.
Carroll said that the mining industry continued to face significant hurdles and the impact of these, plus company-specific challenges, affected the 2012 financial performance.
All prices were down and mining inflation continued to run above the consumer price index, creating cost pressures across Anglo’s businesses.
She was convinced, however, that 2013 would be better than 2012.
Following one-off impairments, loss attributable to equity shareholders was $1.5-billion.
Net debt at year-end was $8.6-billion with pro forma net debt at $9.3-billion.
Thirteen employees lost their lives in work-related incidents after a 48% improvement in lost-time injury frequency rate since 2006.
Productivity measures were taking effect at Kumba Iron Ore’s new Kolomela iron-ore mine, which produced 8.5-million tons ahead of schedule and which was on target for 9-million tons in 2013.
Brazil’s troubled Minas-Rio project review confirmed a 2014 start and $8.8-billion capital expenditure, including the $0.6-billion contingency and $4.0-billion post-tax impairment.
Platinum suffered an 8% decrease in equivalent refined production mainly owing to illegal industrial action.